BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1221
                                                                  Page  1


          SENATE THIRD READING
          SB 1221 (Ron Calderon)
          As Amended  April 6, 2010
          Majority vote 

           SENATE VOTE  :32-0  
           
           BANKING & FINANCE   11-0        JUDICIARY           10-0        
           
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          |Ayes:|Eng, Niello, Evans, Fong, |Ayes:|Feuer, Tran, Brownley,    |
          |     |Fuentes, Gaines, Harkey,  |     |Evans, Hagman, Huffman,   |
          |     |Mendoza, Ruskin, Torres,  |     |Jones, Knight, Monning,   |
          |     |Tran                      |     |Saldana                   |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :  Allows 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 and  
          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.









                                                                  SB 1221
                                                                  Page  2


               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 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, this bill 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).









                                                                  SB 1221
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           Analysis Prepared by  :    Mark Farouk / B. & F. / (916) 319-3081 


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