CALIFORNIA HOMEOWNER'S BILL OF RIGHTS
2923.6.
(a) The Legislature finds and declares that any duty mortgage servicers
may have to maximize net present value under their pooling and servicing
agreements is owed to all parties in a loan pool, or to all investors under
a pooling and servicing agreement, not to any particular party in the loan
pool or investor under a pooling and servicing agreement, and that a
mortgage servicer acts in the best interests of all parties to the loan pool
or investors in the pooling and servicing agreement if it agrees to or
implements a loan modification or workout plan for which both of the
following apply:
- (1) The loan is in payment default, or payment default is reasonably
foreseeable.
- (2) Anticipated recovery under the loan modification or workout plan
exceeds the anticipated recovery through foreclosure on a net present
value basis.
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Borrower can bring claims under
CA
Civil Code § 2924.12.
comparative hardship, irreparable harm, and public interest.
See Yuk Lai Wycliffe Chan v. Lothridge, No. C
94-1827 SAW, 1994 WL 411723 (N.D. Cal. Aug. 5, 1994).
Plaintiff alleges various violations of the
California Homeowner’s Bill of Rights (“HBOR”) and the
Federal Fair Debt Collection Practices Act (“FDCPA”),
15 U.S.C. § 1692, as well as fraudulent misrepresentation.
Plaintiff additionally brings a claim to quiet title and a claim for
declaratory judgment. |
(b) It is the intent of the Legislature that the mortgage servicer offer the
borrower a loan modification or workout plan if such a modification or plan is
consistent with its contractual or other authority.
(c) If a borrower submits a complete application for a first lien loan
modification offered by, or through, the borrower’s mortgage servicer at least
five business days before a scheduled foreclosure sale, a mortgage servicer,
mortgagee, trustee, beneficiary, or authorized agent shall
not record a notice of
default or notice of sale, or
conduct a trustee’s sale, while the complete
first lien loan modification application
is pending.
A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall
not record a notice of default or notice of
sale or conduct a trustee’s sale until any of the following occurs:
- (1) The mortgage servicer makes a written determination that the borrower
is not eligible for a first lien loan modification, and any
appeal period pursuant to subdivision (d) has
expired.
- (2) The borrower does not accept an offered first lien loan modification
within 14 days of the offer.
- (3) The borrower accepts a written first lien loan modification, but
defaults on, or otherwise breaches the borrower’s obligations under, the first
lien loan modification.
(d) If the borrower’s application for a first lien loan modification is
denied, the borrower shall have at least 30 days from the date of the written
denial to appeal the denial and to provide
evidence that the mortgage servicer’s determination was in error.
(e) If the borrower’s application for a first lien loan modification is
denied, the mortgage servicer, mortgagee, trustee, beneficiary, or authorized
agent shall not record a notice of default
or, if a notice of default has already been recorded, record a
notice of sale or conduct a
trustee’s sale until the later of:
- (1) Thirty-one days after the borrower is notified in writing of the
denial.
- (2) If the borrower appeals the denial
pursuant to subdivision (d), the later of 15 days after the denial of the
appeal or 14 days after a first lien loan
modification is offered after appeal but
declined by the borrower, or, if a first lien loan modification is offered and
accepted after appeal, the date on which
the borrower fails to timely submit the first payment or otherwise breaches
the terms of the offer.
(f) Following the denial of a first lien
loan modification application, the mortgage
servicer shall send a written notice to the borrower identifying the
reasons for denial, including the following:
See
how this is used in a Temporary Restraining Order
- (1) The amount of time from the date of the denial letter in which the
borrower may request an appeal of the
denial of the first lien loan modification and instructions regarding how to
appeal the denial.
- (2) If the denial was based on
investor disallowance, the
specific reasons for the investor disallowance.
- (3) If the denial is the result of a
net present value
calculation, the monthly gross income and property value used to calculate the
net present value
and a statement that the borrower may obtain all of the inputs used in the net present value calculation
upon written request to the mortgage servicer.
- (4) If applicable, a finding that the borrower was previously offered a
first lien loan modification and failed to successfully make payments under
the terms of the modified loan.
- (5) If applicable, a description of other foreclosure prevention
alternatives for which the borrower may be eligible, and a list of the steps
the borrower must take in order to be considered for those options.
If the mortgage servicer has already approved the borrower for another
foreclosure prevention alternative, information necessary to complete the
foreclosure prevention alternative.
(g) In order to minimize the risk of borrowers submitting multiple
applications for first lien loan modifications for the purpose of delay, the
mortgage servicer shall not be obligated to evaluate applications from borrowers
who have been evaluated or afforded a fair opportunity to be evaluated
consistent with the requirements of this section, unless there has been a
material change in the borrower’s financial circumstances since the date of
the borrower’s previous application and that change is documented by the
borrower and submitted to the mortgage servicer.
(h) For purposes of this section, an application shall be deemed “complete”
when a borrower has supplied the mortgage servicer with all documents required
by the mortgage servicer within the reasonable timeframes specified by the
mortgage servicer.
(i) Subdivisions (c) to (h), inclusive, shall not apply to entities described
in subdivision (b) of Section 2924.18.
(j) This section shall apply only to mortgages or deeds of trust described in
Section 2924.15.
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2924.12.
(a)
(1) If a trustee’s deed upon sale has
not been recorded, a borrower may bring an action for
injunctive relief to enjoin a
material violation of Section
2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or
2924.17.
(2) Any injunction shall remain in place and any
trustee’s sale shall be enjoined until the court determines that
the mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent
has corrected and remedied the violation
or violations giving rise to the action for injunctive relief. An enjoined
entity may move to dissolve an injunction
based on a showing that the material
violation has been corrected and remedied.
(b) After a trustee’s deed upon sale has
been recorded, a mortgage servicer, mortgagee, trustee, beneficiary, or
authorized agent shall be liable to a borrower for actual
economic damages pursuant to Section
3281, resulting from a
material violation
of Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10,
2924.11, or 2924.17 by that mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent where the violation was not corrected and
remedied prior to the recordation of the trustee’s deed upon sale.
If the court finds that the material
violation was intentional or reckless, or resulted from
willful misconduct by a mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent, the court may award the borrower the greater
of treble actual damages or statutory damages of fifty thousand dollars ($50,000).
(c) A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent
shall not be liable for any violation that it has corrected and remedied prior
to the recordation of the trustee’s deed upon sale,
or that has been corrected and remedied by third parties working on its behalf
prior to the recordation of the trustee’s deed upon
sale.
(d) A violation of Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11,
or 2924.17 by a person licensed by the Department of
Business Oversight or the Department of Real
Estate shall be deemed to be a violation
of that person’s licensing law.
(e) No violation of this article shall affect the validity of a sale in favor
of a bona fide purchaser and any of its encumbrancers for value without notice.
(f) A third-party encumbrancer shall not be relieved of liability resulting
from violations of Section 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or
2924.17 committed by that third-party encumbrancer, that occurred prior to the
sale of the subject property to the bona fide purchaser.
(g) The rights, remedies, and procedures provided by this section are in
addition to and independent of any other rights, remedies, or procedures under
any other law. Nothing in this section shall be construed to alter, limit, or
negate any other rights, remedies, or procedures provided by law.
(h) A court may award a prevailing borrower reasonable
attorney’s fees and costs in an action brought
pursuant to this section. A borrower shall be deemed to have prevailed for
purposes of this subdivision if the borrower obtained
injunctive relief or was awarded damages pursuant to this section. (TRO)
(i) This section shall not apply to entities described in subdivision (b) of
Section 2924.18.
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2923.55.
(a) A mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent
shall not record a notice of default
pursuant to Section 2924 until all of the
following:
- (1) The mortgage servicer has satisfied the requirements of paragraph (1)
of subdivision (b).
