BILL NUMBER: SB 665 CHAPTERED
BILL TEXT
CHAPTER 74
FILED WITH SECRETARY OF STATE JULY 14, 1997
APPROVED BY GOVERNOR JULY 14, 1997
PASSED THE ASSEMBLY JUNE 26, 1997
PASSED THE SENATE APRIL 24, 1997
AMENDED IN SENATE APRIL 14, 1997
INTRODUCED BY Senator Johnson
FEBRUARY 25, 1997
An act to amend Sections 1058.5, 2924c, 2924d, 2924f, 2924g, 2924
(l), and 2941 of the Civil Code, relating to real property.
LEGISLATIVE COUNSEL'S DIGEST
SB 665, Johnson. Real property.
(1) Existing law provides for the recording of a notice of
rescission of the trustee's deed to restore the condition of record
title to the real property described in a trustee's deed and the
existence and priority of all lienholders to the status quo prior to
the recordation of the trustee's deed upon sale.
This bill would provide that the notice of rescission may only be
filed by the trustee or beneficiary who caused the trustee's deed to
be recorded or a successor in interest.
(2) Existing law regulates the procedures for the foreclosure of a
mortgage or deed of trust. Existing law specifies the maximum
trustee's or attorney's fees that may be charged, as specified on the
basis of the amount of the unpaid principal sum secured. Existing
law requires the notice of sale to specify the total amount of the
unpaid balance and specified costs.
This bill would provide that, for the purpose of computing trustee'
s or attorney's fees, the unpaid principal sum secured is calculated
on the date the notice of default is recorded. This bill would also
make a clarifying change regarding the postponement of the sale of
the property pursuant to the above-described procedures and would
specify the method of the calculation of time for these procedures.
(3) Existing law provides that, in the event that a trustee under
a deed of trust is named in an action or proceeding in which that
deed of trust is the subject, and in the event that the trustee
maintains a reasonable belief that it has been named in the action or
proceeding solely in its capacity as trustee and not arising out of
any wrongful acts or omissions in the performance of its duties as
trustee, then the trustee may file a declaration of nonmonetary
status. In the event that there is no objection, the trustee would
not be required to participate in the proceeding, unless a demand to
participate is filed and served.
The bill would require the demand to set forth the factual basis
for the demand.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1058.5 of the Civil Code is amended to read:
1058.5. (a) A notice of nonacceptance of a recorded deed executed
by a holder of a security interest, which notice identifies the
security interest, contains a legal description of the property,
properly identifies the parties to the deed, the date of recordation
of the deed, the county in which the project is located, and the
county assessor's parcel number of the real property referenced in
the deed, may be recorded in the office of the county recorder where
the real property is located.
(b) Where a trustee's deed is invalidated by a pending bankruptcy
or otherwise, recordation of a notice of rescission of the trustee's
deed, which notice properly identifies the deed of trust, the
identification numbers used by the recorder or the books and pages at
which the trustee's deed and deed of trust are recorded, the names
of all trustors and beneficiaries, the location of the property
subject to the deed of trust, and the reason for rescission, shall
restore the condition of record title to the real property described
in the trustee's deed and the existence and priority of all
lienholders to the status quo prior to the recordation of the trustee'
s deed upon sale. Only the trustee or beneficiary who caused the
trustee's deed to be recorded, or his or her successor in interest,
may record a notice of rescission.
SEC. 2. Section 2924c of the Civil Code is amended to read:
2924c. (a) (1) Whenever all or a portion of the principal sum of
any obligation secured by deed of trust or mortgage on real property
or an estate for years therein hereafter executed has, prior to the
maturity date fixed in that obligation, become due or been declared
due by reason of default in payment of interest or of any installment
of principal, or by reason of failure of trustor or mortgagor to
pay, in accordance with the terms of that obligation or of the deed
of trust or mortgage, taxes, assessments, premiums for insurance, or
advances made by beneficiary or mortgagee in accordance with the
terms of that obligation or of the deed of trust or mortgage, the
trustor or mortgagor or his or her successor in interest in the
mortgaged or trust property or any part thereof, or any beneficiary
under a subordinate deed of trust or any other person having a
subordinate lien or encumbrance of record thereon, at any time within
the period specified in subdivision (e), if the power of sale
therein is to be exercised, or, otherwise at any time prior to entry
of the decree of foreclosure, may pay to the beneficiary or the
mortgagee or their successors in interest, respectively, the entire
amount due, at the time payment is tendered, with respect to (A) all
amounts of principal, interest, taxes, assessments, insurance
premiums, or advances actually known by the beneficiary to be, and
that are, in default and shown in the notice of default, under the
terms of the deed of trust or mortgage and the obligation secured
thereby, (B) all amounts in default on recurring obligations not
shown in the notice of default, and (C) all reasonable costs and
expenses, subject to subdivision (c), which are actually incurred in
enforcing the terms of the obligation, deed of trust, or mortgage,
and trustee's or attorney's fees, subject to subdivision (d), other
than the portion of principal as would not then be due had no default
occurred, and thereby cure the default theretofore existing, and
thereupon, all proceedings theretofore had or instituted shall be
dismissed or discontinued and the obligation and deed of trust or
mortgage shall be reinstated and shall be and remain in force and
effect, the same as if the acceleration had not occurred. This
section does not apply to bonds or other evidences of indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations or made by a public utility subject to the Public
Utilities Code. For the purposes of this subdivision, the term
"recurring obligation" means all amounts of principal and interest on
the loan, or rents, subject to the deed of trust or mortgage in
default due after the notice of default is recorded; all amounts of
principal and interest or rents advanced on senior liens or
leaseholds which are advanced after the recordation of the notice of
default; and payments of taxes, assessments, and hazard insurance
advanced after recordation of the notice of default. Where the
beneficiary or mortgagee has made no advances on defaults which would
constitute recurring obligations, the beneficiary or mortgagee may
require the trustor or mortgagor to provide reliable written evidence
that the amounts have been paid prior to reinstatement.
