BILL ANALYSIS                                                                                                                                                                                                    Ó





                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular  Session


          SB 1150 (Leno)
          Version: April 26, 2016
          Hearing Date: May 3, 2016
          Fiscal: No
          Urgency: No
          TH   


                                        SUBJECT
                                           
            Mortgages and Deeds of Trust: Mortgage Servicers and Lenders:  
                               Successors in Interest

                                      DESCRIPTION  

          This bill would require mortgage servicers and lenders, upon  
          receiving sufficient documentation to show a person's "successor  
          in interest" status, to provide that person with basic  
          information about the status of a mortgage or loan.  For certain  
          mortgages that authorize loan assumption, this bill would  
          require financial institutions to allow the successor in  
          interest to assume the loan and apply (though not necessarily  
          receive) a loan modification under the Homeowner's Bill of  
          Rights.  The bill would provide successors in interest with a  
          private right of action against financial institutions that  
          violate these provisions, including $50,000 in statutory  
          damages, and would authorize the Department of Business  
          Oversight and the Bureau of Real Estate to develop implementing  
          regulations.

                                      BACKGROUND  

          On June 27, 2012, the Conference Committee on the California  
          Foreclosure Crisis passed the Homeowners' Bill of Rights (HBOR)  
          in order to protect homeowners in the mortgage market, help keep  
          families in their homes, and revive the state's economy  
          following historic foreclosure rates and rampant abuse, fraud,  
          and deception that caused more than one million Californian's to  
          lose their homes.  That bill package sought to: (1) stop the  










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          practice of "dual-tracking;"<1> (2) establish a single point of  
          contact for homeowners with their lenders; and (3) mandate a  
          chain of title of the property.

          Generally speaking, HBOR creates requirements intended to  
          facilitate communication between mortgage servicers and  
          borrowers regarding options for borrowers to avoid foreclosure.   
          HBOR restricts servicers from recording a Notice of Default  
          under California's non-judicial foreclosure process until at  
          least 30 days after contacting a borrower to discuss options for  
          that borrower to avoid foreclosure.  HBOR requires servicers to  
          send specified documents to delinquent borrowers informing them  
          of their rights and to provide a toll-free telephone number that  
          can be used by borrowers to identify nearby housing counseling  
          agencies before recording a Notice of Default.  Importantly,  
          once a borrower submits a loan modification application, the  
          servicer is prohibited from taking any further steps in the  
          non-judicial foreclosure process while that application is  
          pending.  If the loan modification application is denied, the  
          servicer must send a written notice of denial to the borrower,  
          identifying the reasons for the denial and informing the  
          borrower how the denial decision may be appealed.

          HBOR requires servicers to ensure that they have competent and  
          reliable evidence to substantiate a borrower's default and the  
          servicer's right to foreclose before recording documents in the  
          non-judicial foreclosure process.  HBOR also requires servicers  
          to assign a single point of contact to any borrower who requests  
          a foreclosure prevention alternative, and states that the  
          contact must have authority to act on behalf of the servicer, as  
          specified, and be knowledgeable about the borrower's situation  
          and current status in the servicer's loss mitigation process.   
          HBOR includes various consumer remedies for violations of its  
          provisions, including treble and statutory damages.

          While HBOR contains robust protections for borrowers facing  
          foreclosure, the statute lacks similar protections for the  
          survivors of borrowers who attempt to use the statute's  
          provisions to prevent a deceased relative's home from being  
          foreclosed upon.  According to a recent article in Forbes:

            The California Homeowner Bill of Rights has been widely  
            --------------------------
          <1> "Dual tracking" generally refers to the practice of a lender  
          pursuing foreclosure while a homeowner is applying for, or being  
          considered for, a mortgage modification.








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            credited with leveling the playing field between individual  
            homeowners and their mortgage servicers.  It has been a strong  
            part of the housing recovery.  Both Nevada and Minnesota have  
            enacted similar versions of the Homeowner Bill of Rights.  But  
            a vocal group of housing organizations in California are  
            arguing that it is not strong enough.  The problem?  Widowed  
            homeowners are left with no standing on their mortgage.
            . . .
            Despite the strong protections enacted under HBOR, family  
            members who want to speak with their mortgage servicers after  
            the death of a loved one are still hitting a brick wall.  In  
            some cases, a family member may be on the title to the home,  
            but aren't on the mortgage, and servicers refuse to speak to  
            them and instead insist on speaking with the deceased borrower  
            who was listed on the mortgage.  As a result, homeowners are  
            facing red-tape, mixed messages, unreasonable obstacles, and  
            unnecessary foreclosures.

