BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 2475 (Committee on Veterans Affairs)
As Introduced
Hearing Date: June 26, 2012
Fiscal: Yes
Urgency: No
BCP:rm
SUBJECT
Military Service Protections: Real and Personal Property Rights
DESCRIPTION
Existing law prohibits the foreclosure of a service member's
home during his or her period of military service or within
three months thereafter, as specified.
This bill would extend that prohibition to nine months after the
period of military service.
BACKGROUND
The federal Servicemembers Civil Relief Act (SCRA), formerly
known as the Soldiers' and Sailors' Relief Act of 1940, provides
a comprehensive scheme to stay the enforcement of certain civil
liabilities against persons called to military service overseas.
Among other benefits, the SCRA allows the service member to
seek leave of court to delay payments on debts and tax
obligations, stays enforcement of civil judgments, tolls
statutes of limitation, provides a fixed interest rate on debts,
and stays eviction of a service member's dependents. These
benefits are available to members of the Armed Forces,
reservists, and National Guard members ordered to duty under
Title 10 of the United States Code.
In 2002, AB 1433 (Horton, Ch. 60, Stats. 2002) enacted many of
the financial and consumer-related service member protections as
are provided under the SCRA. Those provisions generally seek to
provide protections against various potential adverse effects of
a deployment, including financial protection with regards to
(more)
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court proceedings, credit contract obligations, rental
agreements, taxes, health insurance, and eviction protection.
AB 1666 (Frommer, Ch. 345, Stats. 2005) provided additional
protection for members called into active duty with regards to
fees for recording a power of attorney, termination of mobile
telephone contracts, academic tuition, state bar fees, vehicle
leases, and residential utility service.
AB 2475 (Committee on Veterans Affairs)
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In 2008, the SCRA was updated to, among other things, extend the
protection from foreclosure for service members from three to
nine months after a service member's period of military service.
This bill would conform California law to the SCRA by similarly
extending protection from foreclosure from three to nine months
after the service member's period of military service.
CHANGES TO EXISTING LAW
Existing state law provides that no sale, foreclosure, or
seizure of property for nonpayment of any sum due under any
obligation secured by a mortgage, trust deed, or other security,
as specified, shall be valid if made during the period of
military service or within three months thereafter, except as
specified. (Mil. & Vet. Code Sec. 408.)
Existing federal law , under the Servicemembers Civil Relief Act
(SCRA), provides that a sale, foreclosure, or seizure of
property for a breach of an obligation secured by a mortgage,
trust deed, or other security, as specified, shall not be valid
if made during, or within nine months after, the period of
military service, except as specified. (50 U.S.C. Appx. 533.)
This bill would conform state law to federal law by prohibiting
foreclosure of service member's homes for nine months after the
period of military deployment.
COMMENT
1. Stated need for the bill
According to the author:
The Servicemember's Civil Relief Act (SCRA) was amended
recently to change the amount of time to which it applies to
a servicemember. Previously a servicemember was covered
under the act for 3 months, but now it is extended to 9
months. State law has the previous time, and this bill will
amend state law so that it is also extended to 9 months.
2. Extending foreclosure prohibition timeframe
In 2008, the subprime mortgage crisis in the U.S. prompted
Congress to enact consumer protections and housing reforms in
the Housing and Economic Recovery Act of 2008 (HERA) ( Pub.L. No.
110-289 (July 30, 2008) 122 Stat. 2654). HERA, among other
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things, revised the SCRA to prohibit foreclosure for a period of
nine months after the service member's period of military
service. This bill would conform state law to that provision of
the SCRA.
As background, existing state law generally prohibits the
foreclosure of a service member's home during his or her period
of military service, or within three months thereafter. In
order to conform to federal law, this bill would extend that
prohibition by an additional six months, thereby prohibiting
foreclosure for a total of nine months after the period of
military service.
The California Bankers Association (CBA), in support, notes that
this bill would conform California to the federal SCRA and that
they have "worked collaboratively with interested parties to
advance reasonable measures that improve consumer protections .
. ." The American Legion - Department of California, the AMVETS
- Department of California, the California Association of County
Veterans Service Officers, the California State Commanders
Veterans Council, and the Vietnam Veterans of America-California
State Council supports the "effort to help service members with
foreclosure issues to have a little more time after their
military service to try and resolve these matters."
Support : American Legion-Department of California;
AMVETS-Department of California; California Association of
County Veterans Service Officers; California Bankers
Association; California Mortgage Bankers Association; California
State Commanders Veterans Council; Vietnam Veterans of
America-California State Council
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation : AB 2476 (Committee on Veterans
Affairs) would extend the maximum interest protection on
mortgage liabilities to one year after the service member leaves
military service. This bill is on the Senate Floor.
Prior Legislation :
AB 2475 (Committee on Veterans Affairs)
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AB 2365 (Lieu, Ch. 385, Stats. 2010), among other things,
permitted service members, when enforcing their rights and
protections under existing law, to recover reasonable attorney's
fees and costs, removed filing fees and court costs for
specified actions, and permitted an expedited review for certain
cases.
AB 1433 (Horton, Ch. 60, Stats. 2002) See Background.
Prior Vote :
Assembly Veterans Affairs Committee (Ayes 8, Noes 0)
Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Appropriations Committee (Ayes 16, Noes 0)
Assembly Floor (Ayes 72, Noes 0)
Senate Veterans Affairs Committee (Ayes 7, Noes 0)
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