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2920. (a) A mortgage is a
contract by which specific property, including an estate for years in real
property, is hypothecated forthe performance of an act, without the
necessity of a change of possession.
(b) For purposes of Sections 2924
to 2924h, inclusive, "mortgage" also means any security
device or instrument, other than a deed of trust, that confers a
power of sale affecting real property or an estate for years therein, to
be exercised after breach of the obligation so secured, including a real
property sales contract, as
defined in Section 2985, which contains such a provision.
2921. A mortgage may be created upon property held adversely
to the mortgagor.
2922. A mortgage can be created, renewed, or extended, only
by writing, executed with the formalities required in the case of a
grant of real property.
2923. The lien of a mortgage is special, unless
otherwise expressly agreed, and is independent of possession.
2924. Every transfer of an interest in property, other
than in trust, made only as a security for the performance of another
act, is to be deemed a mortgage, except when in the case of personal
property it is accompanied by actual change of possession, in which case
it is to be deemed a pledge. Where, by a mortgage created after July
27, 1917, of any estate in real property, other than an estate at will or
for years, less than two, or in any transfer in trust made after July 27,
1917, of a like estate to secure the performance of an obligation, a power
of sale is conferred upon the mortgagee, trustee, or any other person, to
be exercised after a breach of the obligation for which that mortgage or
transfer is a security, the power shall not be exercised except where the
mortgage or transfer is made pursuant to an order, judgment, or decree of
a court of record, or to secure the payment of bonds or other evidences of
indebtedness authorized or permitted to be issued by the Commissioner of
Corporations, or is made by a public utility subject to the provisions of
the Public Utilities Act, until
(a) the trustee, mortgagee, or
beneficiary, or any of their authorized agents shall first file for
record, in the office of the recorder of each county wherein the mortgaged
or trust property or some part or parcel thereof is situated, a notice of
default, identifying the mortgage or deed of trust by stating the name or
names of the trustor or
trustors and giving the book and page, or instrument number, if
applicable, where the same is recorded or a description of the mortgaged
or trust property and containing a statement that a breach of the
obligation for which the mortgage or transfer in trust is security has
occurred, and setting forth the nature of each breach actually known to
the beneficiary and of his or her election to sell or cause to be sold the
property to satisfy that obligation and any other obligation secured by
the deed of trust or mortgage that is in default, and where the default is
curable pursuant to Section 2924c, containing the statement
specified in paragraph (1) of subdivision (b) of Section 2924c;
(b) not less than three months
shall thereafter elapse; and
(c) after the lapse of the three
months the mortgagee, trustee or other person authorized to take the sale
shall give notice of sale, stating the time and place thereof, in the
manner and for a time not less than that set forth in Section 2924f.
In performing acts required by this article, the trustee shall incur no
liability for any good faith error resulting from reliance on information
provided in good faith by the beneficiary regarding the nature and the
amount of the default under the secured obligation, deed of trust,
or mortgage. In performing the acts required by this article,
a trustee shall not be subject to Title 1.6c (commencing with Section
1788) of Part 4.
A recital in the deed executed pursuant to
the power of sale of compliance with all requirements of law regarding the
mailing of copies of notices or the publication of a copy of the notice of
default or the personal delivery of the copy of the notice of default or
the posting of copies of the notice of sale or the publication of a copy
thereof shall constitute prima facie evidence of compliance with these
requirements and conclusive evidence thereof in favor of bona fide
purchasers and encumbrancers for value and without notice.
The mailing, publication, and delivery of
notices as required herein, and the performance of the procedures set
forth in this article, shall constitute privileged communications within
Section 47. There is a rebuttable presumption that the
beneficiary actually knew of all unpaid loan payments on the obligation
owed to the beneficiary and secured by the deed of trust or mortgage
subject to the notice of default. However, the failure to include an
actually known default shall not invalidate the notice of sale and the
beneficiary shall not be precluded from asserting a claim to this omitted
default or defaults in a separate notice of default.
