Caren Jacobs Castle, Esq.

By Caren Jacobs Castle, Esq., The Wolf Firm, A Law Corporation

Effective January 1, 2019, Section 408 of the California Military and Veterans Code was amended.  The amendment, albeit slight, has a major effect on the foreclosure process as it applies to active duty service members in California.

Prior to January 1, 2019, the statute followed the Federal Service members Civil Relief Act and read:

“This section shall apply only to obligations secured by mortgage, trust deed, or other security in the nature of a mortgage upon real or personal property owned by a service member at the commencement of the period of the military service and still so owned by the service member whose obligations originated prior to the person’s period of military service”

Accordingly, it only applied to service members who entered active military service after the loan originated.

As of January 1, 2019, California increased the protections of active duty service members by amending the section to read:

“This section shall apply only to obligations secured by mortgage, trust deed, or other security in the nature of a mortgage upon real or personal property owned by a service member.”

Thus, the protections afforded under California law have now been expanded to every active duty service member, even if the loan was originated prior to the time that person entered active military service.

Moreover, California now requires a court order in order to proceed to foreclosure sale where the borrower is a service member currently on active duty, and up to one year after the service member has left active duty.  The court order is required to proceed regardless of whether or not the lender is pursuing judicial or non-judicial foreclosure.  The penalty for proceeding to sale without a court order is imprisonment not to exceed 1 year or a fine not to exceed $1,000.

Therefore, upon identification of a borrower on active duty, or on inactive status within one year of active status, our office will be proceeding with the filing of a judicial foreclosure combined with a request for the appointment of a guardian ad litem.  Upon receipt of an order of the court authorizing the foreclosure sale, we will then proceed with a non-judicial foreclosure.  The non-judicial foreclosure will result in a much faster and less expensive process than continuing with the judicial foreclosure.

Caren Jacobs Castle is a Senior Mortgage Servicing Attorney at The Wolf Firm, A Law Corporation. Ms. Castle has over 30 years of experience in the mortgage servicing industry and many honors. She can be reached at caren.castle@wolffirm.com

Reprinted with permission of USFN