Bill Text: CA AB2424 | 2023-2024 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Mortgages: foreclosure.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2024-09-20 - Chaptered by Secretary of State - Chapter 311, Statutes of 2024. [AB2424 Detail]
Download: California-2023-AB2424-Amended.html
SECTION 1.
Bill Title: Mortgages: foreclosure.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2024-09-20 - Chaptered by Secretary of State - Chapter 311, Statutes of 2024. [AB2424 Detail]
Download: California-2023-AB2424-Amended.html
|
Amended
IN
Assembly
March 21, 2024 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 2424
| Introduced by Assembly Member Schiavo |
February 13, 2024 |
An act to amend Sections 2923.5, 2923.55, and 2924f of, and to add Section 2932.2 to, the Civil Code, relating to real property.
LEGISLATIVE COUNSEL'S DIGEST
AB 2424, as amended, Schiavo.
Foreclosure. Mortgages: foreclosure.
Existing law imposes various requirements to be satisfied before exercising a power of sale under a mortgage or deed of trust, including recording a notice of default, providing a mortgagor or trustor a copy of the recorded notice of default, providing notice of the time and place scheduled for the public auction sale of the real property and other notices related to the sale, determining the fees and expenses that may be paid from the sale, determining who may conduct the sale and act in the sale as an auctioneer for the trustee, determining the time and place where the auction sale may occur, and specifying how bids may be made and accepted at the auction sale.
This bill would require a notice be provided by and to specified parties that a third party, such as
a family member, HUD-certified housing counselor, or attorney, may record a request to receive copies of any notice of default and notice of sale at specified times in the loan and foreclosure process and that receiving a copy of these documents may allow the third party to assist the borrower in avoiding foreclosure, as specified.
This bill would prohibit a foreclosure sale until the expiration of a specified time period if the mortgagor or trustor provides the trustee and beneficiary with a listing agreement placed in a publicly available multiple listing service, as defined, for the sale of the property subject to the power of sale at least 5 days prior to the initial scheduled date of sale. If the trustor provides the trustee and beneficiary with a copy of a purchase agreement for the sale of the property that is subject to a power of sale within that time period, the bill would require the trustee to postpone the initially scheduled date of sale to a date that
is at least 35 days after the date on which the purchase agreement was entered into by the borrower.
This bill would require the mortgagee, beneficiary, or authorized agent to provide to the trustee the fair market value of the property, as defined, at least 10 days prior to the initially scheduled date of sale, and would prohibit the trustee from selling the property at the initial trustee’s sale for less than 75% of the amount of that fair market value of the property. The bill would prescribe procedures for that sale. If the property remains unsold after the initial trustee’s sale, the bill would require a 2nd trustee’s sale be held, and would authorize the property to be sold to the highest bidder. The bill would prohibit a 2nd trustee’s sale from being held until at least 7 days after the initial trustee’s sale.
Existing law prescribes various requirements to be satisfied before the exercise of a power of sale under a mortgage or deed of trust and prescribes a procedure for the exercise of that power. Existing law establishes the order of priority for the distribution of proceeds following a sale.
This bill would state the intent of the Legislature to enact subsequent legislation relating to home equity protection during the foreclosure process for the purpose of protecting consumers from losing home equity.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 2923.5 of the Civil Code is amended to read:2923.5.
(a) (1) A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default pursuant to Section 2924 until both of the following:(A) Either 30 days after initial contact is made as required by paragraph (2) or 30 days after satisfying the due diligence requirements as described in subdivision (e).
(B) The mortgage servicer complies with paragraph (1) of subdivision (a) of Section 2924.18, if the borrower has provided a complete application as defined in subdivision (d) of Section 2924.18.
(2) (A) A mortgage servicer shall contact the borrower in person or by telephone in order to assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure. During the initial contact, the mortgage servicer shall advise the borrower that he or she the borrower has the right to request a subsequent meeting and, if requested, the mortgage servicer shall schedule the meeting to occur within 14 days. The assessment of the borrower’s financial situation and discussion of options may occur during the first contact, or at the subsequent meeting scheduled for that purpose. In either case, the borrower shall be provided the toll-free telephone number made available by the United States Department of Housing and Urban Development (HUD) to find a HUD-certified
housing counseling agency. Any meeting may occur telephonically.
(B) The mortgage servicer shall notify the borrower during the initial contact required pursuant to subparagraph (A) that a third party, such as a family member, HUD-certified housing counselor, or attorney, may record a request to receive copies of any notice of default and notice of sale pursuant to the process described in Section 2924b and that receiving a copy of these documents may allow the third party to assist the borrower in avoiding foreclosure.
(b) A notice of default recorded pursuant to Section 2924 shall include a declaration that the mortgage servicer has contacted the borrower, has tried with due diligence to contact the borrower as required by this section, or that no contact was required
because the individual did not meet the definition of “borrower” pursuant to subdivision (c) of Section 2920.5.
(c) A mortgage servicer’s loss mitigation personnel may participate by telephone during any contact required by this section.
(d) A borrower may designate, with consent given in writing, a HUD-certified housing counseling agency, attorney, or other advisor to discuss with the mortgage servicer, on the borrower’s behalf, the borrower’s financial situation and options for the borrower to avoid foreclosure. That contact made at the direction of the borrower shall satisfy the contact requirements of paragraph (2) of subdivision (a). Any loan modification or workout plan offered at the meeting by the mortgage servicer is subject to approval by the borrower.
