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Key Votes

AB 278 - Establishes Regulations for Foreclosure Procedures on Home Loans - Key Vote

California Key Votes

Stages

Family

Issues

Stage Details

Legislation - Signed (Executive) -

Title: Establishes Regulations for Foreclosure Procedures on Home Loans

Legislation - Conference Report Adopted (Senate) (25-13) - (Key vote)

Title: Establishes Regulations for Foreclosure Procedures on Home Loans

Vote Smart's Synopsis:

Vote to adopt a conference report that establishes regulations for foreclosure procedures on home loans.

Highlights:
  • Prohibits a mortgage servicer from doing any of the following if a borrower has submitted a complete application for a first lien loan modification and that application is still pending (Sec. 7):
    • Recording a notice of default;
    • Recording a notice of sale; or
    • Conducting a trustee's sale of the property.

 

  • Requires a mortgage servicer to contact the borrower in person or by phone in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure (Sec. 4).  
  • Requires a mortgage servicer to attempt to contact a borrower as follows before filing a notice of default (Sec. 4):
    • Sending a letter to the borrower;
    • Attempting to contact the borrower at least 3 times at different hours on different days by telephone;
    • Providing a toll-free number for the borrower to call regarding his or her mortgage; and
    • Granting the borrower 2 weeks to respond to the mortgage servicer's contact attempts.
  • Requires the mortgage servicer to establish a single point of contact and provide the borrower with 1 or more direct means of communication with that single point of contact (Sec. 9).
  • Authorizes a mortgage servicer to record a notice of default or notice of sale, or conduct a trustee's sale when one of the following occurs (Sec. 7):
    • The mortgage servicer makes a written determination that the borrower is not eligible for a first lien loan modification and the appeal period has expired;
    • The borrower does not accept the offered first lien loan modification within 14 days; or
    • The borrower accepts a first lien loan modification but defaults on it.

 

  • Specifies that borrowers have at least 30 days after a first lien loan modification is denied to appeal the denial and provide evidence that the mortgage servicer's decision was made in error (Sec. 7).
  • Prohibits the mortgage servicer from recording a notice of default or a notice of sale or conducting a trustee's sale until the later of the following dates (Sec. 7):
    • 31 days after the borrower is notified in writing of the denial;
    • 15 days after the denial of the appeal was issued;
    • 14 days after the borrower declines a first lien loan modification after an appeal is granted; or
    • When the borrower fails to submit the first payment after a first lien loan modification is accepted after an appeal.
  • Requires a mortgage servicer to send a written notice to the borrower following the denial of a first lien loan modification application explaining the reasons for denial (Sec. 7).

 

  • Authorizes a borrower to bring an action against the mortgage servicer to refrain from recording a notice of foreclosure for a violation of this chapter, if a trustee's deed of sale has not been recorded (Sec. 16).

 

  • Requires any injunction to remain in place and the trustee's sale to be prohibited until the court determines whether the mortgage servicer has corrected the violation (Sec. 17).

 

  • Requires any mortgage servicer engaged in multiple and repeated violations  in any court relative to a foreclosure proceeding to be held liable for a civil penalty of up to $7,500 per mortgage or deed of trust (Sec. 20).

 

Legislation - Conference Report Adopted (House) -
Legislation - Concurrence Vote Failed (House) (5-57) -
Legislation - Bill Passed With Amendment (Senate) (23-13) -
Legislation - Bill Passed (House) (78-0) -
Legislation - Introduced (House) -

Title: Establishes Regulations for Foreclosure Procedures on Home Loans

Sponsors

  • Mike Eng (CA - D) (Out Of Office)
  • Mike Feuer (CA - D) (Out Of Office)
  • Holly J. Mitchell (CA - D) (Out Of Office)

Co-sponsors

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