Non-judicial Foreclosure in California—How to Get It Right

THE STATE BAR OF CALIFORNIA
84th Annual Meeting
Program114
NonǦjudicialForeclosureinCalifornia—HowtoGetItRight
Saturday,September17,2011
10:30a.m.Ǧ12:00noon
SponsoredbytheRealPropertyLawSection
The State Bar of California and the Office of Section Education and Meeting Services
are approved State Bar of California MCLE providers.
Points of view or opinions expressed in these pages are those of the speaker(s) and/or author(s). They have not
been adopted or endorsed by the State Bar of California’s Board of Governors and do not constitute the official
position or policy of the State Bar of California. Nothing contained herein is intended to address any specific legal
inquiry, nor is it a substitute for independent legal research to original sources or obtaining separate legal advice
regarding specific legal situations.
©2011 State Bar of California
All Rights Reserved
NON-JUDICIAL FORECLOSURE
IN CALIFORNIA -- HOW TO GET IT RIGHT
September 17, 2011
10:30 A.M. - 12:00 NOON
I.
Avoid the Temptation: Don’t Be a Foreclosure Trustee.
A.
The “Upside”: Statutory Fees. Civil Code §2924c(d).
B.
“Shopping” For A Foreclosure Trustee.
C.
Risks inherent in conducting nonjudicial foreclosure as
“boutique” business. Illustrations.
x Munger v. Moore (1970) 11 Cal.App.3d 1
x Kerivan v. Title Insurance and Trust Company, Inc. (1983)
147 Cal.App.3d 225
1
1.
Standard of Care.
x Haas v. Warren, 341 N.C. 148, 459 S.E. 2d 254
(1995)
II.
Duration of Nonjudicial Foreclosure.
A.
Can it be completed in 121 days?
1.
Minimums allowed by statute [Civil Code §§2924
and 2924f(b): 3 months after recordation of notice
of default (“NOD”) + 20 days] don’t allow sufficient
time for notice to IRS and, if applicable, State of
California.
2.
May Duration of Foreclosure be Shortened by
Agreement?
x Civil Code §2889
x Bradbury v. Davenport (1896) 114 Cal. 593
2
III.
Chronology of Events In A Nonjudicial Foreclosure.
A.
Pre-NOD requirement under Civil Code §2923.5.
1.
Impact of Mabry v. Superior Court (2010) 185
Cal.App.4th 208.
x Hamilton v. Greenwich Investors XXVI, LLC (2011)
195 Cal.App.4th 1602
2.
Does a Lender Have A Duty to Modify a Defaulted
Loan?
x Civil Code §2923.6
x Manosca v. Wachovia Mortgage 2011 U.S. Dist.
LEXIS 78609
3
3.
B.
Senate Bill 729
Possession of the Original Note.
1.
Unavailability of the Original Note: comparison of
former and contemporary solutions.
2.
Lost instrument bond and indemnity agreements.
3.
Should a trustee who proceeds with nonjudicial
foreclosure without the Original Note have a safe
harbor under the “good faith error” provisions of
Civil Code §2924(b)?
4
4.
Compliance with Fair Debt Collection Practices Act
(Civil Code §1788, et seq).
5.
Does Commercial Code §3301 apply to nonjudicial
foreclosures?
6.
The Lender’s Perspective
x Garcia v. World Savings, FSB (2010) 183
Cal.App.4th 1031
x Aceves v. U.S. Bank (2011) 192 Cal.App. 4th 218
x Creative Ventures, LLC v. Jim Ward & Associates
(2011) 195 Cal.App.4th 1430
x Macklin v. Deutsche Bank National Trust Co. 2011
Bankr. LEXIS 1877
5
C.
Notice of Default.
1.
Requirement of a detailed statement under Civil
Code §2924c(b)(1) where default is curable.
2.
Execution of NOD. Who can sign?
3.
Substitution of Trustee. Civil Code §2934a.
4.
Importance of accuracy in describing the default.
a.
Use of the proviso “if any”. Anderson v. Heart
Fed. Sav. & Loan Assn. (1989) 208
Cal.App.3d 202.
6
5.
Effect of Statutorily Deficient NOD.
6.
Trustee's Sale Guarantee (“TSG”).
a.
Who must receive notice, and when must it be
sent?
b.
Who is not statutorily entitled to notice, e.g.,
judgment creditors [abstract of judgment] who
failed to record Request for Notice. Banc of
America Leasing Capital, LLC v. 3 Arch
Trustee Services (2009) 180 Cal.App.4th
1090.
c.
Who should request notice, and how.
7
D.
Reinstatement.
1.
Duration of the reinstatement period. Civil Code
§2924c(e).
a.
Time to reinstate -- non-owner encumbrancer
of real property.
b.
Time to reinstate -- trustor.
2.
How does one learn about the amount needed to
reinstate?
3.
Who is entitled
§2924c(a)(1).
8
to
reinstate?
Civil
Code
4.
a.
Trustor and successor/s in interest.
b.
Junior lienholder.
“Short” Sales.
a.
5.
Code of Civil Procedure §580e:
enactment of SB 458
Effect of
What foreclosure-related costs may be included in
the amount required to reinstate?
x Walker v. Countrywide Home Loans, Inc. (2002) 98
Cal.App.4th 1158
9
E.
6.
Notice of Rescission by foreclosing lender (within 21
days of date of reinstatement).
Civil Code
§2924c(a)(2).
7.
Recordation of Notice of Rescission by trustee (30
days from receipt of Notice of Rescission).
Notice of Sale.
1.
Contents of Notice of Sale. Civil Code §2924f(b)(1).
2.
Recording,
publishing,
posting
&
mailing
requirements: the high risk consequences of
mistake and error.
10
F.
3.
Federal tax liens.
§2924b(c)(4).
IRC
§7425;
Civil
Code
4.
Effect of Borrower's non-receipt of Notice of Sale.
5.
Trustee/beneficiary “running start” on Notice of
Sale: five days early per new Civil Code
'2924(b)(4).
Redemption.
1.
Trustor.
x Bank of America v. La Jolla Group (2005) 129
Cal.App.4th 206
11
G.
2.
Junior encumbrancer.
3.
Holders of junior non-monetary interests.
Trustee's Sale.
1.
Postponements. Civil Code §2924g(c)(1).
2.
Bidding.
x California Golf,
Cal.App.4th 1053
3.
LLC
v.
Conduct of Trustee's Sale.
12
Cooper
(2008)
163
a.
Conduct designed to “chill” bidding.
b.
Conspiring bidders.
x
Lo v. Jensen (2001) 88 Cal.App.4th 1093
x
South Bay Building, Inc. v. Riviera LandLease, Inc. (1999) 72 Cal.App.4th 1111
c.
Recordation of trustee's deed and effect.
d.
Refusal to record trustee=s deed. Millennium
Rock Mortgage, Inc. v. T.D. Serv. Co. (2009)
179 Cal.App.4th 804; 6 Angels, Inc. v. StuartWright Mortgage, (2001) 85 Cal.App.4th 127.
13
IV.
4.
Advantages and disadvantages of a full credit bid.
5.
Excess proceeds. Civil Code §2924k; Wells Fargo
Bank v. Neilsen (2009) 178 Cal.App.4th 602.
Remedies and Post-Sale Issues.
A.
Removal: A Strategic Consideration in Borrower Lawsuits
Challenging Foreclosures.
x Destfino v. Reiswig, 630 F.3d. 952 (9TH Cir. Cal. 2011)
B.
Eviction
x Wells Fargo Bank v. Lapeen
2011 U.S. Dist. LEXIS 60671
14
x Malkoskie v. Option One Mortgage Corp. (2010)
188 Cal.App.4th 968
x Dancy v. Aurora Loan Services, LLC
2011 U.S. Dist. LEXIS 21887
C.
Wrongful Foreclosure: Recoverable Damages
D.
Redemption by IRS
15
CIVIL CODE
1058.5.
(a) A notice of nonacceptance of a recorded deed executed
by a holder of a security interest, which notice identifies the
security interest, contains a legal description of the property,
properly identifies the parties to the deed, the date of recordation
of the deed, the county in which the project is located, and the
county assessor's parcel number of the real property referenced in
the deed, may be recorded in the office of the county recorder where
the real property is located.
(b) Where a trustee's deed is invalidated by a pending bankruptcy
or otherwise, recordation of a notice of rescission of the trustee's
deed, which notice properly identifies the deed of trust, the
identification numbers used by the recorder or the books and pages at
which the trustee's deed and deed of trust are recorded, the names
of all trustors and beneficiaries, the location of the property
subject to the deed of trust, and the reason for rescission, shall
restore the condition of record title to the real property described
in the trustee's deed and the existence and priority of all
lienholders to the status quo prior to the recordation of the trustee'
s deed upon sale. Only the trustee or beneficiary who caused the
trustee's deed to be recorded, or his or her successor in interest,
may record a notice of rescission.
1059. Though a grant be not actually delivered into the possession
of the grantee, it is yet to be deemed constructively delivered in
the following cases:
1. Where the instrument is, by the agreement of the parties at the
time of execution, understood to be delivered, and under such
circumstances that the grantee is entitled to immediate delivery; or,
2. Where it is delivered to a stranger for the benefit of the
grantee, and his assent is shown, or may be presumed.
2923.5.
(a) (1) A mortgagee, trustee, beneficiary, or authorized
agent may not file 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 (g).
(2) A 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 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 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. Any meeting may occur telephonically.
(b) A notice of default filed pursuant to Section 2924 shall
include a declaration that the mortgagee, beneficiary, or authorized
agent has contacted the borrower, has tried with due diligence to
contact the borrower as required by this section, or that no contact
was required pursuant to subdivision (h).
(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.
(d) A 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.
(f) A borrower may designate, with consent given in writing, a
HUD-certified housing counseling agency, attorney, or other advisor
to discuss with the mortgagee, beneficiary, or authorized agent, on
the borrower's behalf, the borrowers 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 mortgagee, beneficiary, or
authorized agent is subject to approval by the borrower.
(g) A notice of default may be filed pursuant to Section 2924 when
a 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 mortgagee, beneficiary, or authorized agent. For
purposes of this section, "due diligence" shall require and mean all
of the following:
(1) A 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.
(2) (A) After the letter has been sent, the 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 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 mortgagee, beneficiary, or
authorized agent.
(C) 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.
(3) If the borrower does not respond within two weeks after the
telephone call requirements of paragraph (2) have been satisfied, the
mortgagee, beneficiary, or authorized agent shall then send a
certified letter, with return receipt requested.
(4) 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.
(5) The 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 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 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.
(i) This section shall apply only to mortgages or deeds of trust
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.
(j) This section shall 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.
2924.6. (a) An obligee may not accelerate the maturity date of the
principal and accrued interest on any loan secured by a mortgage or
deed of trust on residential real property solely by reason of any
one or more of the following transfers in the title to the real
property:
(1) A transfer resulting from the death of an obligor where the
transfer is to the spouse who is also an obligor.
(2) A transfer by an obligor where the spouse becomes a coowner of
the property.
(3) A transfer resulting from a decree of dissolution of the
marriage or legal separation or from a property settlement agreement
incidental to such a decree which requires the obligor to continue to
make the loan payments by which a spouse who is an obligor becomes
the sole owner of the property.
(4) A transfer by an obligor or obligors into an inter vivos trust
in which the obligor or obligors are beneficiaries.
(5) Such real property or any portion thereof is made subject to a
junior encumbrance or lien.
(b) Any waiver of the provisions of this section by an obligor is
void and unenforceable and is contrary to public policy.
(c) For the purposes of this section, "residential real property"
means any real property which contains at least one but not more than
four housing units.
(d) This act applies only to loans executed or refinanced on or
after January 1, 1976.