(e) A notice of default may be recorded pursuant to
Section 2924 when a mortgage servicer has not contacted a borrower as required by paragraph (2) of subdivision (a) provided that the failure to contact the borrower occurred despite the due diligence of the mortgage servicer. For purposes of this section, “due diligence” shall require and mean all of the following:
(1) (A) A mortgage servicer shall first attempt to contact a borrower by sending a first-class letter that includes the toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.
(B) The mortgage servicer shall notify the borrower in the first-class letter described in subparagraph (A) that a third party, such as a
family member, HUD-certified housing counselor, or attorney, may record a request to receive copies of any notice of default and notice of sale pursuant to the process described in Section 2924b and that receiving a copy of these documents may allow the third party to assist the borrower in avoiding foreclosure.
(2) (A) After the letter has been sent, the mortgage servicer shall attempt to contact the borrower by telephone at least three times at different hours and on different days. Telephone calls shall be made to the primary telephone number on file.
(B) A mortgage servicer may attempt to contact a borrower using an automated system to dial borrowers, provided that, if the telephone call is answered, the call is connected to a live representative of the mortgage servicer.
(C) A mortgage servicer satisfies the telephone contact requirements of this paragraph:
(i) If it determines, after attempting contact pursuant to this paragraph, that the borrower’s primary telephone number and secondary telephone number or numbers on file, if any, have been disconnected.
(ii) If the borrower or his or her the borrower’s authorized agent notifies the mortgage servicer in writing to cease further communication with the borrower. The cease communication notification shall explicitly pertain to the mortgage loan account to be effective. The cease communication notification shall be effective until the borrower or his or her
the borrower’s authorized agent rescinds it in writing.
(3) If the borrower does not respond within two weeks after the telephone call requirements of paragraph (2) have been satisfied, the mortgage servicer shall then send a certified letter, with return receipt requested.
(4) The mortgage servicer shall provide a means for the borrower to contact it in a timely manner, including a toll-free telephone number that will provide access to a live representative during business hours.
(5) The mortgage servicer has posted a prominent link on the homepage of its Internet Web site,
internet website, if any, to the following information:
(A) Options that may be available to borrowers who are unable to afford their mortgage payments and who wish to avoid foreclosure, and instructions to borrowers advising them on steps to take to explore those options.
(B) A list of financial documents borrowers should collect and be prepared to present to the mortgage servicer when discussing options for avoiding foreclosure.
(C) A toll-free telephone number for borrowers who wish to discuss options for avoiding foreclosure with their mortgage servicer.
(D) The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.
(f) This section shall apply only to mortgages or deeds of trust described in Section 2924.15.
(g) This section shall apply only to entities described in subdivision (b) of Section 2924.18.
SEC. 2.
Section 2923.55 of the Civil Code is amended to read:2923.55.
(a) A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default pursuant to Section 2924 until all of the following:(1) The mortgage servicer has satisfied the requirements of paragraph (1) of subdivision (b).
(2) Either 30 days after initial contact is made as required by paragraph (2) of subdivision (b) or 30 days after satisfying the due diligence requirements as described in subdivision (f).
(3) The mortgage servicer complies with subdivision (c) of Section 2923.6, if the borrower has provided a complete application as defined in subdivision (h) of Section 2923.6.
(b) (1) As specified in subdivision (a), a mortgage servicer shall send the following information in writing to the borrower:
(A) A statement that if the borrower is a servicemember or a dependent of a servicemember, he or she the borrower may be entitled to certain protections under the federal Servicemembers Civil Relief Act (50 U.S.C. Sec. 3901 et seq.) regarding the servicemember’s interest rate and the risk of foreclosure, and counseling for covered servicemembers that is available at agencies such as Military OneSource and Armed Forces Legal Assistance.
(B) A statement that the borrower may request the
following:
(i) A copy of the borrower’s promissory note or other evidence of indebtedness.
(ii) A copy of the borrower’s deed of trust or mortgage.
(iii) A copy of any assignment, if applicable, of the borrower’s mortgage or deed of trust required to demonstrate the right of the mortgage servicer to foreclose.
(iv) A copy of the borrower’s payment history since the borrower was last less than 60 days past due.
(2) (A) A mortgage servicer shall contact the borrower in person or by telephone in order to assess the borrower’s financial situation and explore options
for the borrower to avoid foreclosure. During the initial contact, the mortgage servicer shall advise the borrower that he or she the borrower has the right to request a subsequent meeting and, if requested, the mortgage servicer shall schedule the meeting to occur within 14 days. The assessment of the borrower’s financial situation and discussion of options may occur during the first contact, or at the subsequent meeting scheduled for that purpose. In either case, the borrower shall be provided the toll-free telephone number made available by the United States Department of Housing and Urban Development (HUD) to find a HUD-certified housing counseling agency. Any meeting may occur telephonically.
(B) The mortgage servicer shall notify the borrower during the initial contact required pursuant to subparagraph (A) that a third party, such as a family member, HUD-certified housing counselor, or attorney, may record a request to receive copies of any notice of default and notice of sale pursuant to the process described in Section 2924b and that receiving a copy of these documents may allow the third party to assist the borrower in avoiding foreclosure.
(c) A notice of default recorded pursuant to Section 2924 shall include a declaration that the mortgage servicer has contacted the borrower, has tried with due diligence to contact the borrower as required by this section, or that no contact was required because the individual did not meet the definition of “borrower” pursuant to subdivision (c) of Section 2920.5.
(d) A mortgage servicer’s loss mitigation personnel may participate by telephone during any contact required by this section.