- (2) Either 30 days after initial contact is made as required by paragraph
(2) of subdivision (b) or 30 days after satisfying the due diligence
requirements as described in subdivision (f).
- (3) The mortgage servicer complies with subdivision (c) of Section 2923.6,
if the borrower has provided a complete application as defined in subdivision
(h) of Section 2923.6.
(b)
(1) As specified in
subdivision (a), a mortgage servicer shall
send the following information in writing to the borrower:
(A) A statement that if the borrower is a servicemember or a dependent of
a servicemember, he or she may be entitled to certain protections under the
federal Servicemembers Civil Relief Act (50 U.S.C. Sec. 3901 et seq.)
regarding the servicemember’s interest rate and the risk of foreclosure, and
counseling for covered servicemembers that is available at agencies such as
Military OneSource and Armed Forces Legal Assistance.
(B) A statement that the borrower may request the following:
- (i) A copy of the borrower’s promissory note
or other evidence of indebtedness.
- (ii) A copy of the borrower’s deed of trust
or mortgage.
- (iii) A copy of any assignment, if
applicable, of the borrower’s mortgage or deed of
trust required to demonstrate the
right of the mortgage servicer to foreclose.
- (iv) A copy of the borrower’s payment history
since the borrower was last less than 60 days past due.
(2) A mortgage servicer shall contact the borrower in person or by
telephone in order to assess the borrower’s financial situation and explore
options for the borrower to avoid foreclosure. During the initial contact, the
mortgage servicer shall advise the borrower that he or she has the right to
request a subsequent
meeting and, if requested, the mortgage
servicer shall schedule the meeting to occur within
14 days. The assessment of the borrower’s financial situation and
discussion of options may occur during the first contact, or at the subsequent
meeting scheduled for that purpose.
In either case, the borrower shall be provided the toll-free telephone number
made available by the United States Department of Housing and Urban
Development (HUD) to find a HUD-certified
housing counseling agency. Any meeting may occur telephonically.
(c) A notice of default recorded pursuant
to Section 2924 shall include a declaration
that the mortgage servicer has contacted the borrower, has tried with due
diligence to contact the borrower as required by this section, or that no
contact was required because the individual did not meet the definition of
“borrower” pursuant to subdivision (c) of Section 2920.5.
(d) A mortgage servicer’s loss mitigation personnel may participate by telephone
during any contact required by this section.
(e) A borrower may designate, with consent given in writing, a HUD-certified
housing counseling agency, attorney, or
other adviser to discuss with the mortgage servicer, on the borrower’s behalf,
the borrower’s financial situation and options for the borrower to avoid
foreclosure.
That contact made at the direction of the borrower shall satisfy the contact
requirements of paragraph (2) of subdivision (b).
Any foreclosure prevention alternative offered at the meeting by the mortgage
servicer is subject to approval by the borrower.
(f) A notice of default may be recorded
pursuant to Section 2924 when a mortgage servicer has not contacted a
borrower as required by paragraph (2) of subdivision (b), provided that the
failure to contact the borrower occurred despite the due diligence of the
mortgage servicer.
For purposes of this section, “due diligence” shall require and mean all of the
following:
- (1) A mortgage servicer shall first attempt to contact a borrower by
sending a first-class letter that includes the toll-free telephone number
made available by HUD to find a HUD-certified housing counseling agency.
- (2)
- (A) After the letter has been sent, the mortgage servicer shall
attempt to contact the borrower by telephone at least three times at
different hours and on different days. Telephone calls shall be made to
the primary telephone number on file.
- (B) A mortgage servicer may attempt to contact a borrower using an
automated system to dial borrowers, provided that, if the telephone call
is answered, the call is connected to a live representative of the
mortgage servicer.
- (C) A mortgage servicer satisfies the telephone contact requirements
of this paragraph:
-
- (i) If it determines, after attempting contact pursuant to this
paragraph, that the borrower’s primary telephone number and secondary
telephone number or numbers on file, if any, have been disconnected.
- (ii) If the borrower or his or her authorized agent notifies the
mortgage servicer in writing to cease further communication with the
borrower. The cease communication notification shall explicitly pertain
to the mortgage loan account to be effective. The cease communication
notification shall be effective until the borrower or his or her
authorized agent rescinds it in writing.
- (3) If the borrower does not respond within two weeks after the
telephone call requirements of paragraph (2) have been satisfied, the
mortgage servicer shall then send a certified letter, with return receipt
requested, that includes the toll-free telephone number made available by
HUD to find a HUD-certified housing counseling
agency.
- (4) The mortgage servicer shall provide a means for the borrower to
contact it in a timely manner, including a toll-free telephone number that
will provide access to a live representative during business hours.
- (5) The mortgage servicer has posted a prominent link on the homepage of
its Internet Web site, if any, to the following information:
- (A) Options that may be available to borrowers who are unable to
afford their mortgage payments and who wish to avoid foreclosure, and
instructions to borrowers advising them on steps to take to explore those
options.
- (B) A list of financial documents borrowers should collect and be
prepared to present to the mortgage servicer when discussing options for
avoiding foreclosure.
- (C) A toll-free telephone number for borrowers who wish to discuss
options for avoiding foreclosure with their mortgage servicer.
- (D) The toll-free telephone number made available by HUD to find a
HUD-certified housing counseling agency.
(g) This section shall not apply to entities described in subdivision (b) of
Section 2924.18.
(h) This section shall apply only to mortgages or deeds of trust described in
Section 2924.15.
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2923.7.
(a) When a borrower requests a foreclosure prevention
alternative, the mortgage servicer shall promptly establish a single point of contact and provide to the borrower
one or more direct means of communication with the single point of contact.
(b) The single point of contact shall be responsible for doing all of the
following:
- (1) Communicating the process by which a borrower may apply for an
available foreclosure prevention alternative and the deadline for any required
submissions to be considered for these options.
- (2) Coordinating receipt of all documents associated with available
foreclosure prevention alternatives and notifying the borrower of any missing
documents necessary to complete the application.
- (3) Having access to current information and personnel sufficient to
timely, accurately, and adequately inform the borrower of the current status
of the foreclosure prevention alternative.
- (4) Ensuring that a borrower is considered for all foreclosure prevention
alternatives offered by, or through, the mortgage servicer, if any.
- (5) Having access to individuals with the ability and authority to stop
foreclosure proceedings when necessary.
(c) The single point of contact shall remain assigned to the borrower’s
account until the mortgage servicer determines that all loss mitigation options
offered by, or through, the mortgage servicer have been exhausted or
the borrower’s account becomes current.
(d) The mortgage servicer shall ensure that a single point of contact refers and
transfers a borrower to an appropriate supervisor upon request of the borrower,
if the single point of contact has a supervisor.
(e) For purposes of this section, “single point of contact” means an individual
or team of personnel each of whom has the ability and authority to perform the
responsibilities described in subdivisions (b) to (d), inclusive. The mortgage
servicer shall ensure that each member of the team is knowledgeable about the
borrower’s situation and current status in the alternatives to foreclosure
process.
(f) This section shall apply only to mortgages or deeds of trust described in
Section 2924.15.
(g)
- (1) This section shall not apply to a depository institution chartered
under state or federal law, a person licensed pursuant to Division 9
(commencing with Section 22000) or Division 20 (commencing with Section 50000)
of the Financial Code, or a person licensed pursuant to Part 1 (commencing
with Section 10000) of Division 4 of the Business and Professions Code, that,
during its immediately preceding annual reporting period, as established with
its primary regulator, foreclosed on 175 or fewer residential real properties,
containing no more than four dwelling units, that are located in California.