            Mortgage servicers have argued that protections for homeowners  
            created by HBOR do not extend to widowed homeowners and other  
            surviving heirs who have a legal interest in the home but who  
            aren't listed on a mortgage.  Even in cases where a servicer  
            will speak with a surviving family member, homeowners can be  
            caught in an endless cycle if they try to seek a loan  
            modification as a result of their reduced income after the  
            death of a loved one.  Servicers won't consider them for a  
            loan modification until they assume the mortgage.  But, the  
            servicers won't let them assume the mortgage unless they  
            demonstrate that they can afford it.  As a result, mortgage  
            payments are missed or they are not accepted by the servicer,  
            fees rack up, and servicers push grieving family members into  
            foreclosure.  (Anna Bahney, Widowed Homeowners Fight for  
            Standing in California, Forbes (Apr. 30, 2015)  
             [as of Apr. 29,  
            2016].)

          This bill would address the lack of remedies under HBOR for such  
          individuals by authorizing a successor in interest, as defined,  
          to receive information about a deceased borrower's mortgage  
          loan, assume the loan in certain circumstances, and utilize  
          HBOR's foreclosure prevention tools.

                                CHANGES TO EXISTING LAW
           








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           Existing law  regulates the non-judicial foreclosure of  
          properties pursuant to the power of sale contained within a  
          mortgage contract.  To commence the process, existing law  
          requires the trustee, mortgagee, or beneficiary to record a  
          Notice of Default (NOD) and allow three months to lapse before  
          setting a date for sale of the property.  Existing law requires  
          the notice of a non-judicial foreclosure sale to be officially  
          noticed in a newspaper of general circulation, posted on the  
          property, and recorded at least 20 days before the sale date.   
          (Civ. Code Secs. 2924, 2924f.)
           
          Existing law  , the Homeowner's Bill of Rights (HBOR), from  
          January 1, 2013 through December 31, 2017, generally prohibits a  
          mortgage servicer, mortgagee, trustee, beneficiary, or  
          authorized agent from recording an NOD until at least 30 days  
          after establishing contact with a delinquent borrower or  
          complying with specified due diligence requirements to establish  
          contact, and, if a borrower submits a complete application for a  
          first lien loan modification, before that borrower has been  
          provided with a written determination by the servicer regarding  
          that borrower's eligibility for that loan modification.  (Civ.  
          Code Sec. 2923.5.)

           Existing law  , beginning on January 1, 2018, generally prohibits  
          a mortgage servicer, mortgagee, trustee, beneficiary, or  
          authorized agent from recording an NOD until at least 30 days  
          after establishing contact with a delinquent borrower or  
          complying with specified due diligence requirements to establish  
          contact, and, if a borrower submits a complete application for a  
          foreclosure prevention alternative, before that borrower has  
          been provided with a written determination by the servicer  
          regarding eligibility for the requested alternative. (Civ. Code  
          Sec. 2923.5.)

           Existing law  , from January 1, 2013 through December 31, 2017,  
          generally prohibits a mortgage servicer, mortgagee, trustee,  
          beneficiary, or authorized agent from recording an NOD: (1)  
          until the servicer provides specified information to the  
          borrower;  (2) until at least 30 days after the servicer  
          establishes contact with a delinquent borrower or complies with  
          specified due diligence requirements to establish contact; (3)  
          while a complete first lien loan modification is pending review;  
          and (4) if a complete first lien loan modification application  
          has been submitted by a borrower, until any of the following  
          occurs:  the servicer makes a written determination that the  








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          borrower is not eligible for a first lien loan modification, and  
          any appeal period has expired; the borrower does not accept an  
          offered first lien loan modification within 14 days of its  
          offer; or, the borrower accepts a written first lien loan  
          modification, but defaults on or otherwise breaches his or her  
          obligation under that loan modification agreement.  (Civ. Code  
          Sec. 2923.55.)

