Bill Text: CA SB1146 | 2023-2024 | Regular Session | Chaptered
Bill Title: Mortgages.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2024-09-25 - Chaptered by Secretary of State. Chapter 601, Statutes of 2024. [SB1146 Detail]
Download: California-2023-SB1146-Chaptered.html
Senate Bill
No. 1146
CHAPTER 601
An act to amend Sections 1916.1, 2923.7, 2924.15, 2924.18, 2924c, 2924g, 2924h, and 2924m of the Civil Code, relating to mortgages.
[
Approved by
Governor
September 25, 2024.
Filed with
Secretary of State
September 25, 2024.
]
LEGISLATIVE COUNSEL'S DIGEST
SB 1146, Wilk.
Mortgages.
Existing law exempts from the usury limitation set forth in Section 1 of Article XV of the California Constitution a loan or forbearance made or arranged by any person licensed as a real estate broker by the State of California, and secured, directly or collaterally, in whole or in part on real property. Existing law provides that a loan or forbearance is arranged by a person licensed as a real estate broker when the broker takes any of specified actions, including (1) acting for compensation or in expectation of compensation for soliciting, negotiating, or arranging the loan for another, and (2) acting for compensation or in expectation of compensation for selling, buying, leasing, exchanging, or negotiating the sale, purchase, lease, or exchange of real property or a business for another and arranging a forbearance, extension, or refinancing of any loan in connection with that sale,
purchase, lease, exchange of, or an improvement to, real property or a business. Existing law defines the term “made or arranged” to include any loan made by a person licensed as a real estate broker as a principal or as an agent for others, and whether or not the person is acting within the course and scope of such license.
This bill would include a forbearance, extension, or modification of a loan in the exception described above, as specified.
Existing law defines and regulates mortgages, including recording notices of default, applications for loan modification, foreclosure prevention alternatives, and recordation of the trustee’s deed upon sale of property under the power of sale contained in a deed of trust or mortgage, also known as a trustee’s sale or foreclosure sale.
Existing law requires mortgage servicers to establish a single point of contact when a borrower requests a
foreclosure prevention alternative, as specified. Existing law exempts from these provisions certain entities and persons that, during their immediately preceding annual reporting period, as established with their primary regulator, foreclosed on 175 of fewer residential real properties, containing no more than 4 dwelling units, that are located in California.
This bill would also exempt persons or entities that make and service 7 or fewer loans for the purchase of residential real property in a calendar year from those provisions.
Existing law prohibits certain entities and persons that, during their immediately preceding annual reporting period, as established with their primary regulator, foreclosed on 175 of fewer residential real properties, containing no more than 4 dwelling units, that are located in California from recording a notice of default, notice of sale, or conducting a trustee’s sale if the borrower submits
a complete application for a first lien loan modification, as specified.
This bill would subject persons or entities that make and service 7 or fewer loans for the purchase of residential real property in a calendar year to those provisions.
Existing law provides that specified law only applies to a first lien mortgage or deed of trust that meets either of 2 conditions: (1) the first lien mortgage or deed of trust is secured by owner-occupied residential real property containing no more than 4 dwelling units, or (2) the first lien mortgage or deed of trust is secured by residential real property that is occupied by a tenant, that contains no more than 4 dwelling units, and that meets certain conditions.
This bill would remove the 2nd condition.
Existing law authorizes a trustor or mortgagor to cure a default in certain circumstances.
Existing law requires the beneficiary or mortgagee, after a cure, to reinstate and, within 21 days following the reinstatement, execute and deliver to the trustee a notice, as specified. Existing law requires the trustee to record the notice, as specified.
This bill would provide that a trustee is not required to record that notice if the mortgage or deed of trust is paid in full and a full reconveyance or certificate of discharge is recorded, as specified.
Existing law imposes various requirements on trustee’s sales, including the time and location of the sale, postponement of the sale, and how a postponement of the sale must be announced.
This bill would require a sale to be postponed 7 calendar days at the same time and location if an act of force majeure, as defined, prevents access to the sale location for the conduct of the sale.
Existing law provides the trustee with specified rights at a trustee’s sale, including the right to require every bidder to show evidence of the bidder’s ability to deposit with the trustee the full amount of their final bid, as specified. Existing law authorizes the trustee, in the event the trustee accepts a check or a cash equivalent, to withhold the issuance of the trustee’s deed to the successful bidder until funds become available to the payee or endorsee as a matter of right, as specified.
This bill would provide the trustee the right to require any bid that is not cash to be made directly payable to the trustee, if that requirement is set forth by the trustee in the notice of sale. The bill would authorize the trustee to require the successful bidder to replace the check or cash equivalent with a check or cash equivalent made directly payable to the trustee if necessary for the funds to be made available to the
trustee.
Existing law provides a prospective owner-occupant and eligible tenant buyer various rights in connection with a trustee’s sale. Existing law provides that certain types of trustee’s sales are not deemed final until the earliest of various time periods, including 45 days after the trustee’s sale, except that during that 45-day period, an eligible bidder may submit a specified bid to the trustee that meets certain requirements, including that the bid be sent to the trustee by certified mail, overnight delivery, or another method that allows for confirmation of the delivery date, and that the bid be received by trustee by a specified date on time, except that on the last day that bids are eligible to be received by the trustee, the trustee is prohibited from receiving any bid not sent by certified mail or overnight mail.
This bill would recast that provision to prohibit the trustee, on the last day that bids are
eligible to be received by the trustee pursuant to the provisions described above, from receiving any bid not sent by certified mail with the United States Postal Service or by another overnight mail courier service with tracking information that confirms the recipient’s signature and the date and time of receipt and delivery.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 1916.1 of the Civil Code is amended to read:1916.1.
The restrictions upon rates of interest contained in Section 1 of Article XV of the California Constitution shall not apply to any loan, or any forbearance, extension, or modification of a loan, made or arranged by any person licensed as a real estate broker by the State of California, and secured, directly or collaterally, in whole or in part by liens on real property. For purposes of this section, a loan, or forbearance, extension, or modification of a loan, is arranged by a person licensed as a real estate broker when a broker (1) acts for compensation or in expectation of compensation for soliciting, negotiating, or arranging the loan, or forbearance, extension, or modification of the loan, for another, (2) acts for compensation or in expectation of compensation for selling, buying, leasing, exchanging, or negotiating the sale, purchase, lease, or exchange of real property or a business for another and (A) arranges a loan to pay all or any portion of the purchase price of, or of an improvement to, that property or business or (B) arranges a forbearance, extension, modification, or refinancing of any loan in connection with that sale, purchase, lease, exchange of, or an improvement to, real property or a business, or (3) arranges or negotiates for another a forbearance, extension, modification, or refinancing of any loan secured by real property in connection with a past transaction in which a broker had acted for compensation or in expectation of compensation for selling, buying, leasing, exchanging, or negotiating the sale, purchase, lease, or exchange of real property or a business. The term “made or arranged” includes any loan, or any forbearance, extension, or modification of a loan, made by a person licensed as a real estate broker as a principal or as an agent for others, and whether or not the person is acting within the course and scope of such license.SEC. 2.
