BILL NUMBER: SB 729 INTRODUCED
BILL TEXT
INTRODUCED BY Senators Leno and Steinberg
(Principal coauthor: Assembly Member Feuer)
(Coauthors: Senators DeSaulnier, Hancock, Liu, and Wolk)
(Coauthors: Assembly Members Davis, Dickinson, and Monning)
FEBRUARY 18, 2011
An act to amend Sections 2923.5 and 2924b of, to amend and repeal
Section 2924 of, and to add Sections 2923.4, 2923.5, 2923.7, 2923.73,
2923.74, and 2923.75 to, the Civil Code, relating to mortgages.
LEGISLATIVE COUNSEL'S DIGEST
SB 729, as introduced, Leno. Mortgages and deeds of trust:
foreclosure.
Existing state and federal law regulate the terms and conditions
of mortgages and deeds of trust secured by real property. Existing
state law requires, upon a breach of the obligation of a mortgage or
deed of trust secured by real property, that the trustee, mortgagee,
or beneficiary record a notice of default in the office of the county
recorder where the mortgaged or trust property is situated and mail
the notice of default to the mortgagor or trustor, among other acts,
prior to exercising a power of sale. Existing state law, until
January 1, 2013, prohibits the filing of a notice of default on a
mortgage or deed of trust, as specified, secured by owner-occupied
real property, as defined, until 30 days after specified parties
contact the borrower or 30 days after satisfying due diligence
requirements in this regard.
This bill would prohibit a mortgagee, trustee, beneficiary, or
authorized agent from recording a notice of default unless that party
makes reasonable and good faith efforts to evaluate the borrower for
all available loss mitigation options to avoid foreclosure. The bill
would prohibit a mortgagee, trustee, beneficiary, or authorized
agent from recording a notice of default on residential mortgages and
deeds of trust, as defined, until various notice requirements and
other requirements regarding loan modifications are fulfilled. The
bill would include among these requirements informing the borrower of
the deadline for applying for a loan modification, which would be
prohibited from being earlier than a specified date. The bill would
prohibit a mortgagee, trustee, or beneficiary from recording a notice
of default on a residential mortgage or deed of trust if a borrower
who is eligible for a loan modification submits an application, as
specified, unless the mortgagee, trustee, or beneficiary has, in good
faith, reviewed the application, rendered a decision on the
application, and sent the borrower a denial explanation letter. The
bill would provide a process for reviewing a mortgage loan
modification application, which would depend, in part, on whether the
lender is participating in the federal Making Home Affordable
Modification Program. The bill would except certain borrowers from
these requirements. The bill would require that a borrower who
initiates an application for a loan modification according to the
procedures of the mortgagee, beneficiary, or authorized agent, and
who is denied a loan modification, to receive a denial explanation
letter stating the reason or reasons for the denial, as specified.
The bill would require a mortgage servicer, as defined, to whom
the provisions described above apply, to perform specified actions as
part of foreclosing on a residential mortgage or deed of trust,
including compiling a record documenting compliance with those
provisions, which would be signed, certified, and transmitted to the
foreclosure trustee or authorized agent. The bill would require the
declaration of compliance to be included or attached to every notice
of default recorded, as specified, and a notice of default recorded
without the compliance declaration would be void. The bill would
prescribe a form for the declaration and would require that the
declaration substantially comply with it. The bill would permit an
eligible borrower to enjoin a trustee sale if provisions of the bill
are not satisfied, and would authorize a borrower to recover damages,
attorney's fees, and costs, as specified, if the property is sold
without compliance with the bill's requirements. The bill would
permit the Attorney General to enforce these provisions. The bill
would also establish other penalties for certain acts, including for
a false declaration of a lost note representing a mortgage or deed of
trust. The bill would provide that any person licensed by the State
of California who violates the bill's provisions is deemed to have
violated that person's licensing law. The bill would require certain
information to be recorded with a notice of default and to be
provided with the notice of default sent to a borrower.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2923.4 is added to the Civil Code, to read:
2923.4. A mortgagee, trustee, beneficiary, or authorized agent
shall not record a notice of default pursuant to Section 2924 unless
the mortgagee, trustee, beneficiary, or authorized agent makes
reasonable and good faith efforts to evaluate the borrower for all
available loss mitigation options to avoid foreclosure.
Notwithstanding anything to the contrary, this section shall not be
construed to require a mortgagee, trustee, beneficiary, or authorized
agent to act in a manner inconsistent with the terms of any
applicable contract for the servicing of the loan at issue.
SEC. 2. Section 2923.5 of the Civil Code is amended to read:
2923.5. (a) (1) A mortgagee, trustee, beneficiary, or authorized
agent may shall not file
record 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) , and until the
requirements of Section 2923.7, if applicable, have been
satisfied .
(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 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 , and, if applicable, a deadline
for the borrower to submit an initial application for a loan
modification and receive the associated protect ions of
state law, which shall be at least 45 days after the date the of
initial telephonic or in-person contact . Any meeting may occur
telephonically.
(b) A notice of default filed recorded
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) the declaration of compliance
described in Section 2923.74 .
(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 Subject to the
requirements of Section 2923.7, a notice of default may be
filed recorded 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 following:
(A) The toll-free telephone
number made available by HUD to find a HUD-certified housing
counseling agency.
(B) If applicable, a deadline for the borrower to submit an
initial application for a loan modification and receive the
associated protections of state law, which shall be at least 45 days
after the date of this letter or 45 days after the date the
mortgagee, beneficiary, or authorized agent made initial contact with
the borrower pursuant to paragraph (2) of subdivision (a) of Section
2923.5, whichever is earlier.
(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 .
that includes:
(A) The toll-free telephone number made available by HUD to find a
HUD-certified housing counseling agency.
(B) If applicable, a deadline for the borrower to submit an
initial application for a loan modification and receive the
associated protections of state law, which shall be at least 45 days
after the date of the letter described in paragraph (1) of
subdivision (g) or 45 days after the date the mortgagee, beneficiary,
or authorized agent made initial contact with the borrower pursuant
to paragraph (2) of subdivision (a) of Section 2923.5, whichever is
earlier.
(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.
