BILL NUMBER: SB 435	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Harman

                        FEBRUARY 16, 2011

   An act to amend Section 2924c, 2924g, and 2934a of the Civil Code,
relating to mortgages.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 435, as introduced, Harman. Mortgages and deeds of trust.
   (1) Existing state and federal law regulate the terms and
conditions of mortgages and deeds of trust. Upon the failure to
satisfy specified terms of these obligations, existing state law
requires that a notice of default be sent to a mortgagor or trustor
indicating the property securing the loans may be foreclosed upon and
that he or she has the right to cure the default and bring the
account into good standing. Existing law requires this notice to
include a statement indicating the name, address, and telephone
number of the beneficiary or mortgagee for the purpose of finding out
the amount that is due.
   This bill would also permit the notice to reference the authorized
agent of the beneficiary or mortgagee on the notice described above.

   (2) Existing law regulates the sales of property pursuant to a
power of sale in a mortgage or deed of trust, including prescribing
the times and locations of these sales. Existing law permits these
sales to be postponed, as specified, at any time prior to the
completion of the sale, for any period of time not to exceed a total
of 365 days from the date set forth in the notice of sale, after
which time a new notice of sale must be given, as prescribed.
   This bill would permit these sales to be postponed, as described
above, for any period of time not to exceed one year from the date
set forth in the notice of sale.
   (3) Existing law permits a trustee under a trust deed whose duties
are exclusively related to the power of sale contained in the deed
to be substituted if certain conditions are met. If the substitution
occurs after a notice of default has been recorded but prior to the
recording of the notice of sale, existing law requires that the
beneficiary or his or her authorized agent give notice of this, as
specified.
   This bill would condition the requirement that the notice of
trustee substitution be sent on the notice of default not having been
rescinded.
   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 2924c of the Civil Code is amended to read:
   2924c.  (a) (1) Whenever all or a portion of the principal sum of
any obligation secured by deed of trust or mortgage on real property
or an estate for years therein hereafter executed has, prior to the
maturity date fixed in that obligation, become due or been declared
due by reason of default in payment of interest or of any installment
of principal, or by reason of failure of trustor or mortgagor to
pay, in accordance with the terms of that obligation or of the deed
of trust or mortgage, taxes, assessments, premiums for insurance, or
advances made by beneficiary or mortgagee in accordance with the
terms of that obligation or of the deed of trust or mortgage, the
trustor or mortgagor or his or her successor in interest in the
mortgaged or trust property or any part thereof, or any beneficiary
under a subordinate deed of trust or any other person having a
subordinate lien or encumbrance of record thereon, at any time within
the period specified in subdivision (e), if the power of sale
therein is to be exercised, or, otherwise at any time prior to entry
of the decree of foreclosure, may pay to the beneficiary or the
mortgagee or their successors in interest, respectively, the entire
amount due, at the time payment is tendered, with respect to (A) all
amounts of principal, interest, taxes, assessments, insurance
premiums, or advances actually known by the beneficiary to be, and
that are, in default and shown in the notice of default, under the
terms of the deed of trust or mortgage and the obligation secured
thereby, (B) all amounts in default on recurring obligations not
shown in the notice of default, and (C) all reasonable costs and
expenses, subject to subdivision (c), which are actually incurred in
enforcing the terms of the obligation, deed of trust, or mortgage,
and trustee's or attorney's fees, subject to subdivision (d), other
than the portion of principal as would not then be due had no default
occurred, and thereby cure the default theretofore existing, and
thereupon, all proceedings theretofore had or instituted shall be
dismissed or discontinued and the obligation and deed of trust or
mortgage shall be reinstated and shall be and remain in force and
effect, the same as if the acceleration had not occurred. This
section does not apply to bonds or other evidences of indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations or made by a public utility subject to the Public
Utilities Code. For the purposes of this subdivision, the term
"recurring obligation" means all amounts of principal and interest on
the loan, or rents, subject to the deed of trust or mortgage in
default due after the notice of default is recorded; all amounts of
principal and interest or rents advanced on senior liens or
leaseholds which are advanced after the recordation of the notice of
default; and payments of taxes, assessments, and hazard insurance
advanced after recordation of the notice of default. If the
beneficiary or mortgagee has made no advances on defaults which would
constitute recurring obligations, the beneficiary or mortgagee may
require the trustor or mortgagor to provide reliable written evidence
that the amounts have been paid prior to reinstatement.
   (2) If the trustor, mortgagor, or other person authorized to cure
the default pursuant to this subdivision does cure the default, the
beneficiary or mortgagee or the agent for the beneficiary or
mortgagee shall, within 21 days following the reinstatement, execute
and deliver to the trustee a notice of rescission which rescinds the
declaration of default and demand for sale and advises the trustee of
the date of reinstatement. The trustee shall cause the notice of
rescission to be recorded within 30 days of receipt of the notice of
rescission and of all allowable fees and costs.
   No charge, except for the recording fee, shall be made against the
trustor or mortgagor for the execution and recordation of the notice
which rescinds the declaration of default and demand for sale.
   (b) (1) The notice, of any default described in this section,
recorded pursuant to Section 2924, and mailed to any person pursuant
to Section 2924b, shall begin with the following statement, printed
or typed thereon:
      "IMPORTANT NOTICE 14-point boldface type if printed or in
capital letters if typed]