- (2) Within three months after the close of any calendar year or annual
reporting period as established with its primary regulator during which an
entity or person described in paragraph (1) exceeds the threshold of 175
specified in paragraph (1), that entity shall notify its primary regulator, in
a manner acceptable to its primary regulator, and any mortgagor or trustor who
is delinquent on a residential mortgage loan serviced by that entity of the
date on which that entity will be subject to this section, which date shall be
the first day of the first month that is six months after the close of the
calendar year or annual reporting period during which that entity exceeded the
threshold.
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2924.8 Notice of Foreclosure Sale
Dear resident of property subject to foreclosure sale:
Foreclosure process has begun on this property, which may affect your right to
continue to live in this property.
Twenty days or more after the date of this notice, this property may be sold
at foreclosure.
If you are renting this property, the new property owner may either
give you a new lease or rental agreement or provide you with a 90-day eviction
notice. You may have a right to stay in your home for longer than 90 days. If
you have a fixed-term lease, the new owner must honor the lease unless the new
owner will occupy the property as a primary residence or in other limited
circumstances. Also, in some cases and in some cities with a “just cause for
eviction” law, you may not have to move at all. All rights and obligations under
your lease or tenancy, including your obligation to pay rent, will continue
after the foreclosure sale. You may wish to contact a lawyer or your local legal
aid office or housing counseling agency to discuss any rights you may have.
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2924.9.
(a) Unless a borrower has previously exhausted the first lien loan
modification process offered by, or through, his or her mortgage servicer
described in Section 2923.6, within five business days
after recording a notice of default
pursuant to Section 2924, a mortgage servicer that offers one or more
foreclosure prevention alternatives shall send
a written communication to the borrower that includes all of the following
information:
- (1) That the borrower may be evaluated for a foreclosure prevention
alternative or, if applicable, foreclosure prevention alternatives.
- (2) Whether an application is required to be submitted by the borrower in
order to be considered for a foreclosure prevention alternative.
- (3) The means and process by which a borrower may obtain an application
for a foreclosure prevention alternative.
- (b) This section shall not apply to entities described in subdivision
(b) of Section 2924.18.
- (c) This section shall apply only to mortgages or deeds of trust
described in Section 2924.15.
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2924.10.
(a) When a borrower submits a complete first lien
modification application or any document in connection with a first
lien modification application, the mortgage servicer shall provide written
acknowledgment of the receipt of the documentation within five business days of
receipt. In its initial acknowledgment of receipt of the loan modification
application, the mortgage servicer shall include the following information:
- (1) A description of the loan modification process, including an estimate
of when a decision on the loan modification will be made after a complete
application has been submitted by the borrower and the length of time the
borrower will have to consider an offer of a loan modification or other
foreclosure prevention alternative.
- (2) Any deadlines, including deadlines to submit missing documentation,
that would affect the processing of a first lien loan modification
application.
- (3) Any expiration dates for submitted documents.
- (4) Any deficiency in the borrower’s first lien
loan modification application.
- (b) For purposes of this section, a borrower’s first lien
loan modification application shall be
deemed to be “complete” when a borrower has supplied the mortgage servicer
with all documents required by the mortgage servicer within the reasonable
timeframes specified by the mortgage servicer.
- (c) This section shall not apply to entities described in subdivision
(b) of Section 2924.18.
- (d) This section shall apply only to mortgages or deeds of trust
described in Section 2924.15.
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2924.11.
(a) If a foreclosure prevention alternative is approved in writing prior to
the recordation of a notice of default, a mortgage servicer, mortgagee, trustee,
beneficiary, or authorized agent shall not record a
notice of default under either of the following circumstances:
- (1) The borrower is in compliance with the terms of a
written trial or permanent
loan modification, forbearance, or
repayment plan.
- (2) A foreclosure prevention alternative has been approved in writing by
all parties, including, for example, the first lien investor, junior
lienholder, and mortgage insurer, as applicable, and proof of funds or
financing has been provided to the servicer.
(b) If a foreclosure prevention alternative is approved in writing after the
recordation of a notice of default, a
mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent shall
not record a notice of sale or conduct a trustee’s sale under either of the following
circumstances:
- (1) The borrower is in compliance with the terms of a
written trial or permanent loan modification,
forbearance, or repayment plan.
- (2) A foreclosure prevention alternative has been approved in writing by
all parties, including, for example, the first lien investor, junior
lienholder, and mortgage insurer, as applicable, and proof of funds or
financing has been provided to the servicer.
(c) When a borrower accepts an offered first lien
loan modification or other foreclosure prevention alternative, the
mortgage servicer shall provide the borrower with a copy of the fully executed
loan modification agreement or agreement evidencing the foreclosure prevention
alternative following receipt of the executed copy from the borrower.
(d) A mortgagee, beneficiary, or authorized agent shall record a
rescission of a notice
of default or cancel a pending trustee’s
sale, if applicable, upon the borrower executing a
permanent foreclosure prevention alternative.
In the case of a short sale, the
cancellation of the pending trustee’s sale
shall occur when the short sale has been
approved by all parties and proof of funds or financing has been provided to the
mortgagee, beneficiary, or authorized agent.
(e) The mortgage servicer shall not charge any
application, processing, or other fee for a first lien
loan modification or other foreclosure
prevention alternative.
(f) The mortgage servicer shall not collect any late
fees for periods during which
- a complete first lien loan modification
application is under consideration or
- a denial is being appealed, the
borrower is making timely modification payments, or
- a foreclosure prevention alternative is being evaluated or
exercised.
(g) If a borrower has been approved in writing for a first lien loan
modification or other foreclosure prevention alternative, and the servicing of
that borrower’s loan is transferred or sold to another mortgage servicer, the
subsequent mortgage servicer shall continue to honor any previously approved
first lien loan modification or other foreclosure prevention alternative, in
accordance with the provisions of the act that added this section.
(h) This section shall apply only to mortgages or deeds of trust described in
Section 2924.15.
(i) This section shall not apply to entities described in subdivision (b) of
Section 2924.18.
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2924.17.
(a) A declaration recorded pursuant to Section 2923.5 or pursuant to Section
2923.55, a notice of default, notice of sale,
assignment of a deed of trust, or substitution of trustee recorded by
or on behalf of a mortgage servicer in connection with a foreclosure subject to
the requirements of Section 2924, or a declaration or affidavit filed in any
court relative to a foreclosure proceeding shall be accurate and complete and
supported by competent and reliable evidence.
(b) Before recording or filing any of the documents described in subdivision
(a), a mortgage servicer shall ensure that it has reviewed competent and
reliable evidence to substantiate the borrower’s default and the right to
foreclose, including the borrower’s loan status and loan information.
(c) Any mortgage servicer that engages in multiple and repeated uncorrected
violations of subdivision (b) in recording documents or filing documents in any
court relative to a foreclosure proceeding shall be liable for a civil penalty
of up to seven thousand five hundred dollars ($7,500) per mortgage or deed of
trust in an action brought by a government entity identified in Section 17204 of
the Business and Professions Code, or in an administrative proceeding brought by
the Department of Business Oversight or the Department of Real Estate against a
respective licensee, in addition to any other remedies available to these
entities.
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2923.3
(a) With respect to residential real property containing no more than four
dwelling units, a mortgagee, trustee, beneficiary, or authorized agent shall
provide to the mortgagor or trustor a copy of the recorded
notice of default with an attached separate
summary document of the notice of default in
English and the languages described in Section 1632, as set forth in subdivision
(c), and
a copy of the recorded notice of sale with
an attached separate summary document of the information required to be
contained in the notice of sale in English and the languages described in
Section 1632, as set forth in subdivision (d).
These summaries are not required to be recorded or published.
This subdivision shall become operative on April 1, 2013, or 90 days following
the issuance of the translations by the Department of Business Oversight
pursuant to subdivision (b), whichever is later.