SEC. 3. Section 2923.5 is added to the Civil Code, to read:
2923.5. (a) (1) A mortgagee, trustee, beneficiary, or authorized
agent shall not record a notice of default pursuant to Section 2924
until either 46 days after contacting the borrower in writing as
required by paragraph (2) or until the requirements of Section 2923.7
have been satisfied, whichever is later.
(2) Prior to recording a notice of default pursuant to Section
2924, a mortgagee, trustee, beneficiary, or authorized agent shall
send the borrower a certified letter, with return receipt requested,
that includes the toll-free telephone number made available by HUD to
find a HUD-certified housing counseling agency; and, if applicable,
a description of the options that may be available to the borrower if
he or she wishes to avoid foreclosure, and instructions setting
forth the steps to take to pursue those options, including, if
applicable, a deadline for the borrower to submit an initial
application for a loan modification and receive the associated
protections of state law, which shall be at least 45 days after the
date the letter is received.
(b) A notice of default recorded pursuant to Section 2924 shall
include the declaration of compliance described in Section 2923.74.
(c) (1) 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.
(2) The mortgagee, beneficiary, or authorized agent shall post a
prominent link on the homepage of its Internet Web site, if any, to
all of the following:
(A) Information about any available options for avoiding
foreclosure.
(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) Contact information 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.
(d) This section shall apply only to mortgages or deeds of trust
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 the loan documents.
(e) This section shall go into effect on January 1, 2013.
SEC. 4. Section 2923.7 is added to the Civil Code, to read:
2923.7. (a) If an eligible borrower initiates a loan modification
application on or before the 90th day of delinquency on the mortgage
loan at issue or the 45th day after the mortgagee, trustee, or
beneficiary or authorized agent makes initial contact with the
borrower pursuant to Section 2923.5, whichever is later, the
mortgagee, trustee, or beneficiary shall not record a notice of
default unless and until it has, in good faith, reviewed the
application, rendered a decision on the application, and sent the
borrower a denial explanation letter as described in Section 2923.73.
(b) If a borrower initiates an application for a loan modification
by the deadline described in subdivision (a), but does not include
all of the documentation or information the mortgagee, beneficiary,
or authorized agent requires in order to consider the borrower for a
loan modification, the mortgagee, beneficiary, or authorized agent
shall provide the borrower with a written notice that lists any
supplemental documentation or information required, and includes the
deadline for providing that documentation or information, which shall
not be less than 30 calendar days from the date the borrower
receives the notice.
(c) If an eligible borrower initiates a loan modification
application by 30 days after receiving the statutorily required copy
of the notice of default by certified mail, the mortgagee, trustee,
or beneficiary shall not record a notice of sale until 10 business
days after it has, in good faith, reviewed the application, rendered
a decision on the application, and sent the borrower a denial
explanation letter as described in Section 2923.73.
(d) If the mortgagee, beneficiary, or authorized agent has signed
a Making Home Affordable Servicer Participation Agreement with the
Federal National Mortgage Association or is otherwise required to
review the borrower's loan under the Making Home Affordable
Modification Program (HAMP) guidelines, compliance with applicable
HAMP rules regarding deadlines and timeframes for the borrower to
submit and complete a loan modification application shall satisfy the
requirements of this section.
(e) Notwithstanding anything to the contrary, nothing in this
section shall be construed to require a mortgage servicer to perform
services in a manner inconsistent with the terms of any applicable
contract for the servicing of the mortgage loan at issue.
(f) This section 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 mortgagee, beneficiary, or authorized agent does not offer
any loan modifications.
(3) The borrower is not eligible to be considered for a loan
modification.
(g) This subdivision shall not be construed to diminish in any way
the obligations of a mortgagee, trustee, beneficiary, or authorized
agent that has signed a Making Home Affordable Servicer Participation
Agreement with the Federal National Mortgage Association or is
otherwise required to review a loan under HAMP guidelines.
(h) This section shall apply only to mortgages or deeds of trust
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 the
loan documents.
SEC. 5. Section 2923.73 is added to the Civil Code, to read:
2923.73. (a) If a borrower initiates an application for a loan
modification according to the procedures of the mortgagee,
beneficiary, or authorized agent, and the mortgagee, beneficiary, or
authorized agent denies either a permanent loan modification or a
federal Making Home Affordable Modification Program (HAMP) trial
period plan, the mortgagee, beneficiary, or authorized agent shall
send the borrower by certified mail, no later than 10 business days
following the denial decision, a denial explanation letter that
states the reason or reasons for the denial.
(1) If the loan modification is denied because the borrower failed
to provide all required verification documents or information by the
applicable deadline as set forth in subdivision (b) of Section
2923.7, the letter shall indicate the date by which the borrower was
directed to provide the documents or information, list the documents
or information that were not provided, and state that the borrower's
request for a loan modification has been denied for this reason.
(2) If the borrower submits all required written application
materials for a loan modification by the applicable deadline as set
forth in subdivision (b) of Section 2923.7, and the application is
denied, the denial explanation letter shall include all of the
following information in English or, if communications with the
borrower have been primarily in one of the languages set forth in
subdivision (b) of Section 1632, then in that language:
(A) The date the mortgagee, beneficiary, or authorized agent
received the final materials required in order to complete its review
of the borrower's application for a loan modification.
(B) The date on which the mortgagee, beneficiary, or authorized
agent made the decision to deny the borrower's application for a loan
modification.
(C) If the mortgagee, beneficiary, or authorized agent was
required to consider the borrower for a loan modification under HAMP
guidelines, the information required to be provided in the borrower
notice described in the most current version of the Making Home
Affordable Servicer Handbook and any subsequent amendments thereto.
(D) All of the reasons the borrower did not qualify for a loan
modification, including, as applicable, the following:
(i) If the denial decision is based on any investor guideline or
restriction on loan modifications, a description of the guideline or
restriction that resulted in the denial decision with a copy of the
applicable provision in the pooling and servicing agreement
evidencing the guideline or restriction.
(ii) If the denial decision is based on the borrower's income or
expenses, the income or expense figures used in determining the
borrower's qualification for a loan modification, including, at a
minimum, borrower's gross and net monthly income, property taxes, and
hazard insurance premiums.
