Thoughts on California Homeowners Bill of Rights – From one attorney

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Tuesday, July 03, 2012 5:03 PM
To: Charles Cox
Subject: Thoughts on California Homeowners Bill of Rights – From one attorney

“Giant poison pills:

Civ. Code sec. 2920.5(c)(2)(B) and (C)

Sec. 2923.5(b) [but see subd. (d), which allows HUD-certified counseling agencies and attorneys to help]

Good provisions

Sec. 2923.55 (a) and (b)(1)(B)(i) requires sending the borrower a copy of the note if requested.

Great provisions:

Sec. 2924 (a) (5) and (6)—(5) requires written notice of new sale date is foreclosure is postponed by at least 10 days.

2924(a)(6) precludes recording of notice of default or otherwise initiating foreclosure process by any entity who is not the holder of the beneficial interest under the mortgage or trust deed, the original trustee, the original trustee or substituted trustee under the DOT. No notice of default or initiation of foreclosure can be done by any agent of the holder of the beneficial interest, the original or substituted trustee, except “when acting within the scope of authority designated by the holder of the beneficial interest.”

Sec. 2924.12(a) authorizes an action for injunctive relief to enjoin a material violation of secs. 2923.55, 2923.6, 2923.7, 2924.9, 2924.10, 2924.11, or 2924.17. (sec. 2924.19 authorizes a borrower to seek an injunction for violations of secs. 2923.5, 2924.17, or 2924.18.)

Sec. 2924.12(b) authorizes an action for damages following recordation of a trustee’s deed upon sale. The borrower can recover actual economic damages under CC 3281 for material violation of the above sections unless the violation is corrected and remedied prior to recordation. Court may award the borrower the greater of treble actual damages or $50,000 if it finds the material violation was intentional, reckless, or resulted by willful misconduct. These remedies “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 provided by law.” 2924.12(h). Reasonable attorney’s fees and costs may be awarded to a prevailing borrower by the court. 2924.12(i). However, no claim lies against a signatory to the consent decree in U.S. v. Bank of America, Dist. Of D.C., case no. 1:12-cv-00361RMC if that signatory is in compliance with the relevant terms of the Settlement Term Sheet with respect to the particular borrower. 2924.12(g).

Sec. 2924.17 requires declarations of compliance under sec. 2923.5 or 2923.55 (until 1-1-18), or notices of default, notices of sale, assignments of DIT’s, or substitutions of trustee, to be accurate and complete and supported by competent and reliable evidence. Government entities may obtain civil penalties per mortgage or DOT from any servicer that engages in multiple and repeated uncorrected violations in recording documents or filing them in any court.

I had understood previously that this law will take effect next January, but after reading it, I’m not sure it won’t be effective upon the governor’s signature. It wasn’t adopted as an urgency measure—does anyone know if that means we wait until January?”