BILL NUMBER: AB 2678	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 23, 2010

INTRODUCED BY   Assembly Member  Torrico  
Fuentes 
    (   Coauthor:   Assembly Member  
Torrico   ) 

                        FEBRUARY 19, 2010

   An act to amend Section  2924g, of   2924g
of, and to repeal and amend Section 2924 of,  the Civil Code,
relating to mortgages.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2678, as amended,  Torrico   Fuentes 
. Mortgages: Notice of sale. 
   Existing law requires that, upon a breach of the obligation of a
mortgage or transfer of an interest in property, the trustee,
mortgagee, or beneficiary record a notice of default in the office of
the county recorder where the mortgaged or trust property is
situated and mail the notice of default to the mortgagor or trustor.
Existing law provides that, after not less than 3 months after the
filing of the notice of default, the parties described above may give
notice of sale, stating the time and place of the sale, as
specified.  
   This bill would prohibit the mortgagee, trustee, beneficiary, or
authorized agent from giving notice of sale if the mortgagee,
trustee, beneficiary, or authorized agent is currently in
negotiations to modify the existing loan. The bill also would repeal
a duplicative provision. 
   Existing law requires that 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, notice of the sale must be given, published, and
posted in a specified manner at least 20 days before the date of
sale, as specified. Existing law also requires the mortgagee,
trustee, or other person authorized to record the notice of default
or the notice of sale to send to each mortgagee or trustee a copy of
the notice of sale at least 20 days before the date of sale. Existing
law provides that there may be a postponement or postponements of
the sale proceedings, under specified circumstances.
   This bill would provide that if there is a postponement, or if
there are postponements, of the sale proceedings, the borrower shall
receive a new notification before the date of the actual sale.
   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 of the   Civil
Code   , as added by Section 8 of Chapter 4 of the Second
Extraordinary Session of the Statutes of 2009, is repealed. 

   2924.  (a) Every transfer of an interest in property, other than
in trust, made only as a security for the performance of another act,
is to be deemed a mortgage, except when in the case of personal
property it is accompanied by actual change of possession, in which
case it is to be deemed a pledge. Where, by a mortgage created after
July 27, 1917, of any estate in real property, other than an estate
at will or for years, less than two, or in any transfer in trust made
after July 27, 1917, of a like estate to secure the performance of
an obligation, a power of sale is conferred upon the mortgagee,
trustee, or any other person, to be exercised after a breach of the
obligation for which that mortgage or transfer is a security, the
power shall not be exercised except where the mortgage or transfer is
made pursuant to an order, judgment, or decree of a court of record,
or to secure the payment of bonds or other evidences of indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations, or is made by a public utility subject to the
provisions of the Public Utilities Act, until all of the following
apply:
   (1) The trustee, mortgagee, or beneficiary, or any of their
authorized agents shall first file for record, in the office of the
recorder of each county wherein the mortgaged or trust property or
some part or parcel thereof is situated, a notice of default. That
notice of default shall include all of the following:
   (A) A statement identifying the mortgage or deed of trust by
stating the name or names of the trustor or trustors and giving the
book and page, or instrument number, if applicable, where the
mortgage or deed of trust is recorded or a description of the
mortgaged or trust property.
   (B) A statement that a breach of the obligation for which the
mortgage or transfer in trust is security has occurred.
   (C) A statement setting forth the nature of each breach actually
known to the beneficiary and of his or her election to sell or cause
to be sold the property to satisfy that obligation and any other
obligation secured by the deed of trust or mortgage that is in
default.
   (D) If the default is curable pursuant to Section 2924c, the
statement specified in paragraph (1) of subdivision (b) of Section
2924c.
   (2) Not less than three months shall elapse from the filing of the
notice of default.
   (3) After the lapse of the three months described in paragraph
(2), the mortgagee, trustee, or other person authorized to take the
sale shall give notice of sale, stating the time and place thereof,
in the manner and for a time not less than that set forth in Section
2924f.
   (b) In performing acts required by this article, the trustee shall
incur no liability for any good faith error resulting from reliance
on information provided in good faith by the beneficiary regarding
the nature and the amount of the default under the secured
obligation, deed of trust, or mortgage. In performing the acts
required by this article, a trustee shall not be subject to Title
1.6c (commencing with Section 1788) of Part 4.
   (c) A recital in the deed executed pursuant to the power of sale
of compliance with all requirements of law regarding the mailing of
copies of notices or the publication of a copy of the notice of
default or the personal delivery of the copy of the notice of default
or the posting of copies of the notice of sale or the publication of
a copy thereof shall constitute prima facie evidence of compliance
with these requirements and conclusive evidence thereof in favor of
bona fide purchasers and encumbrancers for value and without notice.
   (d) All of the following shall constitute privileged
communications pursuant to Section 47:
   (1) The mailing, publication, and delivery of notices as required
by this section.
   (2) Performance of the procedures set forth in this article.
   (3) Performance of the functions and procedures set forth in this
article if those functions and procedures are necessary to carry out
the duties described in Sections 729.040, 729.050, and 729.080 of the
Code of Civil Procedure.
   (e) There is a rebuttable presumption that the beneficiary
actually knew of all unpaid loan payments on the obligation owed to
the beneficiary and secured by the deed of trust or mortgage subject
to the notice of default. However, the failure to include an actually
known default shall not invalidate the notice of sale and the
beneficiary shall not be precluded from asserting a claim to this
omitted default or defaults in a separate notice of default.
   (f) This section shall become operative on January 1, 2011.

