SB 1275 - An Act to Amend Section 2923.5 Of, and to Add and Repeal Sections 2923.4, 2923.7, 2923.73, 2923.75, and 2923.77 Of, the Civil Code, Relating to Mortgages.

An Act to Amend Section 2923.5 Of, and to Add and Repeal Sections 2923.4, 2923.7, 2923.73, 2923.75, and 2923.77 Of, the Civil Code, Relating to Mortgages.

SB 1275 — 2009-2010 Legislature

Summary

Existing law, until January 1, 2013, and as applied to mortgages and deeds of trust recorded between January 1, 2003, and December 31, 2007, that are secured by owner-occupied residential real property containing no more than 4 dwelling units, requires a mortgagee, trustee, beneficiary, or authorized agent to contact the borrower, as defined, prior to filing a notice of default, in order to assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure. Existing law requires the notice of default to include a specified declaration from the mortgagee, beneficiary, or authorized agent regarding its contact with the borrower.

This bill would, until January 1, 2013, extend those requirements for those types of dwellings to apply to mortgages or deeds of trust recorded prior to January 1, 2009, if the loans are required to be reviewed under federal Home Affordable Modification Program (HAMP) guidelines, or between January 1, 2003, and January 1, 2009, if the loans are not required to be reviewed under HAMP guidelines. The bill would require a mortgagee, beneficiary, or authorized agent, within a specified time period prior to the… More

Existing law, until January 1, 2013, and as applied to mortgages and deeds of trust recorded between January 1, 2003, and December 31, 2007, that are secured by owner-occupied residential real property containing no more than 4 dwelling units, requires a mortgagee, trustee, beneficiary, or authorized agent to contact the borrower, as defined, prior to filing a notice of default, in order to assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure. Existing law requires the notice of default to include a specified declaration from the mortgagee, beneficiary, or authorized agent regarding its contact with the borrower.

This bill would, until January 1, 2013, extend those requirements for those types of dwellings to apply to mortgages or deeds of trust recorded prior to January 1, 2009, if the loans are required to be reviewed under federal Home Affordable Modification Program (HAMP) guidelines, or between January 1, 2003, and January 1, 2009, if the loans are not required to be reviewed under HAMP guidelines. The bill would require a mortgagee, beneficiary, or authorized agent, within a specified time period prior to the filing of a notice of default, to provide the borrower with written information regarding loan modifications and a specified notice regarding the borrower’s rights during the foreclosure process, subject to specified exceptions. The bill would require an unspecified state entity to make that notice available in English and specified languages. The bill would further revise the borrower contact requirements described above by requiring a mortgagee, beneficiary, or authorized agent to make reasonable borrower solicitation efforts, as specified, to explore options for the borrower to avoid foreclosure. The bill would prohibit a mortgagee, trustee, beneficiary, or authorized agent from filing a notice of default until the borrower has been evaluated and determined to be ineligible for a loan modification or the borrower has failed to submit an application prior to the passing of the deadline. The bill would specify minimum time periods in which the borrower may submit an application or supplemental information for a loan modification, and would require the mortgagee, beneficiary, or authorized agent, if it denies the application, to send a denial explanation letter within a specified time period. These requirements would not apply to a mortgagee, beneficiary, or authorized agent that has no loan modification option available to the borrower or to a grandfathered party, as defined.

This bill would further require, until January 1, 2013, with respect to those properties described above, that a mortgagee, beneficiary, or authorized agent, concurrently with the filing of a notice of default, record a declaration of compliance that attests to specified facts relating to its borrower solicitation and foreclosure avoidance efforts, except as provided. The bill would authorize the borrower to bring an action within one year of the trustee sale to void the foreclosure or request an injunction if, among other things, the mortgagee, beneficiary, or authorized agent records a notice of default without completing reasonable borrower solicitation efforts, or to recover specified damages if the mortgagee, trustee, beneficiary, or authorized agent fails to record a declaration of compliance or materially comply with specified provisions, if specified conditions exist. The bill would provide that a mortgagee, trustee, beneficiary, or authorized agent shall have no civil liability if it satisfies specified requirements prior to the initiation of legal action by the borrower. Hide

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At LegInfo.ca.gov

Title

An Act to Amend Section 2923.5 Of, and to Add and Repeal Sections 2923.4, 2923.7, 2923.73, 2923.75, and 2923.77 Of, the Civil Code, Relating to Mortgages.