(b)
- (1) The Department of Business Oversight
shall provide a standard translation of the statement in paragraph (1) of
subdivision (c), and of the summary of the notice of default, as set forth in
paragraph (2) of subdivision (c) in the languages described in Section 1632.
- (2) The Department of Business Oversight
shall provide a standard translation of the statement in paragraph (1) of
subdivision (d), and of the summary of the notice of sale, as set forth in
paragraph (2) of subdivision (d).
- (3) The department shall make the translations described in paragraphs (1)
and (2) available without charge on its Internet Web site. Any mortgagee,
trustee, beneficiary, or authorized agent who provides the
department’s translations in the manner
prescribed by this section shall be in compliance with this section.
(c)
- (1) The following statement shall appear in the languages described in
Section 1632 at the beginning of the notice of default:
NOTE: THERE IS A SUMMARY OF THE INFORMATION IN THIS DOCUMENT ATTACHED.
- (2) The following summary of key information shall be attached to the copy
of the notice of default provided to the mortgagor or trustor:
SUMMARY OF KEY INFORMATION
The attached notice of default was sent to
[name of the trustor], in relation to [description of the property that
secures the mortgage or deed of trust in default].
This property may be sold to satisfy your obligation and any other obligation
secured by the deed of trust or
mortgage that is in default.
[Trustor] has, as described in the notice of default, breached the mortgage
or deed of trust on the property described above.
IMPORTANT NOTICE: IF YOUR PROPERTY IS IN FORECLOSURE BECAUSE YOU ARE BEHIND IN
YOUR PAYMENTS, IT MAY BE SOLD WITHOUT ANY COURT ACTION, and you may have the
legal right to bring your account in good standing by
paying all of your past due payments plus permitted costs and expenses
within the time permitted by law for reinstatement
of your account, which is normally five business days
prior to the date set for the sale of your property.
No sale date may be set until approximately 90 days
from the date the attached notice of default may be recorded (which date of
recordation appears on the notice).
This amount is ____________ as of ___(date)____________and will increase until
your account becomes current.
While your property is in foreclosure, you still must pay other obligations
(such as insurance and
taxes) required by your note and deed of
trust or mortgage.
If you fail to make future payments on the loan, pay taxes on the property,
provide insurance on the property, or pay other obligations as required in the
note and deed of trust or mortgage, the beneficiary or mortgagee may insist
that you do so in order to reinstate your account in good standing.
In addition, the beneficiary or mortgagee may require as a condition to
reinstatement that you provide reliable written
evidence that you paid all senior liens, property taxes, and hazard insurance
premiums.
Upon your written request, the beneficiary or mortgagee will give you a
written itemization of the entire amount you must pay.
You may not have to pay the entire unpaid portion of your account, even
though full payment was demanded, but you must pay all amounts in default at
the time payment is made.
However, you and your beneficiary or mortgagee may mutually agree in writing
prior to the time the notice of sale is
posted (which may not be earlier than three months
after this notice of default is
recorded) to, among other things,
(1) provide
additional time in which to cure the default by transfer of the property or
otherwise; or
(2) establish a
schedule of payments in order to cure your default; or both (1) and (2).
Following the expiration of the time period
referred to in the first paragraph of this notice, unless the obligation being
foreclosed upon or a separate written agreement between you and your creditor
permits a longer period, you have only the legal
right to stop the sale of your property by paying the entire amount demanded
by your creditor.
To find out the amount you must pay, or to arrange for payment to stop the
foreclosure, or if your property is in foreclosure for any other reason,
contact:
____________________________________
(Name of beneficiary or mortgagee)
____________________________________
(Mailing address)
____________________________________
(Telephone)
If you have any questions, you should contact a lawyer or the governmental
agency which may have insured your loan.
Notwithstanding the fact that your property is in foreclosure, you may offer
your property for sale, provided the sale is concluded prior to the conclusion
of the foreclosure.
Remember, YOU MAY LOSE LEGAL RIGHTS IF YOU DO NOT TAKE PROMPT ACTION.
If you would like additional copies of this summary, you may obtain them by
calling [insert telephone number].
(d)
- (1) The following statement shall appear in the languages described in
Section 1632 at the beginning of the notice of sale:
NOTE: THERE IS A SUMMARY OF THE INFORMATION IN THIS DOCUMENT ATTACHED.
- (2) The following summary of key information shall be attached to the copy
of the notice of sale provided to the mortgagor or trustor:
SUMMARY OF KEY INFORMATION
The attached notice of sale was sent to [trustor], in relation to [description
of the property that secures the mortgage or deed of trust in default].
YOU ARE IN DEFAULT UNDER A (Deed of trust or mortgage) DATED ____. UNLESS YOU
TAKE ACTION TO PROTECT YOUR PROPERTY, IT MAY BE SOLD AT A PUBLIC SALE.
IF YOU NEED AN EXPLANATION OF THE NATURE OF THE PROCEEDING AGAINST YOU, YOU
SHOULD CONTACT A LAWYER.
The total amount due in the notice of sale is ____.
Your property is scheduled to be sold on [insert date and time of sale] at
[insert location of sale].
However, the sale date shown on the attached notice of sale may be postponed
one or more times by the mortgagee, beneficiary, trustee, or a court, pursuant
to Section 2924g of the California Civil Code. The law requires that
information about trustee sale postponements be made available to you and to
the public, as a courtesy to those not present at the sale. If you wish to
learn whether your sale date has been postponed, and, if applicable, the
rescheduled time and date for the sale of this property, you may call
[telephone number for information regarding the trustee’s sale] or visit this
Internet Web site [Internet Web site address for information regarding the
sale of this property], using the file number assigned to this case [case file
number]. Information about postponements that are very short in duration or
that occur close in time to the scheduled sale may not immediately be
reflected in the telephone information or on the Internet Web site. The best
way to verify postponement information is to attend the scheduled sale.
If you would like additional copies of this summary, you may obtain them by
calling [insert telephone number].
(e) Failure to provide these summaries to the mortgagor or trustor shall have
the same effect as if the notice of default or notice of sale were incomplete or
not provided.
(f) This section sets forth a requirement for translation in languages other
than English, and a document complying with the provisions of this section may
be recorded pursuant to subdivision (b) of Section 27293 of the Government Code.
A document that complies with this section shall not be rejected for recordation
on the ground that some part of the document is in a language other than
English.
=============== ====================
======================= ===========================
CIVIL CODE - CIV
DIVISION 3. OBLIGATIONS [1427 - 3273.16]
PART 4. OBLIGATIONS ARISING FROM PARTICULAR TRANSACTIONS [1738 - 3273.16]
TITLE 14. LIEN [2872 - 3081]
CHAPTER 2. Mortgage [2920 - 2967]
ARTICLE 1. Mortgages in General [2920 - 2944.10]
(a) As used in this section:
-
(1) “Beneficiary” means a mortgagee or beneficiary of a mortgage or deed of
trust, or his or her assignees.
-
(2) “Beneficiary statement” means a written statement showing:
-
(A) The amount of the unpaid balance of the obligation secured by the
mortgage or deed of trust and the interest rate, together with the total
amounts, if any, of all overdue installments of either principal or
interest, or both.
-
(B) The amounts of periodic payments, if any.
-
(C) The date on which the obligation is due in whole or in part.
-
(D) The date to which real estate taxes and special assessments have been
paid to the extent the information is known to the beneficiary.
-
(E) The amount of hazard insurance in effect and the term and premium of
that insurance to the extent the information is known to the beneficiary.
-
(F) The amount in an account, if any, maintained for the accumulation of
funds with which to pay taxes and insurance premiums.
-
(G) The nature and, if known, the amount of any additional charges, costs,
or expenses paid or incurred by the beneficiary which have become a lien on
the real property involved.