(e) A borrower may designate, with consent given in writing, a HUD-certified housing counseling agency, attorney, or other adviser to discuss with the mortgage servicer, on the borrower’s behalf, the borrower’s financial situation and options for the borrower to avoid foreclosure. That contact made at the direction of the borrower shall satisfy the contact requirements of paragraph (2) of subdivision (b). Any foreclosure prevention alternative offered at the meeting by the mortgage servicer is subject to approval by the borrower.
(f) A notice of default may be recorded pursuant to Section 2924 when a mortgage servicer has not contacted a borrower as required by paragraph (2) of subdivision (b),
provided that the failure to contact the borrower occurred despite the due diligence of the mortgage servicer. For purposes of this section, “due diligence” shall require and mean all of the following:
(1) (A) A mortgage servicer shall first attempt to contact a borrower by sending a first-class letter that includes the toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.
(B) The mortgage servicer shall notify the borrower in the first-class letter described in subparagraph (A) that a third party, such as a family member, HUD-certified housing counselor, or attorney, may record a request to receive copies of any notice of
default and notice of sale pursuant to the process described in Section 2924b and that receiving a copy of these documents may allow the third party to assist the borrower in avoiding foreclosure.
(2) (A) After the letter has been sent, the mortgage servicer shall attempt to contact the borrower by telephone at least three times at different hours and on different days. Telephone calls shall be made to the primary telephone number on file.
(B) A mortgage servicer may attempt to contact a borrower using an automated system to dial borrowers, provided that, if the telephone call is answered, the call is connected to a live representative of the mortgage servicer.
(C) A mortgage servicer satisfies the telephone contact requirements of this paragraph:
(i) If it determines, after attempting contact pursuant to this paragraph, that the borrower’s primary telephone number and secondary telephone number or numbers on file, if any, have been disconnected.
(ii) If the borrower or his or her the borrower’s authorized agent notifies the mortgage servicer in writing to cease further communication with the borrower. The cease communication notification shall explicitly pertain to the mortgage loan account to be effective. The cease communication notification shall be effective until the borrower or his or her
the borrower’s authorized agent rescinds it in writing.
(3) If the borrower does not respond within two weeks after the telephone call requirements of paragraph (2) have been satisfied, the mortgage servicer shall then send a certified letter, with return receipt requested, that includes the toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.
(4) The mortgage servicer shall provide a means for the borrower to contact it in a timely manner, including a toll-free telephone number that will provide access to a live representative during business hours.
(5) The mortgage servicer has posted a prominent link on the homepage of its Internet Web site,
internet website, if any, to the following information:
(A) Options that may be available to borrowers who are unable to afford their mortgage payments and who wish to avoid foreclosure, and instructions to borrowers advising them on steps to take to explore those options.
(B) A list of financial documents borrowers should collect and be prepared to present to the mortgage servicer when discussing options for avoiding foreclosure.
(C) A toll-free telephone number for borrowers who wish to discuss options for avoiding foreclosure with their mortgage servicer.
(D) The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.
(g) This section shall not apply to entities described in subdivision (b) of Section 2924.18.
(h) This section shall apply only to mortgages or deeds of trust described in Section 2924.15.
SEC. 3.
Section 2924f of the Civil Code, as amended by Section 14 of Chapter 131 of the Statutes of 2023, is amended to read:2924f.
(a) As used in this section and Sections 2924g and 2924h, “property” means real property or a leasehold estate therein, and “calendar week” means Monday through Saturday, inclusive.(b) (1) Except as provided in subdivision (c), before any sale of property can be made under the power of sale contained in any deed of trust or mortgage, or any resale resulting from a rescission for a failure of consideration pursuant to subdivision (c) of Section 2924h, notice of the sale thereof shall be given by posting a written notice of the time of sale and of the street address and the specific place at the street address where the sale will be held, and describing the property to be sold, at least 20 days before the date of sale in one public place in
the city where the property is to be sold, if the property is to be sold in a city, or, if not, then in one public place in the county seat of the county where the property is to be sold, and publishing a copy once a week for three consecutive calendar weeks.
(2) The first publication to be at least 20 days before the date of sale, in a newspaper of general circulation published in the public notice district in which the property or some part thereof is situated, or in case no newspaper of general circulation is published in the public notice district, in a newspaper of general circulation published in the county in which the property or some part thereof is situated, or in case no newspaper of general circulation is published in the public notice district or county, as the case may be, in a newspaper of general circulation published in the county in this state that is contiguous to the county in which the property or some part thereof is
situated and has, by comparison with all similarly contiguous counties, the highest population based upon total county population as determined by the most recent federal decennial census published by the Bureau of the Census. For the purposes of this section, publication of notice in a public notice district is governed by Chapter 1.1 (commencing with Section 6080) of Division 7 of Title 1 of the Government Code.
(3) A copy of the notice of sale shall also be posted in a conspicuous place on the property to be sold at least 20 days before the date of sale, where possible and where not restricted for any reason. If the property is a single-family residence the posting shall be on a door of the residence, but, if not possible or restricted, then the notice shall be posted in a conspicuous place on the property; however, if access is denied because a common entrance to the property is restricted by a guard gate or similar impediment, the property
may be posted at that guard gate or similar impediment to any development community.
(4) The notice of sale shall conform to the minimum requirements of Section 6043 of the Government Code and be recorded with the county recorder of the county in which the property or some part thereof is situated at least 20 days prior to the date of sale.
