July 10, 2008
Governor Schwarzenegger Signs SB 1137 to Protect Homeowners
On Tuesday, July 8, 2008, Governor Schwarzenegger signed SB 1137 regarding residential mortgage foreclosure procedures, which was authored by Senators Don Perata, Ellen Corbett and Michael Machado. The bill became effective with the Governor’s signature.
This legislation requires a lender or servicer to contact a borrower, or satisfy due diligence requirements, 30 days before filing a notice of default (applies to loans made from January 1, 2003 to December 31, 2007, secured by owner-occupied residential real property), for the purpose of assessing the borrower’s financial situation and exploring options for the borrower to avoid foreclosure. SB 1137 also requires that at the time a notice of sale is posted on the property to be sold, the lender or servicer mail a specific notice to the resident of a property subject to foreclosure sale (in English and 5 specified languages). Finally, it requires the legal owner to maintain vacant residential property purchased at a foreclosure sale or acquired through foreclosure and provides for civil fines of up to $1,000 per day for failure to maintain the property.
This bill is repealed on January 1, 2013, unless a subsequent statute changes or repeals the sunset provision. The text of the legislation may be accessed at: http://www.leginfo.ca.gov/pub/07-08/bill/sen/sb_1101-1150/sb_1137_bill_20080708_chaptered.pdf.