California passed a bill amending several of the state’s foreclosure laws under the nonjudicial foreclosure process. Under the bill, a foreclosure sale must be postponed for 45 days if the trustee receives a listing agreement for the sale of the property from the borrower at least 5 business days prior to the scheduled date of the foreclosure sale. The foreclosure sale must be postponed for an additional 45 days if the trustee receives a copy of a purchase agreement for the sale of the property from the borrower at least 5 business days prior to the scheduled date of the foreclosure sale. With respect to a foreclosure involving a 1st lien loan, the bill also prohibits a trustee from selling the property at the initially scheduled foreclosure sale for less than 67% of the fair market value of the property. The foreclosing lender or servicer must provide the fair market value of the property to the trustee at least 10 days prior to the initially scheduled date of the foreclosure sale. In addition, the bill requires a lender and servicer to notify the borrower that a 3rd party may record a request to receive copies of any notice of default and notice of sale. A lender must disclose the information to the borrower in writing before the borrower signs the mortgage or deed of trust. A servicer must include the information in the first class letter sent to the borrower pursuant to California’s pre-foreclosure in-person and telephone contact requirements, and again during the initial contact with the borrower. The bill becomes effective January 1, 2025.
Click to view the CA AB 2424: https://www.tenaco.com/wp-content/uploads/2024/10/CA-AB-2424-09-21-24.pdf