(2) If the trustor, mortgagor, or other person authorized to cure
the default pursuant to this subdivision does cure the default, the
beneficiary or mortgagee or the agent for the beneficiary or
mortgagee shall, within 21 days following the reinstatement, execute
and deliver to the trustee a notice of rescission which rescinds the
declaration of default and demand for sale and advises the trustee of
the date of reinstatement. The trustee shall cause the notice of
rescission to be recorded within 30 days of receipt of the notice of
rescission and of all allowable fees and costs.
No charge, except for the recording fee, shall be made against the
trustor or mortgagor for the execution and recordation of the notice
which rescinds the declaration of default and demand for sale.
(b) (1) The notice, of any default described in this section,
recorded pursuant to Section 2924, and mailed to any person pursuant
to Section 2924b, shall begin with the following statement, printed
or typed thereon:
"IMPORTANT NOTICE (14-point boldface type if printed or in
capital letters if typed)
IF YOUR PROPERTY IS IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR
PAYMENTS, IT MAY BE SOLD WITHOUT ANY COURT ACTION, (14-point boldface
type if printed or in capital letters if typed) and you may have the
legal right to bring your account in good standing by paying all of
your past due payments plus permitted costs and expenses within the
time permitted by law for reinstatement of your account, which is
normally five business days prior to the date set for the sale of
your property. No sale date may be set until three months from the
date this notice of default may be recorded (which date of
recordation appears on this notice).
This amount is ___________________ as of ______________________,
(Date)
and will increase until your account becomes current.
While your property is in foreclosure, you still must pay other
obligations (such as insurance and taxes) required by your note and
deed of trust or mortgage. If you fail to make future payments on
the loan, pay taxes on the property, provide insurance on the
property, or pay other obligations as required in the note and deed
of trust or mortgage, the beneficiary or mortgagee may insist that
you do so in order to reinstate your account in good standing. In
addition, the beneficiary or mortgagee may require as a condition to
reinstatement that you provide reliable written evidence that you
paid all senior liens, property taxes, and hazard insurance premiums.
Upon your written request, the beneficiary or mortgagee will give
you a written itemization of the entire amount you must pay. You may
not have to pay the entire unpaid portion of your account, even
though full payment was demanded, but you must pay all amounts in
default at the time payment is made. However, you and your
beneficiary or mortgagee may mutually agree in writing prior to the
time the notice of sale is posted (which may not be earlier than the
end of the three-month period stated above) to, among other things,
1) provide additional time in which to cure the default by transfer
of the property or otherwise; or (2) establish a schedule of payments
in order to cure your default; or both (1) and (2).
Following the expiration of the time period referred to in the
first paragraph of this notice, unless the obligation being
foreclosed upon or a separate written agreement between you and your
creditor permits a longer period, you have only the legal right to
stop the sale of your property by paying the entire amount demanded
by your creditor.
To find out the amount you must pay, or to arrange for payment to
stop the foreclosure, or if your property is in foreclosure for any
other reason, contact:
______________________________________
(Name of beneficiary or mortgagee)
______________________________________
(Mailing address)
______________________________________
(Telephone)
If you have any questions, you should contact a lawyer or the
governmental agency which may have insured your loan.
Notwithstanding the fact that your property is in foreclosure, you
may offer your property for sale, provided the sale is concluded
prior to the conclusion of the foreclosure.
Remember, YOU MAY LOSE LEGAL RIGHTS IF YOU DO NOT TAKE PROMPT
ACTION. (14-point boldface type if printed or in capital letters if
typed)"
Unless otherwise specified, the notice, if printed, shall appear
in at least 12-point boldface type.
