BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 1221 (Calderon)
As Introduced
Hearing Date: March 23, 2010
Fiscal: No
Urgency: No
BCP:jd
SUBJECT
Mortgages: Notice of Sale
DESCRIPTION
This bill would allow a trustee to notice the sale of a property
in non-judicial foreclosure approximately five days earlier by
allowing a Notice of Sale to be given 85 days, instead of three
months, after the filing of a Notice of Default.
BACKGROUND
Foreclosures in California are generally non-judicial, meaning
that they are accomplished without court involvement. The first
step in the foreclosure process is the filing of a Notice of
Default, which generally occurs after three or more months of
delinquency. The foreclosing entity must then wait at least
three months before noticing the sale of the property, which
must be posted, published, and filed with the county recorder
before the date of sale.
Prior to January 1, 2010, then-existing law required the Notice
of Sale to be published and posted at least 20 days before the
sale of the property. Those provisions also required the notice
to be filed with the county recorder at least 14 days before
sale. To conform those timing requirements and provide greater
advance notice, SB 306 (Calderon, Chapter 43, Statutes of 2009),
effective January 1, 2010, instead required the Notice of Sale
to be filed 20 days before sale. That change conformed the
posting, publishing, and filing requirements to the same 20-day
period.
(more)
SB 1221 (Calderon)
Page 2 of ?
In response to workability issues regarding the ability to file
a notice of sale within the new statutory timeframe, this bill
would permit the mortgagee, trustee, or beneficiary to give a
notice of sale approximately five days earlier (85 days instead
of three months after the filing of the notice of default).
CHANGES TO EXISTING LAW
Existing law regulates the non-judicial foreclosure of
properties pursuant to the power of sale contained within a
mortgage contract. To commence the process, existing law
authorizes the trustee, mortgagee, or beneficiary to record a
Notice of Default and requires three months to lapse before
noticing the sale of the property. (Civ. Code Secs. 2924,
2924f.)
Existing law requires the Notice of Sale to be posted,
published, and filed with the county recorder at least 20 days
before the sale of the property. (Civ. Code Sec. 2924f.)
This bill would, instead, authorize a trustee, mortgagee, or
beneficiary to give notice of sale after the lapse of 85 days
from the filing of the Notice of Default.
This bill would make a corresponding change to the codified
notice that must be included in the notice of default.
COMMENT
1. Stated need for the bill
According to the author:
Prior to enactment of SB 306, notices of sale were required
to be published in newspapers of general circulation at
least 20 days prior to the sale of the property, and
recorded with the county recorder at least 14 days prior to
the sale. SB 306 conformed these dates, so that notices of
sale must now be published and recorded at least 20 days
prior to sale. The change was intended to give the public
and those relying on the recording process as much advance
notice of sales as possible.
The problem with the law, as amended by SB 306, is that,
while publication dates can be coordinated very precisely
SB 1221 (Calderon)
Page 3 of ?
between trustees and newspapers, the recording process is
subject to greater opportunity for error. If recorders
close early on a given day due to budget cutbacks, or if the
notice of sale document is delivered to the recorder's
office, but not actually recorded until the next day, a
technical violation of the law can occur.
To address that issue, SB 1221 would permit a notice of sale to
be given five days earlier in the process - 85 days after
recording the Notice of Default, rather than three months after
the notice of default is recorded. The author notes that those
extra five days seek to account for any delays in the recording
process, and states that the bill is not intended to propose any
change in sale dates.
2. Intent to not modify the duration of the foreclosure process
SB 1221 would permit a Notice of Sale ("NOS") to be filed,
posted, and published around five days sooner - 85 days instead
of three months after the Notice of Default is filed. Since the
actual sale may occur 20 days after the NOS is given, the
proposed change could potentially reduce the foreclosure process
by several days (depending on days of the month and duration of
the filing process). Staff notes that the intent of the bill is
not to modify the duration of the foreclosure process but to
address a workability issue that may occur if there is any delay
in the recording of a NOS. The United Trustees Association,
sponsor, maintains that those delays may result in "a technical
violation of the foreclosure laws [and] lead to significant
expenses in postponing sales." This bill seeks to address that
issue by allowing for the earlier filing of the NOS by the
trustee - that earlier filing seeks to ensure that the NOS is
actually recorded at least 20 days before the sale date.
Given that the intent is not to shorten the foreclosure process,
the author has agreed to the following amendment that would
allow the earlier filing of the NOS while ensuring that the
duration of the foreclosure process remains unchanged. That
amendment would allow a NOS to be filed up to five days earlier
and specifically provide that the actual sale date must be no
earlier than under existing law - three months and twenty days
after the filing of a Notice of Default.
Amendment:
SB 1221 (Calderon)
Page 4 of ?
Strike out Sections 1 and 2, and insert:
Amend Section 2924 of the Civil Code to read:
?
(2) Not less than three months shall elapse from the filing of
the notice of default.
(3) Except as provided in paragraph (4), a fter 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.
(4) Notwithstanding paragraph (3), the mortgagee, trustee, or
other person authorized to take sale may file a notice of sale
pursuant to 2924f up to five days before the lapse of the
three month period described in paragraph (2), provided that
the date of sale is no earlier than three months and 20 days
after the filing of the notice of default.
3. Conforming change to Civil Code Section 2924c
Under existing law, every Notice of Default must contain a
statutory notice that informs the homeowner about the
foreclosure, including information about the timing of the sale
date and the Notice of Sale. (Civ. Code Sec. 2924c(b).) To
conform to the 85-day period discussed in Comment 2, SB 1221
would modify that statutory notice by replacing references to
"three months" with "85 days."
Given that the amendment suggested in Comment 2 would no longer
refer to "85 days," the following clarifying amendments are
suggested to conform the statutory notice to the amendment
suggested above.
Suggested amendments:
1) On page 7, line 37, after "until" insert: "approximately"
2) On page 8, line 23, strike out "the end of the 85-day
period stated above" and insert: "three months after this
notice of default is recorded"
Support : None Known
SB 1221 (Calderon)
Page 5 of ?
Opposition : None Known
HISTORY
Source : United Trustees Association
Related Pending Legislation : None Known
Prior Legislation : SB 306 (Calderon, Chapter 43, Statutes of
2009), conformed the time period in which a Notice of Sale must
be posted, published, and filed.
**************