2924.3. (a) Except as provided in subdivisions (b) and
(c), a person who has undertaken as an agent of a mortgagee, beneficiary,
or owner of a promissory note secured directly or collaterally by a
mortgage or deed of trust on real property or an estate for years therein,
to make collections of payments from an obligor under the note, shall
mail the following notices, postage prepaid, to each mortgagee,
beneficiary or owner for whom the agent has agreed to make collections
from the obligor under the note:
(1) A copy of the notice of default
filed in the office of the county recorder pursuant to Section 2924 on
account of a breach of obligation under the promissory note on which the
agent has agreed to make collections of payments, within 15 days after
recordation.
(2) Notice that a notice of default
has been recorded pursuant to Section 2924 on account of a breach of an
obligation secured by a mortgage or deed of trust against the same
property or estate for years therein having priority over the mortgage or
deed of trust securing the obligation described in paragraph (1), within
15 days after recordation or within three business days after the agent
receives the information, whichever is later.
(3) Notice of the time and place
scheduled for the sale of the real property or estate for years therein
pursuant to Section 2924f under a power of sale in a mortgage or
deed of trust securing an obligation described in paragraphs (1) or (2),
not less than 15 days before the scheduled date of the sale or not later
than the next business day after the agent receives the information,
whichever is later.
(b) An agent who has undertaken to
make collections on behalf of mortgagees, beneficiaries or owners of
promissory notes secured by mortgages or deeds of trust on real property
or an estate for years therein shall not be required to comply with the
provisions of subdivision (a) with respect to a mortgagee, beneficiary or
owner who is entitled to receive notice pursuant to subdivision (c) of
Section 2924b or for whom a request for notice has been recorded pursuant
to subdivision (b) of Section 2924b if the agent reasonably believes that
the address of the mortgagee, beneficiary, or owner described in Section
2924b is the current business or residence address of that person.
(c) An agent who has undertaken to
make collections on behalf of mortgagees, beneficiaries or owners of
promissory notes secured by mortgages or deeds of trust on real property
or an estate for years therein shall not be required to comply with the
provisions of paragraph (1) or (2) of subdivision (a) if the agent knows
or reasonably believes that the default has already been cured by or on
behalf of the obligor.
(d) Any failure to comply with the
provisions of this section shall not affect the validity of a sale in
favor of a bona fide purchaser or the rights of an encumbrancer for value
and without notice.
2924.5. No clause in any deed of trust or mortgage on
property containing four or fewer residential units or on which four or
fewer residential units are to be constructed or in any obligation secured
by any deed of trust or mortgage on property containing four or fewer
residential units or on which four or fewer residential units are to be
constructed that provides for the acceleration of the due date of the
obligation upon the sale, conveyance, alienation, lease, succession,
assignment or other transfer of the property subject to the deed of trust
or mortgage shall be valid unless the clause is set forth, in its entirety
in both the body of the deed of trust or mortgage and the promissory note
or other document evidencing the secured obligation. This section
shall apply to all such deeds of trust, mortgages, and obligations secured
thereby executed on or after July 1, 1972.
2924.6. (a) An obligee may not accelerate the maturity
date of the principal and accrued interest on any loan secured by a
mortgage or deed of trust on residential real property solely by reason
of any one or more of the following transfers in the title to the real
property:
(1) A transfer resulting from the death of
an obligor where the transfer is to the spouse who is also an obligor.
(2) A transfer by an obligor where the
spouse becomes a coowner of the property.
(3) A transfer resulting from a decree of
dissolution of the marriage or legal separation or from a property
settlement agreement incidental to such a decree which requires the
obligor to continue to make the loan payments by which a spouse who is an
obligor becomes the sole owner of the property.
(4) A transfer by an obligor or obligors
into an inter vivos trust in which the obligor or obligors are
beneficiaries.
(5) Such real property or any portion
thereof is made subject to a junior encumbrance or lien.
(b) Any waiver of the provisions of this
section by an obligor is void and unenforceable and is contrary to public
policy.
(c) For the purposes of this section,
"residential real property" means any real property which
contains at least one but not more than four housing units.
(d) This act applies only to loans executed
or refinanced on or after January 1, 1976.
