BILL ANALYSIS
AB 2624
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2624 (Houston)
As Amended August 24, 2006
Majority vote
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|ASSEMBLY: |62-7 |(May 11, 2006) |SENATE: |34-4 |(August 29, |
| | | | | |2006) |
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Original Committee Reference: H. & C.D.
SUMMARY : Adapts certain procedures concerning the rights of
redemption for judicial foreclosures for use with the 90-day
right of redemption in nonjudicial homeowner association
foreclosures.
The Senate amendments make the following changes the Assembly
version:
1)Authorize the trustee to collect the cost of servicing the
notice of default or the notice of the decision of the board
to foreclose.
2)Clarify that in a nonjudicial foreclosure, notices on a
defaulting homeowner must be served by personal service.
3)Delete provisions placing the trustee in charge of
administering the 90-day right of redemption in a nonjudicial
foreclsoure.
4)Provide the performance of any functions or duties required to
carry out nonjudicial foreclosure are considered privileged
communications.
5)Delete clarifying provisions which required a cashier's check
or check used as payment in a foreclosure to be made payable
to the trustee in a foreclosure.
6)Allow a duly authorized agent of the trustee to act in the
sale of a home in a foreclsoure as the auctioneer.
7)Give a homeowner the rights of a judgment debtor in a
nonjudicial foreclsoure.
AB 2624
Page 2
8)Remove the sunset clauses from the bill.
AS PASSED BY THE ASSEMBLY , Established procedures governing the
90-day redemption period in a nonjudicial foreclosure in a CID.
Specifically, this bill :
1)Provided that when a notice of default is served by a
homeowners association (HOA) on an owner of a separate
interest in a CID, the notice must be served on the person
whose name is shown as the owner of the property, unless
another person has been designated as the legal representative
by the owner.
2)Provided, for purposes of the notice of default, in order for
the owner to designate another person as their legal
representative the request must be made in writing and mailed
to the HOA in a manner that indicates the HOA has received it.
3)Required a notice of sale in a nonjudicial foreclosure must
include a statement that the property is being sold subject to
a 90-day right of redemption.
4)Provided in a nonjudicial foreclosure conducted by a HOA in a
CID, the trustee has the powers and capacities of the levying
officer in a judicial foreclosure.
5)Provided in the administration of redemption in a nonjudicial
foreclosure, the trustee is entitled to reasonable
compensation and costs in the county in which the foreclosure
is conducted.
6)Required if the redemption price is not deposited with the
trustee prior to the expiration of the redemption period in a
nonjudicial foreclosure, the trustee must execute the
trustee's deed.
7)Required a cashier's check or check from a state or federal
credit union be made payable to the trustee in a foreclosure.
8)Provided that a lien expires 10 years after the final maturity
date or the last fixed date for the payment of the lien if
either of those is ascertainable from the "recorded evidence
of indebtedness."
AB 2624
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9)Required the trustee to receive notice when a homeowner seeks
to redeem a property.
10) Required the trustee at the time a property is sold in a
nonjudicial foreclosure with the right of redemption to serve
notice on the defaulting homeowner.
11) Provided the provisions of this bill that give the trustee
the duties of a levying officer in a nonjudicial foreclosure
sunset on January 1, 2010.
FISCAL EFFECT : None
COMMENTS : Last year, SB 137 (Ducheny), Chapter 452, Statutes of
2005, changed the procedures by which a HOA in a CID could
foreclosure upon an individual homeowner's separate interest.
SB 137 (Ducheny) limited foreclosures in CIDs by setting both a
monetary and time threshold for delinquent assessments. CIDs
can foreclose on properties only when delinquent assessments are
in excess of $1,800 or for delinquent assessments of any amount
that are more than 12 months delinquent. The law provides if
the amount of delinquent assessments owed is less than $1,800,
the HOA can seek recovery in small claims court. In addition to
these provisions, if a homeowner's home is foreclosed upon the
sale is subject to a 90-day redemption period during which the
homeowner can recover the property by paying the purchase price
of the home plus other fees and costs of the purchaser. As
passed by the Assembly, AB 2624 gave real estate trustees in a
nonjudicial foreclosure the same duties a levying officer has in
a administering a right of redemption in a judicial foreclosure.
The Senate amendments delete these provisions, however still
require the trustee to administer a limited number of duties to
facilitate the right of redemption including notify a defaulting
homeowner after a foreclosure sale that there is a 90-day
redemption period and recording the certificate of sale.
Analysis Prepared by : Lisa Engel / H. & C.D. / (916) 319-2085
FN: 0017389