   IF YOUR PROPERTY IS IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR
PAYMENTS, IT MAY BE SOLD WITHOUT ANY COURT ACTION, 14-point boldface
type if printed or in capital letters if typed] and you may have the
legal right to bring your account in good standing by paying all of
your past due payments plus permitted costs and expenses within the
time permitted by law for reinstatement of your account, which is
normally five business days prior to the date set for the sale of
your property. No sale date may be set until approximately 90 days
from the date this notice of default may be recorded (which date of
recordation appears on this notice).
This amount is ____________ as of _______________
                                      (Date)


and will increase until your account becomes current.

   While your property is in foreclosure, you still must pay other
obligations (such as insurance and taxes) required by your note and
deed of trust or mortgage. If you fail to make future payments on the
loan, pay taxes on the property, provide insurance on the property,
or pay other obligations as required in the note and deed of trust or
mortgage, the beneficiary or mortgagee may insist that you do so in
order to reinstate your account in good standing. In addition, the
beneficiary or mortgagee may require as a condition to reinstatement
that you provide reliable written evidence that you paid all senior
liens, property taxes, and hazard insurance premiums.
   Upon your written request, the beneficiary or mortgagee will give
you a written itemization of the entire amount you must pay. You may
not have to pay the entire unpaid portion of your account, even
though full payment was demanded, but you must pay all amounts in
default at the time payment is made. However, you and your
beneficiary or mortgagee may mutually agree in writing prior to the
time the notice of sale is posted (which may not be earlier than
three months after this notice of default is recorded) to, among
other things, (1) provide additional time in which to cure the
default by transfer of the property or otherwise; or (2) establish a
schedule of payments in order to cure your default; or both (1) and
(2).
   Following the expiration of the time period referred to in the
first paragraph of this notice, unless the obligation being
foreclosed upon or a separate written agreement between you and your
creditor permits a longer period, you have only the legal right to
stop the sale of your property by paying the entire amount demanded
by your creditor.
   To find out the amount you must pay, or to arrange for payment to
stop the foreclosure, or if your property is in foreclosure for any
other reason, contact:
              ____________________________________
                (Name of beneficiary or mortgagee) 
                (Name of beneficiary, mortgagee, or 
                   his or her authorized agent) 
              ____________________________________
                        (Mailing address)
              ____________________________________
                           (Telephone)


   If you have any questions, you should contact a lawyer or the
governmental agency which may have insured your loan.
   Notwithstanding the fact that your property is in foreclosure, you
may offer your property for sale, provided the sale is concluded
prior to the conclusion of the foreclosure.
   Remember, YOU MAY LOSE LEGAL RIGHTS IF YOU DO NOT TAKE PROMPT
ACTION. 14-point boldface type if printed or in capital letters if
typed]"

