BILL NUMBER: AB 1599 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 30, 2012
AMENDED IN ASSEMBLY APRIL 11, 2012
INTRODUCED BY Assembly Members Feuer and Fong
(Principal coauthor: Assembly Member Eng)
(Coauthors: Assembly Members Cedillo and Dickinson)
FEBRUARY 6, 2012
An act to amend Section 2924f of, to amend and repeal Section
2924 of, and to add Section 2923.3 to , the Civil
Code, relating to mortgages.
LEGISLATIVE COUNSEL'S DIGEST
AB 1599, as amended, Feuer. Mortgages and deeds of trust:
foreclosure: languages.
Existing
(1) Existing law requires that,
upon a breach of the obligation of a mortgage or transfer of an
interest in property, the mortgagee, trustee, or beneficiary record a
notice of default in the office of the county recorder where the
mortgaged or trust property is situated and mail the notice of
default to the mortgagor or trustor. Existing law specifies other
requirements and procedures for completion of a foreclosure sale
, including recording a notice of sale prior to exercising a power
of sale . Existing law requires, under specified circumstances,
that a summary of mortgage terms be provided to the borrower in one
of 5 specified languages.
This bill would require a notice of default to contain a
summary of the notice of default in English and 5 specified
languages. The bill would also require a notice of sale to contain a
summary of the information required to be contained in the notice of
sale in English and 5 specified languages. The bill would
require a mortgagee, trustee, beneficiary, or authorized agent to
provide to the mortgagor or trustor a summary
copy of the notice of default , attached to a copy of
the recorded notice of default, and a summary
copy of the notice of sale , attached
to the copy of the recorded notice of sale, in English and those 5
specified languages containing these summaries .
The bill would require the Department of Real Estate, contingent
upon sufficient private funding, to provide a standard summary
translation of a notice of default and a notice of sale in those
languages, and to make those documents available without charge on
its Internet Web site. The bill would provide that any mortgagee,
trustee, beneficiary, or authorized agent who uses the department
summary translation shall not be liable for errors in translation.
(2) The bill would repeal duplicate provisions of law.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2923.3 is added to the Civil Code, to read:
2923.3. (a) A mortgagee, trustee, beneficiary, or authorized
agent shall provide to the mortgagor or trustor a summary of
the notice of default, attached to a copy of the recorded
notice of default containing a summary of the notice of default
in English and the languages described in Section 1632 , and a
summary of the notice of sale, attached to the
copy of the recorded notice of sale ,
containing a summ ary of the information required to be
contained in the notice of sale in English and the languages
described in Section 1632.
(b) The Department of Real Estate shall provide a standard summary
translation of a notice of default and a notice of sale in the
languages described in Section 1632, and shall make those documents
available without charge on its Internet Web site. Any mortgagee,
trustee, beneficiary, or authorized agent who uses the department
summary translation shall not be liable for errors in translation.
(c) Subdivision (b) shall only become operative if sufficient
private funds are provided to the Department of Real Estate for this
purpose. Posting of the documents on the department's Internet Web
site pursuant to subdivision (b) shall be deemed to be an
acknowledgment that sufficient funding has been obtained and that
subdivision (b) is operative.
SEC. 2. Section 2924 of the Civil Code
, as amended by Section 1 of Chapter 180 of the Statutes
of 2010, is amended to read:
2924. (a) Every transfer of an interest in property, other than
in trust, made only as a security for the performance of another act,
is to be deemed a mortgage, except when in the case of personal
property it is accompanied by actual change of possession, in which
case it is to be deemed a pledge. Where, by a mortgage created after
July 27, 1917, of any estate in real property, other than an estate
at will or for years, less than two, or in any transfer in trust made
after July 27, 1917, of a like estate to secure the performance of
an obligation, a power of sale is conferred upon the mortgagee,
trustee, or any other person, to be exercised after a breach of the
obligation for which that mortgage or transfer is a security, the
power shall not be exercised except where the mortgage or transfer is
made pursuant to an order, judgment, or decree of a court of record,
or to secure the payment of bonds or other evidences of indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations, or is made by a public utility subject to the
provisions of the Public Utilities Act, until all of the following
apply:
(1) The trustee, mortgagee, or beneficiary, or any of their
authorized agents shall first file for record, in the office of the
recorder of each county wherein the mortgaged or trust property or
some part or parcel thereof is situated, a notice of default. That
notice of default shall include all of the following:
(A) A statement identifying the mortgage or deed of trust by
stating the name or names of the trustor or trustors and giving the
book and page, or instrument number, if applicable, where the
mortgage or deed of trust is recorded or a description of the
mortgaged or trust property.
(B) A statement that a breach of the obligation for which the
mortgage or transfer in trust is security has occurred.
(C) A statement setting forth the nature of each breach actually
known to the beneficiary and of his or her election to sell or cause
to be sold the property to satisfy that obligation and any other
obligation secured by the deed of trust or mortgage that is in
default.
(D) If the default is curable pursuant to Section 2924c, the
statement specified in paragraph (1) of subdivision (b) of Section
2924c.