If the obligation secured by the deed of trust or mortgage is a
contract or agreement described in paragraph (1) or (4) of
subdivision (a) of Section 1632, the notice required herein shall be
in Spanish if the trustor requested a Spanish language translation of
the contract or agreement pursuant to Section 1632. If the
obligation secured by the deed of trust or mortgage is contained in a
home improvement contract, as defined in Sections 7151.2 and 7159 of
the Business and Professions Code, which is subject to Title 2
(commencing with Section 1801), the seller shall specify on the
contract whether or not the contract was principally negotiated in
Spanish and if the contract was principally negotiated in Spanish,
the notice required herein shall be in Spanish. No assignee of the
contract or person authorized to record the notice of default shall
incur any obligation or liability for failing to mail a notice in
Spanish unless Spanish is specified in the contract or the assignee
or person has actual knowledge that the secured obligation was
principally negotiated in Spanish. Unless specified in writing to
the contrary, a copy of the notice required by subdivision (c) of
Section 2924b shall be in English.
(2) Any failure to comply with the provisions of this subdivision
shall not affect the validity of a sale in favor of a bona fide
purchaser or the rights of an encumbrancer for value and without
notice.
(c) Costs and expenses which may be charged pursuant to Sections
2924 to 2924i, inclusive, shall be limited to the costs incurred for
recording, mailing, publishing, and posting notices required by
Sections 2924 to 2924i, inclusive, postponement pursuant to Section
2924g made to either the beneficiary or trustee not to exceed fifty
dollars ($50) per postponement and a fee for a trustee's sale
guarantee or, in the event of judicial foreclosure, a litigation
guarantee. For purposes of this subdivision, a trustee or
beneficiary may purchase a trustee's sale guarantee at a rate meeting
the standards contained in Sections 12401.1 and 12401.3 of the
Insurance Code.
(d) Trustee's or attorney's fees which may be charged pursuant to
subdivision (a), or until the notice of sale is deposited in the mail
to the trustor as provided in Section 2924b, if the sale is by power
of sale contained in the deed of trust or mortgage, or, otherwise at
any time prior to the decree of foreclosure, are hereby authorized
to be in an amount which does not exceed two hundred forty dollars
($240) with respect to any portion of the unpaid principal sum
secured which is fifty thousand dollars ($50,000) or less, plus
one-half of 1 percent of the unpaid principal sum secured exceeding
fifty thousand dollars ($50,000) up to and including one hundred
fifty thousand dollars ($150,000), plus one-quarter of 1 percent of
any portion of the unpaid principal sum secured exceeding one hundred
fifty thousand dollars ($150,000) up to and including five hundred
thousand dollars ($500,000), plus one-eighth of 1 percent of any
portion of the unpaid principal sum secured exceeding five hundred
thousand dollars ($500,000). Any charge for trustee's or attorney's
fees authorized by this subdivision shall be conclusively presumed to
be lawful and valid where the charge does not exceed the amounts
authorized herein. For purposes of this subdivision, the unpaid
principal sum secured shall be determined as of the date the notice
of default is recorded.
(e) Reinstatement of a monetary default under the terms of an
obligation secured by a deed of trust, or mortgage may be made at any
time within the period commencing with the date of recordation of
the notice of default until five business days prior to the date of
sale set forth in the initial recorded notice of sale.
In the event the sale does not take place on the date set forth in
the initial recorded notice of sale or a subsequent recorded notice
of sale is required to be given, the right of reinstatement shall be
revived as of the date of recordation of the subsequent notice of
sale, and shall continue from that date until five business days
prior to the date of sale set forth in the subsequently recorded
notice of sale.
In the event the date of sale is postponed on the date of sale set
forth in either an initial or any subsequent notice of sale, or is
postponed on the date declared for sale at an immediately preceding
postponement of sale, and, the postponement is for a period which
exceeds five business days from the date set forth in the notice of
sale, or declared at the time of postponement, then the right of
reinstatement is revived as of the date of postponement and shall
continue from that date until five business days prior to the date of
sale declared at the time of the postponement.
Nothing contained herein shall give rise to a right of
reinstatement during the period of five business days prior to the
date of sale, whether the date of sale is noticed in a notice of sale
or declared at a postponement of sale.
Pursuant to the terms of this subdivision, no beneficiary,
trustee, mortgagee, or their agents or successors shall be liable in
any manner to a trustor, mortgagor, their agents or successors for
the failure to allow a reinstatement of the obligation secured by a
deed of trust or mortgage during the period of five business days
prior to the sale of the security property, and no such right of
reinstatement during this period is created by this section. Any
right of reinstatement created by this section is terminated five
business days prior to the date of sale set forth in the initial date
of sale, and is revived only as prescribed herein and only as of the
date set forth herein.
As used in this subdivision, the term "business day" has the same
meaning as specified in Section 9.