Section 2923.7 of the Civil Code is amended to read:2923.7.
(a) When a borrower requests a foreclosure prevention alternative, the mortgage servicer shall promptly establish a single point of contact and provide to the borrower one or more direct means of communication with the single point of contact.(b) The single point of contact shall be responsible for doing all of the following:
(1) Communicating the process by which a borrower may apply for an available foreclosure prevention alternative and the deadline for any required submissions to be considered for these options.
(2) Coordinating receipt of all documents associated with available
foreclosure prevention alternatives and notifying the
borrower of any missing documents necessary to complete the application.
(3) Having access to current information and personnel sufficient to timely, accurately, and adequately inform the borrower of the current status of the foreclosure prevention alternative.
(4) Ensuring that a borrower is considered for all foreclosure prevention alternatives offered by, or through, the mortgage servicer, if any.
(5) Having access to individuals with the ability and authority to stop foreclosure proceedings when necessary.
(c) The single point of contact shall remain assigned to the borrower’s account until the mortgage servicer determines that all loss
mitigation options offered by, or through, the mortgage servicer have been exhausted or the borrower’s account becomes current.
(d) The mortgage servicer shall ensure that a single point of contact refers and transfers a borrower to an appropriate supervisor upon request of the borrower, if the single point of contact has a supervisor.
(e) For purposes of this section, “single point of contact” means an individual or team of personnel each of whom has the ability and authority to perform the responsibilities described in subdivisions (b) to (d), inclusive. The mortgage servicer shall ensure that each member of the team is knowledgeable about the borrower’s situation and current status in the alternatives to foreclosure process.
(f) This section shall apply only to mortgages or deeds of trust described in Section 2924.15.
(g) (1) This section shall not apply to either of the following:
(A) A depository institution chartered under state or federal law, a person licensed pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section 50000) of the Financial Code, or a person licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, that, during its immediately preceding annual reporting period, as established with its primary regulator, foreclosed on 175 or fewer residential real properties, containing no more than four dwelling units, that are located in California.
(B) A person or entity that makes and services seven or fewer loans for the purchase of residential real property in a calendar year.
(2) Within three months after the close of any calendar year or annual reporting period as established with its primary regulator during which an entity or person described in subparagraph (A) of paragraph (1) exceeds the threshold of 175 specified in subparagraph (A) of paragraph (1), that entity shall notify its primary regulator, in a manner acceptable to its primary regulator, and any mortgagor or trustor who is delinquent on a residential mortgage loan serviced by that entity of the date on which that entity will be subject to this section, which date shall be the first day of the first month that is six months after the close of the calendar year or annual reporting period during which that
entity exceeded the threshold.
SEC. 3.
Section 2924.15 of the Civil Code is amended to read:2924.15.
(a) Unless otherwise provided, paragraph (5) of subdivision (a) of Section 2924 and Sections 2923.5, 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, and 2924.18 shall apply only to a first lien mortgage or deed of trust that is secured by owner-occupied residential real property containing no more than four dwelling units.(b) For purposes of this section, “owner-occupied” means that the property is the principal residence of the borrower and is security for a loan made for personal, family, or household purposes.
SEC. 4.
Section 2924.18 of the Civil Code is amended to read:2924.18.
(a) (1) If a borrower submits a complete application for a first lien loan modification offered by, or through, the borrower’s mortgage servicer at least five business days before a scheduled foreclosure sale, a mortgage servicer, trustee, mortgagee, beneficiary, or authorized agent shall not record a notice of default, notice of sale, or conduct a trustee’s sale while the complete first lien loan modification application is pending, and until the borrower has been provided with a written determination by the mortgage servicer regarding that borrower’s eligibility for the requested loan modification.(2) If a foreclosure prevention alternative has been approved in writing
prior to the recordation of a notice of default, a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default under either of the following circumstances:
(A) The borrower is in compliance with the terms of a written trial or permanent loan modification, forbearance, or repayment plan.
(B) A foreclosure prevention alternative has been approved in writing by all parties, including, for example, the first lien investor, junior lienholder, and mortgage insurer, as applicable, and proof of funds or financing has been provided to the servicer.
(3) If a foreclosure prevention alternative is approved in writing after the recordation of a notice of default, a mortgage servicer, mortgagee,
trustee, beneficiary, or authorized agent shall not record a notice of sale or conduct a trustee’s sale under either of the following circumstances:
(A) The borrower is in compliance with the terms of a written trial or permanent loan modification, forbearance, or repayment plan.
(B) A foreclosure prevention alternative has been approved in writing by all parties, including, for example, the first lien investor, junior lienholder, and mortgage insurer, as applicable, and proof of funds or financing has been provided to the servicer.
(b) This section shall apply to both of the following:
(1) A depository institution chartered under state or federal law, a
person licensed pursuant to Division 9 (commencing with Section 22000) or Division 20 (commencing with Section 50000) of the Financial Code, or a person licensed pursuant to Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code, that, during its immediately preceding annual reporting period, as established with its primary regulator, foreclosed on 175 or fewer residential real properties, containing no more than four dwelling units, that are located in California.
(2) A person or entity that makes and services seven or fewer loans for the purchase of residential real property in a calendar year.
(c) Within three months after the close of any calendar year or annual reporting period as established with its primary regulator during which an entity
or person described in paragraph (1) of subdivision (b) exceeds the threshold of 175 specified in paragraph (1) of subdivision (b), that entity shall notify its primary regulator, in a manner acceptable to its primary regulator, and any mortgagor or trustor who is delinquent on a residential mortgage loan serviced by that entity of the date on which that entity will be subject to Sections 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, and 2924.12, which date shall be the first day of the first month that is six months after the close of the calendar year or annual reporting period during which that entity exceeded the threshold.
(d) For purposes of this section, an application shall be deemed “complete” when a borrower has supplied the mortgage servicer with all documents required by the mortgage servicer within the reasonable timeframes
specified by the mortgage servicer.
(e) If a borrower has been approved in writing for a first lien loan modification or other foreclosure prevention alternative, and the servicing of the borrower’s loan is transferred or sold to another mortgage servicer, the subsequent mortgage servicer shall continue to honor any previously approved first lien loan modification or other foreclosure prevention alternative, in accordance with the provisions of the act that added this section.
(f) This section shall apply only to mortgages or deeds of trust described in Section 2924.15.
SEC. 5.
Section 2924c of the Civil Code is amended to read:2924c.
