BILL NUMBER: SB 364	CHAPTERED  09/19/01

	CHAPTER  302
	FILED WITH SECRETARY OF STATE  SEPTEMBER 19, 2001
	APPROVED BY GOVERNOR  SEPTEMBER 18, 2001
	PASSED THE SENATE  AUGUST 30, 2001
	PASSED THE ASSEMBLY  AUGUST 20, 2001
	AMENDED IN ASSEMBLY  JULY 19, 2001
	AMENDED IN ASSEMBLY  JUNE 12, 2001
	AMENDED IN SENATE  APRIL 26, 2001
	AMENDED IN SENATE  APRIL 5, 2001
	AMENDED IN SENATE  MARCH 26, 2001

INTRODUCED BY   Senator Alpert

                        FEBRUARY 21, 2001

   An act to amend Section 2948.5 of the Civil Code, relating to
mortgages and deeds of trust.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 364, Alpert.  Mortgages and deeds of trust:  accrual of
interest.
   Existing law provides that interest on the principal obligation of
a promissory note secured by a mortgage or deed of trust on real
property improved by one to 4 residential dwelling units shall not
commence to accrue prior to close of escrow if the loan proceeds are
paid into escrow or, if there is no escrow, the date upon which the
loan proceeds have been made available for withdrawal as a matter of
right.  This provision does not apply if the funds are paid or made
available from a federally insured financial institution with an
office in this state.
   This bill instead would provide that a borrower may not be
required to pay interest on a principal obligation under a promissory
note secured by a mortgage or deed of trust on real property
improved with between one to 4 residential dwelling units for a
period of more than one day prior to recording the mortgage or deed
of trust, if the loan proceeds are paid into escrow or, if there is
no escrow, the date upon which the loan proceeds have been made
available for withdrawal.  The bill would additionally provide that
interest may begin accruing on the business day immediately preceding
the day of recording, if the borrower requests and the lender agrees
that the recording will occur on Monday or a day immediately after a
bank holiday, and if the lender makes specified disclosures.  This
bill would also delete the limitation for federally insured financial
institutions within an office of this state thereby applying these
provisions to those institutions.  The bill would also exempt
specified loans from these provisions.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 2948.5 of the Civil Code is amended to read:
   2948.5.  (a) A borrower shall not be required to pay interest on a
principal obligation under a promissory note secured by a mortgage
or deed of trust on real property improved with between one to four
residential dwelling units for a period in excess of one day prior to
recording of the mortgage or deed of trust if the loan proceeds are
paid into escrow or, if there is no escrow, the date upon which the
loan proceeds have been made available for withdrawal as a matter of
right, as specified in subdivision (d) of Section 12413.1 of the
Insurance Code.
   (b) Interest may commence to accrue on the business day
immediately preceding the day of recording, if both of the following
occur:
   (1) The borrower affirmatively requests, and the lender agrees,
that the recording will occur on Monday, or a day immediately
following a bank holiday.
   (2) The following information is disclosed to the borrower in
writing:  (A) the amount of additional per diem interest charged to
facilitate recording on Monday or the day following a holiday, as the
case may be, and (B) that it may be possible to avoid the additional
per diem interest charge by recording the deed of trust on a day
immediately following a business day.  This disclosure shall be
provided to the borrower and acknowledged by the borrower by signing
a copy of the disclosure document prior to placing funds in escrow.
   (c) This section does not apply to a loan that is subject to
subdivision (c) of Section 10242 of the Business and Professions
Code.