SEC. 3. Section 2924d of the Civil Code is amended to read:
2924d. (a) Commencing with the date that the notice of sale is
deposited in the mail, as provided in Section 2924b, and until the
property is sold pursuant to the power of sale contained in the
mortgage or deed of trust, a beneficiary, trustee, mortgagee, or his
or her agent or successor in interest, may demand and receive from a
trustor, mortgagor, or his or her agent or successor in interest, or
any beneficiary under a subordinate deed of trust, or any other
person having a subordinate lien or encumbrance of record those
reasonable costs and expenses, to the extent allowed by subdivision
(c) of Section 2924c, which are actually incurred in enforcing the
terms of the obligation and trustee's or attorney's fees which are
hereby authorized to be in an amount which does not exceed three
hundred fifty dollars ($350) with respect to any portion of the
unpaid principal sum secured which is fifty thousand dollars
($50,000) or less, plus 1 percent of any portion of the unpaid
principal sum secured exceeding fifty thousand dollars ($50,000) up
to and including one hundred fifty thousand dollars ($150,000), plus
one-half of 1 percent of any portion of the unpaid principal sum
secured exceeding one hundred fifty thousand dollars ($150,000) up to
and including five hundred thousand dollars ($500,000), plus
one-quarter of 1 percent of any portion of the unpaid principal sum
secured exceeding five hundred thousand dollars ($500,000). For
purposes of this subdivision, the unpaid principal sum secured shall
be determined as of the date the notice of default is recorded. Any
charge for trustee's or attorney's fees authorized by this
subdivision shall be conclusively presumed to be lawful and valid
where that charge does not exceed the amounts authorized herein. Any
charge for trustee's or attorney's fees made pursuant to this
subdivision shall be in lieu of and not in addition to those charges
authorized by subdivision (d) of Section 2924c.
(b) Upon the sale of property pursuant to a power of sale, a
trustee, or his or her agent or successor in interest, may demand and
receive from a beneficiary, or his or her agent or successor in
interest, or may deduct from the proceeds of the sale, those
reasonable costs and expenses, to the extent allowed by subdivision
(c) of Section 2924c, which are actually incurred in enforcing the
terms of the obligation and trustee's or attorney's fees which are
hereby authorized to be in an amount which does not exceed three
hundred fifty dollars ($350) or one percent of the unpaid principal
sum secured, whichever is greater. For purposes of this subdivision,
the unpaid principal sum secured shall be determined as of the date
the notice of default is recorded. Any charge for trustee's or
attorney's fees authorized by this subdivision shall be conclusively
presumed to be lawful and valid where that charge does not exceed the
amount authorized herein. Any charges for trustee's or attorney's
fees made pursuant to this subdivision shall be in lieu of and not in
addition to those charges authorized by subdivision (a) of this
section and subdivision (d) of Section 2924c.
(c) (1) No person shall pay or offer to pay or collect any rebate
or kickback for the referral of business involving the performance of
any act required by this article.
(2) Any person who violates this subdivision shall be liable to
the trustor for three times the amount of any rebate or kickback,
plus reasonable attorney's fees and costs, in addition to any other
remedies provided by law.
(3) No violation of this subdivision shall affect the validity of
a sale in favor of a bona fide purchaser or the rights of an
encumbrancer for value without notice.
(d) It shall not be unlawful for a trustee to pay or offer to pay
a fee to an agent or subagent of the trustee for work performed by
the agent or subagent in discharging the trustee's obligations under
the terms of the deed of trust. Any payment of a fee by a trustee to
an agent or subagent of the trustee for work performed by the agent
or subagent in discharging the trustee's obligations under the terms
of the deed of trust shall be conclusively presumed to be lawful and
valid if the fee, when combined with other fees of the trustee, does
not exceed in the aggregate the trustee's fee authorized by
subdivision (d) of Section 2924c or subdivision (a) or (b) of this
section.
(e) When a court issues a decree of foreclosure, it shall have
discretion to award attorney's fees, costs, and expenses as are
reasonable, if provided for in the note, deed of trust, or mortgage,
pursuant to Section 580c of the Code of Civil Procedure.
SEC. 4. Section 2924f of the Civil Code is amended to read:
2924f. (a) As used in this section and Sections 2924g and 2924h,
"property" means real property or a leasehold estate therein, and
"calendar week" means Monday through Saturday, inclusive.