           Existing law  , from January 1, 2013 through December 31, 2017,  
          generally prohibits a mortgage servicer, mortgagee, trustee,  
          beneficiary, or authorized agent from recording an NOD or Notice  
          of Sale (NOS), or from conducting a trustee's sale: (1) while a  
          complete first lien loan modification is pending review; or (2)  
          if a complete first lien loan modification application has been  
          submitted by a borrower, until any of the following occurs: (a)  
          the servicer makes a written determination that the borrower is  
          not eligible for a first lien loan modification, and any appeal  
          period has expired; (b) the borrower does not accept an offered  
          first lien loan modification within 14 days of its offer; or,  
          (c) the borrower accepts a written first lien loan modification,  
          but defaults or otherwise breaches his or her obligation under  
          that loan modification agreement. (Civ. Code Sec. 2923.6.)

           Existing law  requires, upon request from a borrower who requests  
          a foreclosure prevention alternative, the mortgage servicer to  
          promptly establish a single point of contact and provide the  
          borrower with one or more direct means of communication with the  
          single point of contact.  The mortgage servicer's single point  
          of contact is responsible for, among other things:
           communicating the process by which a borrower may apply for an  
            available foreclosure prevention alternative and the deadline  
            for any required submissions to be considered for these  
            options;
           coordinating receipt of all documents associated with  
            available foreclosure prevention alternatives and notifying  
            the borrower of any missing documents necessary to complete  
            the application;
           having access to current information and personnel sufficient  
            to timely, accurately, and adequately inform the borrower of  
            the current status of the foreclosure prevention alternative;
           ensuring that a borrower is considered for all foreclosure  
            prevention alternatives offered by, or through, the mortgage  
            servicer, if any; and
           having access to individuals with the ability and authority to  
            stop foreclosure proceedings when necessary.  (Civ. Code Sec.  








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            2923.7.)

           Existing law  , from January 1, 2013 through December 31, 2017,  
          generally prohibits a mortgage servicer, mortgagee, trustee,  
          beneficiary, or authorized agent from recording an NOD or NOS,  
          or conducting a trustee's sale, once a borrower has been  
          approved for a foreclosure prevention alternative in writing,  
          and as long as one of the following two conditions is met:  (1)  
          the borrower is in compliance with the terms of a written trial  
          or permanent loan modification, forbearance, or repayment plan;  
          or (2) a foreclosure prevention alternative has been approved in  
          writing by all parties, and proof of funds or financing has been  
          provided to the servicer.  (Civ. Code Sec. 2924.11.)

           Existing law  , beginning on January 1, 2018, prohibits a mortgage  
          servicer, mortgagee, trustee, beneficiary, or authorized agent  
          from:  (1) recording a NOS or conducting a trustee's sale while  
          a complete application for a foreclosure prevention alternative  
          is pending, and until the borrower has been provided with a  
          written determination by the servicer regarding that borrower's  
          eligibility for the requested foreclosure prevention  
          alternative; and (2) recording an NOD or NOS, or conducting a  
          trustee's sale, once a foreclosure prevention alternative is  
          approved in writing, and as long as one of the following two  
          conditions is met:  (a) the borrower is in compliance with the  
          terms of a written trial or permanent loan modification,  
          forbearance, or repayment plan; or (b) a foreclosure prevention  
          alternative has been approved in writing by all parties, and  
          proof of funds or financing has been provided to the servicer.  
          (Civ. Code Sec. 2924.11.)

           Existing law  , from January 1, 2013 through December 31, 2017,  
          generally prohibits a mortgage servicer, trustee, mortgagee,  
          beneficiary, or authorized agent from recording an NOD or NOS,  
          or from conducting a trustee's sale:  (1) while a complete first  
          lien loan modification application is pending, and until the  
          borrower has been provided with a written determination by the  
          servicer regarding that borrower's eligibility for that loan  
          modification; and (2) under either of the following  
          circumstances, if a borrower has been approved for a foreclosure  
          prevention alternative in writing by the servicer:  (a) the  
          borrower is in compliance with the terms of a written trial or  
          permanent loan modification, forbearance, or repayment plan; or  
          (b) a foreclosure prevention alternative has been approved in  
          writing by all parties, and proof of funds or financing has been  








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          provided to the servicer.   (Civ. Code Sec. 2924.18.)