(a) (1) Whenever all or a portion of the principal sum of any obligation secured by deed of trust or mortgage on real property or an estate for years therein hereafter executed has, prior to the maturity date fixed in that obligation, become due or been declared due by reason of default in payment of interest or of any installment of principal, or by reason of failure of trustor or mortgagor to pay, in accordance with the terms of that obligation or of the deed of trust or mortgage, taxes, assessments, premiums for insurance, or advances made by beneficiary or mortgagee in accordance with the terms of that obligation or of the deed of trust or mortgage, the trustor or mortgagor or their successor in interest in the mortgaged or trust property or any part thereof, or any beneficiary under a subordinate deed of trust or any other person having a subordinate lien or encumbrance of record thereon, at any time within the period specified in subdivision (e), if the power of sale therein is to be exercised, or, otherwise at any time prior to entry of the decree of foreclosure, may pay to the beneficiary or the mortgagee or their successors in interest, respectively, the entire amount due, at the time payment is tendered, with respect to (A) all amounts of principal, interest, taxes, assessments, insurance premiums, or advances actually known by the beneficiary to be, and that are, in default and shown in the notice of default, under the terms of the deed of trust or mortgage and the obligation secured thereby, (B) all amounts in default on recurring obligations not shown in the notice of default, and (C) all reasonable costs and expenses, subject to subdivision (c), that are actually incurred, or will be incurred as a direct result of the payment being tendered, in enforcing the terms of the obligation, deed of trust, or mortgage, and trustee’s or attorney’s fees, subject to subdivision (d), other than the portion of principal as would not then be due had no default occurred, and thereby cure the default theretofore existing, and thereupon, all proceedings theretofore had or instituted shall be dismissed or discontinued and the obligation and deed of trust or mortgage shall be reinstated and shall be and remain in force and effect, the same as if the acceleration had not occurred. This section does not apply to bonds or other evidences of indebtedness authorized or permitted to be issued by the Department of Financial Protection and Innovation or made by a public utility subject to the Public Utilities Code. For the purposes of this subdivision, the term “recurring obligation” means all amounts of principal and interest on the loan, or rents, subject to the deed of trust or mortgage in default due after the notice of default is recorded; all amounts of principal and interest or rents advanced on senior liens or leaseholds that are advanced after the recordation of the notice of default; and payments of taxes, assessments, and hazard insurance advanced after recordation of the notice of default. If the beneficiary or mortgagee has made no advances on defaults that would constitute recurring obligations, the beneficiary or mortgagee may require the trustor or mortgagor to provide reliable written evidence that the amounts have been paid prior to reinstatement.(2) If the trustor, mortgagor, or other person authorized to cure the default pursuant to this subdivision does cure the default, the beneficiary or mortgagee or the agent for the beneficiary or mortgagee shall, within 21 days following the reinstatement, execute and deliver to the trustee a notice of rescission that rescinds the declaration of default and demand for sale and advises the trustee of the date of reinstatement. The trustee shall cause the notice of rescission to be recorded within 30
days of receipt of the notice of rescission and of all allowable fees and costs, unless the mortgage or deed of trust is paid in full and a full reconveyance or certificate of discharge is properly recorded.
No charge, except for the recording fee, shall be made against the trustor or mortgagor for the execution and recordation of the notice which rescinds the declaration of default and demand for sale.
(b) (1) The notice, of any default described in this section, recorded pursuant to Section 2924, and mailed to any person pursuant to Section 2924b, shall begin with the following statement, printed or typed thereon:
“IMPORTANT NOTICE [14-point boldface type if printed or in capital letters if typed]
IF YOUR PROPERTY IS IN FORECLOSURE BECAUSE YOU ARE BEHIND IN YOUR PAYMENTS, IT MAY BE SOLD WITHOUT ANY COURT ACTION, [14-point boldface type if printed or in capital letters if typed] and you may have the legal right to bring your account in good standing by paying all of your past due payments plus permitted costs and expenses within the time permitted by law for reinstatement of your account, which is normally five business days prior to the date set for the sale of your property. No sale date may be set until approximately 90 days from the date this notice of default may be recorded (which date of recordation appears on this notice).
This amount is | as of |
_____
| (Date) |
|---|
and will increase until your account becomes current.
While your property is in foreclosure, you still must pay other obligations (such as insurance and taxes) required by your note and deed of trust or mortgage. If you fail to make future payments on the loan,
pay taxes on the property, provide insurance on the property, or pay other obligations as required in the note and deed of trust or mortgage, the beneficiary or mortgagee may insist that you do so in order to reinstate your account in good standing. In addition, the beneficiary or mortgagee may require as a condition to reinstatement that you provide reliable written evidence that you paid all senior liens, property taxes, and hazard insurance premiums.
Upon your written request, the beneficiary or mortgagee will give you a written itemization of the entire amount you must pay. You may not have to pay the entire unpaid portion of your account, even though full payment was demanded, but you must pay all amounts in default at the time payment is made. However, you and your beneficiary or mortgagee may mutually agree in writing prior to the time the notice of sale is posted (which may not be earlier than three months after this notice of default is recorded) to, among
other things, (1) provide additional time in which to cure the default by transfer of the property or otherwise; or (2) establish a schedule of payments in order to cure your default; or both (1) and (2).
Following the expiration of the time period referred to in the first paragraph of this notice, unless the obligation being foreclosed upon or a separate written agreement between you and your creditor permits a longer period, you have only the legal right to stop the sale of your property by paying the entire amount demanded by your creditor.
To find out the amount you must pay, or to arrange for payment to stop the foreclosure, or if your property is in foreclosure for any other reason, contact:
_____
| |
_____
| (Name of beneficiary or mortgagee) |
|---|---|
_____
| |
_____
| (Mailing address) |
_____
| |
_____
| (Telephone) |
If you have any questions, you should contact a lawyer or the governmental agency that may have insured your loan.
Notwithstanding the fact that your property is in foreclosure, you may offer your property for sale, provided the sale is concluded prior to the
conclusion of the foreclosure.
Remember, YOU MAY LOSE LEGAL RIGHTS IF YOU DO NOT TAKE PROMPT ACTION. [14-point boldface type if printed or in capital letters if typed]”
Unless otherwise specified, the notice, if printed, shall appear in at least 12-point boldface type.
If the obligation secured by the deed of trust or mortgage is a contract or agreement described in paragraph (1) or (4) of subdivision (a) of Section 1632, the notice required herein shall be in Spanish if the trustor requested a Spanish language translation of the contract or agreement pursuant to Section 1632. If the obligation secured by the deed of trust or mortgage is contained in a home improvement contract, as defined in Sections 7151.2 and 7159 of the Business and Professions Code, which is subject to Title 2 (commencing with Section 1801), the seller shall
specify on the contract whether or not the contract was principally negotiated in Spanish and if the contract was principally negotiated in Spanish, the notice required herein shall be in Spanish. No assignee of the contract or person authorized to record the notice of default shall incur any obligation or liability for failing to mail a notice in Spanish unless Spanish is specified in the contract or the assignee or person has actual knowledge that the secured obligation was principally negotiated in Spanish. Unless specified in writing to the contrary, a copy of the notice required by subdivision (c) of Section 2924b shall be in English.
(2) Any failure to comply with the provisions of this subdivision shall not affect the validity of a sale in favor of a bona fide purchaser or the rights of an encumbrancer for value and without notice.