Author(s)

Mark Leno, Darrell Steinberg

Co-Authors

• Julia Brownley
• Pedro Nava
• Nancy Skinner
• Gilbert Cedillo
• Anna Caballero

Subjects

• Mortgages: foreclosures

Major Actions

Introduced	2/19/2010
Referred to Committee
Passed Senate Committee on Banking, Finance and Insurance	4/07/2010
Passed Senate Committee on Judiciary	4/20/2010
Passed Senate Committee on Appropriations	5/24/2010
Passed Senate Committee on Banking, Finance and Insurance	6/02/2010
Passed Senate	6/03/2010
Passed Assembly Committee on Banking and Finance	6/21/2010
Passed Assembly Committee on Judiciary	6/29/2010
Passed Assembly Committee on Appropriations	8/12/2010
Passed Assembly	8/30/2010
Failed passage in Assembly	8/30/2010

Bill History

• All Votes
• All Actions

	Chamber/Committee	Motion	Date	Result
currently selected	Senate Committee on Banking, Finance and Insurance	Do pass, but re-refer to the Committee on Judiciary.	4/07/2010	This motion PASSED the Senate Committee on Banking, Finance and Insurance 7 voted YES 2 voted NO 3 voted present/not voting
select this vote	Senate Committee on Judiciary	Do pass as amended, and re-refer to the Committee on Appropriations.	4/20/2010	This motion PASSED the Senate Committee on Judiciary 3 voted YES 1 voted NO 1 voted present/not voting
select this vote	Senate Committee on Appropriations	Do pass.	5/24/2010	This motion PASSED the Senate Committee on Appropriations 6 voted YES 4 voted NO 1 voted present/not voting
select this vote	Senate Committee on Banking, Finance and Insurance	From Committee: Amendments returned to Senate floor for consideration.	6/02/2010	This motion PASSED the Senate Committee on Banking, Finance and Insurance 6 voted YES 5 voted NO 0 voted present/not voting
select this vote	Senate	Senate 3rd Reading SB1275 Leno	6/03/2010	This bill PASSED the Senate 21 voted YES 12 voted NO 5 voted present/not voting
select this vote	Assembly Committee on Banking and Finance	Do pass and be re-referred to the Committee on Judiciary.	6/21/2010	This motion PASSED the Assembly Committee on Banking and Finance 7 voted YES 4 voted NO 1 voted present/not voting
select this vote	Assembly Committee on Judiciary	Do pass and be re-referred to the Committee on Appropriations.	6/29/2010	This motion PASSED the Assembly Committee on Judiciary 7 voted YES 3 voted NO 0 voted present/not voting
select this vote	Assembly Committee on Appropriations	Do pass as amended.	8/12/2010	This motion PASSED the Assembly Committee on Appropriations 9 voted YES 7 voted NO 1 voted present/not voting
select this vote	Assembly	SB 1275 Leno Motion to Reconsider By NAVA	8/30/2010	This bill PASSED the Assembly 47 voted YES 29 voted NO 2 voted present/not voting
select this vote	Assembly	SB 1275 Leno Senate Third Reading By NAVA	8/30/2010	This bill DID NOT PASS the Assembly 30 voted YES 36 voted NO 12 voted present/not voting

