Michelle A. Meirzwa

By Michelle A. Meirzwa, Esq., Wright Finlay & Zak

UTA’s Legislative Committee has produced its 2022 Legislative ‘Wish List’ for California.

The Committee is working with Mike Belote of California Advocates to secure a sponsor and has submitted the Bill proposal to Legislative Counsel in Sacramento as of January 22, 2022.

1. UTA has drafted language addressing rights of judgment lienholders with respect to surplus funds resulting from non-judicial foreclosures. The proposal adds language to Civil Code section 2924j to clarify that judgment lien holders not entitled to notice of surplus funds are not prohibited from utilizing the available Code of Civil Procedure sections for enforcement of judgments against the surplus funds that would otherwise be disbursed to or on behalf of the borrower.

2. Last year, UTA drafted and promoted legislation in AB 175 which was signed into law, effective January 1, 2021, enacting much-needed clarifications to the SB 1079 post-auction bid process. This year, UTA seeks to further amend Civil Code section 2924m to make the following non-controversial changes:

– Clarify that if the 15th or 45th day falls on a weekend or holiday, bids will be accepted the following business day.

– Limit last-day bids to delivery via certified mail or overnight mail to eliminate the possibility of a second “live action” in the trustee’s office on the final day of bidding.

– Limit eligible bidders to a single bid amount to prohibit “step bid” instructions to the trustee.

– Require eligible tenant bidder to attach dated and signed copy of lease or rental agreement to eligibility affidavit.

– Confirm that hazard insurance coverage that was in effect on the date of the sale remains in effect through the date the sale is final following completion of post-auction bid process, despite credit bid of lender at live auction.

3. Potentially more controversial, but certainly of interest to trustees, UTA is also seeking to amend Civil Code section 2924m to propose a post-auction bidder non-refundable deposit and trustee compensation section. Additional possibilities include the potential to limit non-profit eligible bidders to those that qualify under IRS Code section 501(c)(3) and the potential for penalties against persons who fraudulently participate in the SB 1079 process.

Michelle A. Mierzwa is a Partner, Compliance, Licensing and Regulatory Division, with Wright Finlay & Zak. She serves as UTA’s Legislative Committee Chair. She can be reached at mmierzwa@wrightlegal.net.