(b) (1) Except as provided in subdivision (c), before any sale of
property can be made under the power of sale contained in any deed of
trust or mortgage, or any resale resulting from a rescission for a
failure of consideration pursuant to subdivision (c) of Section
2924h, notice of the sale thereof shall be given by posting a written
notice of the time of sale and of the street address and the
specific place at the street address where the sale will be held, and
describing the property to be sold, at least 20 days before the date
of sale in one public place in the city where the property is to be
sold, if the property is to be sold in a city, or, if not, then in
one public place in the judicial district in which the property is to
be sold, and publishing a copy once a week for three consecutive
calendar weeks, the first publication to be at least 20 days before
the date of sale, in a newspaper of general circulation published in
the city in which the property or some part thereof is situated, if
any part thereof is situated in a city, if not, then in a newspaper
of general circulation published in the judicial district in which
the property or some part thereof is situated, or in case no
newspaper of general circulation is published in the city or judicial
district, as the case may be, in a newspaper of general circulation
published in the county in which the property or some part thereof is
situated, or in case no newspaper of general circulation is
published in the city or judicial district or county, as the case may
be, in a newspaper of general circulation published in the county in
this state that (A) is contiguous to the county in which the
property or some part thereof is situated and (B) has, by comparison
with all similarly contiguous counties, the highest population based
upon total county population as determined by the most recent federal
decennial census published by the Bureau of the Census. A copy of
the notice of sale shall also be posted in a conspicuous place on the
property to be sold at least 20 days before the date of sale, where
possible and where not restricted for any reason. If the property is
a single-family residence the posting shall be on a door of the
residence, but, if not possible or restricted, then the notice shall
be posted in a conspicuous place on the property; however, if access
is denied because a common entrance to the property is restricted by
a guard gate or similar impediment, the property may be posted at
that guard gate or similar impediment to any development community.
Additionally, the notice of sale shall conform to the minimum
requirements of Section 6043 of the Government Code and be recorded
with the county recorder of the county in which the property or some
part thereof is situated at least 14 days prior to the date of sale.
The notice of sale shall contain the name, street address, and
telephone number of the trustee or other person conducting the sale,
and the name of the original trustor, and also shall contain the
statement required by paragraph (3) of subdivision (c). In addition
to any other description of the property, the notice shall describe
the property by giving its street address, if any, or other common
designation, if any, and a county assessor's parcel number; but if
the property has no street address or other common designation, the
notice shall contain a legal description of the property, the name
and address of the beneficiary at whose request the sale is to be
conducted, and a statement that directions may be obtained pursuant
to a written request submitted to the beneficiary within 10 days from
the first publication of the notice. Directions shall be deemed
reasonably sufficient to locate the property if information as to the
location of the property is given by reference to the direction and
approximate distance from the nearest crossroads, frontage road, or
access road. If a legal description or a county assessor's parcel
number and either a street address or another common designation of
the property is given, the validity of the notice and the validity of
the sale shall not be affected by the fact that the street address,
other common designation, name and address of the beneficiary, or the
directions obtained therefrom are erroneous or that the street
address, other common designation, name and address of the
beneficiary, or directions obtained therefrom are omitted. The term
"newspaper of general circulation," as used in this section, has the
same meaning as defined in Article 1 (commencing with Section 6000)
of Chapter 1 of Division 7 of Title 1 of the Government Code.
The notice of sale shall contain a statement of the total amount
of the unpaid balance of the obligation secured by the property to be
sold and reasonably estimated costs, expenses, advances at the time
of the initial publication of the notice of sale, and, if republished
pursuant to a cancellation of a cash equivalent pursuant to
subdivision (d) of Section 2924h, a reference of that fact; provided,
that the trustee shall incur no liability for any good faith error
in stating the proper amount, including any amount provided in good
faith by or on behalf of the beneficiary. An inaccurate statement of
this amount shall not affect the validity of any sale to a bona fide
purchaser for value, nor shall the failure to post the notice of
sale on a door as provided by this subdivision affect the validity of
any sale to a bona fide purchaser for value.
(2) If the sale of the property is to be a unified sale as
provided in subparagraph (ii) of paragraph (a) of subdivision (4) of
Section 9501 of the Commercial Code, the notice of sale shall also
contain a description of the personal property or fixtures to be
sold. In the case where it is contemplated that all of the personal
property or fixtures are to be sold, the description in the notice of
the personal property or fixtures shall be sufficient if it is the
same as the description of the personal property or fixtures
contained in the agreement creating the security interest in or
encumbrance on the personal property or fixtures or the filed
financing statement relating to the personal property or fixtures.
In all other cases, the description in the notice shall be sufficient
if it would be a sufficient description of the personal property or
fixtures under Section 9110 of the Commercial Code. Inclusion of a
reference to or a description of personal property or fixtures in a
notice of sale hereunder shall not constitute an election by the
secured party to conduct a unified sale pursuant to
subparagraph (ii) of paragraph (a)
of subdivision (4) of Section 9501 of the Commercial Code, shall not
obligate the secured party to conduct a unified sale pursuant to
subparagraph (ii) of paragraph (a) of subdivision (4) of Section 9501
of the Commercial Code, and in no way shall render defective or
noncomplying either that notice or a sale pursuant to that notice by
reason of the fact that the sale includes none or less than all of
the personal property or fixtures referred to or described in the
notice. This paragraph shall not otherwise affect the obligations or
duties of a secured party under the Commercial Code.
(c) (1) This subdivision applies only to deeds of trust or
mortgages which contain a power of sale and which are secured by real
property containing a single-family, owner-occupied residence, where
the obligation secured by the deed of trust or mortgage is contained
in a contract for goods or services subject to the provisions of the
Unruh Act (Chapter 1 (commencing with Section 1801) of Title 2 of
Part 4 of Division 3).