-
(H) Whether the obligation secured by the mortgage or deed of trust can or
may be transferred to a new borrower.
-
(3) “Delivery” means depositing or causing to be deposited in the United
States mail an envelope with postage prepaid, containing a copy of the
document to be delivered, addressed to the person whose name and address is
set forth in the demand therefor. The document may also be transmitted by
facsimile machine to the person whose name and address is set forth in the
demand therefor.
-
(4) “Entitled person” means the trustor or mortgagor of, or his or her
successor in interest in, the mortgaged or trust property or any part thereof,
any beneficiary under a deed of trust, any person having a subordinate lien or
encumbrance of record thereon, the escrowholder licensed as an agent pursuant
to Division 6 (commencing with Section 17000) of the Financial Code, or the
party exempt by virtue of Section 17006 of the Financial Code who is acting as
the escrowholder.
-
(5) “Payoff demand statement” means a written statement, prepared in response
to a written demand made by an entitled person or authorized agent, setting
forth the amounts required as of the date of preparation by the beneficiary,
to fully satisfy all obligations secured by the loan that is the subject of
the payoff demand statement. The written statement shall include information
reasonably necessary to calculate the payoff amount on a per diem basis for
the period of time, not to exceed 30 days, during which the per diem amount is
not changed by the terms of the note.
(b)
-
(1) A beneficiary, or his or her authorized agent, shall, within 21 days of
the receipt of a written demand by an entitled person or his or her authorized
agent, prepare and deliver to the person demanding it a true, correct, and
complete copy of the note or other
evidence of indebtedness with any modification thereto, and a beneficiary
statement.
-
(2) A request pursuant to this subdivision may be made by an entitled person
or his or her authorized agent at any time before, or within two months after,
the recording of a notice of default under a mortgage or deed of trust, or may
otherwise be made more than 30 days prior to the entry of the decree of
foreclosure.
(c) A beneficiary, or his or her authorized agent, shall, on the written demand
of an entitled person, or his or her authorized agent, prepare and deliver a
payoff demand statement to the person
demanding it within 21 days of the receipt of the demand. However, if the loan
is subject to a recorded notice of default
or a filed complaint commencing a judicial foreclosure,
the beneficiary shall have no obligation to prepare and deliver this statement
as prescribed unless the written demand is received prior to the first
publication of a notice of sale or the
notice of the first date of sale established by
a court.
(d)
-
(1) A beneficiary statement or
payoff demand statement may be relied upon by
the entitled person or his or her authorized agent in accordance with its
terms, including with respect to the payoff demand
statement reliance for the purpose of establishing the amount
necessary to pay the obligation in full. If the beneficiary notifies the
entitled person or his or her authorized agent of any amendment to the
statement, then the amended statement may be relied upon by the entitled
person or his or her authorized agent as provided in this subdivision.
-
(2) If notification of any amendment to the statement is not given in writing,
then a written amendment to the statement shall be delivered to the entitled
person or his or her authorized agent no later than the next business day
after notification.
-
(3) Upon the dates specified in subparagraphs (A) and (B) any sums that were
due and for any reason not included in the statement or amended statement
shall continue to be recoverable by the beneficiary as an unsecured obligation
of the obligor pursuant to the terms of the note and existing provisions of
law.
-
(A) If the transaction is voluntary, the entitled party or his or her
authorized agent may rely upon the statement or amended statement upon the
earlier of (i) the close of escrow, (ii) transfer of title, or (iii)
recordation of a lien.
-
(B) If the loan is subject to a recorded notice of default or a filed
complaint commencing a judicial foreclosure, the entitled party or his or
her authorized agent may rely upon the statement or amended statement upon
the acceptance of the last and highest bid at a trustee’s sale or a court
supervised sale.
(e) The following provisions apply to a demand for either a
beneficiary statement or a
payoff demand statement:
-
(1) If an entitled person or his or her authorized agent requests a statement
pursuant to this section and does not specify a beneficiary statement or a
payoff demand statement the beneficiary shall treat the request as a request
for a payoff demand statement.
-
(2) If the entitled person or the entitled person’s authorized agent includes
in the written demand a specific request for a copy of the deed of trust or
mortgage, it shall be furnished with the written statement at no additional
charge.
-
(3) The beneficiary may, before delivering a statement, require reasonable
proof that the person making the demand is, in fact, an entitled person or an
authorized agent of an entitled person, in which event the beneficiary shall
not be subject to the penalties of this section until 21 days after receipt of
the proof herein provided for. A statement in writing signed by the entitled
person appointing an authorized agent when delivered personally to the
beneficiary or delivered by registered return receipt mail shall constitute
reasonable proof as to the identity of an agent. Similar delivery of a policy
of title insurance, preliminary report issued by a title company, original or
photographic copy of a grant deed or certified copy of letters testamentary,
guardianship, or conservatorship shall constitute reasonable proof as to the
identity of a successor in interest, provided the person demanding a statement
is named as successor in interest in the document.
-
(4) If a beneficiary for a period of 21 days after receipt of the written
demand willfully fails to prepare and deliver the statement, he or she is
liable to the entitled person for all damages which he or she may sustain by
reason of the refusal and, whether or not actual damages are sustained, he or
she shall forfeit to the entitled person the sum of three hundred dollars
($300). Each failure to prepare and deliver the statement, occurring at a time
when, pursuant to this section, the beneficiary is required to prepare and
deliver the statement, creates a separate cause of action, but a judgment
awarding an entitled person a forfeiture, or damages and forfeiture, for any
failure to prepare and deliver a statement bars recovery of damages and
forfeiture for any other failure to prepare and deliver a statement, with
respect to the same obligation, in compliance with a demand therefor made
within six months before or after the demand as to which the award was made.
For the purposes of this subdivision, “willfully” means an intentional failure
to comply with the requirements of this section without just cause or excuse.
-
(5) If the beneficiary has more than one branch, office, or other place of
business, then the demand shall be made to the branch or office address set
forth in the payment billing notice or payment book, and the statement, unless
it specifies otherwise, shall be deemed to apply only to the unpaid balance of
the single obligation named in the request and secured by the mortgage or deed
of trust which is payable at the branch or office whose address appears on the
aforesaid billing notice or payment book.
-
(6) The beneficiary may make a charge not to exceed thirty dollars ($30) for
furnishing each required statement. The provisions of this paragraph shall not
apply to mortgages or deeds of trust insured by the Federal Housing
Administrator or guaranteed by the Administrator of Veterans Affairs.
(f) The preparation and delivery of a beneficiary statement or a payoff demand
statement pursuant to this section shall not change a date of sale established
pursuant to Section 2924g.
(g) This section shall become operative on January 1, 2014.
=============== ====================
======================= ===========================
FEDERAL LAW
12 CFR § 1024.41 - Loss mitigation procedures.
(a) Enforcement and limitations. A borrower may enforce the provisions
of this section pursuant to section 6(f) of RESPA (12 U.S.C. 2605(f)). Nothing
in § 1024.41 imposes a duty on a servicer to provide any borrower with any
specific loss mitigation option. Nothing in § 1024.41 should be construed to
create a right for a borrower to enforce the terms of any agreement between a
servicer and the owner or assignee of a mortgage loan, including with respect to
the evaluation for, or offer of, any loss mitigation option or to eliminate any
such right that may exist pursuant to applicable law.
(b) Receipt of a loss mitigation application –
(1) Complete loss mitigation application. A complete
loss mitigation application means an application in connection with which a
servicer has received all the information that the servicer requires from a
borrower in evaluating applications for the loss mitigation options available
to the borrower. A servicer shall exercise reasonable diligence in obtaining
documents and information to complete a loss mitigation application.
