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New California Foreclosure Laws for 2013

November 6th, 2012 · 1 Comment · California Lending & Mortgage Law, Foreclosures, Trust Deeds

 In July, I posted a snippet about the "Homeowner's Bill of Rights" ("HOBR" or "HOBoR"), also known as the California Foreclosure Reduction act.

At the firm's law blog, I later wrote with more specificity about HOBR explaining some of the requirements that have changed about notices to foreclosure sales -- such as:

  • Before a Notice of Default ("NOD") may be recorded, the borrower is entitled to a Pre-NOD notice advising of the borrower's right to documentation.
  • After an NOD is recorded, the servicer must send the borrower a notice within 5 business days advising of foreclosure prevention alternatives ('FPA")
  • The servicer must send the borrower a written acknowledgment letter 5 days after receipt of borrower's loan modification application.
  • Denial letters of loan mod applications must include information about the appeals process
  • Foreclosure notices must be personally served. 
  • If a trustee's sale is post-poned more than 10 days, the servicer must provide a written notice to the borrower within 5 business days.
  • Most importantly - the servicer must rescind the NOD or cancel the trustee's sale when the borrower executed a "permanent foreclosure prevention alternative.

In addition to HOBR, Governor Jerry Brown also signed into law SB1191 in late September, which requires landlords in foreclosure to disclose that fact to prospective tenants.  This law goes into effect January 1, 2013.  More details here on the firm's blog and here and Senator Simitian's site.

 

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One Comment so far ↓

  • Dan B

    One change in the CA HOBoR that I find interesting is the requirement that notices of foreclosure be “served personally.” In the past and now, NOD/NTS are mailed, published (newspapers/websites) and copies posted at the property. The “posted” (on front door or gate) notices are commonly photographed as extra proof. But now add “served personally.”

    I wonder if the HOBoR spells out the definition of “served personally?” Does front-door or gate posting meet this criteria? Or do the lenders/trustees need to employ process servers? Trustee Cos typically contract with auction companies who in turn tap their criers (auctioneers) to pull double duty and perform the door postings + capture photo proof thereof. Now it seems they will need to be licensed as process servers? As such they’d all deserve a big raise. Few professions endure more bullying/abuse than auction company criers.

    I wonder also about the new CA requirement to re-serve (personally?) these notices whenever a scheduled trustee sale is postponed for more than ten (10) days. Seems to me that bene/trustees will now, as a rule, never schedule the “next” sale date later than 10 days from the previous date. This will have the unintended consequence of even more (like we don’t have enough already) postponements.

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