Sacramento Report
April 17, 2012
Major Foreclosure Bills Have New Requirements
The Senate recently amended two bills to address foreclosure issues. The CLTA has met with legislative staff to let them know of the concerns of the title industry.
The first bill, SB 1471 (Budget Committee), requires mortgage servicers to have a single point of contact for borrowers’ who are delinquent or in default. It prohibits an entity from recording a notice of default unless it is the actual current holder of the beneficial interest and prohibits an agent from recording a notice of default without the specific direction of the actual owner of the beneficial interest. The bill adds a trustee and beneficiary to the current law prohibiting a power of sale from being exercised by an assignee, unless the assignment is duly acknowledged and recorded.
Senate Bill 1471 also provides that a document that contains information that was not verified for accuracy by the person or persons signing, attesting, or swearing to the accuracy of the document or statement is a robosigned document. The bill authorizes a borrower to obtain a postponement of a foreclosure sale until a new notice of default and a corrected version of the robosigned document are recorded. This bill requires any assignment of a mortgage or beneficial interest under a deed of trust to be recorded,changing the law from the existing permissive recording.
The second bill, SB 1470 (Budget Committee), requires addition information on a notice of default, including a declaration the the beneficiary or authorized agent has possession of the note and mortgage or deed of trust as well as that copies of all the assignments and endorsements are attached to the declaration. If the copies cannot be located, then a separate declaration is required to be signed either by an individual having personal knowledge of the facts, or by an individual with authority to bind the trustee, beneficiary, or authorized agent, and stating facts sufficient to show the right to enforce the note. The declaration must also state that the person cannot reasonably obtain possession of the note, along with a description of the reasonable efforts made to obtain the note.
Senate Bill 1470 also prohibits recording a notice of default while a loan modification application is pending. If a loan modification is denied the notice of default cannot be recorded until 30 days after the borrower is notified in writing or 15 day after the denial of an appeal. The bill also adds a new provision requiring a lender to send a notice to the borrower after filing a notice of default regarding alternatives to foreclosure, including a loan modification.