(c) Costs and expenses that may be charged
pursuant to Sections 2924 to 2924i, inclusive, shall be limited to the costs incurred for recording, mailing, including certified and express mail charges, publishing, and posting notices required by Sections 2924 to 2924i, inclusive, recording a notice of rescission under this section, postponement pursuant to Section 2924g not to exceed one hundred dollars ($100) per postponement and a fee for a trustee’s sale guarantee or, in the event of judicial foreclosure, a litigation guarantee. For purposes of this subdivision, a trustee or beneficiary may purchase a trustee’s sale guarantee at a rate meeting the standards contained in Sections 12401.1 and 12401.3 of the Insurance Code.
(d) (1) Trustee’s or attorney’s fees that may be charged pursuant to subdivision (a), or until the notice of sale is deposited in the mail to the trustor as provided in Section 2924b, if the sale is by power of sale contained in the deed of trust
or mortgage, or, otherwise at any time prior to the decree of foreclosure, are hereby authorized to be in an amount as follows:
(A) If the unpaid principal sum secured is fifty thousand dollars ($50,000) or less, then in a base amount that does not exceed three hundred fifty dollars ($350).
(B) If the unpaid principal sum secured is greater than fifty thousand dollars ($50,000) but does not exceed one hundred fifty thousand dollars ($150,000), then in a base amount that does not exceed three hundred fifty dollars ($350) plus one-half of 1 percent of the unpaid principal sum secured exceeding fifty thousand dollars ($50,000).
(C) If the unpaid principal sum secured is greater than one hundred fifty thousand dollars ($150,000) but does not exceed five hundred thousand dollars ($500,000), then in a base amount that does
not exceed three hundred dollars ($300) plus one-half of 1 percent of the unpaid principal sum secured exceeding fifty thousand dollars ($50,000) up to and including one hundred fifty thousand dollars ($150,000) plus one-quarter of 1 percent of any portion of the unpaid principal sum secured exceeding one hundred fifty thousand dollars ($150,000).
(D) If the unpaid principal sum secured is greater than five hundred thousand dollars ($500,000), then in a base amount that does not exceed three hundred dollars ($300) plus one-half of 1 percent of the unpaid principal sum secured exceeding fifty thousand dollars ($50,000) up to and including one hundred fifty thousand dollars ($150,000) plus one-quarter of 1 percent of any portion of the unpaid principal sum secured exceeding one hundred fifty thousand dollars ($150,000) up to and including five hundred thousand dollars ($500,000) plus one-eighth of 1 percent of any portion of the unpaid principal
sum secured exceeding five hundred thousand dollars ($500,000).
(2) Any charge for trustee’s or attorney’s fees authorized by this subdivision shall be conclusively presumed to be lawful and valid where the charge does not exceed the amounts authorized in this subdivision. For purposes of this subdivision, the unpaid principal sum secured shall be determined as of the date the notice of default is recorded.
(e) Reinstatement of a monetary default under the terms of an obligation secured by a deed of trust, or mortgage may be made at any time within the period commencing with the date of recordation of the notice of default until five business days prior to the date of sale set forth in the initial recorded notice of sale.
In the event the sale does not take place on the date set forth in the initial recorded notice of sale or a subsequent
recorded notice of sale is required to be given, the right of reinstatement shall be revived as of the date of recordation of the subsequent notice of sale, and shall continue from that date until five business days prior to the date of sale set forth in the subsequently recorded notice of sale.
In the event the date of sale is postponed on the date of sale set forth in either an initial or any subsequent notice of sale, or is postponed on the date declared for sale at an immediately preceding postponement of sale, and, the postponement is for a period that exceeds five business days from the date set forth in the notice of sale, or declared at the time of postponement, then the right of reinstatement is revived as of the date of postponement and shall continue from that date until five business days prior to the date of sale declared at the time of the postponement.
Nothing contained herein shall give rise to a right of
reinstatement during the period of five business days prior to the date of sale, whether the date of sale is noticed in a notice of sale or declared at a postponement of sale.
Pursuant to the terms of this subdivision, no beneficiary, trustee, mortgagee, or their agents or successors shall be liable in any manner to a trustor, mortgagor, their agents or successors or any beneficiary under a subordinate deed of trust or mortgage or any other person having a subordinate lien or encumbrance of record thereon for the failure to allow a reinstatement of the obligation secured by a deed of trust or mortgage during the period of five business days prior to the sale of the security property, and no such right of reinstatement during this period is created by this section. Any right of reinstatement created by this section is terminated five business days prior to the date of sale set forth in the initial date of sale, and is revived only as prescribed herein and only as of
the date set forth herein.
As used in this subdivision, the term “business day” has the same meaning as specified in Section 9.
SEC. 6.
Section 2924g of the Civil Code, as amended by Section 5 of Chapter 642 of the Statutes of 2022, is amended to read:2924g.
(a) (1) All sales of property under the power of sale contained in any deed of trust or mortgage shall be held in the county where the property or some part thereof is situated, and shall be made at auction, to the highest bidder, between the hours of 9 a.m. and 5 p.m. on any business day, Monday through Friday.(2) (A) The sale shall commence at the time and location specified in the notice of sale. Any postponement shall be announced at the time and location specified in the notice of sale for commencement of the sale or pursuant to paragraph (1) of subdivision (c).
(B) A sale
that is postponed pursuant to subparagraph (E) of paragraph (1) of subdivision (c) shall be postponed seven calendar days at the same time and location.
(3) If the sale of more than one parcel of real property has been scheduled for the same time and location by the same trustee, (A) any postponement of any of the sales shall be announced at the time published in the notice of sale, (B) the first sale shall commence at the time published in the notice of sale or immediately after the announcement of any postponement, and (C) each subsequent sale shall take place as soon as possible after the preceding sale has been completed.
(4) Notwithstanding any other law, a sale of property under the power of sale contained in any deed of trust or mortgage shall be subject to the following
restriction: a trustee shall not bundle properties for the purpose of sale and each property shall be bid on separately, unless the deed of trust or mortgage requires otherwise.
(b) When the property consists of several known lots or parcels, they shall be sold separately unless the deed of trust or mortgage provides otherwise. When a portion of the property is claimed by a third person, who requires it to be sold separately, the portion subject to the claim may be thus sold. The trustor, if present at the sale, may also, unless the deed of trust or mortgage otherwise provides, direct the order in which property shall be sold, when the property consists of several known lots or parcels which may be sold to advantage separately, and the trustee shall follow that direction. After sufficient property has been sold to satisfy the indebtedness,
no more can be sold.
If the property under power of sale is in two or more counties, the public auction sale of all of the property under the power of sale may take place in any one of the counties where the property or a portion thereof is located.
(c) (1) There may be a postponement or postponements of the sale proceedings, including a postponement upon instruction by the beneficiary to the trustee that the sale proceedings be postponed, at any time prior to the completion of the sale for any period of time not to exceed a total of 365 days from the date set forth in the notice of sale. The trustee shall postpone the sale in accordance with any of the following:
(A) Upon the order of any court of competent
jurisdiction.
(B) If stayed by operation of law.
(C) By mutual agreement, whether oral or in writing, of any trustor and any beneficiary or any mortgagor and any mortgagee.
(D) At the discretion of the trustee.
(E) If an act of force majeure prevents access to the sale location at the time of the sale.