(5) The notice of sale shall contain the name, street address in this state, which may reflect an agent of the trustee, and either a toll-free telephone number or telephone number in this state of the trustee, and the name of the original trustor, and also shall contain the statement required by paragraph (3) of subdivision (c). In addition to any other description of the property, the notice shall describe the property by giving its street address, if any, or other common designation, if any, and a county assessor’s parcel number; but if the
property has no street address or other common designation, the notice shall contain a legal description of the property, the name and address of the beneficiary at whose request the sale is to be conducted, and a statement that directions may be obtained pursuant to a written request submitted to the beneficiary within 10 days from the first publication of the notice. Directions shall be deemed reasonably sufficient to locate the property if information as to the location of the property is given by reference to the direction and approximate distance from the nearest crossroads, frontage road, or access road. If a legal description or a county assessor’s parcel number and either a street address or another common designation of the property is given, the validity of the notice and the validity of the sale shall not be affected by the fact that the street address, other common designation, name and address of the beneficiary, or the directions obtained therefrom are erroneous or that the street address,
other common designation, name and address of the beneficiary, or directions obtained therefrom are omitted.
(6) The term “newspaper of general circulation,” as used in this section, has the same meaning as defined in Article 1 (commencing with Section 6000) of Chapter 1 of Division 7 of Title 1 of the Government Code.
(7) The notice of sale shall contain a statement of the total amount of the unpaid balance of the obligation secured by the property to be sold and reasonably estimated costs, expenses, advances at the time of the initial publication of the notice of sale, and, if republished pursuant to a cancellation of a cash equivalent pursuant to subdivision (d) of Section 2924h, a reference of that fact; provided, that the trustee shall incur no liability for any good faith error in stating the proper amount, including any amount provided in good faith by or on behalf of the
beneficiary. An inaccurate statement of this amount shall not affect the validity of any sale to a bona fide purchaser for value, nor shall the failure to post the notice of sale on a door as provided by this subdivision affect the validity of any sale to a bona fide purchaser for value.
(8) (A) On and after April 1, 2012, if the deed of trust or mortgage containing a power of sale is secured by real property containing from one to four single-family residences, the notice of sale shall contain substantially the following language, in addition to the language required pursuant to paragraphs (1) to (7), inclusive:
NOTICE TO POTENTIAL BIDDERS: If you are considering bidding on this property lien, you should understand that there are risks involved in bidding at a trustee auction. You will be bidding on a lien, not on the property itself.
Placing the highest bid at a trustee auction does not automatically entitle you to free and clear ownership of the property. You should also be aware that the lien being auctioned off may be a junior lien. If you are the highest bidder at the auction, you are or may be responsible for paying off all liens senior to the lien being auctioned off, before you can receive clear title to the property. You are encouraged to investigate the existence, priority, and size of outstanding liens that may exist on this property by contacting the county recorder’s office or a title insurance company, either of which may charge you a fee for this information. If you consult either of these resources, you should be aware that the same lender may hold more than one mortgage or deed of trust on the property.
NOTICE TO PROPERTY OWNER: The sale date shown on this notice of sale may be postponed one or more times by the mortgagee, beneficiary,
trustee, or a court, pursuant to Section 2924g of the California Civil Code. The law requires that information about trustee sale postponements be made available to you and to the public, as a courtesy to those not present at the sale. If you wish to learn whether your sale date has been postponed, and, if applicable, the rescheduled time and date for the sale of this property, you may call [telephone number for information regarding the trustee’s sale] or visit this internet website [internet website address for information regarding the sale of this property], using the file number assigned to this case [case file number]. Information about postponements that are very short in duration or that occur close in time to the scheduled sale may not immediately be reflected in the telephone information or on the internet website. The best way to verify postponement information is to attend the scheduled sale.
NOTICE TO TENANT:
You may have a right to purchase this property after the trustee auction pursuant to Section 2924m of the California Civil Code. If you are an “eligible tenant buyer,” you can purchase the property if you match the last and highest bid placed at the trustee auction. If you are an “eligible bidder,” you may be able to purchase the property if you exceed the last and highest bid placed at the trustee auction. There are three steps to exercising this right of purchase. First, 48 hours after the date of the trustee sale, you can call [telephone number for information regarding the trustee’s sale], or visit this internet website [internet website address for information regarding the sale of this property], using the file number assigned to this case [case file number] to find the date on which the trustee’s sale was held, the amount of the last and highest bid, and the address of the trustee. Second, you must send a written notice of intent to place a bid so that the trustee receives it no more than 15 days
after the trustee’s sale. Third, you must submit a bid so that the trustee receives it no more than 45 days after the trustee’s sale. If you think you may qualify as an “eligible tenant buyer” or “eligible bidder,” you should consider contacting an attorney or appropriate real estate professional immediately for advice regarding this potential right to purchase.
(B) A mortgagee, beneficiary, trustee, or authorized agent shall make a good faith effort to provide up-to-date information regarding sale dates and postponements to persons who wish this information. This information shall be made available free of charge. It may be made available via an internet website, a telephone recording that is accessible 24 hours a day, seven days a week, or through any other means that allows 24 hours a day, seven days a week, no-cost access to updated information. A disruption of any of these methods of providing sale
date and postponement information to allow for reasonable maintenance or due to a service outage shall not be deemed to be a violation of the good faith standard.
(C) Except as provided in subparagraph (B), nothing in the wording of the notices required by subparagraph (A) is intended to modify or create any substantive rights or obligations for any person providing, or specified in, either of the required notices. Failure to comply with subparagraph (A) or (B) shall not invalidate any sale that would otherwise be valid under this section.
(D) Information provided pursuant to subparagraph (A) does not constitute the public declaration required by subdivision (d) of Section 2924g.
