Foreclosure Limitations Return Again - Loans Become Unenforceable if “Abandoned”

Senate Bill 681 (Wahab) deems a loan abandoned and unenforceable by means of a judicial or non-judicial foreclosure any time the mortgage servicer fails to provide a transfer of loan servicing notice or provide a transfer of loan ownership notice to the borrower, when required. 

The loan would also be deemed abandoned if a loan servicer has issued a charge off determination notice. A mortgage servicer seeking to foreclosure would have to sign a statement under penalty of perjury that no portion of the loan had been abandoned. The CLTA has joined a coalition of trade association opposed to the bill, which is pending in the Senate Appropriations Committee after passing the Senate Judiciary Committee on a vote of 11-2.