(2) Except as otherwise expressly set forth in this subdivision,
all other provisions of law relating to the exercise of a power of
sale shall govern the exercise of a power of sale contained in a deed
of trust or mortgage described in paragraph (1).
(3) If any default of the obligation secured by a deed of trust or
mortgage described in paragraph (1) has not been cured within 30
days after the recordation of the notice of default, the trustee or
mortgagee shall mail to the trustor or mortgagor, at his or her last
known address, a copy of the following statement:
YOU ARE IN DEFAULT UNDER A
___________________________________________________,
(Deed of trust or mortgage)
DATED ______. UNLESS YOU TAKE ACTION TO PROTECT
YOUR PROPERTY, IT MAY BE SOLD AT A PUBLIC SALE.
IF YOU NEED AN EXPLANATION OF THE NATURE OF THE
PROCEEDING AGAINST YOU, YOU SHOULD CONTACT A LAWYER.
(4) All sales of real property pursuant to a power of sale
contained in any deed of trust or mortgage described in paragraph (1)
shall be held in the county where the residence is located and shall
be made to the person making the highest offer. The trustee may
receive offers during the 10-day period immediately prior to the date
of sale and if any offer is accepted in writing by both the trustor
or mortgagor and the beneficiary or mortgagee prior to the time set
for sale, the sale shall be postponed to a date certain and prior to
which the property may be conveyed by the trustor to the person
making the offer according to its terms. The offer is revocable
until accepted. The performance of the offer, following acceptance,
according to its terms, by a conveyance of the property to the
offeror, shall operate to terminate any further proceeding under the
notice of sale and it shall be deemed revoked.
(5) In addition to the trustee fee pursuant to Section 2924c, the
trustee or mortgagee pursuant to a deed of trust or mortgage subject
to this subdivision shall be entitled to charge an additional fee of
fifty dollars ($50).
(6) This subdivision applies only to property on which notices of
default were filed on or after the effective date of this
subdivision.
SEC. 5. Section 2924g of the Civil Code is amended to read:
2924g. (a) All sales of property under the power of sale
contained in any deed of trust or mortgage shall be held in the
county where the property or some part thereof is situated, and shall
be made at auction, to the highest bidder, between the hours of 9
a.m. and 5 p.m. on any business day, Monday through Friday.
The sale shall commence at the time and location specified in the
notice of sale. Any postponement shall be announced at the time and
location specified in the notice of sale for commencement of the sale
or pursuant to paragraph (1) of subdivision (c).
If the sale of more than one parcel of real property has been
scheduled for the same time and location by the same trustee, (1) any
postponement of any of the sales shall be announced at the time
published in the notice of sale, (2) the first sale shall commence at
the time published in the notice of sale or immediately after the
announcement of any postponement, and (3) each subsequent sale shall
take place as soon as possible after the preceding sale has been
completed.
(b) When the property consists of several known lots or parcels
they shall be sold separately unless the deed of trust or mortgage
provides otherwise. When a portion of the property is claimed by a
third person, who requires it to be sold separately, the portion
subject to the claim may be thus sold. The trustor, if present at
the sale, may also, unless the deed of trust or mortgage otherwise
provides, direct the order in which property shall be sold, when the
property consists of several known lots or parcels which may be sold
to advantage separately, and the trustee shall follow that direction.
After sufficient property has been sold to satisfy the indebtedness
no more can be sold.
If the property under power of sale is in two or more counties the
public auction sale of all of the property under the power of sale
may take place in any one of the counties where the property or a
portion thereof is located.
(c) (1) There may be a postponement of the sale proceedings at any
time prior to the completion of the sale at the discretion of the
trustee, or upon instruction by the beneficiary to the trustee that
the sale proceedings be postponed.
There may be a maximum of three postponements of the sale
proceedings pursuant to this subdivision. In the event that the sale
proceedings are postponed more than three times, the scheduling of
any further sale proceedings shall be preceded by the giving of a new
notice of sale in the manner prescribed by Section 2924f.
(2) The trustee shall postpone the sale upon the order of any
court of competent jurisdiction, or where stayed by operation of law,
or by the mutual agreement, whether oral or in writing, of any
trustor and any beneficiary or any mortgagor and any mortgagee. Any
postponement pursuant to this paragraph shall not be a postponement
for purposes of determining the maximum number of postponements
permitted pursuant to this subdivision nor shall a postponement
resulting from the prohibition upon a sale within seven days from the
expiration of an injunction, restraining order, or stay as provided
in subdivision (d) be deemed a postponement for purposes of this
subdivision. In addition, one postponement by the trustee based upon
a reasonable belief that a petition for bankruptcy has been filed
shall not be a postponement for purposes of determining the maximum
number of postponements permitted pursuant to this subdivision.