2924.7. (a) The provisions of any deed of trust or mortgage on real
property which authorize any beneficiary, trustee, mortgagee, or his
or her agent or successor in interest, to accelerate the maturity
date of the principal and interest on any loan secured thereby or to
exercise any power of sale or other remedy contained therein upon the
failure of the trustor or mortgagor to pay, at the times provided
for under the terms of the deed of trust or mortgage, any taxes,
rents, assessments, or insurance premiums with respect to the
property or the loan, or any advances made by the beneficiary,
mortgagee, or his or her agent or successor in interest shall be
enforceable whether or not impairment of the security interest in the
property has resulted from the failure of the trustor or mortgagor
to pay the taxes, rents, assessments, insurance premiums, or
advances.
(b) The provisions of any deed of trust or mortgage on real
property which authorize any beneficiary, trustee, mortgagee, or his
or her agent or successor in interest, to receive and control the
disbursement of the proceeds of any policy of fire, flood, or other
hazard insurance respecting the property shall be enforceable whether
or not impairment of the security interest in the property has
resulted from the event that caused the proceeds of the insurance
policy to become payable.
2924.8. (a) Upon posting a notice of sale pursuant to Section
2924f, a trustee or authorized agent shall also post the following
notice, in the manner required for posting the notice of sale on the
property to be sold, and a mortgagee, trustee, beneficiary, or
authorized agent, concurrently with the mailing of the notice of sale
pursuant to Section 2924b, shall send by first-class mail in an
envelope addressed to the "Resident of property subject to
foreclosure sale" the following notice in English and the languages
described in Section 1632: "Foreclosure process has begun on this
property, which may affect your right to continue to live in this
property. Twenty days or more after the date of this notice, this
property may be sold at foreclosure. If you are renting this
property, the new property owner may either give you a new lease or
rental agreement or provide you with a 60-day eviction notice.
However, other laws may prohibit an eviction in this circumstance or
provide you with a longer notice before eviction. You may wish to
contact a lawyer or your local legal aid or housing counseling agency
to discuss any rights you may have."
(b) It shall be an infraction to tear down the notice described in
subdivision (a) within 72 hours of posting. Violators shall be
subject to a fine of one hundred dollars ($100).
(c) A state government entity shall make available translations of
the notice described in subdivision (a) which may be used by a
mortgagee, trustee, beneficiary, or authorized agent to satisfy the
requirements of this section.
(d) This section shall only apply to loans secured by residential
real property, and if the billing address for the mortgage note is
different than the property address.
(e) This section shall 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.
2924b. (a) Any person desiring a copy of any notice of default and
of any notice of sale under any deed of trust or mortgage with power
of sale upon real property or an estate for years therein, as to
which deed of trust or mortgage the power of sale cannot be exercised
until these notices are given for the time and in the manner
provided in Section 2924 may, at any time subsequent to recordation
of the deed of trust or mortgage and prior to recordation of notice
of default thereunder, cause to be filed for record in the office of
the recorder of any county in which any part or parcel of the real
property is situated, a duly acknowledged request for a copy of the
notice of default and of sale. This request shall be signed and
acknowledged by the person making the request, specifying the name
and address of the person to whom the notice is to be mailed, shall
identify the deed of trust or mortgage by stating the names of the
parties thereto, the date of recordation thereof, and the book and
page where the deed of trust or mortgage is recorded or the recorder'
s number, and shall be in substantially the following form:
"In accordance with Section 2924b, Civil Code,
request is hereby
made that a copy of any notice of default and a
copy of any notice of sale
under the deed of trust (or mortgage) recorded
______, ____, in Book
_____ page ____ records of ____ County, (or filed
for record with
recorder's serial number ____, _______ County)
California, executed
by ____ as
trustor (or mortgagor) in which
________ is named as
beneficiary (or mortgagee) and ______________ as
trustee be mailed to
___________________ at __________________________.
Name
Address
NOTICE: A copy of any notice of default and of
any notice of sale will be
sent only to the address contained in this
recorded request. If your address changes, a new
request must be
recorded.
Signature _______________"
Upon the filing for record of the request, the recorder shall
index in the general index of grantors the names of the trustors (or
mortgagor) recited therein and the names of persons requesting
copies.
(b) The mortgagee, trustee, or other person authorized to record
the notice of default or the notice of sale shall do each of the
following:
(1) Within 10 business days following recordation of the notice of
default, deposit or cause to be deposited in the United States mail
an envelope, sent by registered or certified mail with postage
prepaid, containing a copy of the notice with the recording date
shown thereon, addressed to each person whose name and address are
set forth in a duly recorded request therefor, directed to the
address designated in the request and to each trustor or mortgagor at
his or her last known address if different than the address
specified in the deed of trust or mortgage with power of sale.
(2) At least 20 days before the date of sale, deposit or cause to
be deposited in the United States mail an envelope, sent by
registered or certified mail with postage prepaid, containing a copy
of the notice of the time and place of sale, addressed to each person
whose name and address are set forth in a duly recorded request
therefor, directed to the address designated in the request and to
each trustor or mortgagor at his or her last known address if
different than the address specified in the deed of trust or mortgage
with power of sale.
(3) As used in paragraphs (1) and (2), the "last known address" of
each trustor or mortgagor means the last business or residence
physical address actually known by the mortgagee, beneficiary,
trustee, or other person authorized to record the notice of default.
For the purposes of this subdivision, an address is "actually known"
if it is contained in the original deed of trust or mortgage, or in
any subsequent written notification of a change of physical address
from the trustor or mortgagor pursuant to the deed of trust or
mortgage. For the purposes of this subdivision, "physical address"
does not include an e-mail or any form of electronic address for a
trustor or mortgagor. The beneficiary shall inform the trustee of the
trustor's last address actually known by the beneficiary. However,
the trustee shall incur no liability for failing to send any notice
to the last address unless the trustee has actual knowledge of it.
(4) A "person authorized to record the notice of default or the
notice of sale" shall include an agent for the mortgagee or
beneficiary, an agent of the named trustee, any person designated in
an executed substitution of trustee, or an agent of that substituted
trustee.
(c) The mortgagee, trustee, or other person authorized to record
the notice of default or the notice of sale shall do the following:
(1) Within one month following recordation of the notice of
default, deposit or cause to be deposited in the United States mail
an envelope, sent by registered or certified mail with postage
prepaid, containing a copy of the notice with the recording date
shown thereon, addressed to each person set forth in paragraph (2),
provided that the estate or interest of any person entitled to
receive notice under this subdivision is acquired by an instrument
sufficient to impart constructive notice of the estate or interest in
the land or portion thereof that is subject to the deed of trust or
mortgage being foreclosed, and provided the instrument is recorded in
the office of the county recorder so as to impart that constructive
notice prior to the recording date of the notice of default and
provided the instrument as so recorded sets forth a mailing address
that the county recorder shall use, as instructed within the
instrument, for the return of the instrument after recording, and
which address shall be the address used for the purposes of mailing
notices herein.
(2) The persons to whom notice shall be mailed under this
subdivision are:
(A) The successor in interest, as of the recording date of the
notice of default, of the estate or interest or any portion thereof
of the trustor or mortgagor of the deed of trust or mortgage being
foreclosed.
(B) The beneficiary or mortgagee of any deed of trust or mortgage
recorded subsequent to the deed of trust or mortgage being
foreclosed, or recorded prior to or concurrently with the deed of
trust or mortgage being foreclosed but subject to a recorded
agreement or a recorded statement of subordination to the deed of
trust or mortgage being foreclosed.
(C) The assignee of any interest of the beneficiary or mortgagee
described in subparagraph (B), as of the recording date of the notice
of default.
(D) The vendee of any contract of sale, or the lessee of any
lease, of the estate or interest being foreclosed that is recorded
subsequent to the deed of trust or mortgage being foreclosed, or
recorded prior to or concurrently with the deed of trust or mortgage
being foreclosed but subject to a recorded agreement or statement of
subordination to the deed of trust or mortgage being foreclosed.
(E) The successor in interest to the vendee or lessee described in
subparagraph (D), as of the recording date of the notice of default.
(F) The office of the Controller, Sacramento, California, where,
as of the recording date of the notice of default, a "Notice of Lien
for Postponed Property Taxes" has been recorded against the real
property to which the notice of default applies.
(3) At least 20 days before the date of sale, deposit or cause to
be deposited in the United States mail an envelope, sent by
registered or certified mail with postage prepaid, containing a copy
of the notice of the time and place of sale addressed to each person
to whom a copy of the notice of default is to be mailed as provided
in paragraphs (1) and (2), and addressed to the office of any state
taxing agency, Sacramento, California, that has recorded, subsequent
to the deed of trust or mortgage being foreclosed, a notice of tax
lien prior to the recording date of the notice of default against the
real property to which the notice of default applies.
(4) Provide a copy of the notice of sale to the Internal Revenue
Service, in accordance with Section 7425 of the Internal Revenue Code
and any applicable federal regulation, if a "Notice of Federal Tax
Lien under Internal Revenue Laws" has been recorded, subsequent to
the deed of trust or mortgage being foreclosed, against the real
property to which the notice of sale applies. The failure to provide
the Internal Revenue Service with a copy of the notice of sale
pursuant to this paragraph shall be sufficient cause to rescind the
trustee's sale and invalidate the trustee's deed, at the option of
either the successful bidder at the trustee's sale or the trustee,
and in either case with the consent of the beneficiary. Any option to
rescind the trustee's sale pursuant to this paragraph shall be
exercised prior to any transfer of the property by the successful
bidder to a bona fide purchaser for value. A recision of the trustee'
s sale pursuant to this paragraph may be recorded in a notice of
recision pursuant to Section 1058.5.
(5) The mailing of notices in the manner set forth in paragraph
(1) shall not impose upon any licensed attorney, agent, or employee
of any person entitled to receive notices as herein set forth any
duty to communicate the notice to the entitled person from the fact
that the mailing address used by the county recorder is the address
of the attorney, agent, or employee.
(d) Any deed of trust or mortgage with power of sale hereafter
executed upon real property or an estate for years therein may
contain a request that a copy of any notice of default and a copy of
any notice of sale thereunder shall be mailed to any person or party
thereto at the address of the person given therein, and a copy of any
notice of default and of any notice of sale shall be mailed to each
of these at the same time and in the same manner required as though a
separate request therefor had been filed by each of these persons as
herein authorized. If any deed of trust or mortgage with power of
sale executed after September 19, 1939, except a deed of trust or
mortgage of any of the classes excepted from the provisions of
Section 2924, does not contain a mailing address of the trustor or
mortgagor therein named, and if no request for special notice by the
trustor or mortgagor in substantially the form set forth in this
section has subsequently been recorded, a copy of the notice of
default shall be published once a week for at least four weeks in a
newspaper of general circulation in the county in which the property
is situated, the publication to commence within 10 business days
after the filing of the notice of default. In lieu of publication, a
copy of the notice of default may be delivered personally to the
trustor or mortgagor within the 10 business days or at any time
before publication is completed, or by posting the notice of default
in a conspicuous place on the property and mailing the notice to the
last known address of the trustor or mortgagor.
(e) Any person required to mail a copy of a notice of default or
notice of sale to each trustor or mortgagor pursuant to subdivision
(b) or (c) by registered or certified mail shall simultaneously cause
to be deposited in the United States mail, with postage prepaid and
mailed by first-class mail, an envelope containing an additional copy
of the required notice addressed to each trustor or mortgagor at the
same address to which the notice is sent by registered or certified
mail pursuant to subdivision (b) or (c). The person shall execute and
retain an affidavit identifying the notice mailed, showing the name
and residence or business address of that person, that he or she is
over the age of 18 years, the date of deposit in the mail, the name
and address of the trustor or mortgagor to whom sent, and that the
envelope was sealed and deposited in the mail with postage fully
prepaid. In the absence of fraud, the affidavit required by this
subdivision shall establish a conclusive presumption of mailing.