(2) In the event that the sale proceedings are postponed for a period or periods totaling more than 365 days, the scheduling of any further sale proceedings shall be preceded by giving a new notice of sale in the manner prescribed in Section 2924f. New fees incurred for the new notice of sale shall not
exceed the amounts specified in Sections 2924c and 2924d, and shall not exceed reasonable costs that are necessary to comply with this paragraph.
(d) (1) The notice of each postponement and the reason therefor shall be given by public declaration by the trustee at the time and place last appointed for sale. A public declaration of postponement shall also set forth the new date, time, and place of sale and the place of sale shall be the same place as originally fixed by the trustee for the sale. No other notice of postponement need be given. However, the sale shall be conducted no sooner than on the seventh day after the earlier of (1) dismissal of the action or (2) expiration or termination of the injunction, restraining order, or stay that required postponement of the sale, whether by entry of an order by a court of
competent jurisdiction, operation of law, or otherwise, unless the injunction, restraining order, or subsequent order expressly directs the conduct of the sale within that seven-day period. For purposes of this subdivision, the seven-day period shall not include the day on which the action is dismissed, or the day on which the injunction, restraining order, or stay expires or is terminated. If the sale had been scheduled to occur, but this subdivision precludes its conduct during that seven-day period, a new notice of postponement shall be given if the sale had been scheduled to occur during that seven-day period. The trustee shall maintain records of each postponement and the reason therefor.
(2) The public declaration described in paragraph (1) shall not be required if the sale is postponed because an act of force majeure prevented access
to the sale location.
(e) Notwithstanding the time periods established under subdivision (d), if postponement of a sale is based on a stay imposed by Title 11 of the United States Code (bankruptcy), the sale shall be conducted no sooner than the expiration of the stay imposed by that title and the seven-day provision of subdivision (d) shall not apply.
(f) For purposes of this section, “an act of force majeure” means an event that was unforeseeable at the time the sale was scheduled that is outside of the trustee’s control and renders completion of the sale impossible or impractical.
(g) This section shall remain in effect only until January 1, 2031, and as of that date is repealed, unless a later enacted
statute that is enacted before January 1, 2031, deletes or extends that date.
SEC. 7.
Section 2924g of the Civil Code, as amended by Section 6 of Chapter 642 of the Statutes of 2022, is amended to read:2924g.
(a) (1) All sales of property under the power of sale contained in any deed of trust or mortgage shall be held in the county where the property or some part thereof is situated, and shall be made at auction, to the highest bidder, between the hours of 9 a.m. and 5 p.m. on any business day, Monday through Friday.(2) The sale shall commence at the time and location specified in the notice of sale. Any postponement shall be announced at the time and location specified in the notice of sale for commencement of the sale or pursuant to paragraph (1) of subdivision (c).
(3) If the sale of more than one parcel of real
property has been scheduled for the same time and location by the same trustee, all of the following conditions apply:
(A) Any postponement of any of the sales shall be announced at the time published in the notice of sale.
(B) The first sale shall commence at the time published in the notice of sale or immediately after the announcement of any
postponement.
(C) Each subsequent sale shall take place as soon as possible after the preceding sale has been completed.
(4) A sale that is postponed pursuant to subparagraph (E) of paragraph (1) of subdivision (c) shall be postponed seven calendar days at the same time and location.
(b) When the property consists of several known lots or parcels, they shall be sold separately unless the deed of trust or mortgage provides otherwise. When a portion of the property is claimed by a third person, who requires it to be sold separately, the portion subject to the claim may be thus sold. The trustor, if present at the sale, may also, unless the deed of trust or mortgage otherwise provides, direct the order in
which property shall be sold, when the property consists of several known lots or parcels which may be sold to advantage separately, and the trustee shall follow that direction. After sufficient property has been sold to satisfy the indebtedness, no more can be sold.
If the property under power of sale is in two or more counties, the public auction sale of all of the property under the power of sale may take place in any one of the counties where the property or a portion thereof is located.
(c) (1) There may be a postponement or postponements of the sale proceedings, including a postponement upon instruction by the beneficiary to the trustee that the sale proceedings be postponed, at any time prior to the completion of the sale for any period of time not to exceed a total
of 365 days from the date set forth in the notice of sale. The trustee shall postpone the sale in accordance with any of the following:
(A) Upon the order of any court of competent jurisdiction.
(B) If stayed by operation of law.
(C) By mutual agreement, whether oral or in writing, of any trustor and any beneficiary or any mortgagor and any mortgagee.
(D) At the discretion of the trustee.
(E) If an act of force majeure prevents access to the sale location at the time of the sale.
(2) In the event that the sale proceedings are postponed for a period
or periods totaling more than 365 days, the scheduling of any further sale proceedings shall be preceded by giving a new notice of sale in the manner prescribed in Section 2924f. New fees incurred for the new notice of sale shall not exceed the amounts specified in Sections 2924c and 2924d, and shall not exceed reasonable costs that are necessary to comply with this paragraph.
(d) (1) The notice of each postponement and the reason therefor shall be given by public declaration by the trustee at the time and place last appointed for sale. A public declaration of postponement shall also set forth the new date, time, and place of sale and the place of sale shall be the same place as originally fixed by the trustee for the sale. No other notice of postponement need be given. However, the sale shall be conducted no sooner than on the
seventh day after the earlier of (1) dismissal of the action or (2) expiration or termination of the injunction, restraining order, or stay that required postponement of the sale, whether by entry of an order by a court of competent jurisdiction, operation of law, or otherwise, unless the injunction, restraining order, or subsequent order expressly directs the conduct of the sale within that seven-day period. For purposes of this subdivision, the seven-day period shall not include the day on which the action is dismissed, or the day on which the injunction, restraining order, or stay expires or is terminated. If the sale had been scheduled to occur, but this subdivision precludes its conduct during that seven-day period, a new notice of postponement shall be given if the sale had been scheduled to occur during that seven-day period. The trustee shall maintain records of each postponement and the
reason therefor.
(2) The public declaration described in paragraph (1) shall not be required if the sale is postponed because an act of force majeure prevented access to the sale location.
(e) Notwithstanding the time periods established under subdivision (d), if postponement of a sale is based on a stay imposed by Title 11 of the United States Code (bankruptcy), the sale shall be conducted no sooner than the expiration of the stay imposed by that title and the seven-day provision of subdivision (d) shall not apply.
(f) For purposes of this section, “an act of force majeure” means an event that was unforeseeable at the time the sale was scheduled that is outside of the trustee’s control and renders completion of the
sale impossible or impractical.
(g) This section shall be operative January 1, 2031.
SEC. 8.
Section 2924h of the Civil Code, as amended by Section 4 of Chapter 142 of the Statutes of 2024, is amended to read:2924h.
(a) Each and every bid made by a bidder at a trustee’s sale under a power of sale contained in a deed of trust or mortgage shall be deemed to be an irrevocable offer by that bidder to purchase the property being sold by the trustee under the power of sale for the amount of the bid. Any second or subsequent bid by the same bidder or any other bidder for a higher amount shall be a cancellation of the prior bid.(b) At the trustee’s sale, the trustee shall have the right to require any of the following:
(1) Every bidder to show evidence of the bidder’s ability to deposit with the trustee the full amount of their final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan
association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee prior to, and as a condition to, the recognizing of the bid, and to conditionally accept and hold these amounts for the duration of the sale.