(d) The notice of each postponement and the reason therefor shall
be given by public declaration by the trustee at the time and place
last appointed for sale. A public declaration of postponement shall
also set forth the new date, time, and place of sale and the place of
sale shall be the same place as originally fixed by the trustee for
the sale. No other notice of postponement need be given. However,
the sale shall be conducted no sooner than on the seventh day after
the earlier of (1) dismissal of the action or (2) expiration or
termination of the injunction, restraining order, or stay (which
required postponement of the sale), whether by entry of an order by a
court of competent jurisdiction, operation of law, or otherwise,
unless the injunction, restraining order, or subsequent order
expressly directs the conduct of the sale within that seven-day
period. For purposes of this subdivision, the seven-day period shall
not include the day on which the action is dismissed, or the day on
which the injunction, restraining order, or stay expires or is
terminated. If the sale had been scheduled to occur, but this
subdivision precludes its conduct during that seven-day period, a new
notice of postponement shall be given if the sale had been scheduled
to occur during that seven-day period. The trustee shall maintain
records of each postponement and the reason therefor.
SEC. 6. Section 2924l of the Civil Code is amended to read:
2924l. (a) In the event that a trustee under a deed of trust is
named in an action or proceeding in which that deed of trust is the
subject, and in the event that the trustee maintains a reasonable
belief that it has been named in the action or proceeding solely in
its capacity as trustee, and not arising out of any wrongful acts or
omissions on its part in the performance of its duties as trustee,
then, at any time, the trustee may file a declaration of nonmonetary
status. The declaration shall be served on the parties in the manner
set forth in Chapter 5 (commencing with Section 1010) of Title 14 of
the Code of Civil Procedure.
(b) The declaration of nonmonetary status shall set forth the
status of the trustee as trustee under the deed of trust that is the
subject of the action or proceeding, that the trustee knows or
maintains a reasonable belief that it has been named as a defendant
in the proceeding solely in its capacity as a trustee under the deed
of trust, its reasonable belief that it has not been named as a
defendant due to any acts or omissions on its part in the performance
of its duties as trustee, the basis for that knowledge or reasonable
belief, and that it agrees to be bound by whatever order or judgment
is issued by the court regarding the subject deed of trust.
(c) The parties who have appeared in the action or proceeding
shall have 15 days from the service of the declaration by the trustee
in which to object to the nonmonetary judgment status of the
trustee. Any objection shall set forth the factual basis on which
the objection is based and shall be served on the trustee.
(d) In the event that no objection is served within the 15-day
objection period, then the trustee shall not be required to
participate any further in the action or proceeding, shall not be
subject to any monetary awards as and for damages, attorneys fees or
costs, shall be required to respond to any discovery requests as a
nonparty, and shall be bound by any court order relating to the
subject deed of trust that is the subject of the action or
proceeding.
(e) In the event of a timely objection to the declaration of
nonmonetary status, the trustee shall thereafter be required to
participate in the action or proceeding.
Additionally, in the event that the parties elect not to, or fail
to, timely object to the declaration of nonmonetary status, but later
through discovery, or otherwise, determine that the trustee should
participate in the action because of the performance of its duties as
a trustee, the parties may file and serve on the trustee a demand to
participate in the action that specifies the factual basis for the
demand. Upon the filing and service of the demand, the trustee shall
thereafter be required to participate in the action or proceeding.
(f) Upon the filing of the declaration of nonmonetary status, the
time within which the trustee is required to file an answer or other
responsive pleading shall be tolled for the period of time within
which the opposing parties may respond to the declaration. Upon the
timely service of an objection to the declaration on nonmonetary
status, the trustee shall have 30 days from the date of service
within which to file an answer or other responsive pleading to the
complaint or cross-complaint.
SEC. 7. Section 2941 of the Civil Code is amended to read:
2941. (a) Within 30 days after any mortgage has been satisfied,
the mortgagee or the assignee of the mortgagee shall execute a
certificate of the discharge thereof, as provided in Section 2939,
and shall record or cause to be recorded, except as provided in
subdivision (c), in the office of the county recorder in which the
mortgage is recorded. The mortgagee shall then deliver, upon the
written request of the mortgagor or the mortgagor's heirs,
successors, or assignees, as the case may be, the original note and
mortgage to the person making the request.
(b) (1) When the obligation secured by any deed of trust has been
satisfied, the beneficiary or the assignee of the beneficiary shall
execute and deliver to the trustee the original note, deed of trust,
request for a full reconveyance, and other documents as may be
necessary to reconvey, or cause to be reconveyed, the deed of trust.
(A) The trustee shall execute the full reconveyance and shall
record or cause it to be recorded, except as provided in subdivision
(c), in the office of the county recorder in which the deed of trust
is recorded within 21 calendar days after receipt by the trustee of
the original note, deed of trust, request for a full reconveyance,
the fee that may be charged pursuant to subdivision (e), recorder's
fees, and other documents as may be necessary to reconvey, or cause
to be reconveyed, the deed of trust.
