BILL ANALYSIS
SB 1221
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Date of Hearing: June 21, 2010
ASSEMBLY COMMITTEE ON BANKING AND FINANCE
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
Default.
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,
2924f.]
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
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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
period.
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).
REGISTERED SUPPORT / OPPOSITION :
Support
United Trustees Association (Sponsor)
Opposition
SB 1221
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None on file.
Analysis Prepared by : Mark Farouk / B. & F. / (916) 319-3081