(f) (1) Notwithstanding subdivision (a), with respect to separate
interests governed by an association, as defined in subdivision (a)
of Section 1351, the association may cause to be filed in the office
of the recorder in the county in which the separate interests are
situated a request that a mortgagee, trustee, or other person
authorized to record a notice of default regarding any of those
separate interests mail to the association a copy of any trustee's
deed upon sale concerning a separate interest. The request shall
include a legal description or the assessor's parcel number of all
the separate interests. A request recorded pursuant to this
subdivision shall include the name and address of the association and
a statement that it is a homeowners' association. Subsequent
requests of an association shall supersede prior requests. A request
pursuant to this subdivision shall be recorded before the filing of a
notice of default. The mortgagee, trustee, or other authorized
person shall mail the requested information to the association within
15 business days following the date the trustee's deed is recorded.
Failure to mail the request, pursuant to this subdivision, shall not
affect the title to real property.
(2) A request filed pursuant to paragraph (1) does not, for
purposes of Section 27288.1 of the Government Code, constitute a
document that either effects or evidences a transfer or encumbrance
of an interest in real property or that releases or terminates any
interest, right, or encumbrance of an interest in real property.
(g) No request for a copy of any notice filed for record pursuant
to this section, no statement or allegation in the request, and no
record thereof shall affect the title to real property or be deemed
notice to any person that any person requesting copies of notice has
or claims any right, title, or interest in, or lien or charge upon
the property described in the deed of trust or mortgage referred to
therein.
(h) "Business day," as used in this section, has the meaning
specified in Section 9.
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 his or her 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), which are actually incurred 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 Commissioner of
Corporations 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 which 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 which 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 which 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.
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 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 which 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.
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 which 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. Ý14-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 which 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, postponement pursuant to Section 2924g not to exceed fifty
dollars ($50) 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) Trustee's or attorney's fees which 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 a base amount that does not exceed three hundred dollars
($300) if the unpaid principal sum secured is one hundred fifty
thousand dollars ($150,000) or less, or two hundred fifty dollars
($250) if the unpaid principal sum secured exceeds one hundred fifty
thousand dollars ($150,000), 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). 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 herein. 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 which
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.
2924d. (a) Commencing with the date that the notice of sale is
deposited in the mail, as provided in Section 2924b, and until the
property is sold pursuant to the power of sale contained in the
mortgage or deed of trust, a beneficiary, trustee, mortgagee, or his
or her agent or successor in interest, may demand and receive from a
trustor, mortgagor, or his or her agent or successor in interest, or
any beneficiary under a subordinate deed of trust, or any other
person having a subordinate lien or encumbrance of record those
reasonable costs and expenses, to the extent allowed by subdivision
(c) of Section 2924c, which are actually incurred in enforcing the
terms of the obligation and trustee's or attorney's fees which are
hereby authorized to be in a base amount which does not exceed four
hundred twenty-five dollars ($425) if the unpaid principal sum
secured is one hundred fifty thousand dollars ($150,000) or less, or
three hundred sixty dollars ($360) if the unpaid principal sum
secured exceeds one hundred fifty thousand dollars ($150,000), plus 1
percent of any portion 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-half 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-quarter of 1 percent of any
portion of the unpaid principal sum secured exceeding five hundred
thousand dollars ($500,000). For purposes of this subdivision, the
unpaid principal sum secured shall be determined as of the date the
notice of default is recorded. Any charge for trustee's or attorney's
fees authorized by this subdivision shall be conclusively presumed
to be lawful and valid where that charge does not exceed the amounts
authorized herein. Any charge for trustee's or attorney's fees made
pursuant to this subdivision shall be in lieu of and not in addition
to those charges authorized by subdivision (d) of Section 2924c.
(b) Upon the sale of property pursuant to a power of sale, a
trustee, or his or her agent or successor in interest, may demand and
receive from a beneficiary, or his or her agent or successor in
interest, or may deduct from the proceeds of the sale, those
reasonable costs and expenses, to the extent allowed by subdivision
(c) of Section 2924c, which are actually incurred in enforcing the
terms of the obligation and trustee's or attorney's fees which are
hereby authorized to be in an amount which does not exceed four
hundred twenty-five dollars ($425) or one percent of the unpaid
principal sum secured, whichever is greater. For purposes of this
subdivision, the unpaid principal sum secured shall be determined as
of the date the notice of default is recorded. Any charge for trustee'
s or attorney's fees authorized by this subdivision shall be
conclusively presumed to be lawful and valid where that charge does
not exceed the amount authorized herein. Any charges for trustee's or
attorney's fees made pursuant to this subdivision shall be in lieu
of and not in addition to those charges authorized by subdivision (a)
of this section and subdivision (d) of Section 2924c.
(c) (1) No person shall pay or offer to pay or collect any rebate
or kickback for the referral of business involving the performance of
any act required by this article.
(2) Any person who violates this subdivision shall be liable to
the trustor for three times the amount of any rebate or kickback,
plus reasonable attorney's fees and costs, in addition to any other
remedies provided by law.
(3) No violation of this subdivision shall affect the validity of
a sale in favor of a bona fide purchaser or the rights of an
encumbrancer for value without notice.
(d) It shall not be unlawful for a trustee to pay or offer to pay
a fee to an agent or subagent of the trustee for work performed by
the agent or subagent in discharging the trustee's obligations under
the terms of the deed of trust. Any payment of a fee by a trustee to
an agent or subagent of the trustee for work performed by the agent
or subagent in discharging the trustee's obligations under the terms
of the deed of trust shall be conclusively presumed to be lawful and
valid if the fee, when combined with other fees of the trustee, does
not exceed in the aggregate the trustee's fee authorized by
subdivision (d) of Section 2924c or subdivision (a) or (b) of this
section.
(e) When a court issues a decree of foreclosure, it shall have
discretion to award attorney's fees, costs, and expenses as are
reasonable, if provided for in the note, deed of trust, or mortgage,
pursuant to Section 580c of the Code of Civil Procedure.
2924e. (a) The beneficiary or mortgagee of any deed of trust or
mortgage on real property either containing one to four residential
units or given to secure an original obligation not to exceed three
hundred thousand dollars ($300,000) may, with the written consent of
the trustor or mortgagor that is either effected through a signed and
dated agreement which shall be separate from other loan and security
documents or disclosed to the trustor or mortgagor in at least
10-point type, submit a written request by certified mail to the
beneficiary or mortgagee of any lien which is senior to the lien of
the requester, for written notice of any or all delinquencies of four
months or more, in payments of principal or interest on any
obligation secured by that senior lien notwithstanding that the loan
secured by the lien of the requester is not then in default as to
payments of principal or interest.
The request shall be sent to the beneficiary or mortgagee, or
agent which it might designate for the purpose of receiving loan
payments, at the address specified for the receipt of these payments,
if known, or, if not known, at the address shown on the recorded
deed of trust or mortgage.
(b) The request for notice shall identify the ownership or
security interest of the requester, the date on which the interest of
the requester will terminate as evidenced by the maturity date of
the note of the trustor or mortgagor in favor of the requester, the
name of the trustor or mortgagor and the name of the current owner of
the security property if different from the trustor or mortgagor,
the street address or other description of the security property, the
loan number (if available to the requester) of the loan secured by
the senior lien, the name and address to which notice is to be sent,
and shall include or be accompanied by the signed written consent of
the trustor or mortgagor, and a fee of forty dollars ($40). For
obligations secured by residential properties, the request shall
remain valid until withdrawn in writing and shall be applicable to
all delinquencies as provided in this section, which occur prior to
the date on which the interest of the requester will terminate as
specified in the request or the expiration date, as appropriate. For
obligations secured by nonresidential properties, the request shall
remain valid until withdrawn in writing and shall be applicable to
all delinquencies as provided in this section, which occur prior to
the date on which the interest of the requester will terminate as
specified in the request or the expiration date, as appropriate. The
beneficiary or mortgagee of obligations secured by nonresidential
properties that have sent five or more notices prior to the
expiration of the effective period of the request may charge a fee up
to fifteen dollars ($15) for each subsequent notice. A request for
notice shall be effective for five years from the mailing of the
request or the recording of that request, whichever occurs later, and
may be renewed within six months prior to its expiration date by
sending the beneficiary or mortgagee, or agent, as the case may be,
at the address to which original requests for notice are to be sent,
a copy of the earlier request for notice together with a signed
statement that the request is renewed and a renewal fee of fifteen
dollars ($15). Upon timely submittal of a renewal request for notice,
the effectiveness of the original request is continued for five
years from the time when it would otherwise have lapsed. Succeeding
renewal requests may be submitted in the same manner. The request for
notice and renewals thereof shall be recorded in the office of the
county recorder of the county in which the security real property is
situated. The rights and obligations specified in this section shall
inure to the benefit of, or pass to, as the case may be, successors
in interest of parties specified in this section. Any successor in
interest of a party entitled to notice under this section shall file
a request for that notice with any beneficiary or mortgagee of the
senior lien and shall pay a processing fee of fifteen dollars ($15).
No new written consent shall be required from the trustor or
mortgagor.
(c) Unless the delinquency has been cured, within 15 days
following the end of four months from any delinquency in payments of
principal or interest on any obligation secured by the senior lien
which delinquency exists or occurs on or after 10 days from the
mailing of the request for notice or the recording of that request,
whichever occurs later, the beneficiary or mortgagee shall give
written notice to the requester of the fact of any delinquency and
the amount thereof.
The notice shall be given by personal service, or by deposit in
the mail, first-class postage paid. Following the recording of any
notice of default pursuant to Section 2924 with respect to the same
delinquency, no notice or further notice shall be required pursuant
to this section.
(d) If the beneficiary or mortgagee of any such senior lien fails
to give notice to the requester as required in subdivision (c), and a
subsequent foreclosure or trustee's sale of the security property
occurs, the beneficiary or mortgagee shall be liable to the requester
for any monetary damage due to the failure to provide notice within
the time period specified in subdivision (c) which the requester has
sustained from the date on which notice should have been given to the
earlier of the date on which the notice is given or the date of the
recording of the notice of default under Section 2924, and shall also
forfeit to the requester the sum of three hundred dollars ($300). A
showing by the beneficiary or mortgagee by a preponderance of the
evidence that the failure to provide timely notice as required by
subdivision (c) resulted from a bona fide error notwithstanding the
maintenance of procedures reasonably adapted to avoid any such error
shall be a defense to any liability for that failure.
(e) If any beneficiary or mortgagee, or agent which it had
designated for the purpose of receiving loan payments, has been
succeeded in interest by any other person, any request for notice
received pursuant to this section shall be transmitted promptly to
that person.
(f) Any failure to comply with the provisions of this section
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.
(g) Upon satisfaction of an obligation secured by a junior lien
with respect to which a notice request was made pursuant to this
section, the beneficiary or mortgagee that made the request shall
communicate that fact in writing to the senior lienholder to whom the
request was made. The communication shall specify that provision of
notice pursuant to the prior request under this section is no longer
required.
2924f. (a) As used in this section and Sections 2924g and 2924h,
"property" means real property or a leasehold estate therein, and
"calendar week" means Monday through Saturday, inclusive.
