The Federal Housing Finance Agency is opposing the efforts in one state to enact legislation that would protect homeowners against the type of illegal foreclosure abuses that led to the “robo-signing” crisis. FHFA recently sent a five-page letter to California lawmakers arguing that the package of bills dubbed the “California Homeowner Bill of Rights” would increase legal risks for lenders and investors by encouraging unnecessary litigation, according to media reports. Among the legislation is a measure that would specifically fine mortgage servicers for recording or filing “robo-signed” documents that contain improperly-performed or illegal notarizations. The FHFA, which oversees the government-controlled mortgage giants Fannie Mae and Freddie Mac, says that provision could penalize lenders for unintentional errors and encourage individuals to file lawsuits as a strategy to delay legitimate foreclosures. The legislation was initially proposed by state Attorney General Kamala Harris several weeks after she signed onto the National Mortgage Settlement. A spokesman for Harris told local media that the package of bills is being carefully drafted to solidify the homeowner protections in the National Mortgage Settlement while discouraging frivolous lawsuits. Michael Lewis is Managing Editor at the National Notary Association.