   Unless otherwise specified, the notice, if printed, shall appear
in at least 12-point boldface type.
   If the obligation secured by the deed of trust or mortgage is a
contract or agreement described in paragraph (1) or (4) of
subdivision (a) of Section 1632, the notice required herein shall be
in Spanish if the trustor requested a Spanish language translation of
the contract or agreement pursuant to Section 1632. If the
obligation secured by the deed of trust or mortgage is contained in a
home improvement contract, as defined in Sections 7151.2 and 7159 of
the Business and Professions Code, which is subject to Title 2
(commencing with Section 1801), the seller shall specify on the
contract whether or not the contract was principally negotiated in
Spanish and if the contract was principally negotiated in Spanish,
the notice required herein shall be in Spanish. No assignee of the
contract or person authorized to record the notice of default shall
incur any obligation or liability for failing to mail a notice in
Spanish unless Spanish is specified in the contract or the assignee
or person has actual knowledge that the secured obligation was
principally negotiated in Spanish. Unless specified in writing to the
contrary, a copy of the notice required by subdivision (c) of
Section 2924b shall be in English.
   (2) Any failure to comply with the provisions of this subdivision
shall not affect the validity of a sale in favor of a bona fide
purchaser or the rights of an encumbrancer for value and without
notice.
   (c) Costs and expenses which may be charged pursuant to Sections
2924 to 2924i, inclusive, shall be limited to the costs incurred for
recording, mailing, including certified and express mail charges,
publishing, and posting notices required by Sections 2924 to 2924i,
inclusive, postponement pursuant to Section 2924g not to exceed fifty
dollars ($50) per postponement and a fee for a trustee's sale
guarantee or, in the event of judicial foreclosure, a litigation
guarantee. For purposes of this subdivision, a trustee or beneficiary
may purchase a trustee's sale guarantee at a rate meeting the
standards contained in Sections 12401.1 and 12401.3 of the Insurance
Code.
   (d) Trustee's or attorney's fees which may be charged pursuant to
subdivision (a), or until the notice of sale is deposited in the mail
to the trustor as provided in Section 2924b, if the sale is by power
of sale contained in the deed of trust or mortgage, or, otherwise at
any time prior to the decree of foreclosure, are hereby authorized
to be in a base amount that does not exceed three hundred dollars
($300) if the unpaid principal sum secured is one hundred fifty
thousand dollars ($150,000) or less, or two hundred fifty dollars
($250) if the unpaid principal sum secured exceeds one hundred fifty
thousand dollars ($150,000), plus one-half of 1 percent of the unpaid
principal sum secured exceeding fifty thousand dollars ($50,000) up
to and including one hundred fifty thousand dollars ($150,000), plus
one-quarter of 1 percent of any portion of the unpaid principal sum
secured exceeding one hundred fifty thousand dollars ($150,000) up to
and including five hundred thousand dollars ($500,000), plus
one-eighth of 1 percent of any portion of the unpaid principal sum
secured exceeding five hundred thousand dollars ($500,000). Any
charge for trustee's or attorney's fees authorized by this
subdivision shall be conclusively presumed to be lawful and valid
where the charge does not exceed the amounts authorized herein. For
purposes of this subdivision, the unpaid principal sum secured shall
be determined as of the date the notice of default is recorded.
   (e) Reinstatement of a monetary default under the terms of an
obligation secured by a deed of trust, or mortgage may be made at any
time within the period commencing with the date of recordation of
the notice of default until five business days prior to the date of
sale set forth in the initial recorded notice of sale.
   In the event the sale does not take place on the date set forth in
the initial recorded notice of sale or a subsequent recorded notice
of sale is required to be given, the right of reinstatement shall be
revived as of the date of recordation of the subsequent notice of
sale, and shall continue from that date until five business days
prior to the date of sale set forth in the subsequently recorded
notice of sale.
   In the event the date of sale is postponed on the date of sale set
forth in either an initial or any subsequent notice of sale, or is
postponed on the date declared for sale at an immediately preceding
postponement of sale, and, the postponement is for a period which
exceeds five business days from the date set forth in the notice of
sale, or declared at the time of postponement, then the right of
reinstatement is revived as of the date of postponement and shall
continue from that date until five business days prior to the date of
sale declared at the time of the postponement.
   Nothing contained herein shall give rise to a right of
reinstatement during the period of five business days prior to the
date of sale, whether the date of sale is noticed in a notice of sale
or declared at a postponement of sale.
   Pursuant to the terms of this subdivision, no beneficiary,
trustee, mortgagee, or their agents or successors shall be liable in
any manner to a trustor, mortgagor, their agents or successors or any
beneficiary under a subordinate deed of trust or mortgage or any
other person having a subordinate lien or encumbrance of record
