AB 244: Mortgages and deeds of trust: successors in interest.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2016-01-04
Existing law imposes various requirements to be satisfied prior to exercising a power of sale under a mortgage or deed of trust. Existing law defines a mortgage servicer as a person or entity who directly services a loan, or is responsible for interacting with the borrower, and managing the loan account on a daily basis, as specified. Existing law defines a borrower, for purposes of specified provisions relating to mortgages and deeds of trust, as a natural person who is a mortgagor or trustor who is potentially eligible for any federal, state, or proprietary foreclosure prevention alternative program offered by, or through, his or her mortgage servicer.
This bill would include a successor in interest in the definition of a borrower for purposes of the eligibility provisions described above. The bill would define a successor in interest for these purposes as a natural person who provides the mortgage servicer with notification of the death of the mortgagor or trustor and reasonable documentation, as specified, showing that the person falls into one of four categories of successors, including a personal representative of the mortgagors or trustors estate or is a surviving spouse, as specified.
Existing law imposes various requirements to be satisfied prior to exercising a power of sale under a mortgage or deed of trust. Existing law defines a mortgage servicer as a person or entity who directly services a loan, or is responsible for interacting with the borrower, and managing the loan account on a daily basis, as specified. Existing law defines a borrower, for purposes of specified provisions relating to mortgages and deeds of trust, as a natural person who is a mortgagor or trustor who is potentially eligible for any federal, state, or proprietary foreclosure prevention alternative program offered by, or through, his or her mortgage servicer.
This bill would include a successor in interest in the definition of a borrower for purposes of the eligibility provisions described above. The bill would define a successor in interest for these purposes as a natural person who provides the mortgage servicer with notification of the death of the mortgagor or trustor and reasonable documentation, as specified, showing that the person falls into one of four categories of successors, including a personal representative of the mortgagors or trustors estate or a surviving spouse, as specified.
For purposes of this article, the following definitions apply:
(a)Mortgage servicer means a person or entity who directly services a loan, or who is responsible for interacting with the borrower, managing the loan account on a daily basis including collecting and crediting periodic loan payments, managing any escrow account, or enforcing the note and security instrument, either as the current owner of the promissory note or as the current owners authorized agent. Mortgage servicer also means a subservicing agent to a master servicer by contract. Mortgage servicer shall not include a trustee, or a trustees authorized agent, acting under a power of sale pursuant to a deed of trust.
(b)Foreclosure prevention alternative means a first lien loan modification or another available loss mitigation option.
(c)(1)(A)Unless otherwise provided and for purposes of Sections 2923.4, 2923.5, 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, 2924.18, and 2924.19, borrower means any natural person who is a mortgagor or trustor, or who is the successor in interest to the mortgagor or trustor following the death of the mortgagor or trustor, and who is potentially eligible for any federal, state, or proprietary foreclosure prevention alternative program offered by, or through, his or her mortgage servicer.
(B)For purposes of this subdivision:
(i)Successor in interest means a natural person who provides the mortgage servicer with notification both of the following:
(I)Notification of the death of the mortgagor or trustor and reasonable trustor.
(II)Reasonable documentation showing that the person is one of the following:
(I)The personal representative, as defined in Section 58 of Probate Code, of the mortgagors or trustors estate.
(II)The surviving joint tenant of the mortgagor or trustor.
(III)The the surviving spouse of the mortgagor or trustor if the real property that secures the mortgage or deed of trust was held as community property with right of survivorship pursuant to Section 682.1 of the Civil Code.
(IV)The trustee of the trust that owns the real property that secures the mortgage or deed of trust or the beneficiary of that trust.
(ii)Notification of the death of the mortgagor or trustor means provision to the mortgage servicer of a death certificate or, if a death certificate is not available, of other written evidence of the death of the mortgagor or trustor deemed sufficient by the mortgage servicer.
(iii)Reasonable documentation means copies of the following documents, as may be applicable, a copy of an affidavit of death of the spouse or a deed showing community property with the right of survivorship, or, if the relevant documentation listed is not available, other written evidence of the persons status as successor in interest to the real property that secures the mortgage or deed of trust deemed sufficient by the mortgage servicer: servicer.
(I)In the case of a personal representative, letters as defined in Section 52 of Probate Code.
(II)In the case of a surviving joint tenant, an affidavit of death of the joint tenant or a grant deed showing joint tenancy.
(III)In the case of a surviving spouse where the real property was held as community property with right of survivorship, an affidavit of death of the spouse or a deed showing community property with right of survivorship.
(IV)In the case of a trustee of a trust, a certification of trust pursuant to 18100.5 of the Probate Code.
(V)In the case of a beneficiary of a trust, relevant trust documents related to the beneficiarys interest.
(C)Designation of a successor in interest as a borrower for purposes of this subdivision does not impose an affirmative duty on a mortgage servicer to offer a loan modification to, or accept an assumption of the loan by, the successor in interest and does not alter any obligation the mortgage servicer may otherwise have to accept an assumption of the loan by the successor in interest. If a successor in interest assumes the loan, he or she may be required to otherwise qualify for available foreclosure prevention alternatives offered by the mortgage servicer.
(2)For purposes of the sections listed in paragraph (1), borrower shall not include any of the following:
(A)An individual who has surrendered the secured property as evidenced by either a letter confirming the surrender or delivery of the keys to the property to the mortgagee, trustee, beneficiary, or authorized agent.