(2) Review of loss mitigation application submission -
(i) Requirements. If a servicer receives a loss
mitigation application 45 days or more before a foreclosure sale, a servicer
shall:
(A) Promptly upon receipt of a loss mitigation
application, review the loss mitigation application to determine if the
loss mitigation application is complete; and
(B) Notify the borrower in writing within 5 days (excluding legal
public holi days, Satur days, and Sun days) after receiving the loss
mitigation application that the servicer acknowledges receipt of the loss
mitigation application and that the servicer has determined that the loss
mitigation application is either complete
or incomplete.
If a loss mitigation application is incomplete,
the notice shall state the additional documents and information the
borrower must submit to make the loss mitigation application
complete and the applicable date pursuant
to paragraph (b)(2)(ii) of this section.
The notice to the borrower shall include a statement that the borrower
should consider contacting servicers of any other mortgage loans secured
by the same property to discuss available loss mitigation options.
(ii) Time period disclosure. The notice required
pursuant to paragraph (b)(2)(i)(B) of this section must include a reasonable
date by which the borrower should submit the documents and information
necessary to make the loss mitigation application complete.
(3) Determining protections. To the extent a determination of whether
protections under this section apply to a borrower is made on the basis of
the number of days between when a complete loss mitigation application is
received and when a foreclosure sale occurs, such determination shall be
made as of the date a complete loss mitigation application is received.
(c) Evaluation of loss mitigation applications –
(1) Complete loss
mitigation application. Except as provided in paragraph (c)(4)(ii) of this
section, if a servicer receives a complete loss mitigation application more
than 37 days before a foreclosure sale, then, within 30 days of receiving the
complete loss mitigation application, a servicer shall:
(i) Evaluate the borrower
for all
loss mitigation options available to the
borrower; and
(ii) Provide the borrower with a notice in writing stating the servicer's
determination of which loss mitigation
options, if any, it will offer to the borrower on behalf of the owner or
assignee of the mortgage. The servicer shall include in this notice the
amount of time the borrower has to accept or reject an offer of a
loss mitigation program as provided for in
paragraph (e) of this section, if applicable, and a notification, if
applicable, that the borrower has the right to appeal the denial of any loan
modification option as well as the amount of time the borrower has to file
such an appeal and any requirements for making an appeal, as provided for in
paragraph (h) of this section.
(2) Incomplete
loss mitigation application evaluation -
(i) In general. Except as set forth in
paragraphs (c)(2)(ii), (iii), and (v) of this section,
a servicer shall not evade the requirement to evaluate
a complete loss
mitigation application for all loss mitigation options available to the
borrower by offering a loss mitigation option based upon an
evaluation of any information provided by a borrower in connection with an
incomplete loss mitigation application.
(ii) Reasonable time. Notwithstanding paragraph
(c)(2)(i) of this section, if a servicer has exercised reasonable diligence
in obtaining documents and information to complete a loss mitigation
application, but a loss mitigation application remains incomplete for a
significant period of time under the circumstances without further progress
by a borrower to make the loss mitigation application complete, a servicer
may, in its discretion, evaluate an incomplete loss mitigation application
and offer a borrower a loss mitigation option. Any such evaluation and offer
is not subject to the requirements of this section and shall not constitute
an evaluation of a single complete loss mitigation application for purposes
of paragraph (i) of this section.
(iii) Short-term loss mitigation options.
Notwithstanding paragraph (c)(2)(i) of this section, a servicer may offer a
short-term payment forbearance program or a short-term
repayment plan to a borrower based upon an
evaluation of an incomplete loss
mitigation application.
Promptly after offering a payment forbearance
program or a repayment plan
under this paragraph (c)(2)(iii), unless the
borrower has rejected the offer, the servicer must provide the
borrower a written notice stating the specific payment terms and duration of
the program or plan, that the servicer offered the program or plan based on
an evaluation of an incomplete
application, that other loss mitigation options may be available, and that
the borrower has the option to submit a complete
loss mitigation application to receive an evaluation for all loss mitigation
options available to the borrower regardless of whether the borrower accepts
the program or plan.
A servicer shall not make the first notice or filing required by applicable
law for any judicial or non-judicial
foreclosure process, and shall not move for foreclosure judgment or order of
sale or conduct a foreclosure sale, if a borrower is performing pursuant to
the terms of a payment forbearance
program or repayment plan offered
pursuant to this paragraph (c)(2)(iii).
A servicer may offer a short-term payment
forbearance program in conjunction with a short-term repayment
plan pursuant to this paragraph (c)(2)(iii).
(iv) Facially complete
application. A loss mitigation application shall be considered facially
complete when a borrower submits all the
missing documents and information as stated in the notice required under
paragraph (b)(2)(i)(B) of this section, when no additional
information is requested in such notice, or once the servicer is required to
provide the borrower a written notice pursuant to paragraph (c)(3)(i) of
this section.
If the servicer later discovers that additional information or corrections
to a previously submitted document are required to complete the application,
the servicer must promptly request the missing information or corrected
documents and treat the application as complete for the purposes of
paragraphs (f)(2) and (g) of this section until the borrower is given a
reasonable opportunity to complete the
application.
If the borrower completes the application within this period, the
application shall be considered complete
as of the date it first became facially complete,
for the purposes of paragraphs (d), (e), (f)(2), (g), and (h) of this
section, and as of the date the application was actually
complete for the purposes of this paragraph
(c).
A servicer that complies with this paragraph (c)(2)(iv) will be deemed to
have fulfilled its obligation to provide an accurate notice under paragraph
(b)(2)(i)(B) of this section.
(v) Certain
COVID-19-related loss mitigation options.
(A) Notwithstanding paragraph (c)(2)(i)
of this section, a servicer may offer a borrower a loss mitigation option
based upon evaluation of an incomplete
application, provided that all of the following criteria are met:
(1) The loss mitigation option permits
the borrower to delay paying covered amounts until the mortgage loan is
-
refinanced,
-
the mortgaged property is sold,
-
the term of the mortgage loan ends,
-
or, for a mortgage loan insured by the Federal
Housing Administration, the mortgage insurance terminates.
For purposes of this paragraph (c)(2)(v)(A)(1),
“covered amounts” includes, without limitation, all principal and
interest payments forborne under a payment
forbearance program made available to borrowers experiencing
a financial hardship due, directly or indirectly, to the COVID-19
emergency, including a payment forbearance program made pursuant to the
Coronavirus Economic Stabilization Act, section
4022 (15 U.S.C. 9056);
it also includes, without limitation, all other principal and
interest payments that are due and unpaid by a borrower experiencing
financial hardship due, directly or indirectly, to the
COVID-19 emergency.
For purposes of this paragraph (c)(2)(v)(A)(1), “COVID-19 emergency” has the same meaning as
under the Coronavirus Economic Stabilization Act,
section 4022(a)(1) (15 U.S.C. 9056(a)(1)).
For purposes of this paragraph (c)(2)(v)(A)(1), “the term of the
mortgage loan” means the term of the mortgage loan according to the
obligation between the parties in effect when the borrower is offered
the loss mitigation option.
(2) Any amounts that the borrower may delay
paying as described in paragraph (c)(2)(v)(A)(1) of this section
-
do not accrue
interest;
-
the servicer does not
charge any fee in connection with the loss mitigation
option; and
-
the servicer waives
all existing late charges,
penalties, stop payment fees, or similar charges promptly
upon the borrower's acceptance of the loss
mitigation option.
(3) The borrower's acceptance of an offer made
pursuant to paragraph (c)(2)(v)(A) of this section
ends any pre-existing delinquency on
the mortgage loan.
