Today's Law As Amended


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SB-729 Mortgages and deeds of trust: foreclosure.(2011-2012)



As Amends the Law Today


SECTION 1.

 Section 2920.5 is added to the Civil Code, to read:

2920.5.
 For purposes of this article, “mortgage servicer” means a person or entity responsible for the day-to-day management of a mortgage loan account, including collecting and crediting periodic loan payments, handling any escrow account, or enforcing mortgage loan terms either as the holder of the loan note or on behalf of the holder of the loan note.

SEC. 2.

 Section 2923.4 is added to the Civil Code, to read:

2923.4.
 A mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default pursuant to Section 2924 unless the mortgagee, trustee, beneficiary, or authorized agent makes reasonable and good faith efforts to evaluate the borrower for all available loss mitigation options to avoid foreclosure. Notwithstanding anything to the contrary, this section shall not be construed to require a mortgagee, trustee, beneficiary, or authorized agent to act in a manner inconsistent with the terms of any applicable contract for the servicing of the loan at issue.

SEC. 2.SEC. 3.

 Section 2923.5 of the Civil Code is amended to read:

2923.5.
 (a) (1) A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default pursuant to Section 2924 until both of the following:
(A) (a)  Either (1)  A mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default pursuant to Section 2924 until  30 days after initial contact is made as required by paragraph (2) or 30 days after satisfying the due diligence requirements as described in subdivision (e). (g), and until the requirements of Section 2923.7, if applicable, have been satisfied. 
(B) The mortgage servicer complies with paragraph (1) of subdivision (a) of Section 2924.18, if the borrower has provided a complete application as defined in subdivision (d) of Section 2924.18.
(2) A mortgage servicer  mortgagee, beneficiary, or authorized agent  shall contact the borrower in person or by telephone in order to assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure. During the initial contact, the mortgage servicer  mortgagee, beneficiary, or authorized agent  shall advise the borrower that he or she has the right to request a subsequent meeting and, if requested, the mortgage servicer  mortgagee, beneficiary, or authorized agent  shall schedule the meeting to occur within 14 days. The assessment of the borrower’s financial situation and discussion of options may occur during the first contact, or at the subsequent meeting scheduled for that purpose. In either case, the borrower shall be provided the toll-free telephone number made available by the United States Department of Housing and Urban Development (HUD) to find a HUD-certified housing counseling agency.  agency, and, if applicable, a deadline for the borrower to submit an initial application for a loan modification and receive the associated protections of state law, which shall be at least 45 days after the date of the initial telephonic or in-person contact.  Any meeting may occur telephonically.
(b) A notice of default recorded pursuant to Section 2924 shall include a declaration that the mortgage servicer has contacted the borrower, has tried with due diligence to contact the borrower as required by this section, or that no contact was required because the individual did not meet the definition of “borrower” pursuant to subdivision (c) of Section 2920.5. the declaration of compliance described in Section 2923.74. 
(c) If a mortgagee, trustee, beneficiary, or authorized agent had already filed the notice of default prior to the enactment of this section and did not subsequently file a notice of rescission, then the mortgagee, trustee, beneficiary, or authorized agent shall, as part of the notice of sale filed pursuant to Section 2924f, include a declaration that either:
(1) States that the borrower was contacted to assess the borrower’s financial situation and to explore options for the borrower to avoid foreclosure.
(2) Lists the efforts made, if any, to contact the borrower in the event no contact was made.
(c) (d)  A mortgage servicer’s  mortgagee’s, beneficiary’s, or authorized agent’s  loss mitigation personnel may participate by telephone during any contact required by this section.
(e) For purposes of this section, a “borrower” shall include a mortgagor or trustor.
(d) (f)  A borrower may designate, with consent given in writing, a HUD-certified housing counseling agency, attorney, or other advisor to discuss with the mortgage servicer,  mortgagee, beneficiary, or authorized agent,  on the borrower’s behalf, the borrower’s financial situation and options for the borrower to avoid foreclosure. That contact made at the direction of the borrower shall satisfy the contact requirements of paragraph (2) of subdivision (a). Any loan modification or workout plan offered at the meeting by the mortgage servicer  mortgagee, beneficiary, or authorized agent  is subject to approval by the borrower.
(e) (g)  A  Subject to the requirements of Section 2923.7, a  notice of default may be recorded pursuant to Section 2924 when a mortgage servicer  mortgagee, beneficiary, or authorized agent  has not contacted a borrower as required by paragraph (2) of subdivision (a) provided that the failure to contact the borrower occurred despite the due diligence of the mortgage servicer.  mortgagee, beneficiary, or authorized agent.  For purposes of this section, “due diligence” shall require and mean all of the following:
(1) A mortgage servicer  mortgagee, beneficiary, or authorized agent  shall first attempt to contact a borrower by sending a first-class letter that includes the toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency. following: 
(A) The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.
(B) If applicable, a deadline for the borrower to submit an initial application for a loan modification and receive the associated protections of state law, which shall be at least 45 days after the date of this letter or 45 days after the date the mortgagee, beneficiary, or authorized agent made initial contact with the borrower pursuant to paragraph (2) of subdivision (a) of Section 2923.5, whichever is earlier.
(2) (A) After the letter has been sent, the mortgage servicer  mortgagee, beneficiary, or authorized agent  shall attempt to contact the borrower by telephone at least three times at different hours and on different days. Telephone calls shall be made to the primary telephone number on file.
(B) A mortgage servicer  mortgagee, beneficiary, or authorized agent  may attempt to contact a borrower using an automated system to dial borrowers, provided that, if the telephone call is answered, the call is connected to a live representative of the mortgage servicer. mortgagee, beneficiary, or authorized agent. 
(C) A mortgage servicer satisfies the telephone contact requirements of this paragraph:
(i) (C)  If  A mortgagee, beneficiary, or authorized agent satisfies the telephone contact requirements of this paragraph if  it determines, after attempting contact pursuant to this paragraph, that the borrower’s primary telephone number and secondary telephone number or numbers on file, if any, have been disconnected.
(ii) If the borrower or his or her authorized agent notifies the mortgage servicer in writing to cease further communication with the borrower. The cease communication notification shall explicitly pertain to the mortgage loan account to be effective. The cease communication notification shall be effective until the borrower or his or her authorized agent rescinds it in writing.
(3) If the borrower does not respond within two weeks after the telephone call requirements of paragraph (2) have been satisfied, the mortgage servicer  mortgagee, beneficiary, or authorized agent  shall then send a certified letter, with return receipt requested. requested that includes: 
(A) The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.
(B) If applicable, a deadline for the borrower to submit an initial application for a loan modification and receive the associated protections of state law, which shall be at least 45 days after the date of the letter described in paragraph (1) of subdivision (g) or 45 days after the date the mortgagee, beneficiary, or authorized agent made initial contact with the borrower pursuant to paragraph (2) of subdivision (a) of Section 2923.5, whichever is earlier.
(4) The mortgage servicer  mortgagee, beneficiary, or authorized agent  shall provide a means for the borrower to contact it in a timely manner, including a toll-free telephone number that will provide access to a live representative during business hours.
(5) The mortgage servicer  mortgagee, beneficiary, or authorized agent  has posted a prominent link on the homepage of its Internet Web site, if any, to the following information:
(A) Options that may be available to borrowers who are unable to afford their mortgage payments and who wish to avoid foreclosure, and instructions to borrowers advising them on steps to take to explore those options.
(B) A list of financial documents borrowers should collect and be prepared to present to the mortgage servicer  mortgagee, beneficiary, or authorized agent  when discussing options for avoiding foreclosure.
(C) A toll-free telephone number for borrowers who wish to discuss options for avoiding foreclosure with their mortgage servicer. mortgagee, beneficiary, or authorized agent. 
(D) The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.
(h) Subdivisions (a), (c), and (g) shall not apply if any of the following occurs:
(1) The borrower has surrendered the property as evidenced by either a letter confirming the surrender or delivery of the keys to the property to the mortgagee, trustee, beneficiary, or authorized agent.
(2) The borrower has contracted with an organization, person, or entity whose primary business is advising people who have decided to leave their homes on how to extend the foreclosure process and avoid their contractual obligations to mortgagees or beneficiaries.
(3) A case has been filed by the borrower under Chapter 7, 11, 12, or 13 of Title 11 of the United States Code and the bankruptcy court has not entered an order closing or dismissing the bankruptcy case, or granting relief from a stay of foreclosure.
(f) (i)  This section shall apply only to mortgages or deeds of trust described in Section 2924.15. recorded from January 1, 2003, to December 31, 2007, inclusive, that are secured by owner-occupied residential real property containing no more than four dwelling units. For purposes of this subdivision, “owner-occupied” means that the residence is the principal residence of the borrower as indicated to the lender in loan documents. 
(g) (j)  This section shall apply only to entities described in subdivision (b) of Section 2924.18. remain in effect only until January 1, 2013, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2013, deletes or extends that date. 