           Existing law  provides for various remedies for violations of the  
          above provisions, including treble actual damages and statutory  
          damages.  (Civ. Code Secs. 2924.12, 2924.19.)

           This bill  states that upon notification by someone claiming to  
          be a successor in interest that a borrower has died, and where  
          that claimant is not a party to the loan or promissory note, a  
          mortgage servicer shall not record a notice of default until the  
          mortgage servicer does both of the following:
             requests reasonable documentation of the death of the  
             borrower from the claimant within a reasonable period of  
             time, as specified; and
             requests reasonable documentation from the claimant  
             regarding the status of that claimant as a successor in  
             interest in the real property within a reasonable period of  
             time, as specified.

           This bill  states that upon receipt by the mortgage servicer of  
          reasonable documentation of the status of a claimant as  
          successor in interest and that claimant's relation to the real  
          property, that claimant shall be deemed a "successor in  
          interest."  This bill specifies that there may be more than one  
          successor in interest, and that being a successor in interest  
          does not impose an affirmative duty on a mortgage servicer or  
          alter any obligation the mortgage servicer has to provide a loan  
          modification to the successor in interest.

          This bill  states that within 10 days of a claimant being deemed  
          a successor in interest, a mortgage servicer shall provide the  
          successor in interest with information in writing about the  
          loan, including loan balance, interest rate and interest reset  
          dates and amounts, balloon payments if any, prepayment penalties  
          if any, default or delinquency status, the monthly payment  
          amount, and payoff amounts.

           This bill  states that a mortgage servicer shall allow a  
          successor in interest to either:
           assume the deceased borrower's loan, unless such assumption is  
            prohibited by the terms of the loan; or
           where a successor in interest of an assumable loan also seeks  
            a foreclosure prevention alternative, simultaneously apply to  
            assume the loan and for a foreclosure prevention alternative  
            that is offered by the loan lender or applicable loss  








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            mitigation rules.  If the successor in interest qualifies for  
            the foreclosure prevention alternative, the servicer shall  
            allow the successor in interest to assume the loan.

           This bill  states that a successor in interest who is eligible to  
          assume a deceased borrower's outstanding mortgage loan and  
          wishes to apply for a foreclosure prevention alternative in  
          connection with that loan shall have all the same rights and  
          remedies as a borrower under specified sections of the  
          Homeowner's Bill of Rights.

           This bill  provides successors in interest with certain remedies  
          for violations of the above provisions, including injunctive  
          relief, actual economic damages, treble actual damages, or  
          statutory damages of $50,000, and reasonable attorney fees and  
          costs.

           This bill  authorizes the Department of Business Oversight and  
          the Bureau of Real Estate to adopt regulations under their  
          respective jurisdictions as necessary to implement the above  
          provisions.

           This bill  specifies that it shall only apply to first lien  
          mortgages or deeds of trust that are secured by owner-occupied  
          residential real property containing no more than four dwelling  
          units.

           This bill  makes related findings and declarations.

                                        COMMENT
           
           1.Stated need for the bill  

          According to the author:

            California led the nation in 2012 with its Homeowners' Bill of  
            Rights (HBOR), requiring a single point of contact and  
            prohibiting dual-tracking of borrowers, a practice of driving  
            owners to foreclosure even while working on loan  
            modifications.  HBOR is credited with having slowed down  
            foreclosures in 2013 as servicers attended to the new  
            homeowner protections.  HBOR helps stabilize families,  
            neighborhoods, and local economies.  However, there's more to  
            be done. 









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            In California and across the country, legal aid organizations  
            have documented that the very abuses HBOR prohibits are being  
            endured by widows, widowers, and other survivors who are  
            losing their homes to foreclosure because the mortgage  
            servicer refuses to consider them for a loan assumption or  
            modification.  The servicers maintain that surviving  
            homeowners who aren't listed on the mortgage note have no  
            protections under HBOR, even though the intent of the bill was  
            to protect all homeowners.

            In the most common scenario, a surviving widow owns her home,  
            but is not listed on its mortgage loan.  She attempts to apply  
            for a loan assumption and to get information on loan  
            modification options, just as her spouse could have done under  
            HBOR.  At that point, she faces a mortgage servicer who  
            exhibits the same problematic behaviors that convinced the  
            legislature to pass HBOR: refusing to talk to the homeowner,  
            creating a confusing labyrinth of processes, losing documents  
            repeatedly, transferring responsibilities between multiple  
            employees, giving inaccurate information, and foreclosing on  
            the homeowner without ever considering her for a loan  
            modification.