(B) Once the borrower accepts an offer made
pursuant to paragraph (c)(2)(v)(A) of this section, the servicer is not
required to comply with paragraph (b)(1) or (2) of this section with
regard to any loss mitigation application the borrower submitted prior to
the servicer's offer of the loss mitigation option described in paragraph
(c)(2)(v)(A) of this section.
(3) Notice of complete application.
(i) Except as provided in paragraph (c)(3)(ii) of
this section, within 5 days (excluding legal public holi days, Satur days,
and Sun days) after receiving a borrower's complete
loss mitigation application, a servicer shall provide the borrower a written
notice that sets forth the following information:
(A) That the loss mitigation application is
complete;
(B) The date the servicer received the complete
application;
(C) That the servicer expects to complete its evaluation within 30 days
of the date it received the complete
application;
(D) That the borrower is entitled to certain foreclosure protections
because the servicer has received the complete
application, and, as applicable, either:
(1) If the servicer has not made the first
notice or filing required by applicable law for any judicial or
non-judicial foreclosure process, that
the servicer cannot make the first notice or filing required to commence
or initiate the foreclosure process under applicable law before
evaluating the borrower's complete
application; or
(2) If the servicer has made the first notice or filing required by
applicable law for any judicial or non-judicial
foreclosure process, that the servicer has begun the foreclosure
process, and that the servicer cannot conduct a
foreclosure sale before evaluating the
borrower's complete application;
(E) That the servicer may need additional
information at a later date to evaluate the application, in which case the
servicer will request that information from the borrower and give the
borrower a reasonable opportunity to submit it, the evaluation process may
take longer, and the foreclosure protections could end if the servicer
does not receive the information as requested; and
(F) That the borrower may be entitled to additional protections under State
or Federal law.
(ii) A servicer is not required to provide a notice pursuant to paragraph
(c)(3)(i) of this section if:
(A) The servicer has already provided the borrower
a notice under paragraph (b)(2)(i)(B) of this section informing the
borrower that the application is complete and the servicer has not
subsequently requested additional information or a corrected version of a
previously submitted document from the borrower pursuant to paragraph
(c)(2)(iv) of this section;
(B) The application was not complete or facially complete more than 37
days before a foreclosure sale; or
(C) The servicer has already provided the borrower a notice regarding the
application under paragraph (c)(1)(ii) of this section.
(4) Information not in the borrower's control -
(i) Reasonable diligence. If a servicer requires
documents or information not in the borrower's control to determine which
loss mitigation options, if any, it will offer to the borrower, the servicer
must exercise reasonable diligence in obtaining such documents or
information.
(ii) Effect in case of delay.
(A)
(1) Except as provided in paragraph (c)(4)(ii)(A)(2)
of this section, a servicer must not deny a
complete loss mitigation application solely because the
servicer lacks required documents or information not in the borrower's
control.
(2) If a servicer has exercised reasonable diligence to obtain required
documents or information from a party other than the borrower or the
servicer, but the servicer has been unable to obtain such documents or
information for a significant period of time following the 30-day period
identified in paragraph (c)(1) of this section, and the servicer, in
accordance with applicable requirements established by the owner or
assignee of the borrower's mortgage loan, is unable to determine which
loss mitigation options, if any, it will offer the borrower without such
documents or information, the servicer may deny the application and
provide the borrower with a written notice in accordance with paragraph
(c)(1)(ii) of this section. When providing the written notice in
accordance with paragraph (c)(1)(ii) of this section, the servicer must
also provide the borrower with a copy of the written notice required by
paragraph (c)(4)(ii)(B) of this section.
(B) If a servicer is unable to make a determination within the 30-day
period identified in paragraph (c)(1) of this section as to which loss
mitigation options, if any, it will offer to the borrower because the
servicer lacks required documents or information from a party other than
the borrower or the servicer, the servicer must, within such 30-day period
or promptly thereafter, provide the borrower a written notice, informing
the borrower:
(1) That the servicer has not received documents
or information not in the borrower's control that the servicer requires
to determine which loss mitigation options, if any, it will offer to the
borrower on behalf of the owner or assignee of the mortgage;
(2) Of the specific documents or information that the servicer lacks;
(3) That the servicer has requested such documents or information; and
(4) That the servicer will complete its evaluation of the borrower for
all available loss mitigation options promptly upon receiving the
documents or information.
(C) If a servicer must provide a notice required
by paragraph (c)(4)(ii)(B) of this section, the servicer must not provide
the borrower a written notice pursuant to paragraph (c)(1)(ii) of this
section until the servicer receives the required documents or information
referenced in paragraph (c)(4)(ii)(B)(2) of this section, except as
provided in paragraph (c)(4)(ii)(A)(2) of this section. Upon receiving
such required documents or information, the servicer must promptly provide
the borrower with the written notice pursuant to paragraph (c)(1)(ii) of
this section.
(d) Denial of loan modification
options. If a borrower's complete
loss mitigation application is denied for any trial or permanent loan
modification option available to the borrower pursuant to paragraph (c) of this
section, a servicer shall state in the notice sent to the borrower pursuant to
paragraph (c)(1)(ii) of this section the specific
reason or reasons for the servicer's determination for each such trial or
permanent loan modification option and, if applicable, that the borrower was not
evaluated on other criteria.
(e) Borrower response -
(1) In general. Subject to paragraphs (e)(2)(ii) and
(iii) of this section, if a complete loss mitigation application is received
90 days or more before a foreclosure sale, a servicer may require that a
borrower accept or reject an offer of a loss mitigation option no earlier than
14 days after the servicer provides the offer of a loss mitigation option to
the borrower. If a complete loss mitigation application is received less than
90 days before a foreclosure sale, but more than 37 days before a foreclosure
sale, a servicer may require that a borrower accept or reject an offer of a
loss mitigation option no earlier than 7 days after the servicer provides the
offer of a loss mitigation option to the borrower.
(2) Rejection -
(i) In general. Except as set forth in paragraphs
(e)(2)(ii) and (iii) of this section, a servicer may deem a borrower that
has not accepted an offer of a loss mitigation option within the deadline
established pursuant to paragraph (e)(1) of this section to have rejected
the offer of a loss mitigation option.
(ii) Trial Loan Modification Plan. A
borrower who does not satisfy the servicer's requirements for accepting a
trial loan modification plan, but submits the
payments that would be owed pursuant to any such plan within the
deadline established pursuant to paragraph (e)(1) of this section, shall be
provided a reasonable period of time to fulfill any remaining requirements
of the servicer for acceptance of the trial loan modification plan beyond
the deadline established pursuant to paragraph (e)(1) of this section.
(iii) Interaction with appeal process. If a borrower makes an appeal
pursuant to paragraph (h) of this section, the borrower's deadline for
accepting a loss mitigation option offered pursuant to paragraph (c)(1)(ii)
of this section shall be extended until 14 days after the servicer provides
the notice required pursuant to paragraph (h)(4) of this section.
(f) Prohibition on foreclosure referral -
(1) Pre-foreclosure review period. A servicer shall
not make the first notice or filing required by applicable law for any
judicial or non-judicial foreclosure process unless:
(i) A borrower's mortgage loan obligation is more
than 120 days delinquent;
(ii) The foreclosure is based on a borrower's violation of a due-on-sale
clause; or
(iii) The servicer is joining the foreclosure action of a superior or
subordinate lienholder.
(2) Application received before foreclosure referral.
If a borrower submits a complete loss mitigation application during the
pre-foreclosure review period set forth in paragraph (f)(1) of this section or
before a servicer has made the first notice or filing required by applicable
law for any judicial or non-judicial foreclosure process, a servicer shall not
make the first notice or filing required by applicable law for any judicial or
non-judicial foreclosure process unless:
(i) The servicer has sent the borrower a notice
pursuant to paragraph (c)(1)(ii) of this section that the borrower is not
eligible for any loss mitigation option and the appeal process in paragraph
(h) of this section is not applicable, the borrower has not requested an
appeal within the applicable time period for requesting an appeal, or the
borrower's appeal has been denied;
(ii) The borrower rejects all loss mitigation options offered by the
servicer; or
(iii) The borrower fails to perform under an agreement on a loss mitigation
option.
