Calif. Civil Code §§2924, 2923.4, 2923.5, 2923.6, 2923.7, 2924.12, 2924.12, 2924.17, 2923.55, 2924.9, 2924.10, 2924.11, 2924.18, 2924.19
Amended and added by S.B. 818
Effective date: January 1, 2018
This bill reenacts many portions of the 2012 California Homeowner Bill of Rights, which expired on January 1, 2018. California’s legislature intends the laws put in place by this bill will take over for the laws which expired January 1, 2018.
When a homeowner becomes delinquent on their mortgage, the lender, mortgage servicer or bank may not record a notice of default (NOD) unless 30 days have passed since contacting or making a diligent effort to contact the homeowner, including mailing a notice and calling at different times of day.
However, when a homeowner makes a written request for the lender to cease communications, the lender is exempt from the telephone contact requirement.
Within five days after recording an NOD, the lender needs to send a written notice to the homeowner regarding any foreclosure prevention alternative it offers, including information on how the homeowner may apply to be considered for these foreclosure prevention alternatives.
The homeowner may submit a complete application for a first lien mortgage modification to the lender. While that application is pending, the lender is prohibited from recording an NOD or notice of trustee’s sale (NOTS), or conducting a trustee’s or foreclosure sale. To qualify for this exclusion, the homeowner’s complete application needs to be submitted at least five business days before the trustee’s sale is scheduled to take place.
To be considered complete, the homeowner’s application for a mortgage modification needs to include all documents required by the lender and be submitted within the reasonable timeframes the lender specifies.
When their application is approved, the homeowner needs to accept the first lien mortgage modification within 14 days of the lender’s offer, otherwise the lender may proceed with the foreclosure process.
Throughout the process, the lender needs to provide the homeowner with a single point of contact.
Once the lender receives the homeowner’s complete application for mortgage modification, it needs to provide the homeowner with written acknowledgment that it has received the application within five days of receipt. At that time, the lender also needs to provide information about the mortgage modification process, including any deadlines the homeowner needs to adhere to in order to be considered for foreclosure prevention.
When a lender approves the mortgage modification application after an NOD has already been recorded, the lender may not complete an NOTS or trustee’s sale as long as the conditions for approval continue to be met. Further, if an NOTS has been issued or a trustee’s sale scheduled, these need to be canceled as long as the conditions for mortgage modification are met.
The lender may not charge a fee for a mortgage modification or other foreclosure alternative on a first lien.
If a mortgage with an approved mortgage modification is transferred to another mortgage servicer, the new servicer needs to honor the agreed-to terms on the modification.
When the lender denies the mortgage modification, it needs to provide the homeowner with a written notice identifying the reasons why the application was denied.
Further, when the homeowner is rejected for a loan modification, the servicer needs to wait at least 31 days after the homeowner is notified before recording an NOD or — if an NOD was already recorded — recording an NOTS.
When the mortgage modification is denied, the homeowner has 30 days to appeal and provide evidence of any errors the lender made in its determination to reject their application for mortgage modification.
During the 30-day appeal period, the lender may not file an NOD. However, if an NOD has already been filed, the lender may not record an NOTS or conduct a trustee’s sale.
California homeowners have the right to sue lenders who do not comply with these laws for up to $50,000.