(iii) If the denial decision is based on a determination that the
net present value of the income stream expected from the modified
loan is not greater than the net present value of the income stream
that is expected from the loan without modification, all of the
inputs, assumptions, and calculations used to make that
determination.
(iv) If applicable, a finding that the borrower was previously
offered a loan modification and failed to successfully make payments
under the terms of the modified loan.
(E) The name and contact information of the holder of the note for
the borrower's loan.
(F) A description of other foreclosure alternatives for which the
borrower may be eligible, if any, including, but not limited to,
other loan modification programs, a short sale, deed in lieu or
forbearance, and a list of the steps the borrower must take in order
to be considered for those options. If the servicer has already
approved the borrower for another foreclosure alternative,
information necessary to participate in or complete the alternative
should be included.
(G) Instructions regarding how to contact the mortgagee,
beneficiary, or authorized agent about the denial of the loan
modification.
(b) If a borrower is denied a loan modification, and the
mortgagee, beneficiary, or authorized agent sends a denial
explanation letter in compliance with this section, the mortgagee,
trustee, beneficiary, or authorized agent may proceed to record a
notice of default even if the borrower initiates a dispute relating
to the denial and the dispute has not yet been resolved.
(c) This section shall apply only to mortgages or deeds of trust
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 the
loan documents.
SEC. 6. Section 2923.74 is added to the Civil Code, to read:
2923.74. (a) After the requirements of Sections 2923.5, 2923.7,
and 2923.73, as applicable, have been satisfied, a mortgage servicer
shall do the following in order to initiate the foreclosure process:
(1) For purposes of completing the declaration of compliance
described in paragraph (2), compile in one place a record
demonstrating that the initial contact of subdivision (a) of Section
2923.5 or the due diligence requirements of subdivision (g) Section
2923.5 have been completed. This record shall include the dates and
times of, and addresses and telephone numbers used for, the contact
or attempted contacts with the borrower, as well as a record of the
good faith efforts undertaken pursuant to Section 2923.4 and 2923.7.
The record shall be made available to the borrower within 10 business
days of the request if requested in writing after a notice of
default has been recorded.
(2) Transmit to the foreclosure trustee or authorized agent the
declaration of compliance required by this section that is signed on
behalf of the mortgage servicer. The declaration shall be signed
either by an individual having personal knowledge of the facts stated
within, or by an individual with authority to bind the mortgage
servicer, who certifies that the declaration is based upon records
that were made in the regular course of the mortgage servicer's
business at or near the time of the events recorded. The declaration
of compliance shall be included as part of, or attached to, every
notice of default filed pursuant to Section 2924. A notice of default
that does not include a declaration of compliance is void.
(3) The declaration of compliance shall be substantially similar
to the following form:
DECLARATION OF COMPLIANCE
I. BORROWER CONTACT
Complete Sections A and B until December 31, 2012 only].
A. /-/ This loan is not subject to Cal. Civil Code Sec. 2923.5,
pursuant to (check all that apply):
/-/ Cal. Civil Code Sec. 2923.5(h).
/-/ Cal. Civil Code Sec. 2923.5(i).
If item (I)(A) is checked, no further information regarding
borrower contact is required. If item (I)(A) is not checked, complete
item (I)(B).
B. /-/ This loan is subject to Cal. Civil Code Sec. 2923.5, and
the mortgagee, beneficiary, or authorized agent has complied with the
requirements of Cal. Civil Code Sec. 2923.5 by satisfying the
applicable contact or due diligence requirements described in Cal.
Civil Code Sec. 2923.5(a) or (g). If checked, insert the date that
the applicable borrower contact requirements were completed here:
______________________________
Complete Sections C and D beginning on January 1, 2013 only].
C. /-/ This loan is not subject to Cal. Civil Code Sec. 2923.5,
pursuant to (check all that apply):
/-/ Cal. Civil Code Sec. 2923.5(d).
D. /-/ This loan is subject to Cal. Civil Code Sec. 2923.5, and
the mortgagee, beneficiary, or authorized agent has complied with the
requirements of Cal. Civil Code Sec. 2923.5(a)(2) and 2923.5(c). If
checked, insert the date that the certified letter required by Sec.
2923.5(a)(2) was sent here: ______________________________
II. FORECLOSURE AVOIDANCE REVIEW
A. /-/ This loan is not subject to Cal. Civil Code Sec. 2923.7,
pursuant to (check all that apply):
/-/ Cal. Civil Code Sec. 2923.7(f)(1)(A).
/-/ Cal. Civil Code Sec. 2923.7(f)(1)(B).
/-/ Cal. Civil Code Sec. 2923.7(h).
If item (II)(A) is checked, no further information regarding
borrower solicitation efforts is required. If item (II)(A) is not
checked, complete item (II)(B).
B. /-/ This loan is subject to Cal. Civil Code Sec. 2923.7 and
(check only one):
/-/ The borrower was evaluated for a loan modification, was not
approved, and the mortgagee, beneficiary, or authorized agent sent
the borrower a denial explanation letter in compliance with the
requirements of Cal. Civil Code Sec. 2923.73(a)(2).
/-/ The borrower did not submit all required written application
materials by the applicable deadline, and the mortgagee, beneficiary,
or authorized agent sent the borrower a denial explanation letter in
compliance with the requirements of Cal. Civil Code Sec. 2923.73(a)
(1).
/-/ The borrower did not initiate an application for a loan
modification by the applicable deadline.
/-/ The borrower was offered a HAMP trial period plan, but did not
accept the trial period plan or did not complete the plan.
/-/ The borrower was offered a permanent loan modification, but
the borrower did not accept the modification offered.
/-/ The borrower was offered and accepted a permanent loan
modification, but did not comply with the terms of the modification.
/-/ The borrower communicated to the mortgagee, beneficiary, or
authorized agent that he or she does not intend to apply for a loan
modification.
III. PROOF OF OWNERSHIP
/-/ Attached is a copy of the note and all assignments and
endorsements of the note, along with a declaration attesting to the
existence and possession of the original note as well as all the
assignments and endorsements, and certifying ownership of the
mortgage and the right to foreclose.
