California passed a bill enacting foreclosure provisions with respect to successors in interest. Under the bill, if a person claiming to be a successor in interest notifies the lender or servicer that the borrower has died, the lender or servicer must request reasonable documentation of the borrower’s death and reasonable documentation demonstrating the claimant’s ownership interest in the real property. A lender or servicer must deem a claimant a successor in interest if the claimant provides the requested documentation within the required period of time. The bill also requires a lender or servicer to provide a successor in interest information about the loan (including loan balance, interest rate and interest reset dates and amounts, balloon payments, prepayment penalties, default or delinquency status, the monthly payment amount, and payoff amounts). In addition, the bill requires a lender or servicer to allow a successor in interest to apply for a loan assumption, subject to applicable investor requirements and guidelines, and to apply for any foreclosure prevention alternative offered by (or available through) the lender or servicer. The bill went into effect January 1, 2017.
Click here to view the California Legislative website for the full text of the Statutes