SEC. 4.

 Section 2923.5 is added to the Civil Code, to read:

2923.5.
 (a) (1) A mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of default pursuant to Section 2924 until either 46 days after contacting the borrower in writing as required by paragraph (2) or until the requirements of Section 2923.7 have been satisfied, whichever is later.
(2) Prior to recording a notice of default pursuant to Section 2924, a mortgagee, trustee, beneficiary, or authorized agent shall send the borrower a certified letter, with return receipt requested, that includes the toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency; and, if applicable, a description of the options that may be available to the borrower if he or she wishes to avoid foreclosure, and instructions setting forth the steps to take to pursue those options, including, if applicable, a deadline for the borrower to submit an initial application for a loan modification and receive the associated protections of state law, which shall be at least 45 days after the date the letter is received.
(b) A notice of default recorded pursuant to Section 2924 shall include the declaration of compliance described in Section 2923.74.
(c) (1) The mortgagee, beneficiary, or authorized agent shall provide a means for the borrower to contact it in a timely manner, including a toll-free telephone number that will provide access to a live representative during business hours.
(2) The mortgagee, beneficiary, or authorized agent shall post a prominent link on the homepage of its Internet Web site, if any, to all of the following:
(A) Information about any available options for avoiding foreclosure.
(B) A list of financial documents borrowers should collect and be prepared to present to the mortgagee, beneficiary, or authorized agent when discussing options for avoiding foreclosure.
(C) Contact information for borrowers who wish to discuss options for avoiding foreclosure with their mortgagee, beneficiary, or authorized agent.
(D) The toll-free telephone number made available by HUD to find a HUD-certified housing counseling agency.
(d) This section shall apply only to mortgages or deeds of trust secured by owner-occupied residential real property containing no more than four dwelling units. For purposes of this subdivision,“owner-occupied” means that the residence is the principal residence of the borrower as indicated to the lender in the loan documents.
(e) This section shall go into effect on January 1, 2013.

