Vote Smart's Synopsis:

Vote to pass a bill that amends requirements for foreclosures.

Highlights:

• Authorizes a trustee to foreclose on a mortgage and any property covered by the mortgage if (Sec. 2): 
• The trustee foreclosing on the mortgage is included on the mortgage records in the county where the property is located; 
• The grantor defaults;    
• The trustee or beneficiary has recorded with the county clerk’s office that the grantor has defaulted and the trustee or beneficiary is electing to sell the property in order to cover the amount still owed on the mortgage;
• The grantor is not in compliance with the terms of a “foreclosure avoidance measure”; and
• No action has been taken to recover the remaining debt. 

• Defines a “foreclosure avoidance measure” as an agreement between the beneficiary and the grantor that uses 1 or more of the following methods to modify a mortgage payment agreement (Sec. 1): 
• The beneficiary chooses not to collect 1 of the payments;
• The beneficiary modifies the payment terms; 
• The beneficiary accepts a deed from the grantor in lieu of a foreclosure;
• The grantor conducts a short sale; or
• The beneficiary provides the grantor with other assistance to prevent foreclosure. 

• Defines “beneficiary” as the lender of funds to and the recipient of payments from a grantor (Sec. 1). 

• Defines “trustee” as a person who is either employed or appointed by the beneficiary who is authorized to receive mortgage payments (Sec. 1).  

• Defines “grantor” as the person who has borrowed funds that have been secured by a mortgage and who is making payments to the beneficiary (Sec. 1). 

• Specifies that tenants of residential properties that have gone through foreclosure and were sold to a new owner have the right to continue living in the property after the foreclosure sale for the remainder of their fixed-term lease or 90 days from the date the tenant was provided with written notification of the sale (Sec. 3).

• Prohibits purchasers of foreclosed residential properties from evicting tenants less than 10 days after the date of the sale (Sec. 3).

• Specifies that the purchaser of a foreclosed property is not the landlord of the tenant unless the purchaser (Sec. 3):
• Accepts rent from the tenant; 
• Enters into a new rental agreement with the tenant; or 
• Fails to terminate the tenancy within 30 days of the date of the sale. 

• Authorizes the purchaser to act as a landlord for the purposes of terminating a tenancy (Sec. 3).

Full Bill Text