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 |
| | | | |
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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
Page 3
Analysis Prepared by : Mark Farouk / B. & F. / (916) 319-3081
FN: 0005197