(b) (1) Except as provided in subdivision (c), before any sale of
property can be made under the power of sale contained in any deed of
trust or mortgage, or any resale resulting from a rescission for a
failure of consideration pursuant to subdivision (c) of Section
2924h, notice of the sale thereof shall be given by posting a written
notice of the time of sale and of the street address and the
specific place at the street address where the sale will be held, and
describing the property to be sold, at least 20 days before the date
of sale in one public place in the city where the property is to be
sold, if the property is to be sold in a city, or, if not, then in
one public place in the judicial district in which the property is to
be sold, and publishing a copy once a week for three consecutive
calendar weeks, the first publication to be at least 20 days before
the date of sale, in a newspaper of general circulation published in
the city in which the property or some part thereof is situated, if
any part thereof is situated in a city, if not, then in a newspaper
of general circulation published in the judicial district in which
the property or some part thereof is situated, or in case no
newspaper of general circulation is published in the city or judicial
district, as the case may be, in a newspaper of general circulation
published in the county in which the property or some part thereof is
situated, or in case no newspaper of general circulation is
published in the city or judicial district or county, as the case may
be, in a newspaper of general circulation published in the county in
this state that (A) is contiguous to the county in which the
property or some part thereof is situated and (B) has, by comparison
with all similarly contiguous counties, the highest population based
upon total county population as determined by the most recent federal
decennial census published by the Bureau of the Census. A copy of
the notice of sale shall also be posted in a conspicuous place on the
property to be sold at least 20 days before the date of sale, where
possible and where not restricted for any reason. If the property is
a single-family residence the posting shall be on a door of the
residence, but, if not possible or restricted, then the notice shall
be posted in a conspicuous place on the property; however, if access
is denied because a common entrance to the property is restricted by
a guard gate or similar impediment, the property may be posted at
that guard gate or similar impediment to any development community.
Additionally, the notice of sale shall conform to the minimum
requirements of Section 6043 of the Government Code and be recorded
with the county recorder of the county in which the property or some
part thereof is situated at least 20 days prior to the date of sale.
The notice of sale shall contain the name, street address in this
state, which may reflect an agent of the trustee, and either a
toll-free telephone number or telephone number in this state of the
trustee, and the name of the original trustor, and also shall contain
the statement required by paragraph (3) of subdivision (c). In
addition to any other description of the property, the notice shall
describe the property by giving its street address, if any, or other
common designation, if any, and a county assessor's parcel number;
but if the property has no street address or other common
designation, the notice shall contain a legal description of the
property, the name and address of the beneficiary at whose request
the sale is to be conducted, and a statement that directions may be
obtained pursuant to a written request submitted to the beneficiary
within 10 days from the first publication of the notice. Directions
shall be deemed reasonably sufficient to locate the property if
information as to the location of the property is given by reference
to the direction and approximate distance from the nearest
crossroads, frontage road, or access road. If a legal description or
a county assessor's parcel number and either a street address or
another common designation of the property is given, the validity of
the notice and the validity of the sale shall not be affected by the
fact that the street address, other common designation, name and
address of the beneficiary, or the directions obtained therefrom are
erroneous or that the street address, other common designation, name
and address of the beneficiary, or directions obtained therefrom are
omitted. The term "newspaper of general circulation," as used in this
section, has the same meaning as defined in Article 1 (commencing
with Section 6000) of Chapter 1 of Division 7 of Title 1 of the
Government Code.
The notice of sale shall contain a statement of the total amount
of the unpaid balance of the obligation secured by the property to be
sold and reasonably estimated costs, expenses, advances at the time
of the initial publication of the notice of sale, and, if republished
pursuant to a cancellation of a cash equivalent pursuant to
subdivision (d) of Section 2924h, a reference of that fact; provided,
that the trustee shall incur no liability for any good faith error
in stating the proper amount, including any amount provided in good
faith by or on behalf of the beneficiary. An inaccurate statement of
this amount shall not affect the validity of any sale to a bona fide
purchaser for value, nor shall the failure to post the notice of sale
on a door as provided by this subdivision affect the validity of any
sale to a bona fide purchaser for value.
(2) If the sale of the property is to be a unified sale as
provided in subparagraph (B) of paragraph (1) of subdivision (a) of
Section 9604 of the Commercial Code, the notice of sale shall also
contain a description of the personal property or fixtures to be
sold. In the case where it is contemplated that all of the personal
property or fixtures are to be sold, the description in the notice of
the personal property or fixtures shall be sufficient if it is the
same as the description of the personal property or fixtures
contained in the agreement creating the security interest in or
encumbrance on the personal property or fixtures or the filed
financing statement relating to the personal property or fixtures. In
all other cases, the description in the notice shall be sufficient
if it would be a sufficient description of the personal property or
fixtures under Section 9108 of the Commercial Code. Inclusion of a
reference to or a description of personal property or fixtures in a
notice of sale hereunder shall not constitute an election by the
secured party to conduct a unified sale pursuant to subparagraph (B)
of paragraph (1) of subdivision (a) of Section 9604 of the Commercial
Code, shall not obligate the secured party to conduct a unified sale
pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of
Section 9604 of the Commercial Code, and in no way shall render
defective or noncomplying either that notice or a sale pursuant to
that notice by reason of the fact that the sale includes none or less
than all of the personal property or fixtures referred to or
described in the notice. This paragraph shall not otherwise affect
the obligations or duties of a secured party under the Commercial
Code.
(c) (1) This subdivision applies only to deeds of trust or
mortgages which contain a power of sale and which are secured by real
property containing a single-family, owner-occupied residence, where
the obligation secured by the deed of trust or mortgage is contained
in a contract for goods or services subject to the provisions of the
Unruh Act (Chapter 1 (commencing with Section 1801) of Title 2 of
Part 4 of Division 3).
(2) Except as otherwise expressly set forth in this subdivision,
all other provisions of law relating to the exercise of a power of
sale shall govern the exercise of a power of sale contained in a deed
of trust or mortgage described in paragraph (1).
(3) If any default of the obligation secured by a deed of trust or
mortgage described in paragraph (1) has not been cured within 30
days after the recordation of the notice of default, the trustee or
mortgagee shall mail to the trustor or mortgagor, at his or her last
known address, a copy of the following statement:
YOU ARE IN DEFAULT UNDER A
_______________________________________________,
(Deed of trust or mortgage)
DATED ____. UNLESS YOU TAKE ACTION TO PROTECT
YOUR PROPERTY, IT MAY BE SOLD AT A PUBLIC SALE.
IF
YOU NEED AN EXPLANATION OF THE NATURE OF THE
PROCEEDING AGAINST YOU, YOU SHOULD CONTACT A
LAWYER.
(4) All sales of real property pursuant to a power of sale
contained in any deed of trust or mortgage described in paragraph (1)
shall be held in the county where the residence is located and shall
be made to the person making the highest offer. The trustee may
receive offers during the 10-day period immediately prior to the date
of sale and if any offer is accepted in writing by both the trustor
or mortgagor and the beneficiary or mortgagee prior to the time set
for sale, the sale shall be postponed to a date certain and prior to
which the property may be conveyed by the trustor to the person
making the offer according to its terms. The offer is revocable until
accepted. The performance of the offer, following acceptance,
according to its terms, by a conveyance of the property to the
offeror, shall operate to terminate any further proceeding under the
notice of sale and it shall be deemed revoked.
(5) In addition to the trustee fee pursuant to Section 2924c, the
trustee or mortgagee pursuant to a deed of trust or mortgage subject
to this subdivision shall be entitled to charge an additional fee of
fifty dollars ($50).
(6) This subdivision applies only to property on which notices of
default were filed on or after the effective date of this
subdivision.
(d) Subject to the provisions of subdivision (f), if a property
contains five or more multifamily units and a public entity is a
party to a regulatory agreement or a recorded deed restriction on the
property, the public entity may, by written notice to the trustee,
postpone the sale date by no more than 60 days. The written notice
shall be provided to the trustee at least 72 hours prior to the
scheduled sale date, through certified or registered mail, guaranteed
or overnight delivery service, or personal delivery. In its written
notice, the public entity shall certify that it has the authority to
postpone the sale date pursuant to the authority in this subdivision.
The trustee may rely on this representation.
(1) If multiple public entities are parties to a regulatory
agreement or a recorded deed restriction on the property pursuant to
this subdivision, only one entity may postpone the sale date.
(2) The power to postpone the sale pursuant to this subdivision
may be exercised only once.
(e) For purposes of this section, the following terms have the
following meanings:
(1) "Public entity" includes a city, county, city and county,
redevelopment agency, or any political subdivision thereof.
(2) "Recorded deed restriction" means a deed recorded as an
encumbrance against title to the property in the official records of
the county in which the property is located, which specifies that all
or a portion of the property's usage is restricted to rental to
lower income households and identifies the number of units restricted
to use as low-income housing.
(3) "Regulatory agreement" means an enforceable and verifiable
agreement with a public entity that has provided government financing
for the acquisition, rehabilitation, construction, development, or
operation of a low-income housing property that restricts all or a
portion of the property's usage for rental to lower income
households. The regulatory agreement shall identify the number of
units restricted for use as low-income housing, specify the maximum
rent allowed for those units, identify the assessor's parcel number
or provide the legal description of the property, and be recorded in
the county in which the property is located.
(f) (1) A public entity may not exercise the authority granted in
subdivision (d), if more than 180 days have elapsed since filing of
the notice of default.
(2) Any period of postponement, which occurs based on a public
entity's exercise of the authority granted in subdivision (d), shall
expire after 180 days have elapsed since the filing of the notice of
default.
(3) Nothing in paragraph (1) or (2) shall be deemed to require a
mortgagee, beneficiary, trustee, or authorized agent to file a notice
of sale after more than 180 days have elapsed since the filing of
the notice of default.
(4) The filing of a case by a trustor or mortgagor under Chapter
7, 11, 12, or 13 of Title 11 of the United States Code shall not act
to toll the 180-day limitation provided by paragraphs (1) and (2).
(g) This section shall 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.
2924f. (a) As used in this section and Sections 2924g and 2924h,
"property" means real property or a leasehold estate therein, and
"calendar week" means Monday through Saturday, inclusive.
(b) (1) Except as provided in subdivision (c), before any sale of
property can be made under the power of sale contained in any deed of
trust or mortgage, or any resale resulting from a rescission for a
failure of consideration pursuant to subdivision (c) of Section
2924h, notice of the sale thereof shall be given by posting a written
notice of the time of sale and of the street address and the
specific place at the street address where the sale will be held, and
describing the property to be sold, at least 20 days before the date
of sale in one public place in the city where the property is to be
sold, if the property is to be sold in a city, or, if not, then in
one public place in the judicial district in which the property is to
be sold, and publishing a copy once a week for three consecutive
calendar weeks, the first publication to be at least 20 days before
the date of sale, in a newspaper of general circulation published in
the city in which the property or some part thereof is situated, if
any part thereof is situated in a city, if not, then in a newspaper
of general circulation published in the judicial district in which
the property or some part thereof is situated, or in case no
newspaper of general circulation is published in the city or judicial
district, as the case may be, in a newspaper of general circulation
published in the county in which the property or some part thereof is
situated, or in case no newspaper of general circulation is
published in the city or judicial district or county, as the case may
be, in a newspaper of general circulation published in the county in
this state that (A) is contiguous to the county in which the
property or some part thereof is situated and (B) has, by comparison
with all similarly contiguous counties, the highest population based
upon total county population as determined by the most recent federal
decennial census published by the Bureau of the Census. A copy of
the notice of sale shall also be posted in a conspicuous place on the
property to be sold at least 20 days before the date of sale, where
possible and where not restricted for any reason. If the property is
a single-family residence the posting shall be on a door of the
residence, but, if not possible or restricted, then the notice shall
be posted in a conspicuous place on the property; however, if access
is denied because a common entrance to the property is restricted by
a guard gate or similar impediment, the property may be posted at
that guard gate or similar impediment to any development community.
Additionally, the notice of sale shall conform to the minimum
requirements of Section 6043 of the Government Code and be recorded
with the county recorder of the county in which the property or some
part thereof is situated at least 20 days prior to the date of sale.