(E) For purposes of a property subject to this paragraph and of satisfying the requirements of Section 2924m, a trustee or an authorized
agent shall maintain an internet website and a telephone number to provide information on applicable properties to persons who wish the information. In addition to any other information required by subparagraph (B), a trustee or an authorized agent shall provide information regarding the sale date, amount of the last and highest bid, and the trustee’s address, to be accessible using the file number assigned to the case and listed on the NOTICE TO TENANT required by subparagraph (A). This information shall be made available free of charge and shall be available 24 hours a day, seven days a week.
(9) If the sale of the property is to be a unified sale as provided in subparagraph (B) of paragraph (1) of subdivision (a) of Section 9604 of the Commercial Code, the notice of sale shall also contain a description of the personal property or fixtures to be sold. In the case where it is contemplated that all of the personal property or fixtures are to
be sold, the description in the notice of the personal property or fixtures shall be sufficient if it is the same as the description of the personal property or fixtures contained in the agreement creating the security interest in or encumbrance on the personal property or fixtures or the filed financing statement relating to the personal property or fixtures. In all other cases, the description in the notice shall be sufficient if it would be a sufficient description of the personal property or fixtures under Section 9108 of the Commercial Code. Inclusion of a reference to or a description of personal property or fixtures in a notice of sale hereunder shall not constitute an election by the secured party to conduct a unified sale pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of Section 9604 of the Commercial Code, shall not obligate the secured party to conduct a unified sale pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of Section 9604 of the Commercial Code, and in no
way shall render defective or noncomplying either that notice or a sale pursuant to that notice by reason of the fact that the sale includes none or less than all of the personal property or fixtures referred to or described in the notice. This paragraph shall not otherwise affect the obligations or duties of a secured party under the Commercial Code.
(c) (1) This subdivision applies only to deeds of trust or mortgages which contain a power of sale and which are secured by real property containing a single-family, owner-occupied residence, where the obligation secured by the deed of trust or mortgage is contained in a contract for goods or services subject to the provisions of the Unruh Act (Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3).
(2) Except as otherwise expressly set forth in this subdivision, all other provisions of law
relating to the exercise of a power of sale shall govern the exercise of a power of sale contained in a deed of trust or mortgage described in paragraph (1).
(3) If any default of the obligation secured by a deed of trust or mortgage described in paragraph (1) has not been cured within 30 days after the recordation of the notice of default, the trustee or mortgagee shall mail to the trustor or mortgagor, at their last known address, a copy of the following statement:
YOU ARE IN DEFAULT UNDER A |
, |
(Deed of trust or mortgage) |
|---|
DATED ____. UNLESS YOU TAKE ACTION TO PROTECT YOUR PROPERTY, IT MAY BE SOLD AT A PUBLIC SALE. IF YOU NEED AN EXPLANATION OF THE NATURE OF THE PROCEEDING AGAINST YOU, YOU SHOULD CONTACT A LAWYER. |
(4) All sales of real property pursuant to a power of sale contained in any deed of trust or mortgage described in paragraph (1) shall be held in the county where the residence is located and shall be made to the person making the highest offer. The trustee may receive offers during the 10-day period immediately prior to the date of sale and if any offer is accepted in writing by both the trustor or mortgagor and the beneficiary or mortgagee prior to the time set for
sale, the sale shall be postponed to a date certain and prior to which the property may be conveyed by the trustor to the person making the offer according to its terms. The offer is revocable until accepted. The performance of the offer, following acceptance, according to its terms, by a conveyance of the property to the offeror, shall operate to terminate any further proceeding under the notice of sale and it shall be deemed revoked.
(5) In addition to the trustee fee pursuant to Section 2924c, the trustee or mortgagee pursuant to a deed of trust or mortgage subject to this subdivision shall be entitled to charge an additional fee of fifty dollars ($50).
(6) This subdivision applies only to property on which notices of default were filed on or after the effective date of this subdivision.
(7) (A) With respect to a sale of real property specified in this subdivision that is subject to a power of sale contained in any deed of trust or mortgage, the sale shall not be conducted until the expiration of an additional 60 days following the time period specified in paragraph (4) of subdivision (a) of Section 2924 if the mortgagor or trustor provides the trustee and beneficiary with a listing agreement placed in a publicly available multiple listing service, as defined in Section 1087, for the sale of the property subject to the power of sale at least 5 days prior to the scheduled date of sale. This paragraph shall not be used more than once to postpone the scheduled date.
(B) If a scheduled date of sale is postponed pursuant to
this paragraph, the trustor’s or mortgagor’s right to reinstate the account shall be calculated based on the new scheduled date of sale.
(8) If the trustor provides the trustee and beneficiary with a copy of a purchase agreement for the sale of the property that is subject to a power of sale within the period specified in paragraph (7), the trustee shall postpone the initially scheduled date of sale to a date that is at least 45 days after the date on which the purchase agreement was entered into by the borrower. The postponement of the sale provided for in this paragraph shall only be required to be made available once.
(d) With respect to residential real property containing no more than four dwelling units, a separate document containing a summary of the notice of sale information in English and the languages described in
Section 1632 shall be attached to the notice of sale provided to the mortgagor or trustor pursuant to Section 2923.3.
(e) (1) With respect to residential real property containing no more than four dwelling units that is subject to a first lien power of sale contained in a first lien deed of trust or mortgage, the mortgagee, beneficiary, or authorized agent shall provide to the trustee a fair market value of the property at least 10 days prior to the initially scheduled date of sale, and the trustee shall not sell the property at the initially scheduled date of sale for less than 75 percent of that fair market value of the property. All of the following requirements apply to the initial trustee’s sale pursuant to this paragraph:
(A) A prospective bidder may make an offer contingent on their satisfactory inspection of the property and ability to obtain third-party financing.