	Action	Date	Description
	Introduced	2/19/2010
		2/19/2010	Introduced. Read first time. To Com. on RLS. for assignment. To print.
		2/20/2010	From print. May be acted upon on or after March 22.
		3/04/2010	To Coms. on B., F. & I. and JUD.
		3/05/2010	Set for hearing April 7.
currently selected	Vote	4/07/2010	Do pass, but re-refer to the Committee on Judiciary.
		4/08/2010	From committee: Do pass, but first be re-referred to Com. on JUD. (Ayes 7. Noes 2.) Re-referred to Com. on JUD. From committee with author's amendments. Read second time. Amended. Re-referred to Com. on JUD.
		4/09/2010	Set for hearing April 20.
select this vote	Vote	4/20/2010	Do pass as amended, and re-refer to the Committee on Appropriations.
		4/27/2010	From committee: Do pass as amended, but first amend, and re-refer to Com. on APPR. (Ayes 3. Noes 1. Page 3305.)
		4/28/2010	Read second time. Amended. Re-referred to Com. on APPR.
		5/07/2010	Set for hearing May 17.
		5/11/2010	Set, first hearing. Hearing canceled at the request of author.
		5/14/2010	Set for hearing May 24.
		5/18/2010	From committee with author's amendments. Read second time. Amended. Re-referred to Com. on APPR.
select this vote	Vote	5/24/2010	Do pass.
		5/25/2010	From committee: Do pass. (Ayes 6. Noes 4. Page 3594.)
		5/26/2010	Read second time. To third reading.
		5/27/2010	Read third time. Amended. To second reading.
		5/28/2010	Read second time. To third reading.
		6/01/2010	Re-referred to Com. on RLS. pursuant to Senate Rule 29.10. From committee: Be re-referred to Com. on B., F. & I. pursuant to Senate Rule 29.10. (Ayes 3. Noes 0. Page 3692.) Re-referred to Com. on B., F. & I.
select this vote	Vote	6/02/2010	From Committee: Amendments returned to Senate floor for consideration.
		6/02/2010	From committee: That the measure be returned to the Senate Floor for consideration. (Ayes 6. Noes 5. Page 3752.) Placed on third reading.
		6/03/2010	Read third time. Passed. (Ayes 21. Noes 12. Page 3785.) To Assembly.
		6/03/2010	In Assembly. Read first time. Held at Desk.
select this vote	Senate Vote on Passage	6/03/2010	Senate 3rd Reading SB1275 Leno
		6/10/2010	To Coms. on B. & F. and JUD. From committee with author's amendments. Read second time. Amended. Re-referred to Com. on B. & F.
select this vote	Vote	6/21/2010	Do pass and be re-referred to the Committee on Judiciary.
		6/22/2010	From committee: Do pass, but first be re-referred to Com. on JUD. (Ayes 7. Noes 4.) Re-referred to Com. on JUD. (Heard in committee on June 21.)
		6/23/2010	From committee with author's amendments. Read second time. Amended. Re-referred to Com. on JUD.
select this vote	Vote	6/29/2010	Do pass and be re-referred to the Committee on Appropriations.
		6/29/2010	From committee: Do pass, but first be re-referred to Com. on APPR. (Ayes 7. Noes 3.) Re-referred to Com. on APPR. (Heard in committee on June 29.)
		8/02/2010	From committee with author's amendments. Read second time. Amended. Re-referred to Com. on APPR.
		8/05/2010	Set, first hearing. Referred to APPR. suspense file.
select this vote	Vote	8/12/2010	Do pass as amended.
		8/13/2010	From committee: Do pass as amended. (Ayes 9. Noes 7.) (Heard in committe August 12.)
		8/16/2010	Read second time. Amended. To second reading.
		8/17/2010	Read second time. To third reading.
		8/24/2010	Read third time. Refused passage. (Ayes 27. Noes 38. Page 6610.) Motion to reconsider made by Assembly Member Nava.
		8/25/2010	Motion to reconsider continued to August 30.
		8/30/2010	Reconsideration granted. (Ayes 47. Noes. 29. Page 6841.) Read third time. Refused passage. (Ayes 30. Noes 36. Page 6873.) From Assembly without further action.
select this vote	Assembly Vote on Passage	8/30/2010	SB 1275 Leno Motion to Reconsider By NAVA
select this vote	Assembly Vote on Passage	8/30/2010	SB 1275 Leno Senate Third Reading By NAVA