thereon for the failure to allow a reinstatement of the obligation
secured by a deed of trust or mortgage during the period of five
business days prior to the sale of the security property, and no such
right of reinstatement during this period is created by this
section. Any right of reinstatement created by this section is
terminated five business days prior to the date of sale set forth in
the initial date of sale, and is revived only as prescribed herein
and only as of the date set forth herein.
   As used in this subdivision, the term "business day" has the same
meaning as specified in Section 9.
  SEC. 2.  Section 2924g of the Civil Code is amended to read:
   2924g.  (a) All sales of property under the power of sale
contained in any deed of trust or mortgage shall be held in the
county where the property or some part thereof is situated, and shall
be made at auction, to the highest bidder, between the hours of 9
a.m. and 5 p.m. on any business day, Monday through Friday.
   The sale shall commence at the time and location specified in the
notice of sale. Any postponement shall be announced at the time and
location specified in the notice of sale for commencement of the sale
or pursuant to paragraph (1) of subdivision (c).
   If the sale of more than one parcel of real property has been
scheduled for the same time and location by the same trustee, (1) any
postponement of any of the sales shall be announced at the time
published in the notice of sale, (2) the first sale shall commence at
the time published in the notice of sale or immediately after the
announcement of any postponement, and (3) each subsequent sale shall
take place as soon as possible after the preceding sale has been
completed.
   (b) When the property consists of several known lots or parcels,
they shall be sold separately unless the deed of trust or mortgage
provides otherwise. When a portion of the property is claimed by a
third person, who requires it to be sold separately, the portion
subject to the claim may be thus sold. The trustor, if present at the
sale, may also, unless the deed of trust or mortgage otherwise
provides, direct the order in which property shall be sold, when the
property consists of several known lots or parcels which may be sold
to advantage separately, and the trustee shall follow that direction.
After sufficient property has been sold to satisfy the indebtedness,
no more can be sold.
   If the property under power of sale is in two or more counties,
the public auction sale of all of the property under the power of
sale may take place in any one of the counties where the property or
a portion thereof is located.
   (c) (1) There may be a postponement or postponements of the sale
proceedings, including a postponement upon instruction by the
beneficiary to the trustee that the sale proceedings be postponed, at
any time prior to the completion of the sale for any period of time
not to exceed a total of  365 days   one year
 from the date set forth in the notice of sale. The trustee
shall postpone the sale in accordance with any of the following:
   (A) Upon the order of any court of competent jurisdiction.
   (B) If stayed by operation of law.
   (C) By mutual agreement, whether oral or in writing, of any
trustor and any beneficiary or any mortgagor and any mortgagee.
   (D) At the discretion of the trustee.
   (2) In the event that the sale proceedings are postponed for a
period or periods totaling more than 365 days, the scheduling of any
further sale proceedings shall be preceded by giving a new notice of
sale in the manner prescribed in Section 2924f. New fees incurred for
the new notice of sale shall not exceed the amounts specified in
Sections 2924c and 2924d, and shall not exceed reasonable costs that
are necessary to comply with this paragraph.
   (d) The notice of each postponement and the reason therefor shall
be given by public declaration by the trustee at the time and place
last appointed for sale. A public declaration of postponement shall
also set forth the new date, time, and place of sale and the place of
sale shall be the same place as originally fixed by the trustee for
the sale. No other notice of postponement need be given. However, the
sale shall be conducted no sooner than on the seventh day after the
earlier of (1) dismissal of the action or (2) expiration or
termination of the injunction, restraining order, or stay that
required postponement of the sale, whether by entry of an order by a
court of competent jurisdiction, operation of law, or otherwise,
unless the injunction, restraining order, or subsequent order
expressly directs the conduct of the sale within that seven-day
period. For purposes of this subdivision, the seven-day period shall
not include the day on which the action is dismissed, or the day on
which the injunction, restraining order, or stay expires or is
terminated. If the sale had been scheduled to occur, but this
subdivision precludes its conduct during that seven-day period, a new
notice of postponement shall be given if the sale had been scheduled
to occur during that seven-day period. The trustee shall maintain
records of each postponement and the reason therefor.
   (e) Notwithstanding the time periods established under subdivision
(d), if postponement of a sale is based on a stay imposed by Title
11 of the United States Code (bankruptcy), the sale shall be
conducted no sooner than the expiration of the stay imposed by that
title and the seven-day provision of subdivision (d) shall not apply.