/-/ The trustee, mortgagee, beneficiary, or any of their
authorized agents are not reasonably able to obtain possession of the
note and/or all assignments and endorsements thereof. Attached is a
declaration of lost note that complies with the requirements of
Section 2924(a)(1)(D) of the Civil Code.
(b) This section shall apply only to mortgages or deeds of trust
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 the
loan documents.
(c) For purposes of this section, "mortgage servicer" shall mean a
person or entity responsible for the day-to-day management of a
mortgage loan account,
including collecting and crediting periodic loan payments, handling
any escrow account or enforcing mortgage loan terms either as the
holder of the loan note or on behalf of holder of the loan note.
SEC. 7. Section 2923.75 is added to the Civil Code, to read:
2923.75. (a) If a borrower is eligible to apply for a loan
modification and the mortgagee, trustee, beneficiary, or authorized
agent records a notice of sale without completing its evaluation of
the borrower's timely completed loan modification application or
waiting for the borrower's deadline for submitting a loan
modification application to pass or fails to send a denial
explanation letter that materially complies with the requirements of
Section 2923.73, the borrower may seek an order in any court having
jurisdiction to enjoin any pending trustee's sale until any of these
requirements not previously satisfied are satisfied.
(b) If a borrower is eligible to apply for a loan modification and
the mortgagee, trustee, beneficiary, or authorized agent either
records a notice of default without completing its evaluation of the
borrower's timely completed loan modification application or without
waiting for the borrower's deadline for submitting a loan
modification application to pass; denies a loan modification
application for failure to provide required verification documents or
information after failing to provide the borrower with a deadline
that complies with subdivision (b) of Section 2923.7 or after failing
to honor that deadline; or fails to send a denial explanation letter
that materially complies with the requirements of Section 2923.73,
and the mortgagee, trustee, beneficiary, or authorized agent causes
the property at issue to be sold at a trustee's sale, the borrower
may pursue any one of the following options within one year following
the trustee's sale, as applicable, against the mortgagee, trustee,
beneficiary, or authorized agent:
(1) If the property at issue is sold to a bona fide purchaser at a
trustee sale conducted in accordance with Section 2924f, the
borrower may recover the greater of treble actual damages or
statutory damages in the amount of fifteen thousand dollars
($15,000), plus reasonable attorney's fees and costs.
(2) If, prior to the initiation of an action under this section,
the property at issue is sold to a bona fide purchaser by the
foreclosing party subsequent to a trustee sale conducted in
accordance with Section 2924f in which title was transferred to the
foreclosing party, the borrower may recover the greater of treble
actual damages or statutory damages in the amount of fifteen thousand
dollars ($15,000), plus reasonable attorney's fees and costs. If the
mortgagee, trustee, beneficiary, or authorized agent had actual
notice of the borrower's claim under this section prior to selling
the property to a bona fide purchaser, the borrower shall be entitled
to recover statutory damages in the amount of twenty thousand
dollars ($20,000), in addition to other damages recoverable under
this paragraph, plus reasonable attorney's fees and costs.
(3) (A) If title to the property at issue is transferred to the
foreclosing party at a trustee sale conducted in accordance with
Section 2924f, but a subsequent sale to a bona fide purchaser, as
described in paragraph (2), has not occurred, the borrower may bring
an action to void the foreclosure sale, for an award of attorney's
fees and costs, and to obtain an injunction of the type described in
subparagraph (B).
(B) Pursuant to subparagraph (A), a borrower may seek an
injunction requiring the mortgagee, trustee, beneficiary, or
authorized agent to comply, at least 30 days prior to recording a
notice of sale, with any requirement, not previously satisfied, of
Section 2923.5, 2923.7, 2923.73, or 2923.74, or any similar
requirement that the court deems appropriate in the interest of
justice. The injunction shall also require the mortgagee, trustee,
beneficiary, or authorized agent to file a declaration affirming
compliance with the requirements of the injunction together with the
notice of sale.
(c) A mortgagee, trustee, beneficiary, or authorized agent shall
have no civil liability under subdivision (b) if, prior to the
initiation of a legal action by the borrower, it satisfies the
requirements of either of the following paragraphs no later than 180
days after the date of the trustee sale:
(1) The mortgagee, trustee, beneficiary, or authorized agent do
all of the following:
(A) Voluntarily rescind the foreclosure sale prior to filing an
unlawful detainer action against the borrower.
(B) Within three days of the rescission, send the borrower a
written communication informing the borrower of the rescission and
listing the steps the mortgagee, trustee, beneficiary, or authorized
agent will take prior to filing a notice of sale.
(C) Materially comply with all the requirements of Section 2923.5,
2923.7, 2923.73, or 2923.74, as applicable, that were not previously
satisfied, and either offer the borrower a loan modification if the
borrower qualifies for one, or send the borrower a written
communication informing the borrower of the steps that were taken and
the outcome, including any reason for the denial of a loan
modification, if applicable, at least 30 days before recording a
notice of sale.
(2) The mortgagee, trustee, beneficiary, or authorized agent shall
refrain from filing an unlawful detainer action against the borrower
until both of the following requirements have been satisfied:
(A) Prior to taking any steps under subparagraph (B), the
mortgagee, trustee, beneficiary, or authorized agent shall send the
borrower a written communication informing the borrower that it will
not proceed with an eviction until it has completed certain steps, as
set forth in the letter.
(B) The mortgagee, trustee, beneficiary, or authorized agent shall
materially comply with all of the requirements of Sections 2923.5,
2923.7, 2923.73, and 2923.74, as applicable, that were not previously
satisfied, and send the borrower a written communication informing
the borrower of the steps that were taken and the outcome, including
any reason for the denial of a loan modification, if applicable. The
mortgagee, trustee, beneficiary, or authorized agent shall wait 30
days after completing those requirements before filing an unlawful
detainer action against the borrower. However, if the mortgagee,
trustee, beneficiary, or authorized agent determines that the
borrower qualifies for a loan modification, it shall rescind the sale
and offer the borrower the loan modification.
(d) (1) If the mortgagee, trustee, beneficiary, or authorized
agent fails to record a completed declaration of compliance pursuant
to subparagraph (B) of paragraph (1) of subdivision (a) of Section
2923.74, a borrower may recover statutory damages of up to ten
thousand dollars ($10,000), but not less than one thousand five
hundred dollars ($1,500), from the mortgagee, trustee, beneficiary,
or authorized agent.
