CFC Supports AB 2502 – Assisting Homeowners in Avoiding Foreclosure

Bill Status: AB 2502 (Brownley) passed the Committee on Housing and Community Development on April 28th, 2010. The bill now moves to the Assembly Judiciary Committee.

CFC Position: Support

The Consumer Federation of California (CFC) supports AB 2502 because it would clarify that any payment collection agreements between the homeowner and the homeowners’ association also are applied to any agent or representative of the homeowners’ association assigned to collect payment for purposes of collection of debt.

This bill would prohibit a homeowner from waiving the right to have payments allocated in the order specified and would require either the 3rd party or the homeowners association to accept partial payments of the debt.

AB 2502 will also require that the association identify any third party collection agencies under the board contract and allows a payment plan to be arranged in an open board meeting. The association’s agent must also provide payment receipts upon a homeowner’s request. The bill also increases the delinquency trigger from $1,800 to $3,600 and extends the time period from 12 to 18 months before a Notice of Default can be issued.

AB 2502 will assist homeowners with the help they need to keep their homes from foreclosure, while empowering consumers who may be vulnerable to predatory debt collection agencies. By keeping more homes off the market, AB 2502’s consumer protections will also help ensure the future stability of the economy. For these reasons, we strongly support AB 2502.