(E) A summary of the notice of default in English and the
languages described in Section 1632.
(2) Not less than three months shall elapse from the filing of the
notice of default.
(3) Except as provided in paragraph (4), after the lapse of the
three months described in paragraph (2), the mortgagee, trustee, or
other person authorized to take the sale shall give notice of sale,
stating the time and place thereof, in the manner and for a time not
less than that set forth in Section 2924f.
(4) Notwithstanding paragraph (3), the mortgagee, trustee, or
other person authorized to take sale may file a notice of sale
pursuant to Section 2924f up to five days before the lapse of the
three-month period described in paragraph (2), provided that the date
of sale is no earlier than three months and 20 days after the filing
of the notice of default.
(b) In performing acts required by this article, the trustee shall
incur no liability for any good faith error resulting from reliance
on information provided in good faith by the beneficiary regarding
the nature and the amount of the default under the secured
obligation, deed of trust, or mortgage. In performing the acts
required by this article, a trustee shall not be subject to Title
1.6c (commencing with Section 1788) of Part 4.
(c) A recital in the deed executed pursuant to the power of sale
of compliance with all requirements of law regarding the mailing of
copies of notices or the publication of a copy of the notice of
default or the personal delivery of the copy of the notice of default
or the posting of copies of the notice of sale or the publication of
a copy thereof shall constitute prima facie evidence of compliance
with these requirements and conclusive evidence thereof in favor of
bona fide purchasers and encumbrancers for value and without notice.
(d) All of the following shall constitute privileged
communications pursuant to Section 47:
(1) The mailing, publication, and delivery of notices as required
by this section.
(2) Performance of the procedures set forth in this article.
(3) Performance of the functions and procedures set forth in this
article if those functions and procedures are necessary to carry out
the duties described in Sections 729.040, 729.050, and 729.080 of the
Code of Civil Procedure.
(e) There is a rebuttable presumption that the beneficiary
actually knew of all unpaid loan payments on the obligation owed to
the beneficiary and secured by the deed of trust or mortgage subject
to the notice of default. However, the failure to include an actually
known default shall not invalidate the notice of sale and the
beneficiary shall not be precluded from asserting a claim to this
omitted default or defaults in a separate notice of default.
(f) This section shall become operative on January 1, 2011.
SEC. 3. Section 2924 of the Civil Code
, as amended by Section 2 of Chapter 180 of the Statutes of
2010, is repealed.
2924. (a) Every transfer of an interest in property, other than
in trust, made only as a security for the performance of another act,
is to be deemed a mortgage, except when in the case of personal
property it is accompanied by actual change of possession, in which
case it is to be deemed a pledge. Where, by a mortgage created after
July 27, 1917, of any estate in real property, other than an estate
at will or for years, less than two, or in any transfer in trust made
after July 27, 1917, of a like estate to secure the performance of
an obligation, a power of sale is conferred upon the mortgagee,
trustee, or any other person, to be exercised after a breach of the
obligation for which that mortgage or transfer is a security, the
power shall not be exercised except where the mortgage or transfer is
made pursuant to an order, judgment, or decree of a court of record,
or to secure the payment of bonds or other evidences of indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations, or is made by a public utility subject to the
provisions of the Public Utilities Act, until all of the following
apply:
(1) The trustee, mortgagee, or beneficiary, or any of their
authorized agents shall first file for record, in the office of the
recorder of each county wherein the mortgaged or trust property or
some part or parcel thereof is situated, a notice of default. That
notice of default shall include all of the following:
(A) A statement identifying the mortgage or deed of trust by
stating the name or names of the trustor or trustors and giving the
book and page, or instrument number, if applicable, where the
mortgage or deed of trust is recorded or a description of the
mortgaged or trust property.
(B) A statement that a breach of the obligation for which the
mortgage or transfer in trust is security has occurred.
(C) A statement setting forth the nature of each breach actually
known to the beneficiary and of his or her election to sell or cause
to be sold the property to satisfy that obligation and any other
obligation secured by the deed of trust or mortgage that is in
default.
(D) If the default is curable pursuant to Section 2924c, the
statement specified in paragraph (1) of subdivision (b) of Section
2924c.
(2) Not less than three months shall elapse from the filing of the
notice of default.
(3) Except as provided in paragraph (4), after the lapse of the
three months described in paragraph (2), the mortgagee, trustee, or
other person authorized to take the sale shall give notice of sale,
stating the time and place thereof, in the manner and for a time not
less than that set forth in Section 2924f.
(4) Notwithstanding paragraph (3), the mortgagee, trustee, or
other person authorized to take sale may file a notice of sale
pursuant to Section 2924f up to five days before the lapse of the
three-month period described in paragraph (2), provided that the date
of sale is no earlier than three months and 20 days after the filing
of the notice of default.
(b) In performing acts required by this article, the trustee shall
incur no liability for any good faith error resulting from reliance
on information provided in good faith by the beneficiary regarding
the nature and the amount of the default under the secured
obligation, deed of trust, or mortgage. In performing the acts
required by this article, a trustee shall not be subject to Title
1.6c (commencing with Section 1788) of Part 4.
