Legislation Would Require Giving Loan Default Notices to Housing Entities

Assembly Bill 1529 (Committee on Housing and Community Development) is an Assembly Housing Committee bill that would enact a number of disparate legislative proposals relating to housing.

One such proposal would add a requirement that, within 10 days of recording a notice of default on a property defined as an assisted housing development, notice of the default must also be provided to a class of “affected public entities,” which the bill defines to include the mayor of the city in which the assisted housing development is located and any relevant local public housing authorities, among others.

According to proponents, this is intended to aid tracking of properties with regulatory agreements relating to low-income housing tax credits in order to maintain the tax credit rents for three years after foreclosure, as required. However, given that an affected property may not necessarily be identifiable by a recorded covenant denoting it as an assisted housing development, it is unclear how foreclosure trustees or others required to send notice could consistent comply with the provision as drafted.

The CLTA is seeking to determine whether amendments could make the legislation workable for the title industry.