(B) The trustee shall accept the highest noncontingent bid even if there is a contingent bid with a higher purchase price.
(C) If all bids are contingent bids, the trustee shall accept the highest contingent bid.
(D) If the trustee accepts a contingent bid, the bidder shall have 20 days from the
date of the auction to notify the trustee in writing that all contingencies are satisfied. The trustee shall not set a second sale date pursuant to paragraph (2) until the expiration of this 20-day period or the termination of the contingent bid, whichever is earlier.
(E) If the bidder of the accepted contingent bid fails to notify the trustee in writing that all contingencies are satisfied within 20 days from the date of the auction, the contingent bid is terminated and the trustee shall schedule a second trustee’s sale pursuant to paragraph (2).
(F) If the mortgagor or trustor sells the property before the trustee receives written notification from the bidder that
the contingencies have been satisfied, the contingent bid is terminated.
(G) Subject to subparagraph (F), the trustee shall finalize the sale when the trustee receives written notification that all contingencies have been satisfied.
(H) If a contingent bid fails to close following the first auction, the trustee shall schedule a second trustee’s sale pursuant to paragraph (2).
(2) (A) If the property remains unsold after the initial trustee’s sale pursuant to paragraph (1), then
the trustee shall hold a second trustee’s sale and the property may be sold to the highest bidder.
(B) The trustee shall not hold the second trustee’s sale until at least seven days after the initial trustee’s sale.
(3) For purposes of this subdivision, “fair market value of the property” means an estimate of the fair market value of the property determined by an opinion of a licensed real estate broker, an appraisal from a licensed appraiser, a value from a commercially utilized automated valuation model, or a value from a computerized property valuation system that is used to derive a real property value.
(e)
(f) This section shall remain in effect only until January 1, 2031, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2031, deletes or extends that date.
SEC. 4.
Section 2924f of the Civil Code, as amended by Section 15 of Chapter 131 of the Statutes of 2023, is amended to read:2924f.
(a) As used in this section and Sections 2924g and 2924h, “property” means real property or a leasehold estate therein, and “calendar week” means Monday through Saturday, inclusive.(b) (1) Except as provided in subdivision (c), before any sale of property can be made under the power of sale contained in any deed of trust or mortgage, or any resale resulting from a rescission for a failure of consideration pursuant to subdivision (c) of Section 2924h, notice of the sale thereof shall be given by posting a written notice of the time of sale and of the street address and the specific place at the street address where the sale will be held, and describing the property to be sold, at least 20 days before the date of sale in one public place in
the city where the property is to be sold, if the property is to be sold in a city, or, if not, then in one public place in the county seat of the county where the property is to be sold, and publishing a copy once a week for three consecutive calendar weeks.
(2) The first publication to be at least 20 days before the date of sale, in a newspaper of general circulation published in the public notice district in which the property or some part thereof is situated, or in case no newspaper of general circulation is published in the public notice district, in a newspaper of general circulation published in the county in which the property or some part thereof is situated, or in case no newspaper of general circulation is published in the public notice district or county, as the case may be, in a newspaper of general circulation published in the county in this state that is contiguous to the county in which the property or some part thereof is
situated and has, by comparison with all similarly contiguous counties, the highest population based upon total county population as determined by the most recent federal decennial census published by the Bureau of the Census. For the purposes of this section, publication of notice in a public notice district is governed by Chapter 1.1 (commencing with Section 6080) of Division 7 of Title 1 of the Government Code.
(3) A copy of the notice of sale shall also be posted in a conspicuous place on the property to be sold at least 20 days before the date of sale, where possible and where not restricted for any reason. If the property is a single-family residence the posting shall be on a door of the residence, but, if not possible or restricted, then the notice shall be posted in a conspicuous place on the property; however, if access is denied because a common entrance to the property is restricted by a guard gate or similar impediment, the property
may be posted at that guard gate or similar impediment to any development community.
(4) The notice of sale shall conform to the minimum requirements of Section 6043 of the Government Code and be recorded with the county recorder of the county in which the property or some part thereof is situated at least 20 days prior to the date of sale.
(5) The notice of sale shall contain the name, street address in this state, which may reflect an agent of the trustee, and either a toll-free telephone number or telephone number in this state of the trustee, and the name of the original trustor, and also shall contain the statement required by paragraph (3) of subdivision (c). In addition to any other description of the property, the notice shall describe the property by giving its street address, if any, or other common designation, if any, and a county assessor’s parcel number; but if the
property has no street address or other common designation, the notice shall contain a legal description of the property, the name and address of the beneficiary at whose request the sale is to be conducted, and a statement that directions may be obtained pursuant to a written request submitted to the beneficiary within 10 days from the first publication of the notice. Directions shall be deemed reasonably sufficient to locate the property if information as to the location of the property is given by reference to the direction and approximate distance from the nearest crossroads, frontage road, or access road. If a legal description or a county assessor’s parcel number and either a street address or another common designation of the property is given, the validity of the notice and the validity of the sale shall not be affected by the fact that the street address, other common designation, name and address of the beneficiary, or the directions obtained therefrom are erroneous or that the street address,
other common designation, name and address of the beneficiary, or directions obtained therefrom are omitted.
(6) The term “newspaper of general circulation,” as used in this section, has the same meaning as defined in Article 1 (commencing with Section 6000) of Chapter 1 of Division 7 of Title 1 of the Government Code.
