BILL ANALYSIS                                                                                                                                                                                                    

                                                                  SB 1221
                                                                  Page  1

          Date of Hearing:   June 21, 2010

                                   Mike Eng, Chair
                   SB 1221 (Calderon) - As Amended:  April 6, 2010

           SENATE VOTE  :   32-0
          SUBJECT  :   Mortgages: notice of sale

           SUMMARY  :   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  

           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. [Civil Code Sections. 2924,  

           FISCAL EFFECT  :   None

          COMMENTS  :   

          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  
            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  


                                                                  SB 1221
                                                                  Page  2

            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.

          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  

          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).


          United Trustees Association (Sponsor)


                                                                 SB 1221
                                                                  Page  3

          None on file.

           Analysis Prepared by  :    Mark Farouk / B. & F. / (916) 319-3081