(2) Any bid that is not cash to be made directly payable to the trustee, if the requirement is set forth by the trustee in the notice of sale.
(3) The last and highest bidder to deposit, if not deposited previously, the full amount of the bidder’s final bid in cash, a cashier’s check drawn on a state
or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee, immediately prior to the completion of the sale, the completion of the sale being so announced by the fall of the hammer or in another customary manner. The present beneficiary of the deed of trust under foreclosure shall have the right to offset their bid or bids only to the extent of the total amount due the beneficiary including the trustee’s fees and expenses.
(c) In the event the trustee accepts a check drawn by a credit union or a savings and loan association pursuant to this subdivision or a cash equivalent designated in the notice of sale, the trustee may withhold the issuance
of the trustee’s deed to the successful bidder submitting the check drawn by a state or federal credit union or savings and loan association or the cash equivalent until funds become available to the payee or endorsee as a matter of right. The trustee may require the successful bidder to replace the check drawn by a credit union or a savings and loan association or cash equivalent pursuant to this subdivision with a check drawn by a credit union or a savings and loan association or cash equivalent to this subdivision made directly payable to the trustee if necessary for the funds to be made available to the trustee.
For the purposes of this subdivision, the trustee’s sale shall be deemed final upon the acceptance of the last and highest bid, and shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 21
calendar days after the sale, or the next business day following the 21st day if the county recorder in which the property is located is closed on the 21st day. If an eligible bidder submits a written notice of intent to bid pursuant to paragraph (2) of subdivision (c) of Section 2924m, the trustee’s sale shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 60 calendar days after the sale or the next business day following the 60th day if the county recorder in which the property is located is closed on the 60th day. However, the sale is subject to an automatic rescission for a failure of consideration in the event the funds are not “available for withdrawal” as defined in Section 12413.1 of the Insurance Code. The trustee shall send a notice of rescission for a failure of consideration to the last and highest bidder submitting the check or alternative instrument, if the address of the last and highest bidder is known to the trustee.
If a sale results in an automatic right of rescission for failure of consideration pursuant to this subdivision, the interest of any lienholder shall be reinstated in the same priority as if the previous sale had not occurred.
(d) If the trustee has not required the last and highest bidder to deposit the cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee in the manner set forth in paragraph (2) of subdivision (b), the trustee shall complete the sale. If the last and highest bidder then fails to deliver to the trustee, when demanded, the amount of their
final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee, that bidder shall be liable to the trustee for all damages which the trustee may sustain by the refusal to deliver to the trustee the amount of the final bid, including any court costs and reasonable attorney’s fees.
If the last and highest bidder willfully fails to deliver to the trustee the amount of their final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section
5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee, or if the last and highest bidder cancels a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent that has been designated in the notice of sale as acceptable to the trustee, that bidder shall be guilty of a misdemeanor punishable by a fine of not more than two thousand five hundred dollars ($2,500).
In the event the last and highest bidder cancels an instrument submitted to the trustee as a cash equivalent, the trustee shall provide a new notice of sale in the manner set forth in Section 2924f and shall be entitled to recover the costs
of the new notice of sale as provided in Section 2924c.
(e) Any postponement or discontinuance of the sale proceedings shall be a cancellation of the last bid.
(f) Except as specifically provided in Section 2924m, in the event that this section conflicts with any other statute, then this section shall prevail.
(g) It shall be unlawful for any person, acting alone or in concert with others, (1) to offer to accept or accept from another, any consideration of any type not to bid, or (2) to fix or restrain bidding in any manner, at a sale of property conducted pursuant to a power of sale in a deed of trust or mortgage. However, it shall not be unlawful for any person, including a trustee, to state that a property subject to a recorded notice of default or subject to a sale conducted pursuant to this chapter is being sold
in an “as-is” condition.
In addition to any other remedies, any person committing any act declared unlawful by this subdivision or any act which would operate as a fraud or deceit upon any beneficiary, trustor, or junior lienor shall, upon conviction, be fined not more than ten thousand dollars ($10,000) or imprisoned in the county jail for not more than one year, or be punished by both that fine and imprisonment.
(h) This section shall remain in effect only until January 1, 2031, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2031, deletes or extends that date.
(i) The amendments made to this section by the bill adding this subdivision shall become operative on January 1, 2022.
(j) The amendments made to this section by the
act adding this subdivision are declaratory of existing law.
SEC. 9.
Section 2924h of the Civil Code, as amended by Section 8 of Chapter 642 of the Statutes of 2022, is amended to read:2924h.
(a) Each and every bid made by a bidder at a trustee’s sale under a power of sale contained in a deed of trust or mortgage shall be deemed to be an irrevocable offer by that bidder to purchase the property being sold by the trustee under the power of sale for the amount of the bid. Any second or subsequent bid by the same bidder or any other bidder for a higher amount shall be a cancellation of the prior bid.(b) At the trustee’s sale, the trustee shall have the right to require any of the following:
(1) Every bidder to show evidence of the bidder’s ability to deposit with the trustee the full amount of their final bid in cash, a
cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee prior to, and as a condition to, the recognizing of the bid, and to conditionally accept and hold these amounts for the duration of the sale.
(2) Any bid that is not cash to be made directly payable to the trustee, if the requirement is set forth by the trustee in the notice of sale.
(3) The last and highest bidder to deposit, if not deposited previously, the full amount of the bidder’s
final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee, immediately prior to the completion of the sale, the completion of the sale being so announced by the fall of the hammer or in another customary manner. The present beneficiary of the deed of trust under foreclosure shall have the right to offset their bid or bids only to the extent of the total amount due the beneficiary including the trustee’s fees and expenses.
(c) In the event the trustee accepts a check drawn by a credit
union or a savings and loan association pursuant to this subdivision or a cash equivalent designated in the notice of sale, the trustee may withhold the issuance of the trustee’s deed to the successful bidder submitting the check drawn by a state or federal credit union or savings and loan association or the cash equivalent until funds become available to the payee or endorsee as a matter of right. The trustee may require the successful bidder to replace the check drawn by a credit union or a savings and loan association or cash equivalent pursuant to this subdivision with a check drawn by a credit union or a savings and loan association or cash equivalent to this subdivision made directly payable to the trustee if necessary for the funds to be made available to the trustee.
For the purposes of this subdivision, the trustee’s sale shall be deemed final upon the
acceptance of the last and highest bid, and shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 15 calendar days after the sale, or the next business day following the 15th day if the county recorder in which the property is located is closed on the 15th day. However, the sale is subject to an automatic rescission for a failure of consideration in the event the funds are not “available for withdrawal” as defined in Section 12413.1 of the Insurance Code. The trustee shall send a notice of rescission for a failure of consideration to the last and highest bidder submitting the check or alternative instrument, if the address of the last and highest bidder is known to the trustee.