            Unnecessary foreclosures devastate families' ability to build  
            for their financial future.  As homeownership remains the  
            primary way that Americans build wealth for themselves and  
            their offspring, our continued failure to protect surviving  
            spouses and children only exacerbates the racial wealth gap in  
            society.  Further, foreclosures on survivors thwart the intent  
            of property, and wills and estates laws. And, unnecessary  
            foreclosures also are secret, silent killers.  Seniors forced  
            from their home are likely to suffer devastating health  
            impacts, and with dramatically high and still rising rents  
            across California, homelessness.

            Surviving homeowners deserve a fair chance to take  
            responsibility for their mortgage loan attached to their  
            homes.  They deserve the respect of receiving clear  
            communication and accurate information, especially during the  
            stressful time following the death of a loved one.  SB 1150  
            clarifies the responsibilities of a lender when a borrower  
            dies leaving a surviving homeowner who wishes to assume the  
            loan.

           2.Protecting successors from foreclosure  








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          The Homeowner's Bill of Rights (HBOR) transformed non-judicial  
          foreclosure practices in California by creating basic fairness  
          and transparency requirements for homeowners facing foreclosure.  
           HBOR requires lenders to take deliberate steps to help  
          homeowners avoid foreclosure by providing them with critical  
          information on loan modification options, and by suspending the  
          foreclosure process while a loan modification is being  
          considered.  HBOR requires transparency and fairness in the  
          foreclosure process by requiring lenders to verify and  
          authenticate documents relied on by lenders during the process,  
          by requiring lenders to speak with one voice to consumers  
          through a single point of contact, and by giving homeowners  
          powerful remedies to incentivize lenders to comply with the law.

          This bill would extend these same critical protections to  
          successors in interest of homeowners who pass away.  Under this  
          bill, successors will be able to obtain basic information about  
          the status of a decedent's loan, postpone the foreclosure  
          process while the lender determines whether a claimant should be  
          treated as a "successor in interest," assume the loan unless  
          prohibited by the loan's terms, and, if necessary, seek a loan  
          modification using all the tools provided under HBOR.  This bill  
          grants a private right of action to successors in interest  
          modeled on the private right of action given to homeowners under  
                                            HBOR, and, like HBOR, the availability of a strong remedial  
          right of action gives successors the power to compel mortgage  
          servicers to comply with the bill's provisions.  With these  
          tools made available to them, successors who choose to assume a  
          loan will be better positioned to help keep a decedent's home  
          from falling into foreclosure.

           3.Existing federal remedies  

          The federal Garn-St Germain Depository Institutions Act of 1982  
          (Pub.L. 97-320) already provides successors in interest with  
          limited authority to act on behalf of a decedent to keep a  
          mortgage loan current.  This act, passed as part of a larger  
          package of measures aimed at revitalizing the housing industry,  
          prevents lenders from calling a loan due or forcing immediate  
          repayment of a note in certain circumstances, including when a  
          surviving joint tenant takes title to a home, or when title is  
          transferred by inheritance to another who takes occupancy of the  
          home.









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          Generally speaking, mortgages with a "due-on-sale" clause become  
          due and payable at the option of the mortgagee if the mortgagor  
          transfers title of a mortgaged property without the mortgagee's  
          consent.  The Garn-St Germain Act invalidated these due-on-sale  
          clauses in certain situations for residential mortgages entered  
          into after 1982 where a property is transferred "by devise,  
          descent, or operation of law on the death of a joint tenant or  
          tenant by the entirety," by "transfer to a relative resulting  
          from the death of a borrower," or by "transfer where the spouse  
          or children of the borrower become an owner of the property."   
          (12,U.S.C. § 1701j-3(d).)  