SEC. 5.

 Section 2923.7 is added to the Civil Code, to read:

2923.7.
 (a) If an eligible borrower requests a loan modification, either orally or in writing, on or before the 90th day of delinquency on the mortgage loan at issue or the 45th day after the mortgagee, trustee, or beneficiary or authorized agent makes initial contact with the borrower pursuant to Section 2923.5, whichever is later, the mortgagee, trustee, or beneficiary shall not record a notice of default unless and until it has, in good faith, reviewed the application, rendered a decision on the application, and sent the borrower a denial explanation letter as described in Section 2923.73.
(b) If a borrower requests a loan modification, either orally or in writing, by the deadline described in subdivision (a), but does not initially submit all of the documentation or information the mortgagee, beneficiary, or authorized agent requires in order to consider the borrower for a loan modification, the mortgagee, beneficiary, or authorized agent shall provide the borrower with a written notice that lists any supplemental documentation or information required, and includes the deadline for providing that documentation or information, which shall not be less than 30 calendar days from the date the borrower receives the notice.
(c) (1) If a borrower requests a loan modification, either orally or in writing, within 15 days after receiving the statutorily required copy of the notice of default by certified mail, and submits a complete loan modification application by the later of either (A) 15 days after receiving application instructions from the mortgage servicer, or (B) any application deadline communicated in writing by the mortgage servicer, the mortgagee, trustee, beneficiary, or authorized agent shall not record a notice of sale until at least 10 business days after it has, in good faith, reviewed the application, rendered a decision on the application, and sent the borrower a denial explanation letter as described in Section 2923.73.
(2) This subdivision shall not apply if a borrower applied for a loan modification before the notice of default was recorded, and the mortgagee, trustee, beneficiary, or authorized agent satisfied the requirements of Sections 2923.73 and 2924.74.
(d) If the mortgage servicer has signed a Making Home Affordable Servicer Participation Agreement with the Federal National Mortgage Association or is otherwise required to review the borrower’s loan under the federal Making Home Affordable Modification Program (HAMP) guidelines, compliance with applicable HAMP rules regarding deadlines and timeframes for the borrower to submit and complete a loan modification application shall satisfy the requirements of this section while HAMP remains in effect.
(e) Notwithstanding anything to the contrary, nothing in this section shall be construed to require a mortgage servicer to perform services in a manner inconsistent with the terms of any applicable contract for the servicing of the mortgage loan at issue.
(f) This section shall not apply if either of the following occurs:
(1) The borrower has surrendered the property as evidenced by either a letter confirming the surrender or delivery of the keys to the property to the mortgagee, trustee, beneficiary, or authorized agent.
(2) The mortgagee, beneficiary, or authorized agent does not offer any loan modifications.
(g) This subdivision shall not be construed to diminish in any way the obligations of a mortgagee, trustee, beneficiary, or authorized agent that has signed a Making Home Affordable Servicer Participation Agreement with the Federal National Mortgage Association or is otherwise required to review a loan under HAMP guidelines.
(h) This section shall apply only to mortgages or deeds of trust that are secured by owner-occupied residential real property containing no more than four dwelling units. For purposes of this subdivision, “owner-occupied” means that the residence is the principal residence of the borrower as indicated to the lender in the loan documents.

SEC. 6.

 Section 2923.73 is added to the Civil Code, to read:

2923.73.
 (a) If a borrower who requests a loan modification, either orally or in writing, is denied either a permanent loan modification or a federal Making Home Affordable Modification Program (HAMP) trial period plan, the mortgagee, beneficiary, or authorized agent shall send the borrower by certified mail, no later than 10 business days following the denial decision, a denial explanation letter that states the reason or reasons for the denial in English or, if communications with the borrower have been primarily in one of the languages set forth in subdivision (b) of Section 1632, then in that language.
(1) If the loan modification is denied because the borrower failed to provide all required verification documents or information by the applicable deadline as set forth in subdivision (b) of Section 2923.7, the letter shall indicate the date by which the borrower was directed to provide the documents or information, list the documents or information that were not provided, and state that the borrower’s request for a loan modification has been denied for this reason.
(2) If the borrower submits all required written application materials for a loan modification by the applicable deadline as set forth in subdivision (b) or (c) of Section 2923.7, and the application is denied, the denial explanation letter shall include all of the following information:
(A) The date the mortgagee, beneficiary, or authorized agent received the final materials required in order to complete its review of the borrower’s application for a loan modification.
(B) The date on which the mortgagee, beneficiary, or authorized agent made the decision to deny the borrower’s application for a loan modification.
(C) If the mortgagee, beneficiary, or authorized agent was required to consider the borrower for a loan modification under HAMP guidelines, the information required to be provided in the borrower notice described in the most current version of the Making Home Affordable Servicer Handbook and any subsequent amendments thereto.
(D) The reason or reasons the borrower did not qualify for a loan modification, including, as applicable, the following:
(i) If the denial decision is based on any investor guideline or restriction on loan modifications, a description of the guideline or restriction that resulted in the denial decision with a copy of the applicable provision in the pooling and servicing agreement or other controlling document evidencing that guideline or restriction.
(ii) If the denial decision is based on the borrower’s income or expenses, the income and expense figures used in determining the borrower’s qualification for a loan modification, including, at a minimum, borrower’s gross and net monthly income, property taxes, and hazard insurance premiums.
(iii) If the denial decision is based on a determination that the net present value of the income stream expected from the modified loan is not greater than the net present value of the income stream that is expected from the loan without modification, all of the inputs, assumptions, and calculations used to make that determination.
(iv) If applicable, a finding that the borrower was previously offered a loan modification and failed to successfully make payments under the terms of the modified loan.
(E) The name and contact information of the holder of the note for the borrower’s loan.
(F) A description of other foreclosure alternatives for which the borrower may be eligible, if any, including, but not limited to, other loan modification programs, a short sale, deed in lieu or forbearance, and a list of the steps the borrower must take in order to be considered for those options. If the servicer has already approved the borrower for another foreclosure alternative, information necessary to participate in or complete the alternative should be included.
(G) Instructions regarding how to contact the mortgagee, beneficiary, or authorized agent about the reasons for the denial of the loan modification.
(b) If a borrower is denied a loan modification, and the mortgagee, beneficiary, or authorized agent sends a denial explanation letter in compliance with this section, the mortgagee, trustee, beneficiary, or authorized agent may proceed to record a notice of default even if the borrower initiates a dispute relating to the denial and the dispute has not yet been resolved.
(c) This section shall apply only to mortgages or deeds of trust that are secured by owner-occupied residential real property containing no more than four dwelling units. For purposes of this subdivision, “owner-occupied” means that the residence is the principal residence of the borrower as indicated to the lender in the loan documents.

SEC. 7.

 Section 2923.74 is added to the Civil Code, to read:

2923.74.
 (a) After the requirements of Sections 2923.5, 2923.7, and 2923.73, as applicable, have been satisfied, a mortgage servicer shall do the following in order to initiate the foreclosure process:
(1) For purposes of completing the declaration of compliance described in paragraph (2), compile in one place a record demonstrating that the initial contact of subdivision (a) of Section 2923.5 or the due diligence requirements of subdivision (g) Section 2923.5 have been completed. This record shall include the dates and times of, and addresses and telephone numbers used for, the contact or attempted contacts with the borrower, as well as a record of the good faith efforts undertaken pursuant to Section 2923.4 and 2923.7. The record shall be made available to the borrower within 10 business days of the request if requested in writing after a notice of default has been recorded.
(2) Transmit to the foreclosure trustee or authorized agent the declaration of compliance required by this section that is signed on behalf of the mortgage servicer. The declaration shall be signed either by an individual having personal knowledge of the facts stated within, or by an individual with authority to bind the mortgage servicer, who certifies that the declaration is based upon records that were made in the regular course of the mortgage servicer’s business at or near the time of the events recorded. The declaration of compliance shall be included as part of, or attached to, every notice of default filed pursuant to Section 2924. A notice of default that does not include a declaration of compliance is void.
(3) The declaration of compliance shall be substantially similar to the following form:

DECLARATION OF COMPLIANCE
I. BORROWER CONTACT
[Complete Sections A and B until December 31, 2012 only].
A. ◻ This loan is not subject to Cal. Civil Code Sec. 2923.5, pursuant to (check all that apply):
◻ Cal. Civil Code Sec. 2923.5(h).
◻ Cal. Civil Code Sec. 2923.5(i).
If item (I)(A) is checked, no further information regarding borrower contact is required. If item (I)(A) is not checked, complete item (I)(B).
B. ◻ This loan is subject to Cal. Civil Code Sec. 2923.5, and the mortgagee, beneficiary, or authorized agent has complied with the requirements of Cal. Civil Code Sec. 2923.5 by satisfying the applicable contact or due diligence requirements described in Cal. Civil Code Sec. 2923.5(a) or (g). If checked, insert the date that the applicable borrower contact requirements were completed here: ______________________________
[Complete Section C beginning on January 1, 2013 only].
C. ◻ This loan is not subject to Cal. Civil Code Sec. 2923.5,
pursuant to Cal. Civil Code Sec. 2923.5(d).
◻ This loan is subject to Cal. Civil Code Sec. 2923.5, and the mortgagee, beneficiary, or authorized agent has complied with the requirements of Cal. Civil Code Sec. 2923.5(a)(2) and 2923.5(c). If checked, insert the date that the certified letter required by Sec. 2923.5(a)(2) was sent here: ______________________________
II. FORECLOSURE AVOIDANCE REVIEW
A. ◻ This loan is not subject to Cal. Civil Code Sec. 2923.7, pursuant to (check all that apply):
◻ Cal. Civil Code Sec. 2923.7(f)(1)(A).
◻ Cal. Civil Code Sec. 2923.7(f)(1)(B).
◻ Cal. Civil Code Sec. 2923.7(h).
If item (II)(A) is checked, no further information regarding borrower solicitation efforts is required. If item (II)(A) is not checked, complete item (II)(B).
B. ◻ This loan is subject to Cal. Civil Code Sec. 2923.7 and (check only one):
◻ The borrower was evaluated for a loan modification, was not approved, and the mortgagee, beneficiary, or authorized agent sent the borrower a denial explanation letter in compliance with the requirements of Cal. Civil Code Sec. 2923.73(a)(2).
◻ The borrower did not submit all required written application materials by the applicable deadline, and the mortgagee, beneficiary, or authorized agent sent the borrower a denial explanation letter in compliance with the requirements of Cal. Civil Code Sec. 2923.73(a)(1).
◻ The borrower did not initiate an application for a loan modification by the applicable deadline.
◻ The borrower was offered a HAMP trial period plan, but did not accept the trial period plan or did not complete the plan.
◻ The borrower was offered a permanent loan modification, but the borrower did not accept the modification offered.
◻ The borrower was offered and accepted a permanent loan modification, but did not comply with the terms of the modification.
◻ The borrower communicated to the mortgagee, beneficiary, or authorized agent that he or she does not intend to apply for a loan modification.
III. PROOF OF OWNERSHIP
◻ Attached is a copy of the note and all assignments and endorsements of the note, along with a declaration attesting to the existence and possession of the original note as well as all the assignments and endorsements, and certifying ownership of the mortgage and the right to foreclose.
◻ The trustee, mortgagee, beneficiary, or any of their authorized agents are not reasonably able to obtain possession of the note and/or all assignments and endorsements thereof. Attached is a declaration of lost note that complies with the requirements of Section 2924(a)(1)(D) of the Civil Code.