The notice of sale shall contain the name, street address in this
state, which may reflect an agent of the trustee, and either a
toll-free telephone number or telephone number in this state of the
trustee, and the name of the original trustor, and also shall contain
the statement required by paragraph (3) of subdivision (c). In
addition to any other description of the property, the notice shall
describe the property by giving its street address, if any, or other
common designation, if any, and a county assessor's parcel number;
but if the property has no street address or other common
designation, the notice shall contain a legal description of the
property, the name and address of the beneficiary at whose request
the sale is to be conducted, and a statement that directions may be
obtained pursuant to a written request submitted to the beneficiary
within 10 days from the first publication of the notice. Directions
shall be deemed reasonably sufficient to locate the property if
information as to the location of the property is given by reference
to the direction and approximate distance from the nearest
crossroads, frontage road, or access road. If a legal description or
a county assessor's parcel number and either a street address or
another common designation of the property is given, the validity of
the notice and the validity of the sale shall not be affected by the
fact that the street address, other common designation, name and
address of the beneficiary, or the directions obtained therefrom are
erroneous or that the street address, other common designation, name
and address of the beneficiary, or directions obtained therefrom are
omitted. The term "newspaper of general circulation," as used in this
section, has the same meaning as defined in Article 1 (commencing
with Section 6000) of Chapter 1 of Division 7 of Title 1 of the
Government Code.
The notice of sale shall contain a statement of the total amount
of the unpaid balance of the obligation secured by the property to be
sold and reasonably estimated costs, expenses, advances at the time
of the initial publication of the notice of sale, and, if republished
pursuant to a cancellation of a cash equivalent pursuant to
subdivision (d) of Section 2924h, a reference of that fact; provided,
that the trustee shall incur no liability for any good faith error
in stating the proper amount, including any amount provided in good
faith by or on behalf of the beneficiary. An inaccurate statement of
this amount shall not affect the validity of any sale to a bona fide
purchaser for value, nor shall the failure to post the notice of sale
on a door as provided by this subdivision affect the validity of any
sale to a bona fide purchaser for value.
(2) If the sale of the property is to be a unified sale as
provided in subparagraph (B) of paragraph (1) of subdivision (a) of
Section 9604 of the Commercial Code, the notice of sale shall also
contain a description of the personal property or fixtures to be
sold. In the case where it is contemplated that all of the personal
property or fixtures are to be sold, the description in the notice of
the personal property or fixtures shall be sufficient if it is the
same as the description of the personal property or fixtures
contained in the agreement creating the security interest in or
encumbrance on the personal property or fixtures or the filed
financing statement relating to the personal property or fixtures. In
all other cases, the description in the notice shall be sufficient
if it would be a sufficient description of the personal property or
fixtures under Section 9108 of the Commercial Code. Inclusion of a
reference to or a description of personal property or fixtures in a
notice of sale hereunder shall not constitute an election by the
secured party to conduct a unified sale pursuant to subparagraph (B)
of paragraph (1) of subdivision (a) of Section 9604 of the Commercial
Code, shall not obligate the secured party to conduct a unified sale
pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of
Section 9604 of the Commercial Code, and in no way shall render
defective or noncomplying either that notice or a sale pursuant to
that notice by reason of the fact that the sale includes none or less
than all of the personal property or fixtures referred to or
described in the notice. This paragraph shall not otherwise affect
the obligations or duties of a secured party under the Commercial
Code.
(c) (1) This subdivision applies only to deeds of trust or
mortgages which contain a power of sale and which are secured by real
property containing a single-family, owner-occupied residence, where
the obligation secured by the deed of trust or mortgage is contained
in a contract for goods or services subject to the provisions of the
Unruh Act (Chapter 1 (commencing with Section 1801) of Title 2 of
Part 4 of Division 3).
(2) Except as otherwise expressly set forth in this subdivision,
all other provisions of law relating to the exercise of a power of
sale shall govern the exercise of a power of sale contained in a deed
of trust or mortgage described in paragraph (1).
(3) If any default of the obligation secured by a deed of trust or
mortgage described in paragraph (1) has not been cured within 30
days after the recordation of the notice of default, the trustee or
mortgagee shall mail to the trustor or mortgagor, at his or her last
known address, a copy of the following statement:
YOU ARE IN DEFAULT UNDER A
_______________________________________________,
(Deed of trust or mortgage)
DATED ____. UNLESS YOU TAKE ACTION TO PROTECT
YOUR PROPERTY, IT MAY BE SOLD AT A PUBLIC SALE.
IF
YOU NEED AN EXPLANATION OF THE NATURE OF THE
PROCEEDING AGAINST YOU, YOU SHOULD CONTACT A
LAWYER.
(4) All sales of real property pursuant to a power of sale
contained in any deed of trust or mortgage described in paragraph (1)
shall be held in the county where the residence is located and shall
be made to the person making the highest offer. The trustee may
receive offers during the 10-day period immediately prior to the date
of sale and if any offer is accepted in writing by both the trustor
or mortgagor and the beneficiary or mortgagee prior to the time set
for sale, the sale shall be postponed to a date certain and prior to
which the property may be conveyed by the trustor to the person
making the offer according to its terms. The offer is revocable until
accepted. The performance of the offer, following acceptance,
according to its terms, by a conveyance of the property to the
offeror, shall operate to terminate any further proceeding under the
notice of sale and it shall be deemed revoked.
(5) In addition to the trustee fee pursuant to Section 2924c, the
trustee or mortgagee pursuant to a deed of trust or mortgage subject
to this subdivision shall be entitled to charge an additional fee of
fifty dollars ($50).
(6) This subdivision applies only to property on which notices of
default were filed on or after the effective date of this
subdivision.
(d) This section shall become operative on January 1, 2013.
2924g. (a) 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.
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).
If the sale of more than one parcel of real property has been
scheduled for the same time and location by the same trustee, (1) any
postponement of any of the sales shall be announced at the time
published in the notice of sale, (2) the first sale shall commence at
the time published in the notice of sale or immediately after the
announcement of any postponement, and (3) each subsequent sale shall
take place as soon as possible after the preceding sale has been
completed.
(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.
(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) 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.
(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.
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 (1) to
require every bidder to show evidence of the bidder's ability to
deposit with the trustee the full amount of his or her 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, and (2) to require 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
his or her 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.
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 his or her 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 attorneys' fees.
If the last and highest bidder willfully fails to deliver to the
trustee the amount of his or her 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 cashiers 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.
2924k. (a) The trustee, or the clerk of the court upon order to the
clerk pursuant to subdivision (d) of Section 2924j, shall distribute
the proceeds, or a portion of the proceeds, as the case may be, of
the trustee's sale conducted pursuant to Section 2924h in the
following order of priority:
(1) To the costs and expenses of exercising the power of sale and
of sale, including the payment of the trustee's fees and attorney's
fees permitted pursuant to subdivision (b) of Section 2924d and
subdivision (b) of this section.
(2) To the payment of the obligations secured by the deed of trust
or mortgage which is the subject of the trustee's sale.
(3) To satisfy the outstanding balance of obligations secured by
any junior liens or encumbrances in the order of their priority.
(4) To the trustor or the trustor's successor in interest. In the
event the property is sold or transferred to another, to the vested
owner of record at the time of the trustee's sale.
(b) A trustee may charge costs and expenses incurred for such
items as mailing and a reasonable fee for services rendered in
connection with the distribution of the proceeds from a trustee's
sale, including, but not limited to, the investigation of priority
and validity of claims and the disbursement of funds. If the fee
charged for services rendered pursuant to this subdivision does not
exceed one hundred dollars ($100), or one hundred twenty-five dollars
($125) where there are obligations specified in paragraph (3) of
subdivision (a), the fee is conclusively presumed to be reasonable.
2924l. (a) In the event that a trustee under a deed of trust is
named in an action or proceeding in which that deed of trust is the
subject, and in the event that the trustee maintains a reasonable
belief that it has been named in the action or proceeding solely in
its capacity as trustee, and not arising out of any wrongful acts or
omissions on its part in the performance of its duties as trustee,
then, at any time, the trustee may file a declaration of nonmonetary
status. The declaration shall be served on the parties in the manner
set forth in Chapter 5 (commencing with Section 1010) of Title 14 of
the Code of Civil Procedure.
(b) The declaration of nonmonetary status shall set forth the
status of the trustee as trustee under the deed of trust that is the
subject of the action or proceeding, that the trustee knows or
maintains a reasonable belief that it has been named as a defendant
in the proceeding solely in its capacity as a trustee under the deed
of trust, its reasonable belief that it has not been named as a
defendant due to any acts or omissions on its part in the performance
of its duties as trustee, the basis for that knowledge or reasonable
belief, and that it agrees to be bound by whatever order or judgment
is issued by the court regarding the subject deed of trust.
(c) The parties who have appeared in the action or proceeding
shall have 15 days from the service of the declaration by the trustee
in which to object to the nonmonetary judgment status of the
trustee. Any objection shall set forth the factual basis on which the
objection is based and shall be served on the trustee.
(d) In the event that no objection is served within the 15-day
objection period, the trustee shall not be required to participate
any further in the action or proceeding, shall not be subject to any
monetary awards as and for damages, attorneys' fees or costs, shall
be required to respond to any discovery requests as a nonparty, and
shall be bound by any court order relating to the subject deed of
trust that is the subject of the action or proceeding.
(e) In the event of a timely objection to the declaration of
nonmonetary status, the trustee shall thereafter be required to
participate in the action or proceeding.
Additionally, in the event that the parties elect not to, or fail
to, timely object to the declaration of nonmonetary status, but later
through discovery, or otherwise, determine that the trustee should
participate in the action because of the performance of its duties as
a trustee, the parties may file and serve on all parties and the
trustee a motion pursuant to Section 473 of the Code of Civil
Procedure that specifies the factual basis for the demand. Upon the
court's granting of the motion, the trustee shall thereafter be
required to participate in the action or proceeding, and the court
shall provide sufficient time prior to trial for the trustee to be
able to respond to the complaint, to conduct discovery, and to bring
other pretrial motions in accordance with the Code of Civil
Procedure.
(f) Upon the filing of the declaration of nonmonetary status, the
time within which the trustee is required to file an answer or other
responsive pleading shall be tolled for the period of time within
which the opposing parties may respond to the declaration. Upon the
timely service of an objection to the declaration on nonmonetary
status, the trustee shall have 30 days from the date of service
within which to file an answer or other responsive pleading to the
complaint or cross-complaint.
(g) For purposes of this section, "trustee" includes any agent or
employee of the trustee who performs some or all of the duties of a
trustee under this article, and includes substituted trustees and
agents of the beneficiary or trustee.
2934a. (a) (1) The trustee under a trust deed upon real property or
an estate for years therein given to secure an obligation to pay
money and conferring no other duties upon the trustee than those
which are incidental to the exercise of the power of sale therein
conferred, may be substituted by the recording in the county in which
the property is located of a substitution executed and acknowledged
by: (A) all of the beneficiaries under the trust deed, or their
successors in interest, and the substitution shall be effective
notwithstanding any contrary provision in any trust deed executed on
or after January 1, 1968; or (B) the holders of more than 50 percent
of the record beneficial interest of a series of notes secured by the
same real property or of undivided interests in a note secured by
real property equivalent to a series transaction, exclusive of any
notes or interests of a licensed real estate broker that is the
issuer or servicer of the notes or interests or of any affiliate of
that licensed real estate broker.
(2) A substitution executed pursuant to subparagraph (B) of
paragraph (1) is not effective unless all the parties signing the
substitution sign, under penalty of perjury, a separate written
document stating the following:
(A) The substitution has been signed pursuant to subparagraph (B)
of paragraph (1).
(B) None of the undersigned is a licensed real estate broker or an
affiliate of the broker that is the issuer or servicer of the
obligation secured by the deed of trust.
(C) The undersigned together hold more than 50 percent of the
record beneficial interest of a series of notes secured by the same
real property or of undivided interests in a note secured by real
property equivalent to a series transaction.
(D) Notice of the substitution was sent by certified mail, postage
prepaid, with return receipt requested to each holder of an interest
in the obligation secured by the deed of trust who has not joined in
the execution of the substitution or the separate document.
The separate document shall be attached to the substitution and be
recorded in the office of the county recorder of each county in
which the real property described in the deed of trust is located.
Once the document required by this paragraph is recorded, it shall
constitute conclusive evidence of compliance with the requirements of
this paragraph in favor of substituted trustees acting pursuant to
this section, subsequent assignees of the obligation secured by the
deed of trust, and subsequent bona fide purchasers or encumbrancers
for value of the real property described therein.
