BILL NUMBER: AB 529	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 14, 2008
	PASSED THE ASSEMBLY  AUGUST 18, 2008
	AMENDED IN SENATE  AUGUST 12, 2008
	AMENDED IN SENATE  AUGUST 4, 2008
	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 2924.4 to the Civil Code, relating to
mortgages.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 529, 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, 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 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.


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

  SECTION 1.  Section 2924.4 is added to the Civil Code, to read:
   2924.4.  (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 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 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) An example of the monthly payment amount if the interest rate
that is initially fixed is reset to an adjustable rate, as calculated
on a date that is chosen by the provider of the notification that is
no more than 14 days prior to the date of that 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 telephone number the borrower may use to contact the entity
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 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.