Code Section

Civil Code - CIV

DIVISION 3. OBLIGATIONS [1427 - 3273.16]

  ( Heading of Division 3 amended by Stats. 1988, Ch. 160, Sec. 14. )


  ( Part 4 enacted 1872. )

TITLE 14. LIEN [2872 - 3081]

  ( Title 14 enacted 1872. )

CHAPTER 2. Mortgage [2920 - 2967]

  ( Chapter 2 enacted 1872. )

ARTICLE 1. Mortgages in General [2920 - 2944.10]
  ( Article 1 enacted 1872. )


(a) Notwithstanding any other provision of law, any person who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower, shall provide the following to the borrower, as a separate statement, in not less than 14-point bold type, prior to entering into any fee agreement with the borrower:

It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting

(b) If loan modification or other mortgage loan forbearance services are offered or negotiated in one of the languages set forth in Section 1632, a translated copy of the statement in subdivision (a) shall be provided to the borrower in that foreign language.

(c) A violation of this section by a natural person is a public offense punishable by a fine not exceeding ten thousand dollars ($10,000), by imprisonment in the county jail for a term not to exceed one year, or by both that fine and imprisonment, or if by a business entity, the violation is punishable by a fine not exceeding fifty thousand dollars ($50,000). These penalties are cumulative to any other remedies or penalties provided by law.

(d) This section does not apply to a person, or an agent acting on that person’s behalf, offering loan modification or other loan forbearance services for a loan owned or serviced by that person.

(e) This section shall apply only to mortgages and deeds of trust secured by residential real property containing four or fewer dwelling units.

(Added by Stats. 2009, Ch. 630, Sec. 9. (SB 94) Effective October 11, 2009.)