If a sale results in an automatic right of rescission for failure of consideration pursuant to this subdivision, the interest of any lienholder
shall be reinstated in the same priority as if the previous sale had not occurred.
(d) If the trustee has not required the last and highest bidder to deposit the cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee in the manner set forth in paragraph (2) of subdivision (b), the trustee shall complete the sale. If the last and highest bidder then fails to deliver to the trustee, when demanded, the amount of their final bid in cash, a cashier’s check drawn on a state or national bank, a check
drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee, that bidder shall be liable to the trustee for all damages which the trustee may sustain by the refusal to deliver to the trustee the amount of the final bid, including any court costs and reasonable attorney’s fees.
If the last and highest bidder willfully fails to deliver to the
trustee the amount of their final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee, or if the last and highest bidder cancels a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent that has been designated in the notice of sale as acceptable to the trustee, that bidder
shall be guilty of a misdemeanor punishable by a fine of not more than two thousand five hundred dollars ($2,500).
In the event the last and highest bidder cancels an instrument submitted to the trustee as a cash equivalent, the trustee shall provide a new notice of sale in the manner set forth in Section 2924f and shall be entitled to recover the costs of the new notice of sale as provided in Section 2924c.
(e) Any postponement or discontinuance of the sale proceedings shall be a cancellation of the last bid.
(f) In the event that this section conflicts with any other statute, then this section shall prevail.
(g) It shall be unlawful for any person, acting alone or in concert with
others, (1) to offer to accept or accept from another, any consideration of any type not to bid, or (2) to fix or restrain bidding in any manner, at a sale of property conducted pursuant to a power of sale in a deed of trust or mortgage. However, it shall not be unlawful for any person, including a trustee, to state that a property subject to a recorded notice of default or subject to a sale conducted pursuant to this chapter is being sold in an “as-is” condition.
In addition to any other remedies, any person committing any act declared unlawful by this subdivision or any act which would operate as a fraud or deceit upon any beneficiary, trustor, or junior lienor shall, upon conviction, be fined not more than ten thousand dollars ($10,000) or imprisoned in the county jail for not more than one year, or be punished by both that fine and imprisonment.
(h) This section shall be operative January 1, 2031.
SEC. 10.
Section 2924m of the Civil Code is amended to read:2924m.
(a) For purposes of this section:(1) “Prospective owner-occupant” means a natural person who presents to the trustee an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, that:
(A) They will occupy the property as their primary residence within 60 days of the trustee’s deed being recorded.
(B) They will maintain their occupancy for at least one year.
(C) They are not any of the following:
(i) The mortgagor or trustor.
(ii) The child, spouse, or parent of the mortgagor or trustor.
(iii) The grantor of a living trust that was named in the title to the property when the notice of default was recorded.
(iv) An employee, officer, or member of the mortgagor or trustor.
(v) A person with an ownership interest in the mortgagor, unless the mortgagor is a publicly traded company.
(D) They are not acting as the agent of any other person or entity in purchasing the real property.
(2) “Eligible tenant buyer” means a natural person who at the time of the trustee’s sale:
(A) Is occupying the real property as their primary residence.
(B) Is occupying the real property under a rental or lease agreement entered into as the result of an arm’s-length transaction with the mortgagor or trustor, or with the mortgagor or trustor’s predecessor in interest, on a date prior to the recording of the notice of default against the property, and who attaches evidence demonstrating the existence of the tenancy to the affidavit or declaration required pursuant to subparagraph (B) of paragraph (2) of subdivision (c).
(C) Is not the mortgagor or trustor, or the child, spouse, or parent of the mortgagor or trustor.
(D) Is not acting as the agent of any other person or entity in purchasing the real property. Submission of a bid pursuant to paragraph (3) of subdivision (c) does not violate this subparagraph.
(E) Has not filed a petition under Chapter 7, 11, 12, or 13 of Title 11 of the United States Code at any time during the period from the date of the trustee’s sale of the property to the 45th day after the trustee’s sale, or the next business day following the 45th day if the 45th day is a weekend or holiday.
(3) “Eligible bidder” means any of the following:
(A) An eligible tenant buyer.
(B) A prospective owner-occupant.
(C) A nonprofit association, nonprofit corporation, or cooperative corporation in which an eligible tenant buyer is a voting member or director.
(D) An eligible nonprofit corporation with all of the following attributes:
(i) It has a determination letter from the Internal Revenue Service affirming its tax-exempt status pursuant to Section 501(c)(3) of the Internal Revenue Code and is not a private foundation as that term is defined in Section 509 of the Internal Revenue Code.
(ii) It has its principal place of business in California.
(iii) The primary residences of all board members are located in California.
(iv) One of its primary activities is the development and preservation of affordable rental or home ownership housing in California.
(v) It is registered and in good standing with the Attorney General’s Registry of Charities and Fundraisers, pursuant to the Supervision of Trustees and Fundraisers for
Charitable Purposes Act (Article 7 (commencing with Section 12580) of Chapter 6 of Part 2 of Division 3 of Title 2 of the Government Code).
(E) A limited liability company wholly owned by one or more eligible nonprofit corporations as described in subparagraph (C) or (D).
(F) A community land trust, as defined in clause (ii) of subparagraph (C) of paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
(G) A limited-equity housing cooperative as defined in Section 817.
(H) The state, the Regents of the University of California, a county, city, district, public authority, or public agency, and any other political subdivision or public corporation in the state.
(4) “Evidence demonstrating the existence of the tenancy” means a copy of the dated and signed rental or lease agreement or, if a copy of the dated and signed rental or lease agreement is not available, then one of the following:
(A) Evidence of rent payments made for the property by the person asserting that they are an eligible tenant buyer for the six months prior to the recording of the notice of default.
(B) Copies of utility bills for the property payable by the person asserting that they are an eligible tenant buyer for the six months prior to the recording of the notice of default.
(b) This section does not prevent an eligible tenant buyer who meets the conditions set forth in paragraph (1) of subdivision (a) from being deemed a prospective owner-occupant.
(c) A trustee’s sale of property under a power of sale contained in a deed of trust or mortgage on real property containing one to four residential units pursuant to Section 2924g shall not be deemed final until the earliest of the following:
(1) If a prospective owner-occupant is the last and highest bidder at the trustee’s sale, the date upon which the conditions set forth in Section 2924h for the sale to become final are met. The prospective owner-occupant shall submit to the trustee the affidavit or declaration described in paragraph (1) of subdivision (a) at the trustee’s sale or to the trustee by 5 p.m. on the next business day following the trustee’s sale.
(2) Fifteen days after the trustee’s sale unless at least one eligible tenant buyer or eligible bidder submits to the trustee either a bid pursuant to
paragraph (3) or (4) or a nonbinding written notice of intent to place such a bid. The bid or written notice of intent to place a bid shall:
(A) Be sent to the trustee by certified mail, overnight delivery, or another method that allows for confirmation of the delivery date.
