BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 708 (Corbett)
Hearing Date: 01/17/2012 Amended: 01/11/2012
Consultant: Maureen Ortiz Policy Vote: B&FI: 6-0 Jud: 5-0
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BILL SUMMARY: SB 708 extends the provisions of law that
established requirements that mortgage lenders had to adhere to
before issuing a notice of default on a homeowner (SB 1137
Perata/Corbett/Machado, Chapter 69, Statutes of 2008) from
January 1, 2013 to January 1, 2018. In addition, SB 708 revises
the contents of the notice relating to the rights of residents.
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Fiscal Impact (in thousands)
Major Provisions 2012-13 2013-14 2014-15 Fund
Dept Financial Institutions -------------minor,
absorbable--------------- Special*
Dept Real Estate -------------minor,
absorbable-------------- Special**
Dept of Corporations
---------------------minor---------------------
Special***
*Financial Institutions Fund **Real Estate Fund
***Corporations Fund
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STAFF COMMENTS:
SB 1137 (chapter 69, Statutes of 2008) imposed the following
requirements on lenders before a notice of default (NOD) may be
recorded on a mortgage or deed of trust secured by
single-family, owner-occupied residential real property:
a) A mortgagee, beneficiary, or authorized agent must contact
the borrower in person or by telephone in order to assess the
borrower's financial situation and explore options for the
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borrower that might avoid foreclosure. The bill prescribes
specific requirements for making contact.
b) A mortgagee, beneficiary, or authorized agent has to wait at
least 30 days after making initial contact with a borrower
before recording a NOD.
c) Each NOD has to include a statement explaining how the
contact with the borrower was made, or specifying that no
contact was required due to qualifying exemptions.
d) Requires a notice to be posted on a property on which a
notice of sale has been recorded, and also requires the notice
to be mailed to the resident of that property.
e) Provides a tenant of a rental housing unit that is to be
sold in foreclosure with 60 days written notice to exit the
property. (This provision was superseded by federal law allowing
renters to remain in the home for 90 days, or through the term
of their lease, whichever is longer. The federal provision will
sunset on January 1, 2015.)
f) Requires a legal property owner to maintain vacant
residential property purchased at a foreclosure sale as
specified, and provides for penalties of up to $1,000 per day
for noncompliance.
SB 708 will extend all of the above provisions until January 1,
2018.
As amended January 11, 2012, SB 708 revises the contents of the
written notice sent to a tenant of a rental housing unit that is
to be sold in foreclosure. Instead of informing the tenant of
the right to receive a 60 day notice to vacate, this notice will
inform the tenant of his or her right of a "60 days written
eviction notice or 90 days if required by any other provision of
state or federal law".
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