BILL NUMBER: AB 2532 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Wagner
FEBRUARY 24, 2012
An act to amend Section 2923.5 of the Civil Code, relating to
mortgages.
LEGISLATIVE COUNSEL'S DIGEST
AB 2532, as introduced, Wagner. Mortgages and deeds of trust:
foreclosure.
Existing law regulates the terms and conditions of mortgages and
deeds of trust secured by real property. Existing law provides that a
mortgagee, trustee, beneficiary, or authorized agent may not file a
notice of default until 30 days after initial contact with the
borrower is made, as specified, or 30 days after satisfying specified
due diligence requirements.
This bill would make a nonsubstantive change 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 2923.5 of the Civil Code is amended to read:
2923.5. (a) (1) A mortgagee, trustee, beneficiary, or authorized
agent may not file a notice of default pursuant to Section 2924 until
30 days after initial contact is made as required by paragraph (2)
or 30 days after satisfying the due diligence requirements as
described in subdivision (g).
(2) A mortgagee, beneficiary, or authorized agent shall contact
the borrower in person or by telephone in order to assess the
borrower's financial situation and to explore options for
the borrower to avoid foreclosure. During the initial contact, the
mortgagee, beneficiary, or authorized agent shall advise the borrower
that he or she has the right to request a subsequent meeting and, if
requested, the mortgagee, beneficiary, or authorized agent shall
schedule the meeting to occur within 14 days. The assessment of the
borrower's financial situation and discussion of options may occur
during the first contact, or at the subsequent meeting scheduled for
that purpose. In either case, the borrower shall be provided the
toll-free telephone number made available by the United States
Department of Housing and Urban Development (HUD) to find a
HUD-certified housing counseling agency. Any meeting may occur
telephonically.
(b) A notice of default filed pursuant to Section 2924 shall
include a declaration that the mortgagee, beneficiary, or authorized
agent has contacted the borrower, has tried with due diligence to
contact the borrower as required by this section, or that no contact
was required pursuant to subdivision (h).
(c) If a mortgagee, trustee, beneficiary, or authorized agent had
already filed the notice of default prior to the enactment of this
section and did not subsequently file a notice of rescission, then
the mortgagee, trustee, beneficiary, or authorized agent shall, as
part of the notice of sale filed pursuant to Section 2924f, include a
declaration that either:
(1) States that the borrower was contacted to assess the borrower'
s financial situation and to explore options for the borrower to
avoid foreclosure.
(2) Lists the efforts made, if any, to contact the borrower in the
event no contact was made.
(d) A mortgagee's, beneficiary's, or authorized agent's loss
mitigation personnel may participate by telephone during any contact
required by this section.
(e) For purposes of this section, a "borrower" shall include a
mortgagor or trustor.
(f) A borrower may designate, with consent given in writing, a
HUD-certified housing counseling agency, attorney, or other advisor
to discuss with the mortgagee, beneficiary, or authorized agent, on
the borrower's behalf, the borrowers financial situation and options
for the borrower to avoid foreclosure. That contact made at the
direction of the borrower shall satisfy the contact requirements of
paragraph (2) of subdivision (a). Any loan modification or workout
plan offered at the meeting by the mortgagee, beneficiary, or
authorized agent is subject to approval by the borrower.
(g) A notice of default may be filed pursuant to Section 2924 when
a mortgagee, beneficiary, or authorized agent has not contacted a
borrower as required by paragraph (2) of subdivision (a) provided
that the failure to contact the borrower occurred despite the due
diligence of the mortgagee, beneficiary, or authorized agent. For
purposes of this section, "due diligence" shall require and mean all
of the following:
(1) A mortgagee, beneficiary, or authorized agent shall first
attempt to contact a borrower by sending a first-class letter that
includes the toll-free telephone number made available by HUD to find
a HUD-certified housing counseling agency.
(2) (A) After the letter has been sent, the mortgagee,
beneficiary, or authorized agent shall attempt to contact the
borrower by telephone at least three times at different hours and on
different days. Telephone calls shall be made to the primary
telephone number on file.
(B) A mortgagee, beneficiary, or authorized agent may attempt to
contact a borrower using an automated system to dial borrowers,
provided that, if the telephone call is answered, the call is
connected to a live representative of the mortgagee, beneficiary, or
authorized agent.
(C) A mortgagee, beneficiary, or authorized agent satisfies the
telephone contact requirements of this paragraph if it determines,
after attempting contact pursuant to this paragraph, that the
borrower's primary telephone number and secondary telephone number or
numbers on file, if any, have been disconnected.
(3) If the borrower does not respond within two weeks after the
telephone call requirements of paragraph (2) have been satisfied, the
mortgagee, beneficiary, or authorized agent shall then send a
certified letter, with return receipt requested.
(4) The mortgagee, beneficiary, or authorized agent shall provide
a means for the borrower to contact it in a timely manner, including
a toll-free telephone number that will provide access to a live
representative during business hours.
(5) The mortgagee, beneficiary, or authorized agent has posted a
prominent link on the homepage of its Internet Web site, if any, to
the following information:
(A) Options that may be available to borrowers who are unable to
afford their mortgage payments and who wish to avoid foreclosure, and
instructions to borrowers advising them on steps to take to explore
those options.
(B) A list of financial documents borrowers should collect and be
prepared to present to the mortgagee, beneficiary, or authorized
agent when discussing options for avoiding foreclosure.
(C) A toll-free telephone number for borrowers who wish to discuss
options for avoiding foreclosure with their mortgagee, beneficiary,
or authorized agent.
(D) The toll-free telephone number made available by HUD to find a
HUD-certified housing counseling agency.
(h) Subdivisions (a), (c), and (g) shall not apply if any of the
following occurs:
(1) The borrower has surrendered the property as evidenced by
either a letter confirming the surrender or delivery of the keys to
the property to the mortgagee, trustee, beneficiary, or authorized
agent.
(2) The borrower has contracted with an organization, person, or
entity whose primary business is advising people who have decided to
leave their homes on how to extend the foreclosure process and avoid
their contractual obligations to mortgagees or beneficiaries.
(3) A case has been filed by the borrower under Chapter 7, 11, 12,
or 13 of Title 11 of the United States Code and the bankruptcy court
has not entered an order closing or dismissing the bankruptcy case,
or granting relief from a stay of foreclosure.
(i) This section shall apply only to mortgages or deeds of trust
recorded from January 1, 2003, to December 31, 2007, inclusive, that
are secured by owner-occupied residential real property containing no
more than four dwelling units. For purposes of this subdivision,
"owner-occupied" means that the residence is the principal residence
of the borrower as indicated to the lender in loan documents.
(j) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.