(B)An individual who has contracted with an organization, person, or entity whose primary business is advising people who have decided to leave their homes on how to extend the foreclosure process and avoid their contractual obligations to mortgagees or beneficiaries.
(C)An individual who has filed a case under Chapter 7, 11, 12, or 13 of Title 11 of the United States Code and the bankruptcy court has not entered an order closing or dismissing the bankruptcy case, or granting relief from a stay of foreclosure.
(d)First lien means the most senior mortgage or deed of trust on the property that is the subject of the notice of default or notice of sale.
For purposes of this article, the following definitions apply:
(a)Mortgage servicer means a person or entity who directly services a loan, or who is responsible for interacting with the borrower, managing the loan account on a daily basis including collecting and crediting periodic loan payments, managing any escrow account, or enforcing the note and security instrument, either as the current owner of the promissory note or as the current owners authorized agent. Mortgage servicer also means a subservicing agent to a master servicer by contract. Mortgage servicer shall not include a trustee, or a trustees authorized agent, acting under a power of sale pursuant to a deed of trust.
(b)Foreclosure prevention alternative means a first lien loan modification or another available loss mitigation option.
(c)(1)(A)Unless otherwise provided and for purposes of Sections 2923.4, 2923.5, 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, 2924.18, and 2924.19, borrower means any natural person who is a mortgagor or trustor, or who is the successor in interest to the mortgagor or trustor following the death of the mortgagor or trustor, and who is potentially eligible for any federal, state, or proprietary foreclosure prevention alternative program offered by, or through, his or her mortgage servicer.
(B)For purposes of this subdivision:
(i)Successor in interest means a natural person who provides the mortgage servicer with notification of the death of the mortgagor or trustor and reasonable documentation showing that the person is one of the following:
(I)The personal representative, as defined in Section 58 of Probate Code, of the mortgagors or trustors estate.
(II)The surviving joint tenant of the mortgagor or trustor.
(III)The surviving spouse of the mortgagor or trustor if the real property that secures the mortgage or deed of trust was held as community property with right of survivorship pursuant to Section 682.1 of the Civil Code.
(IV)The trustee of the trust that owns the real property that secures the mortgage or deed of trust or the beneficiary of that trust.
(ii)Notification of the death of the mortgagor or trustor means provision to the mortgage servicer of a death certificate or, if a death certificate is not available, of other written evidence of the death of the mortgagor or trustor deemed sufficient by the mortgage servicer.
(iii)Reasonable documentation means copies of the following documents, as may be applicable, or, if the relevant documentation listed is not available, other written evidence of the persons status as successor in interest to the real property that secures the mortgage or deed of trust deemed sufficient by the mortgage servicer:
(I)In the case of a personal representative, letters as defined in Section 52 of Probate Code.
(II)In the case of a surviving joint tenant, an affidavit of death of the joint tenant or a grant deed showing joint tenancy.
(III)In the case of a surviving spouse where the real property was held as community property with right of survivorship, an affidavit of death of the spouse or a deed showing community property with right of survivorship.
(IV)In the case of a trustee of a trust, a certification of trust pursuant to 18100.5 of the Probate Code.
(V)In the case of a beneficiary of a trust, relevant trust documents related to the beneficiarys interest.
(C)Designation of a successor in interest as a borrower for purposes of this subdivision does not impose an affirmative duty on a mortgage servicer to offer a loan modification to, or accept an assumption of the loan by, the successor in interest and does not alter any obligation the mortgage servicer may otherwise have to accept an assumption of the loan by the successor in interest. If a successor in interest assumes the loan, he or she may be required to otherwise qualify for available foreclosure prevention alternatives offered by the mortgage servicer.
(2)For purposes of the sections listed in paragraph (1), borrower shall not include any of the following:
(A)An individual who has surrendered the secured property as evidenced by either a letter confirming the surrender or delivery of the keys to the property to the mortgagee, trustee, beneficiary, or authorized agent.
(B)An individual who has contracted with an organization, person, or entity whose primary business is advising people who have decided to leave their homes on how to extend the foreclosure process and avoid their contractual obligations to mortgagees or beneficiaries.
(C)An individual who has filed a case under Chapter 7, 11, 12, or 13 of Title 11 of the United States Code and the bankruptcy court has not entered an order closing or dismissing the bankruptcy case, or granting relief from a stay of foreclosure.
(d)First lien means the most senior mortgage or deed of trust on the property that is the subject of the notice of default or notice of sale.
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Date
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Status
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|---|---|
| Feb 9, 2015 | Read first time. To print. |
| Feb 10, 2015 | From printer. May be heard in committee March 12. |
| Feb 17, 2015 | Referred to Coms. on B. & F. and JUD. |
| Apr 20, 2015 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Apr 27, 2015 | In committee: Set, second hearing. Hearing canceled at the request of author. |
| Jan 4, 2016 | From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & F. Read second time and amended. |
| Jan 4, 2016 | Re-referred to Com. on B. & F. |
| Jan 12, 2016 | In committee: Set, final hearing. Hearing canceled at the request of author. |
| Feb 1, 2016 | From committee: Without further action pursuant to Joint Rule 62(a). |
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