(2) If the mortgagee, trustee, beneficiary, or authorized agent
submits a materially false declaration of compliance, including any
declaration of lost note, a borrower may recover statutory damages of
up to twenty-five thousand dollars ($25,000), but not less than ten
thousand dollars ($10,000), from the mortgagee, trustee, beneficiary,
or authorized agent, plus attorney's fees and costs.
(3) For purposes of this subdivision, the declaration of
compliance shall not be considered false if it lists any incorrect
dates for the date that the requirements described in the declaration
were completed, unless the mortgagee, beneficiary, or authorized
agent knowingly included the wrong date on the declaration.
(e) (1) Notwithstanding anything in this section, a borrower shall
not have a cause of action under this section for any failure or
error that is technical or de minimis in nature.
(2) Failure to complete any required section of the declaration of
compliance shall not be considered technical or de minimus.
(f) (1) The provisions of Section 2923.5, 2923.7, 2923.73,
2923.74, 2924, or 2924b are also enforceable by the Attorney General.
Any person, including a partner or officer of the mortgagee,
trustee, beneficiary, or authorized agent, who violates any provision
of this act, shall be subject to a civil penalty of not more than
ten thousand dollars ($10,000) for each violation, except as stated
in paragraph (2).
(2) (A) Any trustee, beneficiary, or authorized agent that submits
a false or fraudulent declaration of lost note pursuant to
subparagraph (D) of paragraph (1) of subdivision (a) of Section 2924
shall be subject to a civil penalty of twenty-five thousand dollars
($25,000) for each violation.
(B) If the mortgagee, trustee, beneficiary, or authorized agent
had actual notice of a legal claim pursuant to this section prior to
selling the property to a bona fide purchaser subsequent to a trustee
sale conducted in accordance with Section 2924f in which title was
transferred to the foreclosing party, the party shall be subject to a
civil penalty of twenty-five thousand dollars ($25,000) for each
violation.
(3) The Attorney General may also bring a civil action for
injunctive relief, and may include in the action a claim for
restitution, disgorgement, or damages on behalf of the consumers
subject to the act or practice constituting the subject matter of the
action. The Attorney General may include in any action authorized by
this section, a claim for costs, including reasonable attorney's
fees and expenses and the court shall have jurisdiction to award
relief, authorized by this section and any other additional relief.
(g) Any person licensed by the State of California who violates
any provision of Section 2923.5, 2923.7, 2923.73, 2923.74, 2924, or
2924b shall be deemed to have violated that person's licensing law,
and shall be subject to enforcement action by its licensing agency.
SEC. 8. Section 2924 of the Civil Code, as amended by Section 1 of
Chapter 180 of the Statutes of 2010, is amended to read:
2924. (a) Every transfer of an interest in property, other than
in trust, made only as a security for the performance of another act,
is to be deemed a mortgage, except when in the case of personal
property it is accompanied by actual change of possession, in which
case it is to be deemed a pledge. Where, by a mortgage created after
July 27, 1917, of any estate in real property, other than an estate
at will or for years, less than two, or in any transfer in trust made
after July 27, 1917, of a like estate to secure the performance of
an obligation, a power of sale is conferred upon the mortgagee,
trustee, or any other person, to be exercised after a breach of the
obligation for which that mortgage or transfer is a security, the
power shall not be exercised except where the mortgage or transfer is
made pursuant to an order, judgment, or decree of a court of record,
or to secure the payment of bonds or other evidences of indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations, or is made by a public utility subject to the
provisions of the Public Utilities Act, until all of the following
apply:
(1) The trustee, mortgagee, or beneficiary, or any of their
authorized agents shall first file for record, in the office of the
recorder of each county wherein the mortgaged or trust property or
some part or parcel thereof is situated, a notice of default. That
notice of default shall include all of the following:
(A) A statement identifying the mortgage or deed of trust by
stating the name or names of the trustor or trustors and giving the
book and page, or instrument number, if applicable, where the
mortgage or deed of trust is recorded or a description of the
mortgaged or trust property.
(B) A statement that a breach of the obligation for which the
mortgage or transfer in trust is security has occurred.
(C) A statement setting forth the nature of each breach actually
known to the beneficiary and of his or her election to sell or cause
to be sold the property to satisfy that obligation and any other
obligation secured by the deed of trust or mortgage that is in
default.
(D) Proof of ownership of the mortgage or deed of trust note
attached to the notice of default and noted on the declaration of
compliance required by Section 2923.74. This proof shall include a
copy of the mortgage or deed of trust note, and evidence of all
assignments and endorsements of the mortgage or deed of trust note
and mortgage or deed of trust, along with a declaration attesting to
the existence and possession of the note as well as all the
assignments and endorsements, and certifying ownership of the
mortgage or deed of trust and the right to foreclose. If this proof
cannot be located, the mortgagee, trustee, beneficiary, or authorized
agent shall attach a declaration signed either by an individual
having personal knowledge of the facts stated within, or by an
individual with authority to bind the mortgagee, trustee,
beneficiary, or authorized agent, who certifies that the declaration
is based upon records that were made in the regular course of
business at or near the time of the events recorded, stating the
following:
(i) Facts sufficient to show that the mortgagee, trustee,
beneficiary, or authorized agent has the right to enforce the note.
(ii) A statement that the person cannot reasonably obtain
possession of the note, and a description of the reasonable efforts
made to obtain the note.
(iii) A description of the terms of the note and any riders
attached thereto, including, at a minimum:
(I) The date of execution.
(II) The parties.
(III) The principal amount of the loan.
(IV) The amortization period of the loan.
(V) The initial interest rate and, if applicable, the initial date
and the frequency of any adjustments to the interest rate, and the
index and margin used to calculate the interest rate at the time of
any scheduled adjustment.
(VI) The expiration date of any interest-only period, if
applicable.
(iv) Nothing in this subparagraph shall be construed in derogation
of the parties' rights established under Section 3-309 of the
Uniform Commercial Code or any similar rights established under
California law.
