A Year Like No Other

Michael Belote, Esq.

By Michael Belote, Esq., California Advocates, UTA California Lobbyist

Let there be no doubt: in the annals of CTA and UTA, there has never been a year like 2012 in the legislative arena.  The 2011-2012 legislative session which ended on August 31 involved no less than 62 bills of direct interest to UTA.  Almost 20 directly threatened the integrity of nonjudicial foreclosure, with proposals relating to dual tracking, “robo-signing”, chain of title and more.  When the dust settled, trustees, lenders and servicers were left with 25 pages of dense, complicated, and confusing language contained within the “Homeowner’s Bill of Rights”.

Of course, no single column can possibly hope to address the complexities of “HOBR”; more than two hours were devoted to the subject at the recent UTA Conference in Scottsdale, and the discussion could easily have continued for many more hours.  UTA members are urged to become familiar with the language of AB 278/SB 900 (the two bills are absolutely identical, so it is not necessary to review both), available through the UTA website.  The requirement of the bills become effective on January 1 of the coming year, and some will “sunset” in 2018, while others are permanent.

With the complicated issues in HOBR, there is no way to answer every possible issue in the statutes, at least not initially.  It is likely at some point that clean-up legislation will be necessary.  For example, the bill contains different requirements for state and federally chartered lenders and other licensees conducting more than 175 foreclosures “during the immediately proceeding annual reporting period” than those conducting 175 or fewer.  While the best understanding is that this relates to completed foreclosures, the bill is not explicit on this point.  There will be many questions on which trustees, servicers and lenders simply will have to exercise sound judgment, until answers are forthcoming from clean-up legislation or appellate court opinions.

In some ways, comparing the Homeowner’s Bill of Rights to other legislation enacted during 2012 is like comparing the World Series Champion Giants to, say, the Dodgers, but still there were other bills enacted this year that UTA members will want to review.  All of the following were enacted by the legislature and signed by Governor Brown, and all are available through the UTA website:

• AB 929 (Wieckowski): Debtor Exemptions.  Increases the amounts of various debtor exemptions from bankruptcy.  Chapter 678, Statutes of 2012.
  
  
• AB 1599 (Feuer): Translations.  It is critical that trustees review this bill, which imposes a new requirement for summary translations of notices of default and notices of sale.  Effective on the later of April 1, 2013 or 90 days after the Department of Corporations posts translations on its website, notices of default and sale must have attached summary translations in the five languages specified in Civil Code Section 1632, prepared by DOC.  Further, the NOD and NOS must include one-line references to the summaries in the five languages, again prepared by DOC.  The summaries need not be recorded or published. Chapter 556, Statutes of 2012.
  
  
• AB 2273 (Wieckowski): CID Foreclosures.  Requires trustees deeds resulting from foreclosures of properties within common interest developments to be recorded within 30 days following sale.  Chapter 255, Statutes of 2012.
  
  
• AB 2475 (Committee on Veterans Affairs): Foreclosures.  Amends Section 408 of the Military and Veterans Code to extend the prohibition on foreclosures during the period of military service to nine months after the end of the military service period, instead of three.  Chapter 204, Statutes of 2012.
  
  
• AB 2476 (Committee on Veterans Affairs): Interest Limitations.  Amends Military and Veterans Code Section 405 to extend the 6% interest rate limitation to one year following the end of the military service period.  Chapter 101, Statutes of 2012.
  
  
• AB 2610 (Skinner): Unlawful Detainer.  Revises the required language in notices of sale relating to tenants rights, and extends the sunset date on such posting until 2019.  Chapter 562, Statutes of 2012.
  
  
• SB 1069 (Corbett): Deficiency Judgments.  Amends Code of Civil Procedure Section 580b to prohibit deficiency judgments following refinances, or refinances of refinances, except to the extent of new money provided to borrowers not used to satisfy prior obligations.  Chapter 64, Statutes of 2012.
  
  
• SB 1191 (Simitian): Tenants Rights.  Requires applicants for residential tenancies on properties for which an unrescinded notice of default has been recorded to be advised of that fact.  Chapter 566, Statutes of 2012.

The new Legislature will be sworn in to office on Monday, December 3, and will return to Sacramento in earnest on Monday, January 7, 2013.