  SEC. 3.  Section 2934a of the Civil Code, as amended by Section 5
of Chapter 177 of the Statutes of 2004, is amended to read:
   2934a.  (a) (1) The trustee under a trust deed upon real property
or an estate for years therein given to secure an obligation to pay
money and conferring no other duties upon the trustee than those
which are incidental to the exercise of the power of sale therein
conferred, may be substituted by the recording in the county in which
the property is located of a substitution executed and acknowledged
by: (A) all of the beneficiaries under the trust deed, or their
successors in interest, and the substitution shall be effective
notwithstanding any contrary provision in any trust deed executed on
or after January 1, 1968; or (B) the holders of more than 50 percent
of the record beneficial interest of a series of notes secured by the
same real property or of undivided interests in a note secured by
real property equivalent to a series transaction, exclusive of any
notes or interests of a licensed real estate broker that is the
issuer or servicer of the notes or interests or of any affiliate of
that licensed real estate broker.
   (2) A substitution executed pursuant to subparagraph (B) of
paragraph (1) is not effective unless all the parties signing the
substitution sign, under penalty of perjury, a separate written
document stating the following:
   (A) The substitution has been signed pursuant to subparagraph (B)
of paragraph (1).
   (B) None of the undersigned is a licensed real estate broker or an
affiliate of the broker that is the issuer or servicer of the
obligation secured by the deed of trust.
   (C) The undersigned together hold more than 50 percent of the
record beneficial interest of a series of notes secured by the same
real property or of undivided interests in a note secured by real
property equivalent to a series transaction.
   (D) Notice of the substitution was sent by certified mail, postage
prepaid, with return receipt requested to each holder of an interest
in the obligation secured by the deed of trust who has not joined in
the execution of the substitution or the separate document.
   The separate document shall be attached to the substitution and be
recorded in the office of the county recorder of each county in
which the real property described in the deed of trust is located.
Once the document required by this paragraph is recorded, it shall
constitute conclusive evidence of compliance with the requirements of
this paragraph in favor of substituted trustees acting pursuant to
this section, subsequent assignees of the obligation secured by the
deed of trust and subsequent bona fide purchasers or encumbrancers
for value of the real property described therein.
   (3) For purposes of this section, "affiliate of the licensed real
estate broker" includes any person as defined in Section 25013 of the
Corporations Code that is controlled by, or is under common control
with, or who controls, a licensed real estate broker. "Control" means
the possession, direct or indirect, of the power to direct or cause
the direction of management and policies.
   (4) The substitution shall contain the date of recordation of the
trust deed, the name of the trustor, the book and page or instrument
number where the trust deed is recorded, and the name of the new
trustee. From the time the substitution is filed for record, the new
trustee shall succeed to all the powers, duties, authority, and title
granted and delegated to the trustee named in the deed of trust. A
substitution may be accomplished, with respect to multiple deeds of
trust which are recorded in the same county in which the substitution
is being recorded and which all have the same trustee and
beneficiary or beneficiaries, by recording a single document,
complying with the requirements of this section, substituting
trustees for all those deeds of trust.
   (b) If the substitution is executed, but not recorded, prior to or
concurrently with the recording of the notice of default, the
beneficiary or beneficiaries or their authorized agents shall cause
notice of the substitution to be mailed prior to or concurrently with
the recording thereof, in the manner provided in Section 2924b, to
all persons to whom a copy of the notice of default would be required
to be mailed by the provisions of Section 2924b. An affidavit shall
be attached to the substitution that notice has been given to those
persons and in the manner required by this subdivision.
   (c) If the substitution is effected after a notice of default has
been recorded but prior to the recording of the notice of sale 
and the notice of default has not been rescinded  , the
beneficiary or beneficiaries or their authorized agents shall cause a
copy of the substitution to be mailed, prior to, or concurrently
with, the recording thereof, in the manner provided in Section 2924b,
to the trustee then of record and to all persons to whom a copy of
the notice of default would be required to be mailed by the
provisions of Section 2924b. An affidavit shall be attached to the
substitution that notice has been given to those persons and in the
manner required by this subdivision.
   (d)  A trustee named in a recorded substitution of trustee shall
be deemed to be authorized to act as the trustee under the mortgage
or deed of trust for all purposes from the date the substitution is
executed by the mortgagee, beneficiaries, or by their authorized
agents. Nothing herein requires that a trustee under a recorded
substitution accept the substitution. Once recorded, the substitution
shall constitute conclusive evidence of the authority of the
substituted trustee or his or her agents to act pursuant to this
section.
   (e)  Notwithstanding any provision of this section or any
provision in any deed of trust, unless a new notice of sale
containing the name, street address, and telephone number of the
substituted trustee is given pursuant to Section 2924f after
execution of the substitution, any sale conducted by the substituted
trustee shall be void.
   (f)  This section shall become operative on January 1, 1998.