(D)
(E) If the default is curable pursuant to Section
2924c, the statement specified in paragraph (1) of subdivision (b) of
Section 2924c.
(2) Not less than three months shall elapse from the filing of the
notice of default.
(3) Except as provided in paragraph (4), after the lapse of the
three months described in paragraph (2), the mortgagee, trustee, or
other person authorized to take the sale shall give notice of sale,
stating the time and place thereof, in the manner and for a time not
less than that set forth in Section 2924f.
(4) Notwithstanding paragraph (3), the mortgagee, trustee, or
other person authorized to take sale may file a notice of sale
pursuant to Section 2924f up to five days before the lapse of the
three-month period described in paragraph (2), provided that the date
of sale is no earlier than three months and 20 days after the filing
of the notice of default.
(b) In performing acts required by this article, the trustee shall
incur no liability for any good faith error resulting from reliance
on information provided in good faith by the beneficiary regarding
the nature and the amount of the default under the secured
obligation, deed of trust, or mortgage. In performing the acts
required by this article, a trustee shall not be subject to Title
1.6c (commencing with Section 1788) of Part 4.
(c) A recital in the deed executed pursuant to the power of sale
of compliance with all requirements of law regarding the mailing of
copies of notices or the publication of a copy of the notice of
default or the personal delivery of the copy of the notice of default
or the posting of copies of the notice of sale or the publication of
a copy thereof shall constitute prima facie evidence of compliance
with these requirements and conclusive evidence thereof in favor of
bona fide purchasers and encumbrancers for value and without notice.
(d) All of the following shall constitute privileged
communications pursuant to Section 47:
(1) The mailing, publication, and delivery of notices as required
by this section.
(2) Performance of the procedures set forth in this article.
(3) Performance of the functions and procedures set forth in this
article if those functions and procedures are necessary to carry out
the duties described in Sections 729.040, 729.050, and 729.080 of the
Code of Civil Procedure.
(e) There is a rebuttable presumption that the beneficiary
actually knew of all unpaid loan payments on the obligation owed to
the beneficiary and secured by the deed of trust or mortgage subject
to the notice of default. However, the failure to include an actually
known default shall not invalidate the notice of sale and the
beneficiary shall not be precluded from asserting a claim to this
omitted default or defaults in a separate notice of default.
(f) This section shall become operative on January 1, 2011.
SEC. 9. Section 2924 of the Civil Code, as amended by Section 2 of
Chapter 180 of the Statutes of 2010, is repealed.
2924. (a) Every transfer of an interest in property, other than
in trust, made only as a security for the performance of another act,
is to be deemed a mortgage, except when in the case of personal
property it is accompanied by actual change of possession, in which
case it is to be deemed a pledge. Where, by a mortgage created after
July 27, 1917, of any estate in real property, other than an estate
at will or for years, less than two, or in any transfer in trust made
after July 27, 1917, of a like estate to secure the performance of
an obligation, a power of sale is conferred upon the mortgagee,
trustee, or any other person, to be exercised after a breach of the
obligation for which that mortgage or transfer is a security, the
power shall not be exercised except where the mortgage or transfer is
made pursuant to an order, judgment, or decree of a court of record,
or to secure the payment of bonds or other evidences of indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations, or is made by a public utility subject to the
provisions of the Public Utilities Act, until all of the following
apply:
(1) The trustee, mortgagee, or beneficiary, or any of their
authorized agents shall first file for record, in the office of the
recorder of each county wherein the mortgaged or trust property or
some part or parcel thereof is situated, a notice of default. That
notice of default shall include all of the following:
(A) A statement identifying the mortgage or deed of trust by
stating the name or names of the trustor or trustors and giving the
book and page, or instrument number, if applicable, where the
mortgage or deed of trust is recorded or a description of the
mortgaged or trust property.
(B) A statement that a breach of the obligation for which the
mortgage or transfer in trust is security has occurred.
(C) A statement setting forth the nature of each breach actually
known to the beneficiary and of his or her election to sell or cause
to be sold the property to satisfy that obligation and any other
obligation secured by the deed of trust or mortgage that is in
default.
(D) If the default is curable pursuant to Section 2924c, the
statement specified in paragraph (1) of subdivision (b) of Section
2924c.
(2) Not less than three months shall elapse from the filing of the
notice of default.
(3) Except as provided in paragraph (4), after the lapse of the
three months described in paragraph (2), the mortgagee, trustee, or
other person authorized to take the sale shall give notice of sale,
stating the time and place thereof, in the manner and for a time not
less than that set forth in Section 2924f.
(4) Notwithstanding paragraph (3), the mortgagee, trustee, or
other person authorized to take sale may file a notice of sale
pursuant to Section 2924f up to five days before the lapse of the
three-month period described in paragraph (2), provided that the date
of sale is no earlier than three months and 20 days after the filing
of the notice of default.
(b) In performing acts required by this article, the trustee shall
incur no liability for any good faith error resulting from reliance
on information provided in good faith by the beneficiary regarding
the nature and the amount of the default under the secured
obligation, deed of trust, or mortgage. In performing the acts
required by this article, a trustee shall not be subject to Title
1.6c (commencing with Section 1788) of Part 4.
(c) A recital in the deed executed pursuant to the power of sale
of compliance with all requirements of law regarding the mailing of
copies of notices or the publication of a copy of the notice of
default or the personal delivery of the copy of the notice of default
or the posting of copies of the notice of sale or the publication of
a copy thereof shall constitute prima facie evidence of compliance
with these requirements and conclusive evidence thereof in favor of
bona fide purchasers and encumbrancers for value and without notice.
(d) All of the following shall constitute privileged
communications pursuant to Section 47:
(1) The mailing, publication, and delivery of notices as required
by this section.
(2) Performance of the procedures set forth in this article.
(3) Performance of the functions and procedures set forth in this
article if those functions and procedures are necessary to carry out
the duties described in Sections 729.040, 729.050, and 729.080 of the
Code of Civil Procedure.
(e) There is a rebuttable presumption that the beneficiary
actually knew of all unpaid loan payments on the obligation owed to
the beneficiary and secured by the deed of trust or mortgage subject
to the notice of default. However, the failure to include an actually
known default shall not invalidate the notice of sale and the
beneficiary shall not be precluded from asserting a claim to this
omitted default or defaults in a separate notice of default.