(c) A recital in the deed executed pursuant to the power of sale
of compliance with all requirements of law regarding the mailing of
copies of notices or the publication of a copy of the notice of
default or the personal delivery of the copy of the notice of default
or the posting of copies of the notice of sale or the publication of
a copy thereof shall constitute prima facie evidence of compliance
with these requirements and conclusive evidence thereof in favor of
bona fide purchasers and encumbrancers for value and without notice.
(d) All of the following shall constitute privileged
communications pursuant to Section 47:
(1) The mailing, publication, and delivery of notices as required
by this section.
(2) Performance of the procedures set forth in this article.
(3) Performance of the functions and procedures set forth in this
article if those functions and procedures are necessary to carry out
the duties described in Sections 729.040, 729.050, and 729.080 of the
Code of Civil Procedure.
(e) There is a rebuttable presumption that the beneficiary
actually knew of all unpaid loan payments on the obligation owed to
the beneficiary and secured by the deed of trust or mortgage subject
to the notice of default. However, the failure to include an actually
known default shall not invalidate the notice of sale and the
beneficiary shall not be precluded from asserting a claim to this
omitted default or defaults in a separate notice of default.
(f) This section shall become operative on January 1, 2011.
SEC. 4. Section 2924f of the Civil Code
, as amended by Section 2 of Chapter 229 of the Statutes
of 2011, 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 weeks.
(2) 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
(3) 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
(4) 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 20 days prior
to the date of sale. The
(5) The notice of sale shall
contain the name, street address in this state, which may reflect an
agent of the trustee, and either a toll-free telephone number or
telephone number in this state of the trustee, 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
(6) 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
(7) 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)
(8) (A) On and after April 1, 2012, if the deed of
trust or mortgage containing a power of sale is secured by real
property containing from one to four single-family residences, the
notice of sale shall contain substantially the following language, in
addition to the language required pursuant to paragraph
paragraphs (1) to (7), inclusive :
NOTICE TO POTENTIAL BIDDERS: If you are considering bidding on
this property lien, you should understand that there are risks
involved in bidding at a trustee auction. You will be bidding on a
lien, not on the property itself. Placing the highest bid at a
trustee auction does not automatically entitle you to free and clear
ownership of the property. You should also be aware that the lien
being auctioned off may be a junior lien. If you are the highest
bidder at the auction, you are or may be responsible for paying off
all liens senior to the lien being auctioned off, before you can
receive clear title to the property. You are encouraged to
investigate the existence, priority, and size of outstanding liens
that may exist on this property by contacting the county recorder's
office or a title insurance company, either of which may charge you a
fee for this information. If you consult either of these resources,
you should be aware that the same lender may hold more than one
mortgage or deed of trust on the property.
NOTICE TO PROPERTY OWNER: The sale date shown on this notice of
sale may be postponed one or more times by the mortgagee,
beneficiary, trustee, or a court, pursuant to Section 2924g of the
California Civil Code. The law requires that information about
trustee sale postponements be made available to you and to the
public, as a courtesy to those not present at the sale. If you wish
to learn whether your sale date has been postponed, and, if
applicable, the rescheduled time and date for the sale of this
property, you may call telephone number for information regarding the
trustee's sale] or visit this Internet Web site Internet Web site
address for information regarding the sale of this property], using
the file number assigned to this case case file number]. Information
about postponements that are very short in duration or that occur
close in time to the scheduled sale may not immediately be reflected
in the telephone information or on the Internet Web site. The best
way to verify postponement information is to attend the scheduled
sale.
(B) A mortgagee, beneficiary, trustee, or authorized agent shall
make a good faith effort to provide up-to-date information regarding
sale dates and postponements to persons who wish this information.
This information shall be made available free of charge. It may be
made available via an Internet Web site, a telephone recording that
is accessible 24 hours a day, seven days a week, or through any other
means that allows 24 hours a day, seven days a week, no-cost access
to updated information. A disruption of any of these methods of
providing sale date and postponement information to allow for
reasonable maintenance or due to a service outage shall not be deemed
to be a violation of the good faith standard.
(C) Except as provided in subparagraph (B), nothing in the wording
of the notices required by subparagraph (A) is intended to modify or
create any substantive rights or obligations for any person
providing, or specified in, either of the required notices. Failure
to comply with subparagraph (A) or (B) shall not invalidate any sale
that would otherwise be valid under Section 2924f.
(D) Information provided pursuant to subparagraph (A) does not
constitute the public declaration required by subdivision (d) of
Section 2924g.
(3)
(9) If the sale of the property is to be a unified sale
as provided in subparagraph (B) of paragraph (1) of subdivision (a)
of Section 9604 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 9108 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 (B)
of paragraph (1) of subdivision (a) of Section 9604 of the Commercial
Code, shall not obligate the secured party to conduct a unified sale
pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of
Section 9604 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.
(d) The notice of sale shall contain a summary of the
information required to be contained in the notice of sale in English
and the languages described in Section 1632.
(d)
(e) This section shall become operative on January 1,
2013.