(7) The notice of sale shall contain a statement of the total amount of the unpaid balance of the obligation secured by the property to be sold and reasonably estimated costs, expenses, advances at the time of the initial publication of the notice of sale, and, if republished pursuant to a cancellation of a cash equivalent pursuant to subdivision (d) of Section 2924h, a reference of that fact; provided, that the trustee shall incur no liability for any good faith error in stating the proper amount, including any amount provided in good faith by or on behalf of the
beneficiary. An inaccurate statement of this amount shall not affect the validity of any sale to a bona fide purchaser for value, nor shall the failure to post the notice of sale on a door as provided by this subdivision affect the validity of any sale to a bona fide purchaser for value.
(8) (A) On and after April 1, 2012, if the deed of trust or mortgage containing a power of sale is secured by real property containing from one to four single-family residences, the notice of sale shall contain substantially the following language, in addition to the language required pursuant to paragraphs (1) to (7), inclusive:
NOTICE TO POTENTIAL BIDDERS: If you are considering bidding on this property lien, you should understand that there are risks involved in bidding at a trustee
auction. You will be bidding on a lien, not on the property itself. Placing the highest bid at a trustee auction does not automatically entitle you to free and clear ownership of the property. You should also be aware that the lien being auctioned off may be a junior lien. If you are the highest bidder at the auction, you are or may be responsible for paying off all liens senior to the lien being auctioned off, before you can receive clear title to the property. You are encouraged to investigate the existence, priority, and size of outstanding liens that may exist on this property by contacting the county recorder’s office or a title insurance company, either of which may charge you a fee for this information. If you consult either of these resources, you should be aware that the same lender may hold more than one mortgage or deed of trust on the property.
NOTICE TO PROPERTY OWNER: The sale date shown on this notice of sale may be postponed one or more times by the mortgagee, beneficiary, trustee, or a court, pursuant to Section 2924g of the California Civil Code. The law requires that information about trustee sale postponements be made available to you and to the public, as a courtesy to those not present at the sale. If you wish to learn whether your sale date has been postponed, and, if applicable, the rescheduled time and date for the sale of this property, you may call [telephone number for information regarding the trustee’s sale] or visit this internet website [internet website address for information regarding the sale of this property], using the file number assigned to this case [case file number]. Information about postponements that are very short in duration or that occur close in time to the scheduled sale may not immediately be reflected in the telephone information or on the internet website. The best way
to verify postponement information is to attend the scheduled sale.
(B) A mortgagee, beneficiary, trustee, or authorized agent shall make a good faith effort to provide up-to-date information regarding sale dates and postponements to persons who wish this information. This information shall be made available free of charge. It may be made available via an internet website, a telephone recording that is accessible 24 hours a day, seven days a week, or through any other means that allows 24 hours a day, seven days a week, no-cost access to updated information. A disruption of any of these methods of providing sale date and postponement information to allow for reasonable maintenance or due to a service outage shall not be deemed to be a violation of the good faith standard.
(C) Except as provided in subparagraph (B), nothing in the wording of the notices required by subparagraph (A) is intended to modify or create any substantive rights or obligations for any person providing, or specified in, either of the required notices. Failure to comply with subparagraph (A) or (B) shall not invalidate any sale that would otherwise be valid under this section.
(D) Information provided pursuant to subparagraph (A) does not constitute the public declaration required by subdivision (d) of Section 2924g.
(9) If the sale of the property is to be a unified sale as provided in subparagraph (B) of paragraph (1) of subdivision (a) of Section 9604 of the Commercial Code, the notice of sale shall also contain a description of the personal property or fixtures to be sold. In the case where it is contemplated that all of the personal property or fixtures are to
be sold, the description in the notice of the personal property or fixtures shall be sufficient if it is the same as the description of the personal property or fixtures contained in the agreement creating the security interest in or encumbrance on the personal property or fixtures or the filed financing statement relating to the personal property or fixtures. In all other cases, the description in the notice shall be sufficient if it would be a sufficient description of the personal property or fixtures under Section 9108 of the Commercial Code. Inclusion of a reference to or a description of personal property or fixtures in a notice of sale hereunder shall not constitute an election by the secured party to conduct a unified sale pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of Section 9604 of the Commercial Code, shall not obligate the secured party to conduct a unified sale pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of Section 9604 of the Commercial Code, and in no
way shall render defective or noncomplying either that notice or a sale pursuant to that notice by reason of the fact that the sale includes none or less than all of the personal property or fixtures referred to or described in the notice. This paragraph shall not otherwise affect the obligations or duties of a secured party under the Commercial Code.
(c) (1) This subdivision applies only to deeds of trust or mortgages which contain a power of sale and which are secured by real property containing a single-family, owner-occupied residence, where the obligation secured by the deed of trust or mortgage is contained in a contract for goods or services subject to the provisions of the Unruh Act (Chapter 1 (commencing with Section 1801) of Title 2 of Part 4 of Division 3).
(2) Except as otherwise expressly set forth in this subdivision, all other provisions of law
relating to the exercise of a power of sale shall govern the exercise of a power of sale contained in a deed of trust or mortgage described in paragraph (1).