2924.7. (a) The provisions of any deed of trust or mortgage
on real property which authorize any beneficiary, trustee, mortgagee, or
his or her agent or successor in interest, to accelerate the maturity date
of the principal and interest on any loan secured thereby or to exercise
any power of sale or other remedy contained therein upon the failure of
the trustor or mortgagor to pay, at the times provided for under the terms
of the deed of trust or mortgage, any taxes, rents, assessments, or
insurance premiums with respect to the
property or the loan, or any advances made by the beneficiary,
mortgagee, or his or her agent or successor in interest shall be
enforceable whether or not impairment of the security interest in the
property has resulted from the failure of the trustor or mortgagor
to pay the taxes, rents, assessments, insurance premiums, or
advances.
(b) The provisions of any deed of trust or mortgage on real
property which authorize any beneficiary, trustee, mortgagee, or his
or her agent or successor in interest, to receive and control the
disbursement of the proceeds of any policy of fire, flood, or other
hazard insurance respecting the property shall be enforceable whether
or not impairment of the security interest in the property has
resulted from the event that caused the proceeds of the insurance
policy to become payable.
2924a. Where by the terms of any trust or deed of trust a power of
sale is conferred upon the trustee, the attorney for such trustee may
conduct the sale and act in such sale as the auctioneer for the
trustee.
2924b. (a) Any person desiring a copy of any notice of default and
of any notice of sale under any deed of trust or mortgage with power
of sale upon real property or an estate for years therein, as to
which deed of trust or mortgage the power of sale cannot be exercised
until these notices are given for the time and in the manner
provided in Section 2924 may, at any time subsequent to recordation
of the deed of trust or mortgage and prior to recordation of notice
of default thereunder, cause to be filed for record in the office of
the recorder of any county in which any part or parcel of the real
property is situated, a duly acknowledged request for a copy of the
notice of default and of sale. This request shall be signed and
acknowledged by the person making the request, specifying the name
and address of the person to whom the notice is to be mailed, shall
identify the deed of trust or mortgage by stating the names of the
parties thereto, the date of recordation thereof, and the book and
page where the deed of trust or mortgage is recorded or the recorder'
s number, and shall be in substantially the following form:
"In accordance with Section 2924b, Civil Code, request
is hereby
made that a copy of any notice of default and a copy of any notice of
sale
under the deed of trust (or mortgage) recorded ____, 19__, in Book
_____ page ____ records of ____ County, (or filed for record with
recorder's serial number ______, ______ County) California, executed
by ____ as trustor (or mortgagor) in which ____, is named as
beneficiary (or mortgagee) and ____ as trustee be mailed to
________________________________ at _______________________________.
Name
Address
NOTICE: A copy of any notice of default and of any notice of sale
will be
sent only to the address contained in this recorded request. If your
address
changes, a new request must be recorded.
Signature
________________________"
Upon the filing for record of the request, the recorder shall
index in the general index of grantors the names of the trustors (or
mortgagor) recited therein and the names of persons requesting
copies.
(b) The mortgagee, trustee, or other person authorized to
record
the notice of default shall do each of the following:
(1) Within 10 business days following recordation of the
notice of
default, deposit or cause to be deposited in the United States mail
an envelope, sent by registered or certified mail with postage
prepaid, containing a copy of the notice with the recording date
shown thereon, addressed to each person whose name and address are
set forth in a duly recorded request therefor, directed to the
address designated in the request and to each trustor or mortgagor at
his or her last known address if different than the address
specified in the deed of trust or mortgage with power of sale.
(2) At least 20 days before the date of sale, deposit or
cause to
be deposited in the United States mail an envelope, sent by
registered or certified mail with postage prepaid, containing a copy
of the notice of the time and place of sale, addressed to each person
whose name and address are set forth in a duly recorded request
therefor, directed to the address designated in the request and to
each trustor or mortgagor at his or her last known address if
different than the address specified in the deed of trust or mortgage
with power of sale.
(3) As used in paragraphs (1) and (2), the "last known
address" of
each trustor or mortgagor means the last business or residence
address actually known by the mortgagee, beneficiary, trustee, or
other person authorized to record the notice of default. The
beneficiary shall inform the trustee of the trustor's last address
actually known by the beneficiary. However, the trustee shall incur
no liability for failing to send any notice to the last address
unless the trustee has actual knowledge of it.