          Despite invalidating these due-on-sale clauses, the Garn-St  
          Germain Act does not require lenders to allow successors to  
          "assume" a decedent's mortgage, which is where a successor takes  
          on all the obligations and benefits held by the decedent under a  
          loan contract and becomes legally responsible for the loan.   
          Rather, Garn-St Germain encourages lenders "to permit an  
          assumption of a real property loan at the existing contract  
          rate."  (12,U.S.C. § 1701j-3(b).)  Without the ability to assume  
          a loan and be added to the mortgage note, a successor in  
          interest lacks lawful authority to exercise rights as a  
          homeowner under HBOR and pursue a mortgage loan modification,  
          should a modification prove necessary.  This bill remedies that  
          situation by requiring a mortgage servicer to allow a successor  
          in interest to assume the deceased borrower's loan, unless such  
          assumption is prohibited by the terms of the loan, at the  
          successor's election.

           4.Multiple successors in interest  

          The California Bankers Association, along with other mortgage  
          servicer and business organizations writing in opposition, raise  
          concerns that this bill could require mortgage servicers to  
          contend with multiple, potentially competing, successors in  
          interest all seeking to assume a decedent's mortgage.  They  
          write:

            [a]s drafted, the measure mandates that a mortgage servicer  
            negotiate with more than one successor in interest.  And while  
            the measure contemplates multiple successors approaching a  
            mortgage servicer, the measure offers no clarity on how to  
            manage such scenarios.  Accordingly, the measure may  
            inappropriately circumvent a necessary judicial process by  
            forcing a mortgage servicer into a situation normally left to  








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            a probate court when attempting to settle an estate.  In order  
            to comply, should the mortgage servicer work with the first  
            successor in interest or a subsequent successor?  Does a  
            successor that is not a family member who approaches the  
            mortgage servicer first have priority over a family member?

          Responding to this concern, the author states:

            The opponents' "multiple successors" issue is a red herring.   
            Servicers already face these situations - when a homeowner  
            leaves his or her home to two or more children/people - and  
            should have policies in place to address them.  Nothing in SB  
            1150 will change the frequency of these cases.  Additionally,  
            because Fannie Mae, Freddie Mac, and the Federal Housing  
            Administration currently require the types of communication  
            included in SB 1150, servicers should already know how to  
            communicate with multiple successors and allow them to assume  
            the loan.  Put another way, any servicer that does not have a  
            "multiple successors" policy in place is in violation of  
            existing federal rules [such as] CFPB Bulletin 2013-12.

          Staff notes that regulations implementing the federal Real  
          Estate Settlement Procedures Act (RESPA) already require  
          mortgage servicers to treat successors in interest as borrowers  
          with respect to a decedent's mortgage loan, both in terms of  
          communicating loan details and in terms of considering  
          applications for loan modifications.  These regulations require  
          loan servicers to "maintain policies and procedures that are  
          reasonably designed," upon notification of the death of a  
          borrower, to:
           promptly identify and facilitate communication with the  
            successor in interest of the deceased borrower with respect to  
            the property secured by the deceased borrower's mortgage loan;
           provide accurate information regarding loss mitigation options  
            available to a borrower from the owner or assignee of the  
            borrower's mortgage loan;
           identify with specificity all loss mitigation options for  
            which borrowers may be eligible pursuant to any requirements  
            established by an owner or assignee of the borrower's mortgage  
            loan; 
           provide prompt access to all documents and information  
            submitted by a borrower in connection with a loss mitigation  
            option to servicer personnel that are assigned to assist the  
            borrower; 
           identify documents and information that a borrower is required  








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            to submit to complete a loss mitigation application; and
           properly evaluate a borrower who submits an application for a  
            loss mitigation option for all loss mitigation options for  
            which the borrower may be eligible pursuant to any  
            requirements established by the owner or assignee of the  
            borrower's mortgage loan.  (12 C.F.R. Sec. 1024.38(b).

          To clarify that mortgage lenders are to follow existing federal  
          regulations concerning communications with, and applications  
          received from, successors in interest, the author offers the  
          following amendment:

             Author's Amendment  :

            On page 4, following line 9, insert "Servicers shall apply the  
            provisions of this section to multiple successors in  
            accordance with the terms of the loan and federal and state  
            laws and regulations."