(g) Prohibition on foreclosure sale. If a borrower
submits a complete loss mitigation application after a servicer has made the
first notice or filing required by applicable law for any judicial or
non-judicial foreclosure process but more than 37 days before a foreclosure
sale, a servicer shall not move for foreclosure judgment or order of sale, or
conduct a foreclosure sale, unless:
(1) The servicer has sent the borrower a notice
pursuant to paragraph (c)(1)(ii) of this section that the borrower is not
eligible for any loss mitigation option and the appeal process in paragraph
(h) of this section is not applicable, the borrower has not requested an
appeal within the applicable time period for requesting an appeal, or the
borrower's appeal has been denied;
(2) The borrower rejects all loss mitigation options offered by the servicer;
or
(3) The borrower fails to perform under an agreement on a loss mitigation
option.
(h) Appeal process -
(1) Appeal process required for loan modification
denials. If a servicer receives a complete loss mitigation application 90 days
or more before a foreclosure sale or during the period set forth in paragraph
(f) of this section, a servicer shall permit a borrower to appeal the
servicer's determination to deny a borrower's loss mitigation application for
any trial or permanent loan modification program available to the borrower.
(2) Deadlines. A servicer shall permit a borrower to make an appeal within 14
days after the servicer provides the offer of a loss mitigation option to the
borrower pursuant to paragraph (c)(1)(ii) of this section.
(3) Independent evaluation. An appeal shall be reviewed by different personnel
than those responsible for evaluating the borrower's complete loss mitigation
application.
(4) Appeal determination. Within 30 days of a borrower making an appeal, the
servicer shall provide a notice to the borrower stating the servicer's
determination of whether the servicer will offer the borrower a loss
mitigation option based upon the appeal and, if applicable, how long the
borrower has to accept or reject such an offer or a prior offer of a loss
mitigation option. A servicer may require that a borrower accept or reject an
offer of a loss mitigation option after an appeal no earlier than 14 days
after the servicer provides the notice to a borrower. A servicer's
determination under this paragraph is not subject to any further appeal.
(i) Duplicative requests. A servicer must comply with
the requirements of this section for a borrower's loss mitigation application,
unless the servicer has previously complied with the requirements of this
section for a complete loss mitigation application submitted by the borrower and
the borrower has been delinquent at all times since submitting the prior
complete application.
(j) Small servicer requirements. A small servicer shall be subject to the
prohibition on foreclosure referral in paragraph (f)(1) of this section. A small
servicer shall not make the first notice or filing required by applicable law
for any judicial or non-judicial foreclosure process and shall not move for
foreclosure judgment or order of sale, or conduct a foreclosure sale, if a
borrower is performing pursuant to the terms of an agreement on a loss
mitigation option.
(k) Servicing transfers -
(1) In general -
(i) Timing of compliance. Except as provided in
paragraphs (k)(2) through (4) of this section, if a transferee servicer
acquires the servicing of a mortgage loan for which a loss mitigation
application is pending as of the transfer date, the transferee servicer must
comply with the requirements of this section for that loss mitigation
application within the timeframes that were applicable to the transferor
servicer based on the date the transferor servicer received the loss
mitigation application. All rights and protections under paragraphs (c)
through (h) of this section to which a borrower was entitled before a
transfer continue to apply notwithstanding the transfer.
(ii) Transfer date defined. For purposes of this paragraph (k), the transfer
date is the date on which the transferee servicer will begin accepting
payments relating to the mortgage loan, as disclosed on the notice of
transfer of loan servicing pursuant to § 1024.33(b)(4)(iv).
(2) Acknowledgment notices -
(i) Transferee servicer timeframes. If a transferee
servicer acquires the servicing of a mortgage loan for which the period to
provide the notice required by paragraph (b)(2)(i)(B) of this section has
not expired as of the transfer date and the transferor servicer has not
provided such notice, the transferee servicer must provide the notice within
10 days (excluding legal public holi days, Satur days, and Sun days) of the
transfer date.
(ii) Prohibitions. A transferee servicer that must provide the notice
required by paragraph (b)(2)(i)(B) of this section under this paragraph
(k)(2):
(A) Shall not make the first notice or filing
required by applicable law for any judicial or non-judicial foreclosure
process until a date that is after the reasonable date disclosed to the
borrower pursuant to paragraph (b)(2)(ii) of this section, notwithstanding
paragraph (f)(1) of this section. For purposes of paragraph (f)(2) of this
section, a borrower who submits a complete loss mitigation application on
or before the reasonable date disclosed to the borrower pursuant to
paragraph (b)(2)(ii) of this section shall be treated as having done so
during the pre-foreclosure review period set forth in paragraph (f)(1) of
this section.
(B) Shall comply with paragraphs (c), (d), and (g) of this section if the
borrower submits a complete loss mitigation application to the transferee
or transferor servicer 37 or fewer days before the foreclosure sale but on
or before the reasonable date disclosed to the borrower pursuant to
paragraph (b)(2)(ii) of this section.
(3) Complete loss mitigation applications pending at
transfer. If a transferee servicer acquires the servicing of a mortgage loan
for which a complete loss mitigation application is pending as of the transfer
date, the transferee servicer must comply with the applicable requirements of
paragraphs (c)(1) and (4) of this section within 30 days of the transfer date.
(4) Applications subject to appeal process. If a transferee servicer acquires
the servicing of a mortgage loan for which an appeal of a transferor
servicer's determination pursuant to paragraph (h) of this section has not
been resolved by the transferor servicer as of the transfer date or is timely
filed after the transfer date, the transferee servicer must make a
determination on the appeal if it is able to do so or, if it is unable to do
so, must treat the appeal as a pending complete loss mitigation application.
(i) Determining appeal. If a transferee servicer is
required under this paragraph (k)(4) to make a determination on an appeal,
the transferee servicer must complete the determination and provide the
notice required by paragraph (h)(4) of this section within 30 days of the
transfer date or 30 days of the date the borrower made the appeal, whichever
is later.
(ii) Servicer unable to determine appeal. A transferee servicer that is
required to treat a borrower's appeal as a pending complete loss mitigation
application under this paragraph (k)(4) must comply with the requirements of
this section for such application, including evaluating the borrower for all
loss mitigation options available to the borrower from the transferee
servicer. For purposes of paragraph (c) or (k)(3) of this section, as
applicable, such a pending complete loss mitigation application shall be
considered complete as of the date the appeal was received by the transferor
servicer or the transferee servicer, whichever occurs first. For purposes of
paragraphs (e) through (h) of this section, the transferee servicer must
treat such a pending complete loss mitigation application as facially
complete under paragraph (c)(2)(iv) as of the date it was first facially
complete or complete, as applicable, with respect to the transferor servicer.
(5) Pending loss mitigation offers. A transfer does
not affect a borrower's ability to accept or reject a loss mitigation option
offered under paragraph (c) or (h) of this section. If a transferee servicer
acquires the servicing of a mortgage loan for which the borrower's time period
under paragraph (e) or (h) of this section for accepting or rejecting a loss
mitigation option offered by the transferor servicer has not expired as of the
transfer date, the transferee servicer must allow the borrower to accept or
reject the offer during the unexpired balance of the applicable time period.
[78 FR 10876, Feb. 14, 2013, as amended at 78 FR 60437, Oct. 1, 2013; 81 FR
72373, Oct. 19, 2016; 85 FR 39065, June 30, 2020]
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