(c) The mortgagee, trustee, or other person authorized to
record
the notice of default shall do the following:
(1) Within one month following recordation of the notice of
default, deposit or cause to be deposited in the United States mail
an envelope, sent by registered or certified mail with postage
prepaid, containing a copy of the notice with the recording date
shown thereon, addressed to each person set forth in paragraph (2),
provided that the estate or interest of any person entitled to
receive notice under this subdivision is acquired by an instrument
sufficient to impart constructive notice of the estate or interest in
the land or portion thereof which is subject to the deed of trust or
mortgage being foreclosed, and provided the instrument is recorded
in the office of the county recorder so as to impart that
constructive notice prior to the recording date of the notice of
default and provided the instrument as so recorded sets forth a
mailing address which the county recorder shall use, as instructed
within the instrument, for the return of the instrument after
recording, and which address shall be the address used for the
purposes of mailing notices herein.
(2) The persons to whom notice shall be mailed under this
subdivision are:
(A) The successor in interest, as of the recording date of
the
notice of default, of the estate or interest or any portion thereof
of the trustor or mortgagor of the deed of trust or mortgage being
foreclosed.
(B) The beneficiary or mortgagee of any deed of trust or
mortgage
recorded subsequent to the deed of trust or mortgage being
foreclosed, or recorded prior to or concurrently with the deed of
trust or mortgage being foreclosed but subject to a recorded
agreement or a recorded statement of subordination to the deed of
trust or mortgage being foreclosed.
(C) The assignee of any interest of the beneficiary or
mortgagee
described in subparagraph (B), as of the recording date of the notice
of default.
(D) The vendee of any contract of sale, or the lessee of any
lease, of the estate or interest being foreclosed which is recorded
subsequent to the deed of trust or mortgage being foreclosed, or
recorded prior to or concurrently with the deed of trust or mortgage
being foreclosed but subject to a recorded agreement or statement of
subordination to the deed of trust or mortgage being foreclosed.
(E) The successor in interest to the vendee or lessee
described in
subparagraph (D), as of the recording date of the notice of default.
(F) The Office of the Controller, Sacramento, California,
where,
as of the recording date of the notice of default, a "Notice of Lien
for Postponed Property Taxes" has been recorded against the real
property to which the notice of default applies.
(3) At least 20 days before the date of sale, deposit or
cause to
be deposited in the United States mail, an envelope, sent by
registered or certified mail with postage prepaid, containing a copy
of the notice of the time and place of sale addressed to each person
to whom a copy of the notice of default is to be mailed as provided
in paragraphs (1) and (2), and addressed to the office of any state
taxing agency, Sacramento, California, which has recorded a notice of
tax lien prior to the recording date of the notice of default
against the real property to which the notice of default applies.
(4) Provide a copy of the notice of sale to the Internal
Revenue
Service, in accordance with Section 7425 of the Internal Revenue Code
and any applicable federal regulation, if a "Notice of Federal Tax
Lien under Internal Revenue laws" has been recorded against the real
property to which the notice of sale applies.
(5) The mailing of notices in the manner set forth in
paragraph
(1) shall not impose upon any licensed attorney, agent, or employee
of any person entitled to receive notices as herein set forth any
duty to communicate the notice to the entitled person from the fact
that the mailing address used by the county recorder is the address
of the attorney, agent, or employee.
(d) Any deed of trust or mortgage with power of sale
hereafter
executed upon real property or an estate for years therein may
contain a request that a copy of any notice of default and a copy of
any notice of sale thereunder shall be mailed to any person or party
thereto at the address of the person given therein, and a copy of any
notice of default and of any notice of sale shall be mailed to each
of these at the same time and in the same manner required as though a
separate request therefor had been filed by each of these persons as
herein authorized. If any deed of trust or mortgage with power of
sale executed after September 19, 1939, except a deed of trust or
mortgage of any of the classes excepted from the provisions of
Section 2924, does not contain a request of the trustor or mortgagor
for special notice at the address of the person given therein or does
contain such a request but no address of the person is given therein
and if no request for special notice by the trustor or mortgagor in
substantially the form set forth in this section has subsequently
been recorded, a copy of the notice of default shall be published
once a week for at least four weeks in a newspaper of general
circulation in the county in which the property is situated, the
publication to commence within 10 business days after the filing of
the notice of default. In lieu of publication, a copy of the notice
of default may be delivered personally to the trustor or mortgagor
within the 10 business days or at any time before publication is
completed, or by posting the notice of default in a conspicuous place
on the property and mailing the notice to the last known address of
the trustor.
