BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 878|
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THIRD READING
Bill No: SB 878
Author: Liu (D)
Amended: 5/12/10
Vote: 21
SENATE JUDICIARY COMMITTEE : 4-0, 5/4/10
AYES: Corbett, Harman, Hancock, Leno
NO VOTE RECORDED: Walters
SUBJECT : Local government: Los Angeles County: notice
of
recordation
SOURCE : County of Los Angeles
DIGEST : This bill expands the scope of existing law to
allow the bills sponsor, the County of Los Angeles, and the
Los Angeles County Recorder to notify affected parties,
including occupants of the property, when a notice of
default or notice of sale has been recorded. This bill
also allows for the Los Angeles County Recorder to collect
a fee of up to $7 in order to cover the costs of notifying
the parties and providing information about housing
assistance and counseling. The various provisions of this
bill have operative and sunset dates of January 1, 2015.
ANALYSIS : Existing law requires a mortgagee, trustee,
beneficiary, or authorized agent to send residents of the
property a notice by first class mail indicating that the
property is subject to foreclosure. The notification shall
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contain specific language, advising the residents of their
right to be given a 60-day eviction notice, or be assigned
a new lease agreement. The notification also advises the
property residents of the right to contact a lawyer to
discuss any rights the occupant may have. (Section 2924.8
of the Civil Code)
Existing law requires that for notices of default, the
trustee, mortgagee, or beneficiary must record the notice
at least three months before setting the date of sale. For
notices of sale, notices must be recorded at least 20 days
before the date of sale. (Sections 2924(a)(3) and 2924f of
the Civil Code)
Existing law provides the Los Angeles County Recorder with
the authority to send a notice to the parties executing a
deed, a quitclaim deed, or a deed of trust within 30 days
of the document's recordation. The notice shall be sent by
mail, and the Los Angeles County Recorder may collect a
filing fee of up to $7 to cover the mailing costs of
sending notice. (Sections 27297.6 and 27387.1 of the
Government Code)
This bill allows the Los Angeles County Recorder to notify
affected parties, within five days but in no event more
than 20 days of recordation, that a notice of default or
notice of sale had been recorded. This provision becomes
effective on January 1, 2015.
This bill authorizes the Los Angeles County Recorder to
collect a filing fee, not to exceed $7, to cover the
mailing costs of the notices and to provide Los Angeles
County residents with housing information, counseling, or
assistance. This provision sunsets on January 1, 2015.
This bill provides that the notice may also be sent to
parties which are subject to the document, including
occupants of the real property described in the document.
This bill provides that in addition to any other recording
fee, the recorder may collect a fee from the party filing a
deed, quitclaim deed, or deed of trust, other than a
government entity, pursuant to Section 27297.6. The fee
shall not exceed the mailing cost of the notice specified
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in Section 27297.6, not to exceed $7. This provision shall
become operative on January 1, 2015.
Background
Currently, the Los Angeles County Recorder may send notice
to the executing parties that a deed, quitclaim deed, or
deed of trust has been recorded. The County does this in
order to protect homeowners against forged real estate
documents by notifying occupants that their residence is
subject to a recently filed document that could affect
their property interests. Included with the notice is
information about commonly filed real estate documents,
real estate fraud, and who the resident should contact if
they believe a real estate document has been fraudulently
filed. Los Angeles County does this to protect its
residents from real estate con artists who prey on
unsuspecting homeowners who may be unknowledgeable about
the housing process.
Taking into consideration the nationwide foreclosure
crisis, Los Angeles County is equally concerned about scam
artists preying on homeowners after a notice of default or
notice of sale has been filed against the property.
According to Los Angeles County's "Report and
Recommendations to Address Foreclosures and Real Estate
Fraud," the County should focus on the needs of homeowners,
renters, and residents in order to adequately address the
issues caused by real estate fraud, predatory lending, and
foreclosure.
To help address these needs, this bill allows Los Angeles
County to protect its tenants and homeowners even further
by allowing the Los Angeles County Recorder to notify
residents that a notice of default or notice of sale has
been recorded, coupled with information about rental and
housing scams. According to the sponsor, that supplemental
notice would also warn occupants of loan modification scams
and rental listing agency scams, and would provide
occupants with a list of resources they may turn to for
assistance.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
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SUPPORT : (Verified 5/12/10)
County of Los Angeles (source)
California Consumer Affairs Association
California Rural Legal Assistance Foundation
Consumers Union
Los Angeles County District Attorney
Los Angeles County Sheriff
Western Center on Law and Poverty
ARGUMENTS IN SUPPORT : The author writes:
"The purpose of the bill is to give Los Angeles County
authority to notify and assist homeowners and occupants
of possible foreclosure and to charge a fee, not to
exceed $7, to provide the notification and consumer
assistance. Current law allows Los Angeles County to
charge a fee, not to exceed $7, to notify homeowners when
a deed, quitclaim deed, or deed of trust is recorded.
Notices of default and notices of sale are not covered by
the current law.
"Notices of default and notices of sale are public
documents. Criminals, acting as foreclosure consultants
and loan modification specialists, contact homeowners in
foreclosure. They promise homeowners they will stop the
foreclosure or obtain a loan modification. They charge
homeowners thousands of dollars but never stop the
foreclosure, obtain the promised loan modification, or
provide any other service of value.
"This bill would address this problem by allowing Los
Angeles County to mail a written notification to
homeowners and occupants who are subject to a notice of
default or notice of sale. The notification would warn
homeowners about the unscrupulous foreclosure and loan
modification consultants who contact them. The bill also
allows Los Angeles County to offer counseling and
assistance to these homeowners."
RJG:mw 5/12/10 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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