(b) This section shall apply only to mortgages or deeds of trust that are secured by owner-occupied residential real property containing no more than four dwelling units. For purposes of this subdivision, “owner-occupied” means that the residence is the principal residence of the borrower as indicated to the lender in the loan documents.

SEC. 8.

 Section 2923.75 is added to the Civil Code, to read:

2923.75.
 (a) If the mortgagee, trustee, beneficiary, or authorized agent records a notice of sale without satisfying any of the following requirements, the borrower may seek an order in any court having jurisdiction to enjoin any pending trustee’s sale until the mortgagee, trustee, beneficiary, or authorized agent has performed all of the following, as applicable:
(1) Waited for the borrower’s deadlines for requesting and applying for a loan modification to pass pursuant to Section 2923.7.
(2) Completed the evaluation of the borrower’s timely completed loan modification application pursuant to Section 2923.7.
(3) Sent the borrower a denial explanation letter that materially complies with the requirements of Section 2923.73.
(b) If the mortgagee, trustee, beneficiary, or authorized agent records a notice of default without completing its evaluation of the borrower’s timely completed loan modification application, waiting for the borrower’s deadlines for requesting and applying for a loan modification to pass as required by Section 2923.7, or sending the borrower a denial explanation letter that materially complies with the requirements of Section 2923.73, and the mortgagee, trustee, beneficiary, or authorized agent causes the property at issue to be sold at a trustee’s sale, the borrower may pursue any one of the following options, as applicable, against the beneficiary or mortgage servicer, within one year following the trustee’s sale:
(1) If the property at issue is sold to a bona fide purchaser at a trustee’s sale conducted in accordance with Section 2924f, the borrower may recover the greater of treble actual damages or statutory damages in the amount of fifteen thousand dollars ($15,000), plus reasonable attorney’s fees and costs.
(2) If, prior to the initiation of an action under this section, the property at issue is sold to a bona fide purchaser by the foreclosing party subsequent to a trustee sale conducted in accordance with Section 2924f in which title was transferred to the foreclosing party, the borrower may recover the greater of treble actual damages or statutory damages in the amount of fifteen thousand dollars ($15,000), plus reasonable attorney’s fees and costs. If the mortgagee, trustee, beneficiary, or authorized agent had actual notice of the borrower’s claim under this section prior to selling the property to a bona fide purchaser, the borrower shall also be entitled to recover statutory damages in the amount of twenty thousand dollars ($20,000), in addition to other damages recoverable under this paragraph.
(3) If title to the property at issue is transferred to the foreclosing party at a trustee sale conducted in accordance with Section 2924f, and there has been no subsequent sale to a bona fide purchaser, the borrower may bring an action to void the foreclosure sale, to enjoin the recording of any further notice of sale until at least 30 days after any requirement of Section 2923.5, 2923.7, 2923.73, or 2923.74 not previously satisfied is satisfied, and for reasonable attorney’s fees and costs.
(c) A beneficiary or mortgage servicer shall have no civil liability under subdivision (b) if, prior to the initiation of a legal action by the borrower, the mortgagee, trustee, beneficiary, or authorized agent satisfies the requirements of either of the following paragraphs no later than 180 days after the date of the trustee’s sale:
(1) (A) Voluntarily rescinds the foreclosure sale prior to filing an unlawful detainer action against the borrower.
(B) Within three days of the rescission, sends the borrower a written communication informing the borrower of the rescission and listing the steps the beneficiary or mortgage servicer will take prior to recording any further notice of sale.
(C) Materially complies with all the requirements of Section 2923.5, 2923.7, 2923.73, or 2923.74, as applicable, that were not previously satisfied, at least 30 days before recording any further notice of sale.
(2) (A) Sends the borrower a written communication stating that the beneficiary or mortgage servicer will not file an unlawful detainer action against the borrower before completing certain steps, as set forth in the letter.
(B) Refrains from filing an unlawful detainer action against the borrower until at least 30 days after the beneficiary or mortgage servicer has materially complied with all of the applicable requirements of Sections 2923.5, 2923.7, 2923.73, and 2923.74 that were not previously satisfied, and sent the borrower a written communication describing the steps that were taken and the outcome, including any reason for the denial of a loan modification, if applicable. If the beneficiary or mortgage servicer determines that the borrower qualifies for a loan modification, it shall rescind the sale and offer the borrower a loan modification.
(d) (1) If the mortgage servicer fails to record, or have recorded on its behalf, a completed declaration of compliance pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of Section 2923.74, a borrower may recover statutory damages of up to ten thousand dollars ($10,000), but not less than one thousand five hundred dollars ($1,500), plus attorney’s fees and costs, from the mortgage servicer.
(2) If the mortgage servicer records, or has recorded on its behalf, a materially false declaration of compliance, including any declaration of lost note, a borrower may recover statutory damages of up to twenty-five thousand dollars ($25,000), but not less than ten thousand dollars ($10,000), plus attorney’s fees and costs, from the mortgage servicer.
(3) For purposes of this subdivision, the declaration of compliance shall not be considered false if it lists any incorrect dates for the date that the requirements described in the declaration were completed, unless the mortgage servicer knowingly included the wrong date on the declaration.
(e) (1) Notwithstanding anything in this section, a borrower shall not have a cause of action under this section for any failure or error that is technical or de minimis in nature.
(2) Failure to complete any required section of the declaration of compliance shall not be considered a technical or de minimis error.
(f) (1) The provisions of Section 2923.5, 2923.7, 2923.73, 2923.74, 2924, or 2924b are also enforceable by the Attorney General. Any person, including a partner or officer of the mortgagee, trustee, beneficiary, or authorized agent, who violates any provision of this act, shall be subject to a civil penalty of not more than ten thousand dollars ($10,000) for each violation, except as stated in paragraph (2).
(2) (A) Any trustee, beneficiary, or authorized agent that records, or has recorded on its behalf, a false or fraudulent declaration of lost note pursuant to subparagraph (D) of paragraph (1) of subdivision (a) of Section 2924 shall be subject to a civil penalty of twenty-five thousand dollars ($25,000) for each violation.
(B) If the mortgagee, trustee, beneficiary, or authorized agent had actual notice of a legal claim pursuant to this section prior to selling the property to a bona fide purchaser subsequent to a trustee sale conducted in accordance with Section 2924f in which title was transferred to the foreclosing party, the party shall be subject to a civil penalty of twenty-five thousand dollars ($25,000) for each violation.
(3) The Attorney General may also bring a civil action for injunctive relief, and may include in the action a claim for restitution, disgorgement, or damages on behalf of affected consumers. The Attorney General may include in any action authorized by this section, a claim for costs, including reasonable attorney’s fees and expenses. The court shall have jurisdiction to award the relief authorized by this section and any other additional relief.
(g) Any person licensed by the State of California who violates any provision of Section 2923.5, 2923.7, 2923.73, 2923.74, 2924, or 2924b shall be deemed to have violated the licensing law applicable to that person, and shall be subject to enforcement action by its licensing agency.

SEC. 8.SEC. 9.

 Section 2924 of the Civil Code, as amended by Section 1 of Chapter 180 of the Statutes of 2010, is amended to read:

2924.
 (a) Every transfer of an interest in property, other than in trust, made only as a security for the performance of another act, is to be deemed a mortgage, except when in the case of personal property it is accompanied by actual change of possession, in which case it is to be deemed a pledge. If, Where,  by a mortgage created after July 27, 1917, of any estate in real property, other than an estate at will or for years, less than two, or in any transfer in trust made after July 27, 1917, of a like estate to secure the performance of an obligation, a power of sale is conferred upon the mortgagee, trustee, or any other person, to be exercised after a breach of the obligation for which that mortgage or transfer is a security, the power shall not be exercised except where the mortgage or transfer is made pursuant to an order, judgment, or decree of a court of record, or to secure the payment of bonds or other evidences of indebtedness authorized or permitted to be issued by the Commissioner of Financial Protection and Innovation,  Corporations,  or is made by a public utility subject to the provisions of the Public Utilities Act, until all of the following apply:
(1) The trustee, mortgagee, or beneficiary, or any of their authorized agents shall first file for record, in the office of the recorder of each county wherein the mortgaged or trust property or some part or parcel thereof is situated, a notice of default. That notice of default shall include all of the following:
(A) A statement identifying the mortgage or deed of trust by stating the name or names of the trustor or trustors and giving the book and page, or instrument number, if applicable, where the mortgage or deed of trust is recorded or a description of the mortgaged or trust property.
(B) A statement that a breach of the obligation for which the mortgage or transfer in trust is security has occurred.
(C) A statement setting forth the nature of each breach actually known to the beneficiary and of the beneficiary’s  his or her  election to sell or cause to be sold the property to satisfy that obligation and any other obligation secured by the deed of trust or mortgage that is in default.
(D) Proof of ownership of the mortgage or deed of trust note attached to the notice of default and noted on the declaration of compliance required by Section 2923.74. This proof shall include a copy of the mortgage or deed of trust note, and evidence of all assignments and endorsements of the mortgage or deed of trust note and mortgage or deed of trust, along with a declaration attesting to the existence and possession of the note as well as all the assignments and endorsements, and certifying ownership of the mortgage or deed of trust and the right to foreclose. If this proof cannot be located, the mortgagee, trustee, beneficiary, or authorized agent shall attach a declaration signed either by an individual having personal knowledge of the facts stated within, or by an individual with authority to bind the mortgagee, trustee, beneficiary, or authorized agent, who certifies that the declaration is based upon records that were made in the regular course of business at or near the time of the events recorded, stating the following:
(i) Facts sufficient to show that the mortgagee, trustee, beneficiary, or authorized agent has the right to enforce the note.
(ii) A statement that the person cannot reasonably obtain possession of the note, and a description of the reasonable efforts made to obtain the note.
(iii) A description of the terms of the note and any riders attached thereto, including, at a minimum:
(I) The date of execution.
(II) The parties.
(III) The principal amount of the loan.
(IV) The amortization period of the loan.
(V) The initial interest rate and, if applicable, the initial date and the frequency of any adjustments to the interest rate, and the index and margin used to calculate the interest rate at the time of any scheduled adjustment.
(VI) The expiration date of any interest-only period, if applicable.
(iv) Nothing in this subparagraph shall be construed in derogation of the parties’ rights established under Section 3-309 of the Uniform Commercial Code or any similar rights established under California law.
(D) (E)  If the default is curable pursuant to Section 2924c, the statement specified in paragraph (1) of subdivision (b) of Section 2924c.
(2) Not less than three months shall elapse from the filing of the notice of default.
(3) Except as provided in paragraph (4), after the lapse of the three months described in paragraph (2), the mortgagee, trustee, or other person authorized to take the sale shall give notice of sale, stating the time and place thereof, in the manner and for a time not less than that set forth in Section 2924f.
(4) Notwithstanding paragraph (3), the mortgagee, trustee, or other person authorized to take sale may record file  a notice of sale pursuant to Section 2924f up to 5 five  days before the lapse of the three-month period described in paragraph (2), provided that the date of sale is no earlier than three months and 20 days after the recording filing  of the notice of default.
(5) Whenever a sale is postponed for a period of at least 10 business days pursuant to Section 2924g, a mortgagee, beneficiary, or authorized agent shall provide written notice to a borrower regarding the new sale date and time, within 5 business days following the postponement. Information provided pursuant to this paragraph shall not constitute the public declaration required by subdivision (d) of Section 2924g. Failure to comply with this paragraph shall not invalidate any sale that would otherwise be valid under Section 2924f.
(6) An entity shall not record or cause a notice of default to be recorded or otherwise initiate the foreclosure process unless it is the holder of the beneficial interest under the mortgage or deed of trust, the original trustee or the substituted trustee under the deed of trust, or the designated agent of the holder of the beneficial interest. An agent of the holder of the beneficial interest under the mortgage or deed of trust, original trustee, or substituted trustee under the deed of trust shall not record a notice of default or otherwise commence the foreclosure process except when acting within the scope of authority designated by the holder of the beneficial interest.
(b) In performing acts required by this article or responding to requests for payoff or reinstatement information,  article,  the trustee shall not  incur no  liability for any good faith error resulting from reliance on information provided in good faith by the beneficiary regarding the nature and the amount of the default under the secured obligation, deed of trust, or mortgage. In performing the acts required by this article or responding to requests for payoff or reinstatement information,  article,  a trustee shall not be subject to Title 1.6c (commencing with Section 1788) of Part 4.
(c) A recital in the deed executed pursuant to the power of sale of compliance with all requirements of law regarding the mailing of copies of notices or the publication of a copy of the notice of default or the personal delivery of the copy of the notice of default or the posting of copies of the notice of sale or the publication of a copy thereof shall constitute prima facie evidence of compliance with these requirements and conclusive evidence thereof in favor of bona fide purchasers and encumbrancers for value and without notice.
(d) All of the following shall constitute privileged communications pursuant to Section 47:
(1) The mailing, publication, and delivery of notices as required by this section.
(2) Performance of the procedures set forth in this article.
(3) Performance of the functions and procedures set forth in this article if those functions and procedures are necessary to carry out the duties described in Sections 729.040, 729.050, and 729.080 of the Code of Civil Procedure.
(e) There is a rebuttable presumption that the beneficiary actually knew of all unpaid loan payments on the obligation owed to the beneficiary and secured by the deed of trust or mortgage subject to the notice of default. However, the failure to include an actually known default shall not invalidate the notice of sale and the beneficiary shall not be precluded from asserting a claim to this omitted default or defaults in a separate notice of default.
(f) With respect to residential real property containing no more than four dwelling units, a separate document containing a summary of the notice of default information in English and the languages described in Section 1632 shall be attached to the notice of default provided to the mortgagor or trustor pursuant to Section 2923.3. This section shall become operative on January 1, 2011. 