(f) This section shall become operative on January 1, 2011.
SEC. 10. Section 2924b of the Civil Code is amended to read:
2924b. (a) Any person desiring a copy of any notice of default
and of any notice of sale under any deed of trust or mortgage with
power of sale upon real property or an estate for years therein, as
to which deed of trust or mortgage the power of sale cannot be
exercised until these notices are given for the time and in the
manner provided in Section 2924 may, at any time subsequent to
recordation of the deed of trust or mortgage and prior to recordation
of notice of default thereunder, cause to be filed for record in the
office of the recorder of any county in which any part or parcel of
the real property is situated, a duly acknowledged request for a copy
of the notice of default and of sale. This request shall be signed
and acknowledged by the person making the request, specifying the
name and address of the person to whom the notice is to be mailed,
shall identify the deed of trust or mortgage by stating the names of
the parties thereto, the date of recordation thereof, and the book
and page where the deed of trust or mortgage is recorded or the
recorder's number, and shall be in substantially the following form:
""In accordance with Section 2924b, Civil Code,
request is hereby
made that a copy of any notice of default and a
copy of any notice of sale
under the deed of trust (or mortgage) recorded
______, ____, in Book
_____ page ____ records of ____ County, (or filed
for record with
recorder's serial number ____, _______ County)
California, executed
by ____ as trustor (or mortgagor) in which
________ is named as
beneficiary (or mortgagee) and
______________ as trustee be mailed to
_________________ at __________________________.
Name Address
NOTICE: A copy of any notice of default and of
any notice of sale will be
sent only to the address contained in this
recorded request. If your address changes, a new
request must be recorded.
Signature ______________''
Upon the filing for record of the request, the recorder shall
index in the general index of grantors the names of the trustors (or
mortgagor) recited therein and the names of persons requesting
copies.
(b) The mortgagee, trustee, or other person authorized to record
the notice of default or the notice of sale shall do each of the
following:
(1) (A) Within 10 business days following
recordation of the notice of default, deposit or cause to be
deposited in the United States mail an envelope, sent by registered
or certified mail with postage prepaid, containing a copy of the
notice with the recording date shown thereon, addressed to each
person whose name and address are set forth in a duly recorded
request therefor, directed to the address designated in the request
and to each trustor or mortgagor at his or her last known address if
different than the address specified in the deed of trust or mortgage
with power of sale.
(B) Together with the copy of the notice of default, send to each
trustor or mortgagor at his or her last known address if different
than the address specified in the deed of trust or mortgage with
power of sale, a life of
loan accounting for the mortgage at issue. A life of loan accounting
shall include each of the following:
(i) An accounting of all payments made on the mortgage or deed of
trust loan account from the close of escrow to the date the notice of
default was recorded in the form of a spreadsheet showing all
account activity, including running balances for each account,
including balances for principal, interest, escrow, unapplied funds,
and fees.
(ii) An itemization and description of all late fees, late
charges, appraisal fees, property inspection fees, forced placed
insurance charges, legal fees, and recoverable corporate advances
charged on the mortgage or deed of trust loan account and an
explanation as to why those fees were charged.
(iii) A copy of all interest rate adjustment notices and the two
most recent escrow analysis notices sent to the borrower.
(iv) A breakdown of the current escrow charges showing how they
are calculated and the reasons for any increase within the last 24
months and a breakdown of any shortage, deficiency, or surplus in the
escrow account over the past three years.
(2) At least 20 days before the date of sale, deposit or cause to
be deposited in the United States mail an envelope, sent by
registered or certified mail with postage prepaid, containing a copy
of the notice of the time and place of sale, addressed to each person
whose name and address are set forth in a duly recorded request
therefor, directed to the address designated in the request and to
each trustor or mortgagor at his or her last known address if
different than the address specified in the deed of trust or mortgage
with power of sale.
(3) As used in paragraphs (1) and (2), the "last known address" of
each trustor or mortgagor means the last business or residence
physical address actually known by the mortgagee, beneficiary,
trustee, or other person authorized to record the notice of default.
For the purposes of this subdivision, an address is "actually known"
if it is contained in the original deed of trust or mortgage, or in
any subsequent written notification of a change of physical address
from the trustor or mortgagor pursuant to the deed of trust or
mortgage. For the purposes of this subdivision, "physical address"
does not include an e-mail or any form of electronic address for a
trustor or mortgagor. The beneficiary shall inform the trustee of the
trustor's last address actually known by the beneficiary. However,
the trustee shall incur no liability for failing to send any notice
to the last address unless the trustee has actual knowledge of it.
(4) A "person authorized to record the notice of default or the
notice of sale" shall include an agent for the mortgagee or
beneficiary, an agent of the named trustee, any person designated in
an executed substitution of trustee, or an agent of that substituted
trustee.
(c) The mortgagee, trustee, or other person authorized to record
the notice of default or the notice of sale shall do the following:
(1) Within one month following recordation of the notice of
default, deposit or cause to be deposited in the United States mail
an envelope, sent by registered or certified mail with postage
prepaid, containing a copy of the notice with the recording date
shown thereon, addressed to each person set forth in paragraph (2),
provided that the estate or interest of any person entitled to
receive notice under this subdivision is acquired by an instrument
sufficient to impart constructive notice of the estate or interest in
the land or portion thereof that is subject to the deed of trust or
mortgage being foreclosed, and provided the instrument is recorded in
the office of the county recorder so as to impart that constructive
notice prior to the recording date of the notice of default and
provided the instrument as so recorded sets forth a mailing address
that the county recorder shall use, as instructed within the
instrument, for the return of the instrument after recording, and
which address shall be the address used for the purposes of mailing
notices herein.
(2) The persons to whom notice shall be mailed under this
subdivision are:
(A) The successor in interest, as of the recording date of the
notice of default, of the estate or interest or any portion thereof
of the trustor or mortgagor of the deed of trust or mortgage being
foreclosed.
(B) The beneficiary or mortgagee of any deed of trust or mortgage
recorded subsequent to the deed of trust or mortgage being
foreclosed, or recorded prior to or concurrently with the deed of
trust or mortgage being foreclosed but subject to a recorded
agreement or a recorded statement of subordination to the deed of
trust or mortgage being foreclosed.