(3) For purposes of this section, "affiliate of the licensed real
estate broker" includes any person as defined in Section 25013 of the
Corporations Code that is controlled by, or is under common control
with, or who controls, a licensed real estate broker. "Control" means
the possession, direct or indirect, of the power to direct or cause
the direction of management and policies.
(4) The substitution shall contain the date of recordation of the
trust deed, the name of the trustor, the book and page or instrument
number where the trust deed is recorded, and the name of the new
trustee. From the time the substitution is filed for record, the new
trustee shall succeed to all the powers, duties, authority, and title
granted and delegated to the trustee named in the deed of trust. A
substitution may be accomplished, with respect to multiple deeds of
trust which are recorded in the same county in which the substitution
is being recorded and which all have the same trustee and
beneficiary or beneficiaries, by recording a single document,
complying with the requirements of this section, substituting
trustees for all those deeds of trust.
(b) If the substitution is effected after a notice of default has
been recorded but prior to the recording of the notice of sale, the
beneficiary or beneficiaries shall cause a copy of the substitution
to be mailed, prior to the recording thereof, in the manner provided
in Section 2924b, to the trustee then of record and to all persons to
whom a copy of the notice of default would be required to be mailed
by the provisions of Section 2924b. An affidavit shall be attached to
the substitution that notice has been given to those persons and in
the manner required by this subdivision.
(c) Notwithstanding any provision of this section or any provision
in any deed of trust, unless a new notice of sale containing the
name, street address, and telephone number of the substituted trustee
is given pursuant to Section 2924f, any sale conducted by the
substituted trustee shall be void.
(d) This section shall remain in effect only until January 1,
1998, and shall have no force or effect after that date, unless a
later enacted statute, which is enacted before January 1, 1998,
deletes or extends that date.
2941. (a) Within 30 days after any mortgage has been satisfied, the
mortgagee or the assignee of the mortgagee shall execute a
certificate of the discharge thereof, as provided in Section 2939,
and shall record or cause to be recorded in the office of the county
recorder in which the mortgage is recorded. The mortgagee shall then
deliver, upon the written request of the mortgagor or the mortgagor's
heirs, successors, or assignees, as the case may be, the original
note and mortgage to the person making the request.
(b) (1) Within 30 calendar days after the obligation secured by
any deed of trust has been satisfied, the beneficiary or the assignee
of the beneficiary shall execute and deliver to the trustee the
original note, deed of trust, request for a full reconveyance, and
other documents as may be necessary to reconvey, or cause to be
reconveyed, the deed of trust.
(A) The trustee shall execute the full reconveyance and shall
record or cause it to be recorded in the office of the county
recorder in which the deed of trust is recorded within 21 calendar
days after receipt by the trustee of the original note, deed of
trust, request for a full reconveyance, the fee that may be charged
pursuant to subdivision (e), recorder's fees, and other documents as
may be necessary to reconvey, or cause to be reconveyed, the deed of
trust.
(B) The trustee shall deliver a copy of the reconveyance to the
beneficiary, its successor in interest, or its servicing agent, if
known. The reconveyance instrument shall specify one of the following
options for delivery of the instrument, the addresses of which the
recorder has no duty to validate:
(i) The trustor or successor in interest, and that person's last
known address, as the person to whom the recorder will deliver the
recorded instrument pursuant to Section 27321 of the Government Code.
(ii) That the recorder shall deliver the recorded instrument to
the trustee's address. If the trustee's address is specified for
delivery, the trustee shall mail the recorded instrument to the
trustor or the successor in interest to the last known address for
that party.
(C) Following execution and recordation of the full reconveyance,
upon receipt of a written request by the trustor or the trustor's
heirs, successors, or assignees, the trustee shall then deliver, or
caused to be delivered, the original note and deed of trust to the
person making that request.
(D) If the note or deed of trust, or any copy of the note or deed
of trust, is electronic, upon satisfaction of an obligation secured
by a deed of trust, any electronic original, or electronic copy which
has not been previously marked solely for use as a copy, of the note
and deed of trust, shall be altered to indicate that the obligation
is paid in full.
(2) If the trustee has failed to execute and record, or cause to
be recorded, the full reconveyance within 60 calendar days of
satisfaction of the obligation, the beneficiary, upon receipt of a
written request by the trustor or trustor's heirs, successor in
interest, agent, or assignee, shall execute and acknowledge a
document pursuant to Section 2934a substituting itself or another as
trustee and issue a full reconveyance.
(3) If a full reconveyance has not been executed and recorded
pursuant to either paragraph (1) or paragraph (2) within 75 calendar
days of satisfaction of the obligation, then a title insurance
company may prepare and record a release of the obligation. However,
at least 10 days prior to the issuance and recording of a full
release pursuant to this paragraph, the title insurance company shall
mail by first-class mail with postage prepaid, the intention to
release the obligation to the trustee, trustor, and beneficiary of
record, or their successor in interest of record, at the last known
address.
(A) The release shall set forth:
(i) The name of the beneficiary.
(ii) The name of the trustor.
(iii) The recording reference to the deed of trust.
(iv) A recital that the obligation secured by the deed of trust
has been paid in full.
(v) The date and amount of payment.
(B) The release issued pursuant to this subdivision shall be
entitled to recordation and, when recorded, shall be deemed to be the
equivalent of a reconveyance of a deed of trust.
(4) Where an obligation secured by a deed of trust was paid in
full prior to July 1, 1989, and no reconveyance has been issued and
recorded by October 1, 1989, then a release of obligation as provided
for in paragraph (3) may be issued.
(5) Paragraphs (2) and (3) do not excuse the beneficiary or the
trustee from compliance with paragraph (1). Paragraph (3) does not
excuse the beneficiary from compliance with paragraph (2).
(6) In addition to any other remedy provided by law, a title
insurance company preparing or recording the release of the
obligation shall be liable to any party for damages, including
attorney's fees, which any person may sustain by reason of the
issuance and recording of the release, pursuant to paragraphs (3) and
(4).
(7) A beneficiary may, at its discretion, in accordance with the
requirements and procedures of Section 2934a, substitute the title
company conducting the escrow through which the obligation is
satisfied for the trustee of record, in which case the title company
assumes the obligation of a trustee under this subdivision, and may
collect the fee authorized by subdivision (e).
(8) In lieu of delivering the original note and deed of trust to
the trustee within 30 days of loan satisfaction, as required by
paragraph (1) of subdivision (b), a beneficiary who executes and
delivers to the trustee a request for a full reconveyance within 30
days of loan satisfaction may, within 120 days of loan satisfaction,
deliver the original note and deed of trust to either the trustee or
trustor. If the note and deed of trust are delivered as provided in
this paragraph, upon satisfaction of the note and deed of trust, the
note and deed of trust shall be altered to indicate that the
obligation is paid in full. Nothing in this paragraph alters the
requirements and obligations set forth in paragraphs (2) and (3).
(c) For the purposes of this section, the phrases "cause to be
recorded" and "cause it to be recorded" include, but are not limited
to, sending by certified mail with the United States Postal Service
or by an independent courier service using its tracking service that
provides documentation of receipt and delivery, including the
signature of the recipient, the full reconveyance or certificate of
discharge in a recordable form, together with payment for all
required fees, in an envelope addressed to the county recorder's
office of the county in which the deed of trust or mortgage is
recorded. Within two business days from the day of receipt, if
received in recordable form together with all required fees, the
county recorder shall stamp and record the full reconveyance or
certificate of discharge. Compliance with this subdivision shall
entitle the trustee to the benefit of the presumption found in
Section 641 of the Evidence Code.
(d) The violation of this section shall make the violator liable
to the person affected by the violation for all damages which that
person may sustain by reason of the violation, and shall require that
the violator forfeit to that person the sum of five hundred dollars
($500).
(e) (1) The trustee, beneficiary, or mortgagee may charge a
reasonable fee to the trustor or mortgagor, or the owner of the land,
as the case may be, for all services involved in the preparation,
execution, and recordation of the full reconveyance, including, but
not limited to, document preparation and forwarding services rendered
to effect the full reconveyance, and, in addition, may collect
official fees. This fee may be made payable no earlier than the
opening of a bona fide escrow or no more than 60 days prior to the
full satisfaction of the obligation secured by the deed of trust or
mortgage.
(2) If the fee charged pursuant to this subdivision does not
exceed forty-five dollars ($45), the fee is conclusively presumed to
be reasonable.
(3) The fee described in paragraph (1) may not be charged unless
demand for the fee was included in the payoff demand statement
described in Section 2943.
(f) For purposes of this section, "original" may include an
optically imaged reproduction when the following requirements are
met:
(1) The trustee receiving the request for reconveyance and
executing the reconveyance as provided in subdivision (b) is an
affiliate or subsidiary of the beneficiary or an affiliate or
subsidiary of the assignee of the beneficiary, respectively.
(2) The optical image storage media used to store the document
shall be nonerasable write once, read many (WORM) optical image media
that does not allow changes to the stored document.
(3) The optical image reproduction shall be made consistent with
the minimum standards of quality approved by either the National
Institute of Standards and Technology or the Association for
Information and Image Management.
(4) Written authentication identifying the optical image
reproduction as an unaltered copy of the note, deed of trust, or
mortgage shall be stamped or printed on the optical image
reproduction.
(g) No fee or charge may be imposed on the trustor in connection
with, or relating to, any act described in this section except as
expressly authorized by this section.
(h) The amendments to this section enacted at the 1999-2000
Regular Session shall apply only to a mortgage or an obligation
secured by a deed of trust that is satisfied on or after January 1,
2001.
(i) (1) In any action filed before January 1, 2002, that is
dismissed as a result of the amendments to this section enacted at
the 2001-02 Regular Session, the plaintiff shall not be required to
pay the defendant's costs.
(2) Any claimant, including a claimant in a class action lawsuit,
whose claim is dismissed or barred as a result of the amendments to
this section enacted at the 2001-02 Regular Session, may, within 6
months of the dismissal or barring of the action or claim, file or
refile a claim for actual damages occurring before January 1, 2002,
that were proximately caused by a time lapse between loan
satisfaction and the completion of the beneficiary's obligations as
required under paragraph (1) of subdivision (b). In any action
brought under this section, the defendant may be found liable for
actual damages, but may not be found liable for any civil penalty
authorized by Section 2941.
(j) Notwithstanding any other penalties, if a beneficiary collects
a fee for reconveyance and thereafter has knowledge, or should have
knowledge, that no reconveyance has been recorded, the beneficiary
shall cause to be recorded the reconveyance, or in the event a
release of obligation is earlier and timely recorded, the beneficiary
shall refund to the trustor the fee charged to perform the
reconveyance. Evidence of knowledge includes, but is not limited to,
notice of a release of obligation pursuant to paragraph (3) of
subdivision (b).
2943. (a) As used in this section:
(1) "Beneficiary" means a mortgagee or beneficiary of a mortgage
or deed of trust, or his or her assignees.
(2) "Beneficiary statement" means a written statement showing:
(A) The amount of the unpaid balance of the obligation secured by
the mortgage or deed of trust and the interest rate, together with
the total amounts, if any, of all overdue installments of either
principal or interest, or both.
(B) The amounts of periodic payments, if any.
(C) The date on which the obligation is due in whole or in part.
(D) The date to which real estate taxes and special assessments
have been paid to the extent the information is known to the
beneficiary.
(E) The amount of hazard insurance in effect and the term and
premium of that insurance to the extent the information is known to
the beneficiary.
(F) The amount in an account, if any, maintained for the
accumulation of funds with which to pay taxes and insurance premiums.
(G) The nature and, if known, the amount of any additional
charges, costs, or expenses paid or incurred by the beneficiary which
have become a lien on the real property involved.
(H) Whether the obligation secured by the mortgage or deed of
trust can or may be transferred to a new borrower.