(B) The trustee shall deliver a copy of the reconveyance to the
beneficiary, its successor in interest, or its servicing agent, if
known.
(C) Following execution and recordation of the full reconveyance,
upon receipt of a written request by the trustor or the trustor's
heirs, successors, or assignees, the trustee shall then deliver the
original note and deed of trust to the person making that request.
(2) If the trustee has failed to execute and record, or cause to
be recorded, the full reconveyance within 60 calendar days of
satisfaction of the obligation, the beneficiary, upon receipt of a
written request by the trustor or trustor's heirs, successor in
interest, agent, or assignee, shall execute and acknowledge a
document pursuant to Section 2934a substituting itself or another as
trustee and issue a full reconveyance.
(3) If a full reconveyance has not been executed and recorded
pursuant to either paragraph (1) or paragraph (2) within 75 calendar
days of satisfaction of the obligation, then a title insurance
company may prepare and record a release of the obligation. However,
at least 10 days prior to the issuance and recording of a full
release pursuant to this paragraph, the title insurance company shall
mail by first-class mail with postage prepaid, the intention to
release the obligation to the trustee, trustor, and beneficiary of
record, or their successor in interest of record, at the last known
address.
(A) The release shall set forth:
(i) The name of the beneficiary.
(ii) The name of the trustor.
(iii) The recording reference to the deed of trust.
(iv) A recital that the obligation secured by the deed of trust
has been paid in full.
(v) The date and amount of payment.
(B) The release issued pursuant to this subdivision shall be
entitled to recordation and, when recorded, shall be deemed to be the
equivalent of a reconveyance of a deed of trust.
(4) Where an obligation secured by a deed of trust was paid in
full prior to July 1, 1989, and no reconveyance has been issued and
recorded by October 1, 1989, then a release of obligation as provided
for in paragraph (3) may be issued.
(5) Paragraphs (2) and (3) do not excuse the beneficiary or the
trustee from compliance with paragraph (1). Paragraph (3) does not
excuse the beneficiary from compliance with paragraph (2).
(6) In addition to any other remedy provided by law, a title
insurance company preparing or recording the release of the
obligation shall be liable to any party for damages, including
attorneys' fees, which any person may sustain by reason of the
issuance and recording of the release, pursuant to paragraphs (3) and
(4).
(c) The mortgagee or trustee shall not record or cause the
certificate of discharge or full reconveyance to be recorded when any
of the following circumstances exists:
(1) The mortgagee or trustee has received written instructions to
the contrary from the mortgagor or trustor, or the owner of the land,
as the case may be, or from the owner of the obligation secured by
the deed of trust or his or her agent, or escrow.
(2) The certificate of discharge or full reconveyance is to be
delivered to the mortgagor or trustor, or the owner of the land, as
the case may be, through an escrow to which the mortgagor, trustor,
or owner is a party.
(3) When the personal delivery is not for the purpose of causing
recordation and when the certificate of discharge or full
reconveyance is to be personally delivered with receipt acknowledged
by the mortgagor or trustor or owner of the land, as the case may be,
or their agent if authorized by mortgagor or trustor or owner of the
land.
(d) The violation of this section shall make the violator liable
to the person affected by the violation for all damages which that
person may sustain by reason of the violation, and shall require that
the violator forfeit to that person the sum of three hundred dollars
($300). However, a trustee acting in accordance with subdivision
(c) shall not be deemed a violator for purposes of this subdivision.
(e) (1) The trustee, beneficiary, or mortgagee may charge a
reasonable fee to the trustor or mortgagor, or the owner of the land,
as the case may be, for all services involved in the preparation,
execution, and recordation of the full reconveyance, including, but
not limited to, document preparation and forwarding services rendered
to effect the full reconveyance, and, in addition, may collect
official fees. This fee may be made payable no earlier than the
opening of a bona fide escrow or no more than 60 days prior to the
full satisfaction of the obligation secured by the deed of trust or
mortgage.
(2) If the fee charged pursuant to this subdivision does not
exceed sixty-five dollars ($65), the fee is conclusively presumed to
be reasonable.
(f) For purposes of this section, "original" may include an
optically imaged reproduction when the following requirements are
met:
(1) The trustee receiving the request for reconveyance and
executing the reconveyance as provided in subdivision (b) is an
affiliate or subsidiary of the beneficiary or an affiliate or
subsidiary of the assignee of the beneficiary, respectively.
(2) The optical image storage media used to store the document
shall be nonerasable write once, read many (WORM) optical image media
that does not allow changes to the stored document.
(3) The optical image reproduction shall be made consistent with
the minimum standards of quality approved by either the National
Institute of Standards and Technology or the Association for
Information and Image Management.
(4) Written authentication identifying the optical image
reproduction as an unaltered copy of the note, deed of trust, or
mortgage shall be stamped or printed on the optical image
reproduction.