BILL NUMBER: SB 483	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 23, 2009
	AMENDED IN SENATE  APRIL 2, 2009

INTRODUCED BY   Senator Corbett

                        FEBRUARY 26, 2009

   An act to amend Section  2923.5 of the Civil Code
   2924.8 of the Civil Code, and to amend Section 1161b
of the Code of Civil Procedure  , relating to mortgages.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 483, as amended, Corbett. Mortgages: foreclosure. 
   Upon a breach of the obligation of a mortgage or transfer of an
interest in property, existing law requires the trustee, mortgagee,
or beneficiary to post a notice of sale, as specified. Existing law
also requires that the notice of sale in the case of default be
mailed to the resident of the property and posted on the property, as
specified. It is an infraction to tear down the notice within 72
hours of posting.  
   Existing law also requires that a tenant or subtenant in
possession of a rental housing unit at the time the property is sold
in foreclosure shall be given 60 days' written notice to quit, as
specified, before the tenant or subtenant may be removed from the
property, as specified.  
   This bill would revise the content of the notice described above
that is required to be posted on the property. The bill would also
revise the latter provision to provide that a tenant or subtenant in
possession of a rental housing unit at the time the property is sold
in foreclosure shall be given 60 days' written notice to quit, as
specified, or 90 days if required by any other provision of state or
federal law, before the tenant or subtenant may be removed from the
property, as specified.  
   Upon a breach of the obligation of a mortgage or transfer of an
interest in property, in order to exercise a power of sale, existing
law requires the trustee, mortgagee, or beneficiary to record in the
office of the county recorder wherein the mortgaged or trust property
is situated, a notice of default. Existing law prohibits filing the
notice of default until 30 days after certain actions are taken,
except in certain instances, including when the borrower has filed
for bankruptcy and the proceedings are not finalized. 

   This bill would revise this bankruptcy exception described above,
to provide instead that a notice of default may be filed without
waiting 30 days when the borrower has filed a case under specified
federal provisions relating to bankruptcy and that the bankruptcy
court has not entered an order closing or dismissing the bankruptcy
case or granting relief from a stay of foreclosure. 
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 2924.8 of the   Civil
Code   is amended to read: 
   2924.8.  (a) Upon posting a notice of sale pursuant to Section
2924f, a trustee or authorized agent shall also post the following
notice, in the manner required for posting the notice of sale on the
property to be sold, and a mortgagee, trustee, beneficiary, or
authorized agent shall mail, at the same time in an envelope
addressed to the "Resident of property subject to foreclosure sale"
the following notice in English and the languages described in
Section 1632:  "Foreclosure process has begun on this
property, which may affect your right to continue to live in this
property. Twenty days or more after the date of this notice, this
property may be sold at foreclosure. If you are renting this
property, the new property owner may either give you a new lease or
rental agreement or provide you with a 60-day eviction notice.
However, other laws may prohibit an eviction in this circumstance or
provide you with a longer notice before eviction. You may wish to
contact a lawyer or your local legal aid or housing counseling agency
to discuss any rights you may have."   "You are not
required to move at this time. However, the foreclosure process has
begun on this property, which may affect your right to continue to
live in this property in the future. Twenty days or more after the
date of this notice, this property may be sold at foreclosure. If you
are renting this property, your tenancy may continue after the
foreclosure sale. In order for the new owner to evict you, the new
owner must provide you with a written eviction notice. However, some
laws may prohibit an eviction. You should contact a lawyer or your
local legal aid or housing counseling agency to discuss any rights
you may have." 
   (b) It shall be an infraction to tear down the notice described in
subdivision (a) within 72 hours of posting. Violators shall be
subject to a fine of one hundred dollars ($100).
   (c) A state government entity shall make available translations of
the notice described in subdivision (a) which may be used by a
mortgagee, trustee, beneficiary, or authorized agent to satisfy the
requirements of this section.
   (d) This section shall only apply to loans secured by residential
real property, and if the billing address for the mortgage note is
different than the property address.
   (e) 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. 2.    Section 1161b of the   Code of
Civil Procedure   is amended to read: 
   1161b.  (a) Notwithstanding Section 1161a, a tenant or subtenant
in possession of a rental housing unit at the time the property is
sold in foreclosure shall be given 60 days' written notice to quit
pursuant to Section 1162  , or 90 days if required by any other
provision of state or federal law,  before the tenant or
subtenant may be removed from the property as prescribed in this
chapter.
   (b) This section shall not apply if any party to the note remains
in the property as a tenant, subtenant, or occupant.
   (c) 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. 
  SECTION 1.    Section 2923.5 of the Civil Code is
amended to read:
   2923.5.  (a) (1) A mortgagee, trustee, beneficiary, or authorized
agent may not file a notice of default pursuant to Section 2924 until
30 days after contact is made as required by paragraph (2) or 30
days after satisfying the due diligence requirements as described in
subdivision (g).
   (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. Any meeting may occur telephonically.
   (b) A notice of default filed pursuant to Section 2924 shall
include a declaration from the mortgagee, beneficiary, or authorized
agent that it has contacted the borrower, tried with due diligence to
contact the borrower as required by this section, or the borrower
has surrendered the property to the mortgagee, trustee, beneficiary,
or authorized agent.
   (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 a HUD-certified housing counseling
agency, attorney, or other advisor to discuss with the mortgagee,
beneficiary, or authorized agent, on the borrower's behalf, 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 notice of default may be filed 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 toll-free telephone number made available by HUD to find
a HUD-certified housing counseling agency.
   (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.
   (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 loans made from January 1,
2003, to December 31, 2007, inclusive, that are secured by
residential real property and are for owner-occupied residences. For
purposes of this subdivision, "owner-occupied" means that the
residence is the principal residence of the borrower.
   (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.