AB 1957, sponsored by Assemblymember Blanda Pacheco (D-64) passed the California Assembly by a vote of 62-0 after passing in the Senate last week by a vote of 39-0. The bill now heads to the Governor for his signature, where he may sign the bill into law by September 30th.

Although the vote count indicates unanimity and agreement, in fact, there are still groups who actively oppose the bill. A significant amount of work has been done by UTA to ensure that the legislation is palatable to both Democrats and Republicans. We are now asking members to contact Governor Newsom directly to encourage him to sign the bill into law, in order to prevent any last-minute shenanigans by the bill’s opponents.

In short, the bill limits the abuses of post-auction bidding by unauthorized parties posing as eligible tenants, prospective owner occupants and non-profits, causing a reduction in the amount of legitimate foreclosure bids to the detriment of foreclosed homeowners.

Please see a template letter to Governor Newsom below. We ask that you not submit the letter verbatim, but that you modify the letter as you see fit. While the Governor’s office does not accept email, you can contact the Governor via his contact page as an alternative to a hard-copy letter.

SAMPLE LETTER

The Honorable Gavin Newsom
Governor of California
1021 O Street, Suite 9000
Sacramento, CA 95814

Dear Governor Newsom,

I am writing to request that you sign AB 1957, sponsored by Assemblymember Pacheco into law. The bill passed both the Assembly and the Senate with just one dissenting vote.

AB 1957 is a clean-up bill to SB 1079, which was enacted in 2020 and has been modified several times since. SB 1079 proposed a well-intentioned idea to broaden opportunities to achieve home ownership for tenants, prospective owner-occupants, nonprofits, land trusts, and others.

SB 1079 did not envision the degree to which the law would depress bidding at foreclosure sales and lead to outright fraud by investors posing as prospective owner-occupants, hiding behind straw-buyer tenants, and even creating sham nonprofits.

AB 1957 addresses the fraud that has occurred associated with the misuse of the SB 1079 statutes that were trying to address the lack of affordable housing for owner occupants in California. AB 1957 makes needed changes in terms of reducing the categories of SB 1079 bidders, and reducing the properties subject to the process. Specifically, AB 1957 would limit post-auction bidding to first priority deeds of trust so that inexperienced eligible buyers are not unwittingly subject to substantial senior liens when seeking to purchase properties and

inadvertently lose title when a senior lien forecloses shortly after their purchase. AB 1957 would redefine the term ‘eligible bidder’ to remove prospective owner-occupants and recategorize into two general types of bidder, an ‘eligible tenant bidder’ or an ‘eligible community bidder’.

AB 1957 would also limit the purchases by an eligible tenant bidder to properties valued at or below federal program loan limits to eliminate multi-million-dollar luxury properties that are not affordable housing, and would require that eligible properties be fully constructed and habitable. AB 1957 would enact additional certification requirements by HCD with respect to non-profit bidders as eligible community bidders to ensure compliance with affordable housing objectives in renting and resale of properties acquired by these nonprofits pursuant to SB 1079 statutes. These reforms are needed to curb the documented abuses of the SB1079 post-auction bid process over the past five years and ensure that the process benefits the intended recipients as opposed to unscrupulous individuals.

Thank you for your consideration.

Sincerely,

[YOUR FIRST NAME] [YOUR LAST NAME]