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SB 1079 Changes Enacted

Michael Belote, Esq.,

After a tumultuous pandemic year in the Capitol, the California legislature is on fall recess until Monday, January 3, 2022.  As predicted, the 773 new laws enacted by the legislature and signed by Governor Newsom are almost double the number enacted last year, when the legislature was forced to close for over three months due to COVID.  At the same time, this year’s total is still hundreds less than in normal years, as legislators focused primarily on bills requiring action during the pandemic.

A fair amount of uncertainty exists concerning the legislature in 2022, which is the second year of the current 2021-2022 session.  Procedurally, it now appears that the Assembly will attempt a return to full normalcy, with staff members in their offices and fully open committee hearings. The Senate seems more cautious and may continue to permit staff to work from home.  This all depends upon the degree to which cold weather and resulting indoor activities causes a spike in COVID infection rates.

However “open” the session is, it will look radically different for one basic reason: the “annex” portion of the Capitol, which contains offices for the governor, lieutenant governor and legislators, is being torn down and rebuilt over the next four or five years, at least.   All of those individuals previously housed in the Capitol Annex have been moved to a new building south of the Capitol, known as the “swing space”,  while the Capitol itself goes through a long-overdue remodel.  So for the foreseeable future, no one will “walk the halls of the Capitol”.  Somehow “walking the halls of the swing space” does not have quite the same ring to it!

In terms of issues likely to arise next year of interest to UTA, one question is whether any legislator is interested in carrying a bill relating to loans and foreclosures.  There are 120 legislators between the state Senate and Assembly, and it would only take one to begin a discussion on the issue.  On the other hand, 2022 is inarguably different from the Great Recession, when large percentages of homeowners were underwater on their loan obligations.  Rates of delinquency and forbearance are fundamentally different from the last downturn, on both the residential and commercial sides. We will know more when the deadline for the introduction of new 2022 bills occurs on February 18.

To close out 2021, however, UTA is very proud to announce that many of our suggested clean-up changes to last year’s SB 1079 were enacted and signed into law by Governor Newsom. The changes were incorporated into AB 175, carried by the Assembly Budget Committee.  The 50-page bill is technically a “budget trailer bill”, which means that it took effect immediately upon the governor’s signature. However, and this is a critical point, the changes to SB 1079 specifically provide that they are effective on January 1, 2022.

Changes to SB 1079 enacted in AB 175 amend Civil Code sections 2924h and 2924m, and include the following:

– Lengthens the “relation back” period for recording trustee’s deeds after-sale from 18 to 21 days, and from 48 to 60 days if an intent to bid under SB 1079 is submitted within 15 days after the sale;

–  Clarifies that the affidavit or declaration presented to trustees by prospective owner-occupants must comply with the provisions of California Code of Civil Procedure Section 2015.5;

– Adds to the list of persons who may not be prospective owner-occupants, grantors of living trusts named in title to the property when the NOD was recorded; an employee, officer or director of the mortgagor or trustor; and persons with an ownership interest in the mortgagor, unless the mortgagor is a publicly-traded company;

– Requires a prospective owner-occupant who is the last and highest bidder at the trustee’s sale to submit the CCP Section 2015.5 affidavit or declaration to the trustee by 5:00 p.m. on the next business day following the sale;

– Specifies the manner of delivery to trustees of bids and notices of intent to bid, both of which must be accompanied by an affidavit specifying the eligibility status of the party;

– Requires persons submitting bids or notices of intent to bid to supply current telephone numbers and return mailing addresses to trustees;

– Clarifies that information that must be provided by trustees to persons deciding whether to bid or submit notices of intent to bid is limited to the date of sale, amount of the last and highest bid at the sale, and the address of the trustee for receiving documents.

As noted in the prior edition of UTA eNews, kudos are due to Michelle Mierzwa, Andrew Boylan, and other members of the UTA Legislative Committee for their work in identifying proposed changes to SB 1079.  We are also grateful to Senator Nancy Skinner and her staff, and the staff of the Assembly Judiciary Committee, for their collaboration on this year’s changes.


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