June 15, 2010
Senate Bill 1275 (Leno), modifying the foreclosure process, passed the Senate on a vote of 21-12 just one day prior to a legislative deadline that would have left it grounded. Under SB 1275, prior to filing a notice of default, a trustee or beneficiary would have to provide a borrower with an application for loan modification, or other foreclosure avoidance options, as well as a notice specifying a borrower’s rights during the foreclosure process. The bill would also prohibit a beneficiary or their agent from combining collections activity with communications to a borrower about foreclosure avoidance options, and would require that a compliance notice be recorded concurrently with the filing of a notice of default. Under SB 1275 a failure to record the compliance notice would allow the borrower to take action to either void the foreclosure or seek statutory damages up to $10,000.