(e) Any person required to mail a copy of a notice of default
or
notice of sale to each trustor or mortgagor pursuant to subdivision
(b) or (c) by registered or certified mail shall simultaneously cause
to be deposited in the United States mail, with postage prepaid and
mailed by first-class mail, an envelope containing an additional copy
of the required notice addressed to each trustor or mortgagor at the
same address to which the notice is sent by registered or certified
mail pursuant to subdivision (b) or (c). The person shall execute
and retain an affidavit identifying the notice mailed, showing the
name and residence or business address of that person, that he or she
is over the age of 18 years, the date of deposit in the mail, the
name and address of the trustor or mortgagor to whom sent, and that
the envelope was sealed and deposited in the mail with postage fully
prepaid. In the absence of fraud, the affidavit required by this
subdivision shall establish a conclusive presumption of mailing.
(f) No request for a copy of any notice filed for record
pursuant
to this section, no statement or allegation in the request, and no
record thereof shall affect the title to real property or be deemed
notice to any person that any person requesting copies of notice has
or claims any right, title, or interest in, or lien or charge upon
the property described in the deed of trust or mortgage referred to
therein.
(g) "Business day," as used in this section, has
the meaning
specified in Section 9.
2924c. (a) (1) Whenever all or a portion of the principal sum of
any obligation secured by deed of trust or mortgage on real property
or an estate for years therein hereafter executed has, prior to the
maturity date fixed in that obligation, become due or been declared
due by reason of default in payment of interest or of any installment
of principal, or by reason of failure of trustor or mortgagor to
pay, in accordance with the terms of that obligation or of the deed
of trust or mortgage, taxes, assessments, premiums for insurance, or
advances made by beneficiary or mortgagee in accordance with the
terms of that obligation or of the deed of trust or mortgage, the
trustor or mortgagor or his or her successor in interest in the
mortgaged or trust property or any part thereof, or any beneficiary
under a subordinate deed of trust or any other person having a
subordinate lien or encumbrance of record thereon, at any time within
the period specified in subdivision (e), if the power of sale
therein is to be exercised, or, otherwise at any time prior to entry
of the decree of foreclosure, may pay to the beneficiary or the
mortgagee or their successors in interest, respectively, the entire
amount due, at the time payment is tendered, with respect to (A) all
amounts of principal, interest, taxes, assessments, insurance
premiums, or advances actually known by the beneficiary to be, and
that are, in default and shown in the notice of default, under the
terms of the deed of trust or mortgage and the obligation secured
thereby, (B) all amounts in default on recurring obligations not
shown in the notice of default, and (C) all reasonable costs and
expenses, subject to subdivision (c), which are actually incurred in
enforcing the terms of the obligation, deed of trust, or mortgage,
and trustee's or attorney's fees, subject to subdivision (d), other
than the portion of principal as would not then be due had no default
occurred, and thereby cure the default theretofore existing, and
thereupon, all proceedings theretofore had or instituted shall be
dismissed or discontinued and the obligation and deed of trust or
mortgage shall be reinstated and shall be and remain in force and
effect, the same as if the acceleration had not occurred. This
section does not apply to bonds or other evidences of indebtedness
authorized or permitted to be issued by the Commissioner of
Corporations or made by a public utility subject to the Public
Utilities Code. For the purposes of this subdivision, the term
"recurring obligation" means all amounts of principal and
interest on
the loan, or rents, subject to the deed of trust or mortgage in
default due after the notice of default is recorded; all amounts of
principal and interest or rents advanced on senior liens or
leaseholds which are advanced after the recordation of the notice of
default; and payments of taxes, assessments, and hazard insurance
advanced after recordation of the notice of default. Where the
beneficiary or mortgagee has made no advances on defaults which would
constitute recurring obligations, the beneficiary or mortgagee may
require the trustor or mortgagor to provide reliable written evidence
that the amounts have been paid prior to reinstatement.