(3) "Delivery" means depositing or causing to be deposited in the
United States mail an envelope with postage prepaid, containing a
copy of the document to be delivered, addressed to the person whose
name and address is set forth in the demand therefor. The document
may also be transmitted by facsimile machine to the person whose name
and address is set forth in the demand therefor.
(4) "Entitled person" means the trustor or mortgagor of, or his or
her successor in interest in, the mortgaged or trust property or any
part thereof, any beneficiary under a deed of trust, any person
having a subordinate lien or encumbrance of record thereon, the
escrowholder licensed as an agent pursuant to Division 6 (commencing
with Section 17000) of the Financial Code, or the party exempt by
virtue of Section 17006 of the Financial Code who is acting as the
escrowholder.
(5) "Payoff demand statement" means a written statement, prepared
in response to a written demand made by an entitled person or
authorized agent, setting forth the amounts required as of the date
of preparation by the beneficiary, to fully satisfy all obligations
secured by the loan that is the subject of the payoff demand
statement. The written statement shall include information reasonably
necessary to calculate the payoff amount on a per diem basis for the
period of time, not to exceed 30 days, during which the per diem
amount is not changed by the terms of the note.
(b) (1) A beneficiary, or his or her authorized agent, shall,
within 21 days of the receipt of a written demand by an entitled
person or his or her authorized agent, prepare and deliver to the
person demanding it a true, correct, and complete copy of the note or
other evidence of indebtedness with any modification thereto, and a
beneficiary statement.
(2) A request pursuant to this subdivision may be made by an
entitled person or his or her authorized agent at any time before, or
within two months after, the recording of a notice of default under
a mortgage or deed of trust, or may otherwise be made more than 30
days prior to the entry of the decree of foreclosure.
(c) A beneficiary, or his or her authorized agent, shall, on the
written demand of an entitled person, or his or her authorized agent,
prepare and deliver a payoff demand statement to the person
demanding it within 21 days of the receipt of the demand. However, if
the loan is subject to a recorded notice of default or a filed
complaint commencing a judicial foreclosure, the beneficiary shall
have no obligation to prepare and deliver this statement as
prescribed unless the written demand is received prior to the first
publication of a notice of sale or the notice of the first date of
sale established by a court.
(d) (1) A beneficiary statement or payoff demand statement may be
relied upon by the entitled person or his or her authorized agent in
accordance with its terms, including with respect to the payoff
demand statement reliance for the purpose of establishing the amount
necessary to pay the obligation in full. If the beneficiary notifies
the entitled person or his or her authorized agent of any amendment
to the statement, then the amended statement may be relied upon by
the entitled person or his or her authorized agent as provided in
this subdivision.
(2) If notification of any amendment to the statement is not given
in writing, then a written amendment to the statement shall be
delivered to the entitled person or his or her authorized agent no
later than the next business day after notification.
(3) Upon the dates specified in subparagraphs (A) and (B) any sums
that were due and for any reason not included in the statement or
amended statement shall continue to be recoverable by the beneficiary
as an unsecured obligation of the obligor pursuant to the terms of
the note and existing provisions of law.
(A) If the transaction is voluntary, the entitled party or his or
her authorized agent may rely upon the statement or amended statement
upon the earlier of (i) the close of escrow, (ii) transfer of title,
or (iii) recordation of a lien.
(B) If the loan is subject to a recorded notice of default or a
filed complaint commencing a judicial foreclosure, the entitled party
or his or her authorized agent may rely upon the statement or
amended statement upon the acceptance of the last and highest bid at
a trustee's sale or a court supervised sale.
(e) The following provisions apply to a demand for either a
beneficiary statement or a payoff demand statement:
(1) If an entitled person or his or her authorized agent requests
a statement pursuant to this section and does not specify a
beneficiary statement or a payoff demand statement the beneficiary
shall treat the request as a request for a payoff demand statement.
(2) If the entitled person or the entitled person's authorized
agent includes in the written demand a specific request for a copy of
the deed of trust or mortgage, it shall be furnished with the
written statement at no additional charge.
(3) The beneficiary may, before delivering a statement, require
reasonable proof that the person making the demand is, in fact, an
entitled person or an authorized agent of an entitled person, in
which event the beneficiary shall not be subject to the penalties of
this section until 21 days after receipt of the proof herein provided
for. A statement in writing signed by the entitled person appointing
an authorized agent when delivered personally to the beneficiary or
delivered by registered return receipt mail shall constitute
reasonable proof as to the identity of an agent. Similar delivery of
a policy of title insurance, preliminary report issued by a title
company, original or photographic copy of a grant deed or certified
copy of letters testamentary, guardianship, or conservatorship shall
constitute reasonable proof as to the identity of a successor in
interest, provided the person demanding a statement is named as
successor in interest in the document.
(4) If a beneficiary for a period of 21 days after receipt of the
written demand willfully fails to prepare and deliver the statement,
he or she is liable to the entitled person for all damages which he
or she may sustain by reason of the refusal and, whether or not
actual damages are sustained, he or she shall forfeit to the entitled
person the sum of three hundred dollars ($300). Each failure to
prepare and deliver the statement, occurring at a time when, pursuant
to this section, the beneficiary is required to prepare and deliver
the statement, creates a separate cause of action, but a judgment
awarding an entitled person a forfeiture, or damages and forfeiture,
for any failure to prepare and deliver a statement bars recovery of
damages and forfeiture for any other failure to prepare and deliver a
statement, with respect to the same obligation, in compliance with a
demand therefor made within six months before or after the demand as
to which the award was made. For the purposes of this subdivision,
"willfully" means an intentional failure to comply with the
requirements of this section without just cause or excuse.
(5) If the beneficiary has more than one branch, office, or other
place of business, then the demand shall be made to the branch or
office address set forth in the payment billing notice or payment
book, and the statement, unless it specifies otherwise, shall be
deemed to apply only to the unpaid balance of the single obligation
named in the request and secured by the mortgage or deed of trust
which is payable at the branch or office whose address appears on the
aforesaid billing notice or payment book.
(6) The beneficiary may make a charge not to exceed thirty dollars
($30) for furnishing each required statement. The provisions of this
paragraph shall not apply to mortgages or deeds of trust insured by
the Federal Housing Administrator or guaranteed by the Administrator
of Veterans Affairs.
(f) The preparation and delivery of a beneficiary statement or a
payoff demand statement pursuant to this section shall not change a
date of sale established pursuant to Section 2924g.
(g) This section shall become operative on January 1, 2014.
CODE OF CIVIL PROCEDURE
580a. Whenever a money judgment is sought for the balance due upon
an obligation for the payment of which a deed of trust or mortgage
with power of sale upon real property or any interest therein was
given as security, following the exercise of the power of sale in
such deed of trust or mortgage, the plaintiff shall set forth in his
or her complaint the entire amount of the indebtedness which was
secured by the deed of trust or mortgage at the time of sale, the
amount for which the real property or interest therein was sold and
the fair market value thereof at the date of sale and the date of
that sale. Upon the application of either party made at least 10 days
before the time of trial the court shall, and upon its own motion
the court at any time may, appoint one of the probate referees
provided for by law to appraise the property or the interest therein
sold as of the time of sale. The referee shall file his or her
appraisal with the clerk and that appraisal shall be admissible in
evidence. The referee shall take and subscribe an oath to be attached
to the appraisal that he or she has truly, honestly and impartially
appraised the property to the best of his or her knowledge and
ability. Any referee so appointed may be called and examined as a
witness by any party or by the court itself. The court must fix the
compensation of the referee in an amount as determined by the court
to be reasonable, but those fees shall not exceed similar fees for
similar services in the community where the services are rendered,
which may be taxed and allowed in like manner as other costs. Before
rendering any judgment the court shall find the fair market value of
the real property, or interest therein sold, at the time of sale. The
court may render judgment for not more than the amount by which the
entire amount of the indebtedness due at the time of sale exceeded
the fair market value of the real property or interest therein sold
at the time of sale with interest thereon from the date of the sale;
provided, however, that in no event shall the amount of the judgment,
exclusive of interest after the date of sale, exceed the difference
between the amount for which the property was sold and the entire
amount of the indebtedness secured by the deed of trust or mortgage.
Any such action must be brought within three months of the time of
sale under the deed of trust or mortgage. No judgment shall be
rendered in any such action until the real property or interest
therein has first been sold pursuant to the terms of the deed of
trust or mortgage, unless the real property or interest therein has
become valueless.
580b. No deficiency judgment shall lie in any event after a sale of
real property or an estate for years therein for failure of the
purchaser to complete his or her contract of sale, or under a deed of
trust or mortgage given to the vendor to secure payment of the
balance of the purchase price of that real property or estate for
years therein, or under a deed of trust or mortgage on a dwelling for
not more than four families given to a lender to secure repayment of
a loan which was in fact used to pay all or part of the purchase
price of that dwelling occupied, entirely or in part, by the
purchaser.
Where both a chattel mortgage and a deed of trust or mortgage have
been given to secure payment of the balance of the combined purchase
price of both real and personal property, no deficiency judgment
shall lie at any time under any one thereof if no deficiency judgment
would lie under the deed of trust or mortgage on the real property
or estate for years therein.
580d. No judgment shall be rendered for any deficiency upon a note
secured by a deed of trust or mortgage upon real property or an
estate for years therein hereafter executed in any case in which the
real property or estate for years therein has been sold by the
mortgagee or trustee under power of sale contained in the mortgage or
deed of trust.
This section does not apply to any deed of trust, mortgage or
other lien given to secure the payment of bonds or other evidences of
indebtedness authorized or permitted to be issued by the
Commissioner of Corporations, or which is made by a public utility
subject to the Public Utilities Act (Part 1 (commencing with Section
201) of Division 1 of the Public Utilities Code).
580e. (a) No judgment shall be rendered for any deficiency under a
note secured by a first deed of trust or first mortgage for a
dwelling of not more than four units, in any case in which the
trustor or mortgagor sells the dwelling for less than the remaining
amount of the indebtedness due at the time of sale with the written
consent of the holder of the first deed of trust or first mortgage.
Written consent of the holder of the first deed of trust or first
mortgage to that sale shall obligate that holder to accept the sale
proceeds as full payment and to fully discharge the remaining amount
of the indebtedness on the first deed of trust or first mortgage.
(b) If the trustor or mortgagor commits either fraud with respect
to the sale of, or waste with respect to, the real property that
secures the first deed of trust or first mortgage, this section shall
not limit the ability of the holder of the first deed of trust or
first mortgage to seek damages and use existing rights and remedies
against the trustor or mortgagor or any third party for fraud or
waste.
(c) This section shall not apply if the trustor or mortgagor is a
corporation or political subdivision of the state.
726. (a) There can be but one form of action for the recovery of
any debt or the enforcement of any right secured by mortgage upon
real property or an estate for years therein, which action shall be
in accordance with the provisions of this chapter. In the action the
court may, by its judgment, direct the sale of the encumbered real
property or estate for years therein (or so much of the real property
or estate for years as may be necessary), and the application of the
proceeds of the sale to the payment of the costs of court, the
expenses of levy and sale, and the amount due plaintiff, including,
where the mortgage provides for the payment of attorney's fees, the
sum for attorney's fees as the court shall find reasonable, not
exceeding the amount named in the mortgage.