SEC. 9.

 Section 2924 of the Civil Code, as amended by Section 2 of Chapter 180 of the Statutes of 2010, is repealed.

2924.
 (a) Every transfer of an interest in property, other than in trust, made only as a security for the performance of another act, is to be deemed a mortgage, except when in the case of personal property it is accompanied by actual change of possession, in which case it is to be deemed a pledge. If, by a mortgage created after July 27, 1917, of any estate in real property, other than an estate at will or for years, less than two, or in any transfer in trust made after July 27, 1917, of a like estate to secure the performance of an obligation, a power of sale is conferred upon the mortgagee, trustee, or any other person, to be exercised after a breach of the obligation for which that mortgage or transfer is a security, the power shall not be exercised except where the mortgage or transfer is made pursuant to an order, judgment, or decree of a court of record, or to secure the payment of bonds or other evidences of indebtedness authorized or permitted to be issued by the Commissioner of Financial Protection and Innovation, or is made by a public utility subject to the provisions of the Public Utilities Act, until all of the following apply:
(1) The trustee, mortgagee, or beneficiary, or any of their authorized agents shall first file for record, in the office of the recorder of each county wherein the mortgaged or trust property or some part or parcel thereof is situated, a notice of default. That notice of default shall include all of the following:
(A) A statement identifying the mortgage or deed of trust by stating the name or names of the trustor or trustors and giving the book and page, or instrument number, if applicable, where the mortgage or deed of trust is recorded or a description of the mortgaged or trust property.
(B) A statement that a breach of the obligation for which the mortgage or transfer in trust is security has occurred.
(C) A statement setting forth the nature of each breach actually known to the beneficiary and of the beneficiary’s election to sell or cause to be sold the property to satisfy that obligation and any other obligation secured by the deed of trust or mortgage that is in default.
(D) If the default is curable pursuant to Section 2924c, the statement specified in paragraph (1) of subdivision (b) of Section 2924c.
(2) Not less than three months shall elapse from the filing of the notice of default.
(3) Except as provided in paragraph (4), after the lapse of the three months described in paragraph (2), the mortgagee, trustee, or other person authorized to take the sale shall give notice of sale, stating the time and place thereof, in the manner and for a time not less than that set forth in Section 2924f.
(4) Notwithstanding paragraph (3), the mortgagee, trustee, or other person authorized to take sale may record a notice of sale pursuant to Section 2924f up to 5 days before the lapse of the three-month period described in paragraph (2), provided that the date of sale is no earlier than three months and 20 days after the recording of the notice of default.
(5) Whenever a sale is postponed for a period of at least 10 business days pursuant to Section 2924g, a mortgagee, beneficiary, or authorized agent shall provide written notice to a borrower regarding the new sale date and time, within 5 business days following the postponement. Information provided pursuant to this paragraph shall not constitute the public declaration required by subdivision (d) of Section 2924g. Failure to comply with this paragraph shall not invalidate any sale that would otherwise be valid under Section 2924f.
(6) An entity shall not record or cause a notice of default to be recorded or otherwise initiate the foreclosure process unless it is the holder of the beneficial interest under the mortgage or deed of trust, the original trustee or the substituted trustee under the deed of trust, or the designated agent of the holder of the beneficial interest. An agent of the holder of the beneficial interest under the mortgage or deed of trust, original trustee, or substituted trustee under the deed of trust shall not record a notice of default or otherwise commence the foreclosure process except when acting within the scope of authority designated by the holder of the beneficial interest.
(b) In performing acts required by this article or responding to requests for payoff or reinstatement information, the trustee shall not incur liability for any good faith error resulting from reliance on information provided in good faith by the beneficiary regarding the nature and the amount of the default under the secured obligation, deed of trust, or mortgage. In performing the acts required by this article or responding to requests for payoff or reinstatement information, a trustee shall not be subject to Title 1.6c (commencing with Section 1788) of Part 4.
(c) A recital in the deed executed pursuant to the power of sale of compliance with all requirements of law regarding the mailing of copies of notices or the publication of a copy of the notice of default or the personal delivery of the copy of the notice of default or the posting of copies of the notice of sale or the publication of a copy thereof shall constitute prima facie evidence of compliance with these requirements and conclusive evidence thereof in favor of bona fide purchasers and encumbrancers for value and without notice.
(d) All of the following shall constitute privileged communications pursuant to Section 47:
(1) The mailing, publication, and delivery of notices as required by this section.
(2) Performance of the procedures set forth in this article.
(3) Performance of the functions and procedures set forth in this article if those functions and procedures are necessary to carry out the duties described in Sections 729.040, 729.050, and 729.080 of the Code of Civil Procedure.
(e) There is a rebuttable presumption that the beneficiary actually knew of all unpaid loan payments on the obligation owed to the beneficiary and secured by the deed of trust or mortgage subject to the notice of default. However, the failure to include an actually known default shall not invalidate the notice of sale and the beneficiary shall not be precluded from asserting a claim to this omitted default or defaults in a separate notice of default.
(f) With respect to residential real property containing no more than four dwelling units, a separate document containing a summary of the notice of default information in English and the languages described in Section 1632 shall be attached to the notice of default provided to the mortgagor or trustor pursuant to Section 2923.3.
SEC. 10.
 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.