Ending “Dual Track” in California

Last week, the California legislature passed the California Foreclosure Reduction Act, finally putting an end to the unfair “dual track” system that allows banks to process foreclosure papers while also moving a family through a loan modification.  This historic step is a critical one in a series of those that are needed to repair the housing market.

We know that the banks fought this legislation very aggressively. According to Americans for Financial Reform, lenders spent $70,000 a day on lobbyists and other efforts to prevent this bill from passing.  As informed voters and advocates, we fought back and won.  The following are some of our most important wins.  The new law:


  • Prohibits dual tracking, where a bank forecloses on a homeowner at the same time they are negotiating a modification.

  • Guarantees a single point of contact for struggling homeowners.

  • Creates civil penalties for fraudulently signing mortgage documents (robosigning).

We know that this law will deeply and positively impact communities of color in particular, as a disproportionate number of homeowners of color have been held in limbo or unnecessarily lost their homes when they could have received a loan modification.  Many Californians will find relief as a result of the decision, and this commonsense legislation sets a strong precedent for states to follow suit. There is still much we as advocates, homeowners, and renters can do to fight for a sound housing system, but today we have many reasons to celebrate.

A version of this article first appeared on the Home for Good blog.

Photo: Los Angeles Mayor Anthonio Villaraigosa with California Attorney General Kamala Harris, left, at a May 2012 event announcing the creation of a new initiative to protect California homeowners from mortgage fraud. Photo courtesy of the office of Los Angeles Mayor Antonio Villaraigosa, CC BY-NC

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