           1.Opposition concerns  

          In addition to concerns over mortgage servicers potentially  
          having to respond to requests by multiple successors in  
          interest, opposition stakeholders raise a number of other  
          concerns with SB 1150.  First, the coalition of opposition  
          stakeholders asserts that SB 1150 is premature, given that  
          regulations are being promulgated by the federal Consumer  
          Financial Protection Bureau that are expected to address some of  
          the same issues in SB 1150 and are scheduled to be finalized in  
          mid-2016.  Opposition stakeholders also assert that SB 1150  
          would impermissibly interfere with the contract rights of others  
          by allowing third parties not originally party to a mortgage  
          contract to apply for loan assumption and foreclosure avoidance  
          alternatives in connection with the original contract.   
          Opposition stakeholders suggest generally that "state and  
          federal privacy laws" will restrict mortgage servicers from  
          providing loan information to successors as proposed in the  
          bill, that the bill's provisions will "delay the foreclosure  
          process by additional months, if not years," and that the bill  
          "establishes new, lopsided, private rights of action with  
          draconian penalties."  Finally, opposition stakeholders believe  
          the bill's scope extends far beyond that of HBOR, including to  
          residences that are not "owner-occupied," and that imprecision  
          regarding how mortgage servicers are to comply with the bill's  
          provisions "will lead to unnecessary litigation as parties  








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          pursue court action as a means to clarify the law."


           Support  :  AARP California; AIDS Legal Referral Panel; Alameda  
          County Board of Supervisors; Attorney General Kamala Harris; Bay  
          Area Legal Aid; Burbank Housing Development Corporation;  
          California District Attorneys Association; California Nurses  
          Association; California Professional Firefighters; California  
          Rural Legal Assistance Foundation; CALPIRG; Capital Impact  
          Partners; Community Legal Services in East Palo Alto; Consumer  
          Attorneys of California; Consumer Federation of California;  
          Consumers Union; Courage Campaign; Fair Housing Council of the  
          San Fernando Valley; Fair Housing of Marin; Family Caregiver  
          Alliance; Housing California; Inland Fair Housing and Meditation  
          Board; Institute on Aging; Justice in Aging; Law Foundation of  
          Silicon Valley; Legal Aid Foundation of Los Angeles; Legal  
          Services of Northern California; Los Angeles County Democratic  
          Party; Montebello Housing Development Corporation; National  
          Center for Lesbian Rights; National Council of La Raza; National  
          Housing Law Project; Nehemiah Corporation of America;  
          Neighborhood Housing Services of Los Angeles County; Non-Profit  
          Housing Association of Northern California; People's Self-Help  
          Housing; Project Sentinel; Public Counsel; Public Law Center;  
          Renaissance Entrepreneurship Center; Retired Public Employees  
          Association; Rural Community Assistance Corporation; SEIU  
          California; Tenants Together; The Arc and United Cerebral Palsy  
          California Collaboration; United Domestic Workers of America  
          /AFSCME Local 3930; UNITE HERE; Valley Industry and Commerce  
          Association; Western Center on Law & Poverty; One individual

           Opposition  :  American Securitization Forum; California Bankers  
          Association; California Building Industry Association;  
          California Business Roundtable; California Chamber of Commerce;  
          California Citizens Against Lawsuit Abuse; California Community  
          Banking Network; California Credit Union League; California  
          Financial Services Association;
          California Land Title Association; California Mortgage  
          Association; California Mortgage Bankers Association; Civil  
          Justice Association of California; Consumer Mortgage Coalition;  
          Securities Industry and Financial Markets Association; United  
          Trustees Association

                                        HISTORY
           
           Source  :  California Alliance for Retired Americans; California  








          SB 1150 (Leno)
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          Reinvestment Coalition; Housing and Economic Rights Advocates

           Related Pending Legislation  :  None Known

           Prior Legislation  :

          AB 244 (Eggman, 2015) would have permitted a successor in  
          interest to succeed a deceased borrower for the purpose of  
          exercising rights under the Homeowner's Bill of Rights.  This  
          bill would have defined a successor in interest as a surviving  
          spouse who provides the mortgage servicer with notification of  
          the death of the mortgagor or trustor, as well as specified  
          supporting documentation.  This bill died in the Assembly  
          Banking and Finance Committee.

          AB 278 (Eng et al., Ch. 86, Stats. 2012) and SB 900 (Leno et  
          al., Ch. 87, Stats. 2012) enacted the Homeowner's Bill of  
          Rights.

           Prior Vote  :  Senate Banking and Financial Institutions Committee  
          (Ayes 4, Noes 3)

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