(3) If any default of the obligation secured by a deed of trust or mortgage described in paragraph (1) has not been cured within 30 days after the recordation of the notice of default, the trustee or mortgagee shall mail to the trustor or mortgagor, at their last known address, a copy of the following statement:
YOU ARE IN DEFAULT UNDER A |
, |
(Deed of trust or mortgage) |
|---|
DATED ____. UNLESS YOU TAKE ACTION TO PROTECT YOUR PROPERTY, IT MAY BE SOLD AT A PUBLIC SALE. IF YOU NEED AN EXPLANATION OF THE NATURE OF THE PROCEEDING AGAINST YOU, YOU SHOULD CONTACT A LAWYER. |
(4) All sales of real property pursuant to a power of sale contained in any deed of trust or mortgage described in paragraph (1) shall be held in the county where the residence is located and shall be made to the person making the highest offer. The trustee may receive offers during the 10-day period immediately prior to the date of sale and if any offer is accepted in writing by both the trustor or mortgagor and the beneficiary or mortgagee prior to the time set for
sale, the sale shall be postponed to a date certain and prior to which the property may be conveyed by the trustor to the person making the offer according to its terms. The offer is revocable until accepted. The performance of the offer, following acceptance, according to its terms, by a conveyance of the property to the offeror, shall operate to terminate any further proceeding under the notice of sale and it shall be deemed revoked.
(5) In addition to the trustee fee pursuant to Section 2924c, the trustee or mortgagee pursuant to a deed of trust or mortgage subject to this subdivision shall be entitled to charge an additional fee of fifty dollars ($50).
(6) This subdivision applies only to property on which notices of default were filed on or after the effective date of this subdivision.
(7) (A) With respect to a sale of real property specified in this subdivision that is subject to a power of sale contained in any deed of trust or mortgage, the sale shall not be conducted until the expiration of an additional 60 days following the time period specified in paragraph (4) of subdivision (a) of Section 2924 if the mortgagor or trustor provides the trustee and beneficiary with a listing agreement placed in a publicly available multiple listing service, as defined in Section 1087, for the sale of the property subject to the power of sale at least 5 days prior to the scheduled date of sale. This paragraph shall not be used more than once to postpone the scheduled date.
(B) If a scheduled date of sale is postponed pursuant to this paragraph, the trustor’s or mortgagor’s right to reinstate the account shall be calculated based on
the new scheduled date of sale.
(8) If the trustor provides the trustee and beneficiary with a copy of a purchase agreement for the sale of the property that is subject to a power of sale within the period specified in paragraph (7), the trustee shall postpone the initially scheduled date of sale to a date that is at least 45 days after the date on which the purchase agreement was entered into by the borrower. The postponement of the sale provided for in this paragraph shall only be required to be made available once.
(d) With respect to residential real property containing no more than four dwelling units, a separate document containing a summary of the notice of sale information in English and the languages described in Section 1632 shall be attached to the notice of sale provided to the mortgagor or trustor pursuant to Section
2923.3.
(e) (1) With respect to residential real property containing no more than four dwelling units that is subject to a first lien power of sale contained in a first lien deed of trust or mortgage, the mortgagee, beneficiary, or authorized agent shall provide to the trustee a fair market value of the property at least 10 days prior to the initially scheduled date of sale, and the trustee shall not sell the property at the initially scheduled date of sale for less than 75 percent of that fair market value of the property. All of the following requirements apply to the initial trustee’s sale pursuant to this paragraph:
(A) A prospective bidder may make an offer contingent on their satisfactory inspection of the property and ability to obtain third-party financing.
(B) The trustee shall accept the highest noncontingent bid even if there is a contingent bid with a higher purchase price.
(C) If all bids are contingent bids, the trustee shall accept the highest contingent bid.
(D) If the trustee accepts a contingent bid, the bidder shall have 20 days from the date of the auction to notify the trustee in writing that all contingencies are satisfied. The trustee shall not set a second sale date pursuant to paragraph (2) until the expiration of this 20-day period or the termination of the contingent bid, whichever is earlier.
(E) If the bidder of the accepted contingent bid fails to notify the trustee in writing that all contingencies are satisfied within 20 days from the date of the auction, the contingent bid is
terminated and the trustee shall schedule a second trustee’s sale pursuant to paragraph (2).
(F) If the mortgagor or trustor sells the property before the trustee receives written notification from the bidder that the contingencies have been satisfied, the contingent bid is terminated.
(G) Subject to subparagraph (F), the trustee shall finalize the sale when the trustee receives written notification that all contingencies have been satisfied.
(H) If a contingent bid fails to close following the first auction, the trustee shall schedule a second trustee’s sale pursuant to paragraph (2).
(2) (A) If the property remains unsold after the initial trustee’s sale pursuant to paragraph (1), then the trustee shall hold a second trustee’s
sale and the property may be sold to the highest bidder.
(B) The trustee shall not hold the second trustee’s sale until at least seven days after the initial trustee’s sale.
(3) For purposes of this subdivision, “fair market value of the property” means an estimate of the fair market value of the property determined by an opinion of a licensed real estate broker, an appraisal from a licensed appraiser, a value from a commercially utilized automated valuation model, or a value from a computerized property valuation system that is used to derive a real property value.
(e)
(f) This section shall be operative January 1, 2031.
SEC. 5.
Section 2932.2 is added to the Civil Code, to read:2932.2.
With respect to residential real property containing no more than four dwelling units, a mortgagee, beneficiary, or authorized agent shall provide to the mortgagor or trustor, before the mortgagor or trustor signs the mortgage or deed of trust, a written disclosure that a third party, such as a family member, HUD-certified housing counselor, or attorney, may record a request to receive copies of any notice of default and notice of sale. A request for notice under this section shall comply with Section 2924b.It is the intent of the Legislature to enact subsequent legislation relating to home equity protection during the foreclosure process for the purpose of protecting consumers from losing home equity.