   SEC. 2.    Section 2924 of the   
Civil Code   , as added by Section 8 of Chapter 5 of the
Second Extraordinary Session of the Statutes of 2009, is amended to
read: 
   2924.  (a) Every transfer of an interest in property, other than
in trust, made only as a security for the performance of another act,
is to be deemed a mortgage, except when in the case of personal
property it is accompanied by actual change of possession, in which
case it is to be deemed a pledge. Where, by a mortgage created after
July 27, 1917, of any estate in real property, other than an estate
at will or for years, less than two, or in any transfer in trust made
after July 27, 1917, of a like estate to secure the performance of
an obligation, a power of sale is conferred upon the mortgagee,
trustee, or any other person, to be exercised after a breach of the
obligation for which that mortgage or transfer is a security, the
power shall not be exercised except where the mortgage or transfer is
made pursuant to an order, judgment, or decree of a court of record,
or to secure the payment of bonds or other evidences of indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations, or is made by a public utility subject to the
provisions of the Public Utilities Act, until all of the following
apply:
   (1) The trustee, mortgagee, or beneficiary, or any of their
authorized agents shall first file for record, in the office of the
recorder of each county wherein the mortgaged or trust property or
some part or parcel thereof is situated, a notice of default. That
notice of default shall include all of the following:
   (A) A statement identifying the mortgage or deed of trust by
stating the name or names of the trustor or trustors and giving the
book and page, or instrument number, if applicable, where the
mortgage or deed of trust is recorded or a description of the
mortgaged or trust property.
   (B) A statement that a breach of the obligation for which the
mortgage or transfer in trust is security has occurred.
   (C) A statement setting forth the nature of each breach actually
known to the beneficiary and of his or her election to sell or cause
to be sold the property to satisfy that obligation and any other
obligation secured by the deed of trust or mortgage that is in
default.
   (D) If the default is curable pursuant to Section 2924c, the
statement specified in paragraph (1) of subdivision (b) of Section
2924c.
   (2) Not less than three months shall elapse from the filing of the
notice of default.
   (3) After the lapse of the three months described in paragraph
(2), the mortgagee, trustee, or other person authorized to take the
sale shall give notice of sale, stating the time and place thereof,
in the manner and for a time not less than that set forth in Section
2924f.  The mortgagee, trustee, beneficiary, or authorized agent
shall not give notice of sale if the mortgagee, trustee, beneficiary,
or authorized agent is currently in negotiations to modify the
existing loan. 
   (b) In performing acts required by this article, the trustee shall
incur no liability for any good faith error resulting from reliance
on information provided in good faith by the beneficiary regarding
the nature and the amount of the default under the secured
obligation, deed of trust, or mortgage. In performing the acts
required by this article, a trustee shall not be subject to Title
1.6c (commencing with Section 1788) of Part 4.
   (c) A recital in the deed executed pursuant to the power of sale
of compliance with all requirements of law regarding the mailing of
copies of notices or the publication of a copy of the notice of
default or the personal delivery of the copy of the notice of default
or the posting of copies of the notice of sale or the publication of
a copy thereof shall constitute prima facie evidence of compliance
with these requirements and conclusive evidence thereof in favor of
bona fide purchasers and encumbrancers for value and without notice.
   (d) All of the following shall constitute privileged
communications pursuant to Section 47:
   (1) The mailing, publication, and delivery of notices as required
by this section.
   (2) Performance of the procedures set forth in this article.
   (3) Performance of the functions and procedures set forth in this
article if those functions and procedures are necessary to carry out
the duties described in Sections 729.040, 729.050, and 729.080 of the
Code of Civil Procedure.
   (e) There is a rebuttable presumption that the beneficiary
actually knew of all unpaid loan payments on the obligation owed to
the beneficiary and secured by the deed of trust or mortgage subject
to the notice of default. However, the failure to include an actually
known default shall not invalidate the notice of sale and the
beneficiary shall not be precluded from asserting a claim to this
omitted default or defaults in a separate notice of default.
   (f) This section shall become operative on January 1, 2011.
   SECTION 1.   SEC. 3.   Section 2924g of
the Civil Code is amended to read:
   2924g.  (a) All sales of property under the power of sale
contained in any deed of trust or mortgage shall be held in the
county where the property or some part thereof is situated, and shall
be made at auction, to the highest bidder, between the hours of 9
a.m. and 5 p.m. on any business day, Monday through Friday.
   The sale shall commence at the time and location specified in the
notice of sale. Any postponement shall be announced at the time and
location specified in the notice of sale for commencement of the sale
or pursuant to paragraph (1) of subdivision (c).
   If the sale of more than one parcel of real property has been
scheduled for the same time and location by the same trustee, (1) any
postponement of any of the sales shall be announced at the time
published in the notice of sale, (2) the first sale shall commence at
the time published in the notice of sale or immediately after the
announcement of any postponement, and (3) each subsequent sale shall
take place as soon as possible after the preceding sale has been
completed.
   (b) When the property consists of several known lots or parcels,
they shall be sold separately unless the deed of trust or mortgage
provides otherwise. When a portion of the property is claimed by a
third person, who requires it to be sold separately, the portion
subject to the claim may be thus sold. The trustor, if present at the
sale, may also, unless the deed of trust or mortgage otherwise
provides, direct the order in which property shall be sold, when the
property consists of several known lots or parcels which may be sold
to advantage separately, and the trustee shall follow that direction.
After sufficient property has been sold to satisfy the indebtedness,
no more can be sold.
   If the property under power of sale is in two or more counties,
the public auction sale of all of the property under the power of
sale may take place in any one of the counties where the property or
a portion thereof is located.
   (c) (1) There may be a postponement or postponements of the sale
proceedings, including a postponement upon instruction by the
beneficiary to the trustee that the sale proceedings be postponed, at
any time prior to the completion of the sale for any period of time
not to exceed a total of 365 days from the date set forth in the
notice of sale. The trustee shall postpone the sale in accordance
with any of the following:
   (A) Upon the order of any court of competent jurisdiction.
   (B) If stayed by operation of law.
   (C) By mutual agreement, whether oral or in writing, of any
trustor and any beneficiary or any mortgagor and any mortgagee.
   (D) At the discretion of the trustee.
   (2) If there is a postponement, or if there are postponements, of
the sale proceedings, as described in paragraph (1), the borrower
shall receive a new notification, as provided in Section 2924b,
before the date of the actual sale.
   (3) In the event that the sale proceedings are postponed for a
period or periods totaling more than 365 days, the scheduling of any
further sale proceedings shall be preceded by giving a new notice of
sale in the manner prescribed in Section 2924f. New fees incurred for
the new notice of sale shall not exceed the amounts specified in
Sections 2924c and 2924d, and shall not exceed reasonable costs that
are necessary to comply with this paragraph.
   (d) The notice of each postponement and the reason therefor shall
be given by public declaration by the trustee at the time and place
last appointed for sale. A public declaration of postponement shall
also set forth the new date, time, and place of sale and the place of
sale shall be the same place as originally fixed by the trustee for
the sale. No other notice of postponement need be given. However, the
sale shall be conducted no sooner than on the seventh day after the
earlier of (1) dismissal of the action or (2) expiration or
termination of the injunction, restraining order, or stay that
required postponement of the sale, whether by entry of an order by a
court of competent jurisdiction, operation of law, or otherwise,
unless the injunction, restraining order, or subsequent order
expressly directs the conduct of the sale within that seven-day
period. For purposes of this subdivision, the seven-day period shall
not include the day on which the action is dismissed, or the day on
which the injunction, restraining order, or stay expires or is
terminated. If the sale had been scheduled to occur, but this
subdivision precludes its conduct during that seven-day period, a new
notice of postponement shall be given if the sale had been scheduled
to occur during that seven-day period. The trustee shall maintain
records of each postponement and the reason therefor.
   (e) Notwithstanding the time periods established under subdivision
(d), if postponement of a sale is based on a stay imposed by Title
11 of the United States Code (bankruptcy), the sale shall be
conducted no sooner than the expiration of the stay imposed by that
title and the seven-day provision of subdivision (d) shall not apply.