BILL NUMBER: AB 529	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 10, 2008
	AMENDED IN SENATE  MAY 27, 2008
	AMENDED IN ASSEMBLY  JANUARY 22, 2008
	AMENDED IN ASSEMBLY  DECEMBER 13, 2007

INTRODUCED BY   Assembly Member Torrico
   (Coauthors: Assembly Members Lieu and Wolk)

                        FEBRUARY 21, 2007

   An act to add Section 2924.8 to the Civil Code, relating to
mortgages.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 529, as amended, Torrico. Mortgages: adjustable interest rates:
notification.
   Existing state and federal law regulates the provision of loans
that are secured by real property. Existing law prohibits a lender
from accelerating the maturity date of the principal and interest on
loans secured by a mortgage or deed of trust on residential real
property solely by reason of specified transfers of the title.
   This bill would require the entity responsible for collecting
payments of principal and interest from a borrower on a first-lien
mortgage loan  that was made between January 1, 2003, and
December 31, 2007  ,  secured by residential real
property,  as specified, where the interest rate on the loan is
initially fixed and then becomes adjustable, or for which the
borrower may select  from among 4   one of
several  payment amounts each month, to notify the borrower of
specified items of information no more than 120 days, and no less
than 90 days, prior to an interest rate adjustment or the resetting
of the loan to a fully amortizing loan, as specified. The bill would
require the notification to be personally delivered or mailed, as
specified.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  Section 2924.8 is added to the Civil Code, to read:
   2924.8.  (a) The entity responsible for collecting payments of
principal, interest, or both, from a borrower shall notify the
borrower, as provided below:
   (1) In the case of a loan with an interest rate that is initially
fixed and then becomes adjustable, the notification required pursuant
to this subdivision shall be provided no more than 120 days, and no
less than 90 days, before the date on which the loan is  first
 scheduled to switch from the  initial  fixed rate to
an adjustable rate.
   (2) In the case of a loan that allows the borrower to select
 from among four   one of several  payment
amounts each month, the notification required pursuant to this
subdivision shall be provided no more than 120 days, and no less than
90 days, before the date on which the loan is scheduled to reset to
a fully amortizing loan.
   (b) The notification required pursuant to subdivision (a) shall be
in addition to the notification required under Part 226 of Title 12
of the Code of Federal Regulations (Regulation Z).
   (c) The notification required pursuant to subdivision (a) shall
include at least all of the following information:
   (1) The current monthly payment amount, in the case of a loan with
an interest rate that is initially fixed and scheduled to become
adjustable, or the current minimum payment, in the case of a loan
that allows the borrower to select  from among four 
 one of several  payment amounts each month.
   (2) The month and year in which the entity responsible for
collecting loan payments estimates the loan will change from a
fixed-rate to an adjustable rate, or from nonamortizing to fully
amortizing, as applicable. 
   (3) The estimated monthly payment amount once the interest rate
that is initially fixed resets to an adjustable rate, or once the

    (3)    An example of the monthly payment
amount if the interest rate that is initially fixed is reset to an
adjustable rate, as calculated at the time of notification, or once
the  borrower is required to begin paying both principal and
interest each month. The interest rate used to provide the estimated
monthly payment amount may be based upon current interest rates.
   (4) Whether the monthly payment amount required to be provided
pursuant to paragraphs (1) and (3) includes real estate taxes, home
insurance, or both.
   (5) A  toll-free  telephone number the borrower
may contact for additional information about the terms of the loan.
   (d) The notification required pursuant to subdivision (a) shall
include a statement as follows:
   (1) The information in the notice is not a request for payment,
and is for informational purposes only.
   (2) The actual monthly payment due in the month in which the loan
is expected to reset may be different than the amount shown in the
notice.
   (3) The borrower will be mailed a notification, pursuant to
federal law, at least 25 days prior to the loan reset, which will
indicate the actual payment that will be due when the loan resets.
   (e) The notification shall be personally delivered or mailed, with
first-class postage, to the borrower's last known address, as
contained in the  lender's   entity's 
records.
   (f) This section is limited to first-lien mortgage loans that are
secured by residential real property that is improved by four or
fewer residential units  , and that were made between January
1, 2003, and December 31, 2007  .