(C) The assignee of any interest of the beneficiary or mortgagee
described in subparagraph (B), as of the recording date of the notice
of default.
(D) The vendee of any contract of sale, or the lessee of any
lease, of the estate or interest being foreclosed that is recorded
subsequent to the deed of trust or mortgage being foreclosed, or
recorded prior to or concurrently with the deed of trust or mortgage
being foreclosed but subject to a recorded agreement or statement of
subordination to the deed of trust or mortgage being foreclosed.
(E) The successor in interest to the vendee or lessee described in
subparagraph (D), as of the recording date of the notice of default.
(F) The office of the Controller, Sacramento, California, where,
as of the recording date of the notice of default, a "Notice of Lien
for Postponed Property Taxes" has been recorded against the real
property to which the notice of default applies.
(3) At least 20 days before the date of sale, deposit or cause to
be deposited in the United States mail an envelope, sent by
registered or certified mail with postage prepaid, containing a copy
of the notice of the time and place of sale addressed to each person
to whom a copy of the notice of default is to be mailed as provided
in paragraphs (1) and (2), and addressed to the office of any state
taxing agency, Sacramento, California, that has recorded, subsequent
to the deed of trust or mortgage being foreclosed, a notice of tax
lien prior to the recording date of the notice of default against the
real property to which the notice of default applies.
(4) Provide a copy of the notice of sale to the Internal Revenue
Service, in accordance with Section 7425 of the Internal Revenue Code
and any applicable federal regulation, if a "Notice of Federal Tax
Lien under Internal Revenue Laws" has been recorded, subsequent to
the deed of trust or mortgage being foreclosed, against the real
property to which the notice of sale applies. The failure to provide
the Internal Revenue Service with a copy of the notice of sale
pursuant to this paragraph shall be sufficient cause to rescind the
trustee's sale and invalidate the trustee's deed, at the option of
either the successful bidder at the trustee's sale or the trustee,
and in either case with the consent of the beneficiary. Any option to
rescind the trustee's sale pursuant to this paragraph shall be
exercised prior to any transfer of the property by the successful
bidder to a bona fide purchaser for value. A recision of the trustee'
s sale pursuant to this paragraph may be recorded in a notice of
recision pursuant to Section 1058.5.
(5) The mailing of notices in the manner set forth in paragraph
(1) shall not impose upon any licensed attorney, agent, or employee
of any person entitled to receive notices as herein set forth any
duty to communicate the notice to the entitled person from the fact
that the mailing address used by the county recorder is the address
of the attorney, agent, or employee.
(d) Any deed of trust or mortgage with power of sale hereafter
executed upon real property or an estate for years therein may
contain a request that a copy of any notice of default and a copy of
any notice of sale thereunder shall be mailed to any person or party
thereto at the address of the person given therein, and a copy of any
notice of default and of any notice of sale shall be mailed to each
of these at the same time and in the same manner required as though a
separate request therefor had been filed by each of these persons as
herein authorized. If any deed of trust or mortgage with power of
sale executed after September 19, 1939, except a deed of trust or
mortgage of any of the classes excepted from the provisions of
Section 2924, does not contain a mailing address of the trustor or
mortgagor therein named, and if no request for special notice by the
trustor or mortgagor in substantially the form set forth in this
section has subsequently been recorded, a copy of the notice of
default shall be published once a week for at least four weeks in a
newspaper of general circulation in the county in which the property
is situated, the publication to commence within 10 business days
after the filing of the notice of default. In lieu of publication, a
copy of the notice of default may be delivered personally to the
trustor or mortgagor within the 10 business days or at any time
before publication is completed, or by posting the notice of default
in a conspicuous place on the property and mailing the notice to the
last known address of the trustor or mortgagor.
(e) Any person required to mail a copy of a notice of default or
notice of sale to each trustor or mortgagor pursuant to subdivision
(b) or (c) by registered or certified mail shall simultaneously cause
to be deposited in the United States mail, with postage prepaid and
mailed by first-class mail, an envelope containing an additional copy
of the required notice addressed to each trustor or mortgagor at the
same address to which the notice is sent by registered or certified
mail pursuant to subdivision (b) or (c). The person shall execute and
retain an affidavit identifying the notice mailed, showing the name
and residence or business address of that person, that he or she is
over the age of 18 years, the date of deposit in the mail, the name
and address of the trustor or mortgagor to whom sent, and that the
envelope was sealed and deposited in the mail with postage fully
prepaid. In the absence of fraud, the affidavit required by this
subdivision shall establish a conclusive presumption of mailing.
(f) (1) Notwithstanding subdivision (a), with respect to separate
interests governed by an association, as defined in subdivision (a)
of Section 1351, the association may cause to be filed in the office
of the recorder in the county in which the separate interests are
situated a request that a mortgagee, trustee, or other person
authorized to record a notice of default regarding any of those
separate interests mail to the association a copy of any trustee's
deed upon sale concerning a separate interest. The request shall
include a legal description or the assessor's parcel number of all
the separate interests. A request recorded pursuant to this
subdivision shall include the name and address of the association and
a statement that it is a homeowners' association. Subsequent
requests of an association shall supersede prior requests. A request
pursuant to this subdivision shall be recorded before the filing of a
notice of default. The mortgagee, trustee, or other authorized
person shall mail the requested information to the association within
15 business days following the date the trustee's deed is recorded.
Failure to mail the request, pursuant to this subdivision, shall not
affect the title to real property.
(2) A request filed pursuant to paragraph (1) does not, for
purposes of Section 27288.1 of the Government Code, constitute a
document that either effects or evidences a transfer or encumbrance
of an interest in real property or that releases or terminates any
interest, right, or encumbrance of an interest in real property.
(g) No request for a copy of any notice filed for record pursuant
to this section, no statement or allegation in the request, and no
record thereof shall affect the title to real property or be deemed
notice to any person that any person requesting copies of notice has
or claims any right, title, or interest in, or lien or charge upon
the property described in the deed of trust or mortgage referred to
therein.
(h) "Business day," as used in this section, has the meaning
specified in Section 9.