Sacramento Report
March 16, 2010
Required Foreclosure Modification Process Prior to a Notice of Default
Senate Bill 1275 (Leno) would require a trustee or beneificiary 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 prior to filing a notice of default. The bill would also prohibit a beneficiary or their agent from combining collections activity with communication with 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 the bill’s language, a failure to record the compliance notice would allow the borrower to file an action that would either void the foreclosure or seek statutory damages up to $10,000.
