BILL NUMBER: AB 2374	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Roger Hernández

                        FEBRUARY 24, 2012

   An act to amend Section 711.5 of the Civil Code, relating to
property.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2374, as introduced, Roger Hernández. Property: conditions of
ownership.
   Existing law governs property ownership and conditions for
property ownership. Under existing law, a state or local public
entity that provides housing purchase or rehabilitation loans may
deny assumptions, or require the denial of assumptions, of a housing
purchase or rehabilitation loan by a subsequent ineligible purchaser
or transferee. Existing law authorizes a state or local public entity
that provides housing purchase or rehabilitation loans to accelerate
or require that a loan's principal balance be accelerated if the
subsequent purchaser or transferee does not meet the entity's
eligibility requirements. The state or local public entity is also
authorized to recast the repayment schedule for the remainder of a
loan term as a condition of authorizing assumption of a housing
purchase or rehabilitation loan.
   This bill would make technical, nonsubstantive changes to these
provisions.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 711.5 of the Civil Code is amended to read:
   711.5.  (a) Notwithstanding the provisions of Sections 711 and
1916.5, a state or local public entity  that  directly or
indirectly  providing   provides  housing
purchase or rehabilitation loans shall have the authority to deny
assumptions, or require the denial of assumptions, by a subsequent
ineligible purchaser or transferee of the prior borrower of the
obligation of any  such  loan made for the purpose
of rehabilitating or providing affordable housing. If  such
 a subsequent purchaser or transferee does not meet 
such an   the  entity's eligibility requirements,
 that   the  entity may accelerate or may
require the acceleration of the principal balance of the loan to be
all due and payable upon the sale or transfer of the property.
   (b) As a condition of authorizing assumption of a loan pursuant to
this section, the entity may recast the repayment schedule for the
remainder of the term of the loan by increasing the interest to the
current market rate at the time of assumption, or to  such
  a  lower rate of interest as is the maximum
allowed by an entity that provided any insurance or other assistance
 which   that  results in an assumption
being permitted. Any additional increment of interest produced by
increasing the rate of interest upon a loan pursuant to this
subdivision shall be transmitted or forwarded to the entity for
deposit in the specified fund from which the loan was made, or, if no
such fund exists, or the public entity has directed otherwise, then
to the general fund of  such   that 
entity.
   (c) The state or local public entity providing assistance as
specified in this section may implement appropriate measures to
assure compliance with this section.