(b) The decree for the foreclosure of a mortgage or deed of trust
secured by real property or estate for years therein shall declare
the amount of the indebtedness or right so secured and, unless
judgment for any deficiency there may be between the sale price and
the amount due with costs is waived by the judgment creditor or a
deficiency judgment is prohibited by Section 580b, shall determine
the personal liability of any defendant for the payment of the debt
secured by the mortgage or deed of trust and shall name the
defendants against whom a deficiency judgment may be ordered
following the proceedings prescribed in this section. In the event of
waiver, or if the prohibition of Section 580b is applicable, the
decree shall so declare and there shall be no judgment for a
deficiency. In the event that a deficiency is not waived or
prohibited and it is decreed that any defendant is personally liable
for the debt, then upon application of the plaintiff filed at any
time within three months of the date of the foreclosure sale and
after a hearing thereon at which the court shall take evidence and at
which hearing either party may present evidence as to the fair value
of the real property or estate for years therein sold as of the date
of sale, the court shall render a money judgment against the
defendant or defendants for the amount by which the amount of the
indebtedness with interest and costs of levy and sale and of action
exceeds the fair value of the real property or estate for years
therein sold as of the date of sale. In no event shall the amount of
the judgment, exclusive of interest from the date of sale and of
costs exceed the difference between the amount for which the real
property or estate for years therein was sold and the entire amount
of the indebtedness secured by the mortgage or deed of trust. Notice
of the hearing shall be served upon all defendants who have appeared
in the action and against whom a deficiency judgment is sought, or
upon their attorneys of record, at least 15 days before the date set
for the hearing. Upon application of any party made at least 10 days
before the date set for the hearing the court shall, and upon its own
motion the court at any time may, appoint one of the probate
referees provided for by law to appraise the real property or estate
for years therein sold as of the time of sale. The probate referee
shall file the appraisal with the clerk and the appraisal is
admissible in evidence. The probate referee shall take and subscribe
an oath to be attached to the appraisal that the referee has truly,
honestly and impartially appraised the real property or estate for
years therein to the best of the referee's knowledge and ability. Any
probate referee so appointed may be called and examined as a witness
by any party or by the court itself. The court shall fix the
compensation, in an amount as determined by the court to be
reasonable, but the fees shall not exceed similar fees for similar
services in the community where the services are rendered, which may
be taxed and allowed in like manner as other costs.
(c) No person holding a conveyance from or under the mortgagor of
real property or estate for years therein, or having a lien thereon,
which conveyance or lien does not appear of record in the proper
office at the time of the commencement of the action need be made a
party to the action, and the judgment therein rendered, and the
proceedings therein had, are as conclusive against the person holding
the unrecorded conveyance or lien as if the person had been a party
to the action. Notwithstanding Section 701.630, the sale of the
encumbered real property or estate for years therein does not affect
the interest of a person who holds a conveyance from or under the
mortgagor of the real property or estate for years therein mortgaged,
or has a lien thereon, if the conveyance or lien appears of record
in the proper office at the time of the commencement of the action
and the person holding the recorded conveyance or lien is not made a
party to the action.
(d) If the real property or estate for years therein mortgaged
consists of a single parcel, or two or more parcels, situated in two
or more counties, the court may, in its judgment, direct the whole
thereof to be sold in one of the counties, and upon these
proceedings, and with like effect, as if the whole of the property
were situated in that county.
(e) If a deficiency judgment is waived or prohibited, the real
property or estate for years therein shall be sold as provided in
Section 716.020. If a deficiency judgment is not waived or
prohibited, the real property or estate for years therein shall be
sold subject to the right of redemption as provided in Sections
729.010 to 729.090, inclusive.
(f) Notwithstanding this section or any other provision of law to
the contrary, any person authorized by this state to make or arrange
loans secured by real property or any successor in interest thereto,
that originates, acquires, or purchases, in whole or in part, any
loan secured directly or collaterally, in whole or in part, by a
mortgage or deed of trust on real property or an estate for years
therein, may bring an action for recovery of damages, including
exemplary damages not to exceed 50 percent of the actual damages,
against a borrower where the action is based on fraud under Section
1572 of the Civil Code and the fraudulent conduct by the borrower
induced the original lender to make that loan.
(g) Subdivision (f) does not apply to loans secured by
single-family, owner-occupied residential real property, when the
property is actually occupied by the borrower as represented to the
lender in order to obtain the loan and the loan is for an amount of
one hundred fifty thousand dollars ($150,000) or less, as adjusted
annually, commencing on January 1, 1987, to the Consumer Price Index
as published by the United States Department of Labor.
(h) Any action maintained pursuant to subdivision (f) for damages
shall not constitute a money judgment for deficiency, or a deficiency
judgment within the meaning of Section 580a, 580b, or 580d of the
Code of Civil Procedure.
COMMERCIAL CODE
§ 3301. Person entitled to enforce
"Person entitled to enforce" an instrument means (a) the holder of the instrument,
(b) a nonholder in possession of the instrument who has the rights of a holder, or
(c) a person not in possession of the instrument who is entitled to enforce the
instrument pursuant to Section 3309 or subdivision (d) of Section 3418. A person
may be a person entitled to enforce the instrument even though the person is not
the owner of the instrument or is in wrongful possession of the instrument.
GARY STEPHENSON
Stephenson Law Office
525 B Street, Ste. 1500
San Diego, CA 92101
Education:
UC Berkeley (AB 1964) -- Tuition: ~$100/semester for A.S.B. Card;
UC Berkeley (JD 1967) -- Tuition: ~$100/semester for A.S.B. Card;
UC Berkeley Law 2011 -- Tuition: $49,096 for California residents -- A.S.B. Card
probably extra.
Bar Memberships: State Bar of California 1967 and Real Property Law Section; San
Diego County Bar Association and Real Property Law Section.
Lectures:
CEB Recent Developments in Real Property Law [1980-2003, 2010, 2011];
CEB Real Property Purchase & Sales [1978, 1980, 1983];
CEB Real Property Finance [2000, 2001];
CEB Escrow Practice & Litigation [1979, 1982];
CEB Title Insurance Practice & Litigation [1980];
BOMA Annual Lease Workshop [1991-1996];
State Bar Loan Modifications [as if anyone gets one] [2010];
SDCnty Bar Assn Anti-Deficiency Basics [2010, 2011];
SDCnty Bar Assn Real Property Basics Series [2011]:
Deeds and Legal Descriptions;
Promissory Notes;
Trust Deeds and Security Agreements;
Trustee Foreclosure;
Judicial Foreclosure;
One-Action, Security-First, Fair-Value, Anti-Deficiency.
E. LUDLOW KEENEY, JR.
Partner:
Keeney Waite & Stevens, APC
402 West Broadway, Suite 1820
San Diego, California 92101
(619) 238-1661
Education:
Pomona College, (B.A. 1961)
University of California at Los Angeles, (LL.B. 1964)
Bar Memberships: California (1965)
U.S. Supreme Court (1968)
Professional Memberships, Association, Committees and Listings:
Member, Real Property Law Section, State Bar of California
Member, Real Property and Probate Law Section, American Bar Association
Member, Real Property Section, San Diego County Bar Association
Consultant, Real Property Subcommittee of the Joint Advisory Committee of CEB
Member, CEB Real Property Practice Institute
Member, American College of Real Estate Lawyers
Listing: Best Lawyers in America (Real Estate Law): 1987 Real Property Executive Committee, State Bar of California 2007 Lectures:
CEB, Fundamentals of Real Property Law Practice [1978-1980; 1986; 1989; 1990; 1997;
1998; 1999; 2000]
CEB, Recent Developments in Real Property Law [1980- 2003]
CEB, Real Estate Broker Practice [1997]
CEB, Advising Real Property Investors [1979]
CEB, Real Estate Secured Transactions [1980; 1983; 1985; 1990;1992; 2000]
CEB, Mechanic’s Liens & Stop Notices [1972]
CEB, Real Property Remedies [1974; 1977; 1979; 1991]
San Diego Trial Lawyers Association, Real Estate Litigation [1984]
CEB, Sixth Annual Institute [1989]
CEB, Eleventh Annual Institute [1994]
CEB, Representing The Borrower In a Real Property Foreclosure Or Workout [1992; 1994]
National Business Institute, Title Law In California [2003]
National Business Institute, Boundary Disputes [2006; 2007]
National Business Institute, In-Depth Title Insurance Principles [2008]
National Business Institute, Title Law in California [2008]
National Business Institute, Real Property Foreclosure: A Step-by-Step Workshop [2009]
State Bar of California, Handling A Title Insurance Claim [2009]
State Bar of California, Use and Abuse of Lis Pendens [2009]
State Bar of California, Real Estate Broker Liability in a Down Economy [2009]
State Bar of California, Subprime Mortgage Fallout [2010]
State Bar of California, Real Property Foreclosure: Recent Legislative & Case Developments [2011]
ATTORNEY BIOGRAPHICAL PROFILE OF SPENCER P. SCHEER
Mr. Scheer is a principal of SLG. He graduated from the University of Massachusetts (B.A.,
cum laude, 1980), and earned his Juris Doctor Degree from Empire College of Law (1983).
After clerking for Alan Jaroslovsky ( now Bankruptcy Judge, N Dist of CA), Mr. Scheer
worked as Bankruptcy Administrator and In-House counsel for World Savings and Loan
Association, a Fortune 500 Company. Mr. Scheer then went on to work for the AV rated Firm
of Polk, Scheer & Prober from 1984-2002, becoming a shareholder and Managing Principal in
1993.
Mr. Scheer has received an AV (highest rating) from Martindale-Hubbell. He is an effective and
successful litigator and has handled over 200 jury and non-jury trials in State and Federal courts,
focusing on creditor and real estate litigation matters. Mr. Scheer has a reputation as an attorney
who provides superior client service and who gets things done.
Published cases of note that Mr. Scheer has been involved in include:
In re Reggie Ong, BAP No. NC-10-1192-HBaJu (9th Cir. BAP, Filed June 29, 2011):
Successful appeal of bankruptcy court order denying entry of creditor reaffirmation agreement.
Case of first impression in the 9th Circuit.
In re 600 Ala. LLC, 2010 U.S. Dist. LEXIS 108722 (N.D. Cal. Sept. 28, 2010): Successful
appeal of decision by bankruptcy court, governing standards to be applied when considering
removal of bankruptcy trustee.
Qari v. Patelco Credit Union (In re Qari), 357 B.R. 793 (Bankr. N.D. Cal. 2006): Prevailed
in Trial to Determine Discharge of Debt in Bankruptcy based on consumer and commercial fraud
claims of Lender.
In re Elm Inn, Inc., 942 F.2d 630 (9th Cir. 1991): Successful appeal of case involving
assumption or rejection of lease under bankruptcy law and impact on Lender fee interest in real
property.
Mr. Scheer’s published topical articles include:
“To Remove or not to Remove? That is the Question. Then what Happens? ( United Trustees
Association Quarterly (Spring 2011).
“Retail TIC Financing-A New Frontier” UTA Quarterly (Summer 2006)
“The Bankruptcy Discharge and Post-Discharge Communications and Agreements” (United
Trustees Association Newsletter), December 2004.
“When is a Foreclosure Final?” Mortgage Finance, (CMBA), January/ February 1998.
“What Ever Happened to Bankruptcy Reform?” Mortgage Finance, (CMBA), October 1995
“Cramdown of the Deflationary Monster,” Mortgage Finance, (CMBA), August 1993
“Repeat Bankruptcy Filings-The Scourge of 1991,” CMBA News, Vol. 18, No. 4 April 1991
“Non judicial Foreclosure-The End of the Road to Obtaining Your Security?” CMBA News,
Vol.17, No. 12, December 1991.
Mr. Scheer has been a speaker on issues affecting lender/ servicer rights at numerous seminars
and conventions including: California Mortgage Bankers Association, United Trustee's
Association, California Credit Union Collectors Council, Marin County Bar Association-Real
Property Section, and the Northern California Consumer Bankruptcy Conference . Mr. Scheer
is also a lecturer and speaker for the California State Bar Association and was a panelist at
California State Bar Association Annual Real Property Law Section Retreat (Subprime Mortgage
Fallout-Lender Perspective (2010), and a webinar presenter on Real Property Foreclosure:
Recent Legislation and & Case Developments (2011).
Mr. Scheer is an avid New England Patriots fan and a musician in a classic rock band called
Factor 11. He is a longstanding volunteer with local Marin County groups providing volunteer
services to incarcerated youth in Marin County California.
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