New law aims for fairness in foreclosure market

By Marisa Kendall, The Mercury News, September 29, 2020

“Gov. Gavin Newsom signed SB 1079 into law this week — one of several housing protection or production-focused bills to make it off his desk. SB 1079, which was inspired by the Oakland activist group Moms 4 Housing, prevents corporations from snapping up bundles of homes during foreclosure auctions. Instead, it gives tenants and families an opportunity to buy them individually.

“After the initial bids at a foreclosure auction are received, tenants, families, local governments, affordable housing nonprofits, and community land trusts have 45 days to top the highest bid and buy the property.

“With the new law targeting corporate investors, the goal is to prevent a repeat of what happened in the aftermath of the Great Recession of 2007-2008 — when millions of families lost their homes to foreclosure, and Wall Street investment firms swooped in and bought groups of homes for rock-bottom prices.

“Eliminating bundling is a huge step in the right direction, said Leah Simon-Weisberg, legal director for tenants rights organization Alliance of Californians for Community Empowerment (ACCE).

“ ‘One of the pieces that’s missing, obviously, is how are we going to fund keeping these properties in the community?’ she said. ‘Because having to match the highest bidder is difficult without funding.’ ”

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