(B) Be accompanied by an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, identifying the category set forth in paragraph (3) of subdivision (a) to which the person or entity submitting the bid or nonbinding written notice of intent belongs and stating that the person meets the criteria for that category. If the winning bid is placed by an eligible bidder described in
subparagraphs (C) to (G), inclusive, of paragraph (3) of subdivision (a), the affidavit or declaration shall affirm the bidder’s duty to comply with subdivision (a) of Section 2924o for the benefit of tenants occupying the property.
(C) Be received by the trustee no later than 5 p.m. on the 15th day after the trustee’s sale, or the next business day following the 15th day if the 15th day is a weekend or holiday.
(D) Contain a current telephone number and return mailing address for the person submitting the bid or nonbinding written notice of intent.
(3) (A) The date upon which a representative of all of the eligible tenant buyers submits to the trustee a bid in an amount equal to the full amount of the last and highest bid at the trustee’s sale, in the form of cash, a cashier’s check drawn on a
state or national bank, a cashier’s check drawn by a state or federal credit union, or a cashier’s check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state. This bid shall:
(i) Be sent to the trustee by certified mail, overnight delivery, or another method that allows for confirmation of the delivery date.
(ii) Be accompanied by an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, stating that the persons represented meet the criteria set forth in paragraph (2) of subdivision (a), and that the persons represented are
all of the eligible tenant buyers.
(iii) Meet either of the following criteria:
(I) Be received by the trustee no later than 5 p.m. on the 15th day after the trustee’s sale, or the next business day following the 15th day if the 15th day is a weekend or holiday.
(II) Be received by the trustee no later than 5 p.m. on the 45th day after the trustee’s sale, or the next business day following the 45th day if the 45th day is a weekend or holiday, if at least one of the eligible tenant buyers submitted a nonbinding written notice of intent to place a bid pursuant to paragraph (2).
(iv) Contain a current telephone number and return mailing address for the person submitting the bid.
(B) If the
conditions in this paragraph are satisfied, the eligible tenant buyers shall be deemed the last and highest bidder pursuant to the power of sale.
(4) (A) Forty-five days after the trustee’s sale, except that during the 45-day period, an eligible bidder may submit to the trustee a bid in an amount that exceeds the last and highest bid at the trustee’s sale, in the form of cash, a cashier’s check drawn on a state or national bank, a cashier’s check drawn by a state or federal credit union, or a cashier’s check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state. The bid shall:
(i) Be sent to the trustee by certified mail, overnight delivery, or
another method that allows for confirmation of the delivery date.
(ii) Be accompanied by an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, identifying the category set forth in paragraph (3) of subdivision (a) to which the eligible bidder belongs and stating that the eligible bidder meets the criteria for that category.
(iii) Be received by the trustee no later than 5 p.m. on the 45th day after the trustee’s sale, or the next business day following the 45th day if the 45th day is a weekend or holiday, if the eligible bidder submitted a nonbinding written notice of intent to bid pursuant to paragraph (2). Notwithstanding clause (i), on the last day that bids are eligible to be received by the trustee under this clause, the trustee shall not receive any bid that is not sent by certified mail
with the United States Postal Service or by another overnight mail courier service with tracking information that confirms the recipient’s signature and the date and time of receipt and delivery.
(iv) Contain a current telephone number and return mailing address for the person submitting the bid.
(v) Be limited to a single bid amount and not contain instructions for successive bid amounts.
(B) As of 5 p.m. on the 45th day after the trustee’s sale, if one or more eligible bidders has submitted a bid that meets the conditions in this paragraph, the eligible bidder that submitted the highest bid shall be deemed the last and highest bidder pursuant to the power of sale. The trustee shall return any losing bid to the eligible bidder that submitted it.
(d) The trustee may reasonably rely on affidavits and declarations regarding bidder eligibility received under this section. The affidavit or declaration of the winning bidder shall be attached as an exhibit to the trustee’s deed and recorded. If the winning bidder is not required to submit an affidavit or declaration pursuant to this section, the trustee shall attach as an exhibit to the trustee’s deed a statement that no affidavit or declaration is required by this section, and the lack of an affidavit or declaration shall not prevent the deed from being recorded and shall not invalidate the transfer of title pursuant to the trustee’s deed.
(e) If the conditions set forth in paragraph (1) of subdivision (c) for a sale to be deemed final are not met, then:
(1) Not later than 48 hours after the trustee’s sale of
property under Section 2924g, the trustee or an authorized agent shall post on the internet website set forth on the notice of sale, as required under paragraph (8) of subdivision (b) of Section 2924f, the following information:
(A) The date on which the trustee’s sale took place.
(B) The amount of the last and highest bid at the trustee’s sale.
(C) An address at which the trustee can receive documents sent by United States mail and by a method of delivery providing for overnight delivery.
(2) The information required to be posted on the internet website under paragraph (1) shall also be made available not later than 48 hours after the trustee’s sale of property under Section 2924g by calling the telephone number set forth on the notice of sale as
required under paragraph (8) of subdivision (b) of Section 2924f.
(3) The information required to be provided under paragraphs (1) and (2) shall be made available using the file number assigned to the case that is set forth on the notice of sale as required under paragraph (8) of subdivision (b) of Section 2924f.
(4) The information required to be provided under paragraphs (1) and (2) shall be made available for a period of not less than 45 days after the sale of property under Section 2924g.
(5) A disruption of any of these methods of providing the information required under paragraphs (1) and (2) to allow for reasonable maintenance or due to a service outage shall not be deemed to be a violation of this subdivision.
(6) The information to be provided
by the trustee to eligible bidders or to persons considering whether to submit a bid or notice of intent to bid pursuant to this section is limited to the information set forth in paragraph (1).
(f) Title to the property shall remain with the mortgagor or trustor or successor in interest until the property sale is deemed final as provided in this section.
(g) A prospective owner-occupant shall not be in violation of this section if a legal owner’s compliance with the requirements of Section 2924n renders them unable to occupy the property as their primary residence within 60 days of the trustee’s deed being recorded.
(h) This section shall prevail over any conflicting provision of Section 2924h.
(i) For trustee’s sales where the winning bidder is an
eligible bidder under this section, the trustee or an authorized agent shall electronically send the following information to the office of the Attorney General within 15 days of the sale being deemed final:
(1) The dates when the trustee’s sale took place and when it was deemed final.
(2) The name of the winning bidder.
(3) The street address and assessor’s parcel number of the subject property.
(4) A copy of the trustee’s deed, as executed, including the attached affidavit or declaration of the winning bidder.
(5) The category set forth in paragraph (3) of subdivision (a) to which the eligible bidder belongs.
(j) The
Attorney General, a county counsel, a city attorney, or a district attorney may bring an action for specific performance or any other remedy at equity or at law to enforce this section.
(k) The Department of Justice shall include a summary of information contained in the reports received pursuant to subdivision (i) in a searchable repository on its official internet website.
(l) The pendency of a determination of finality under subdivision (c) shall not cause termination of any hazard insurance coverage in effect at the time of the trustee’s sale.
(m) This section shall remain in effect only until January 1, 2031, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2031, deletes or extends that date.
