BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 708 (Corbett)
          
          Hearing Date: 01/17/2012        Amended: 01/11/2012
          Consultant: Maureen Ortiz       Policy Vote: B&FI: 6-0  Jud: 5-0
          _________________________________________________________________
          ____
          BILL SUMMARY:  SB 708 extends the provisions of law that 
          established requirements that mortgage lenders had to adhere to 
          before issuing a notice of default on a homeowner (SB 1137 
          Perata/Corbett/Machado, Chapter 69, Statutes of 2008) from 
          January 1, 2013 to January 1, 2018.  In addition, SB 708 revises 
          the contents of the notice relating to the rights of residents.
          _________________________________________________________________
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2012-13      2013-14       2014-15     Fund
           
          Dept Financial Institutions         -------------minor, 
          absorbable---------------        Special*

          Dept Real Estate                       -------------minor, 
          absorbable--------------         Special**

          Dept of Corporations                  
          ---------------------minor---------------------          
          Special***
                                                                      
          *Financial Institutions Fund       **Real Estate Fund         
          ***Corporations Fund
          _________________________________________________________________
          ____

          STAFF COMMENTS: 
          
          SB 1137 (chapter 69, Statutes of 2008) imposed the following 
          requirements on lenders before a notice of default (NOD) may be 
          recorded on a mortgage or deed of trust secured by 
          single-family, owner-occupied residential real property:

          a)  A mortgagee, beneficiary, or authorized agent must contact 
          the borrower in person or by telephone in order to assess the 
          borrower's financial situation and explore options for the 








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          borrower that might avoid foreclosure.  The bill prescribes 
          specific requirements for making contact.

          b)  A mortgagee, beneficiary, or authorized agent has to wait at 
          least 30 days after making initial contact with a borrower 
          before recording a NOD.

          c)  Each NOD has to include a statement explaining how the 
          contact with the borrower was made, or specifying that no 
          contact was required due to qualifying exemptions.

          d)  Requires a notice to be posted on a property on which a 
          notice of sale has been recorded, and also requires the notice 
          to be mailed to the resident of that property.

          e)  Provides a tenant of a rental housing unit that is to be 
          sold in foreclosure with 60 days written notice to exit the 
          property. (This provision was superseded by federal law allowing 
          renters to remain in the home for 90 days, or through the term 
          of their lease, whichever is longer.  The federal provision will 
          sunset on January 1, 2015.)

          f)  Requires a legal property owner to maintain vacant 
          residential property purchased at a foreclosure sale as 
          specified, and provides for penalties of up to $1,000 per day 
          for noncompliance.

          SB 708 will extend all of the above provisions until January 1, 
          2018.

          As amended January 11, 2012, SB 708 revises the contents of the 
          written notice sent to a tenant of a rental housing unit that is 
          to be sold in foreclosure.  Instead of informing the tenant of 
          the right to receive a 60 day notice to vacate, this notice will 
          inform the tenant of his or her right of a "60 days written 
          eviction notice or 90 days if required by any other provision of 
          state or federal law".













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