(2) If the trustor, mortgagor, or other person authorized to
cure
the default pursuant to this subdivision does cure the default, the
beneficiary or mortgagee or the agent for the beneficiary or
mortgagee shall, within 21 days following the reinstatement, execute
and deliver to the trustee a notice of rescission which rescinds the
declaration of default and demand for sale and advises the trustee of
the date of reinstatement. The trustee shall cause the notice of
rescission to be recorded within 30 days of receipt of the notice of
rescission and of all allowable fees and costs.
No charge, except for the recording fee, shall be made
against the
trustor or mortgagor for the execution and recordation of the notice
which rescinds the declaration of default and demand for sale.
(b) (1) The notice, of any default described in this section,
recorded pursuant to Section 2924, and mailed to any person pursuant
to Section 2924b, shall begin with the following statement, printed
or typed thereon:
"IMPORTANT NOTICE (14-point boldface
type if printed or in
capital letters if typed)
IF YOUR PROPERTY IS IN FORECLOSURE BECAUSE YOU ARE BEHIND IN
YOUR
PAYMENTS, IT MAY BE SOLD WITHOUT ANY COURT ACTION, (14-point boldface
type if printed or in capital letters if typed) 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 three months from the
date this notice of default may be recorded (which date of
recordation appears on this 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 the
end of the three-month period stated above) 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. (14-point boldface type if printed or in capital letters if
typed)"
Unless otherwise specified, the notice, if printed, shall
appear
in at least 12-point boldface type.
If the obligation secured by the deed of trust or mortgage is
a
contract or agreement described in paragraph (1) or (4) of
subdivision (a) of Section 1632, the notice required herein shall be
in Spanish if the trustor requested a Spanish language translation of
the contract or agreement pursuant to Section 1632. If the
obligation secured by the deed of trust or mortgage is contained in a
home improvement contract, as defined in Sections 7151.2 and 7159 of
the Business and Professions Code, which is subject to Title 2
(commencing with Section 1801), the seller shall specify on the
contract whether or not the contract was principally negotiated in
Spanish and if the contract was principally negotiated in Spanish,
the notice required herein shall be in Spanish. No assignee of the
contract or person authorized to record the notice of default shall
incur any obligation or liability for failing to mail a notice in
Spanish unless Spanish is specified in the contract or the assignee
or person has actual knowledge that the secured obligation was
principally negotiated in Spanish. Unless specified in writing to
the contrary, a copy of the notice required by subdivision (c) of
Section 2924b shall be in English.
(2) Any failure to comply with the provisions of this
subdivision
shall not affect the validity of a sale in favor of a bona fide
purchaser or the rights of an encumbrancer for value and without
notice.
(c) Costs and expenses which may be charged pursuant to
Sections
2924 to 2924i, inclusive, shall be limited to the costs incurred for
recording, mailing, including certified and express mail charges,
publishing, and posting notices required by Sections 2924 to 2924i,
inclusive, postponement pursuant to Section 2924g not to exceed fifty
dollars ($50) per postponement and a fee for a trustee's sale
guarantee or, in the event of judicial foreclosure, a litigation
guarantee. For purposes of this subdivision, a trustee or
beneficiary may purchase a trustee's sale guarantee at a rate meeting
the standards contained in Sections 12401.1 and 12401.3 of the
Insurance Code.
(d) Trustee's or attorney's fees which may be charged
pursuant to
subdivision (a), or until the notice of sale is deposited in the mail
to the trustor as provided in Section 2924b, if the sale is by power
of sale contained in the deed of trust or mortgage, or, otherwise at
any time prior to the decree of foreclosure, are hereby authorized
to be in a base amount that does not exceed three hundred dollars
($300) if the unpaid principal sum secured is one hundred fifty
thousand dollars ($150,000) or less, or two hundred fifty dollars
($250) if the unpaid principal sum secured exceeds one hundred fifty
thousand dollars ($150,000), plus one-half of 1 percent of the unpaid
principal sum secured exceeding fifty thousand dollars ($50,000) up
to and including one hundred fifty thousand dollars ($150,000), plus
one-quarter of 1 percent of any portion of the unpaid principal sum
secured exceeding one hundred fifty thousand dollars ($150,000) up to
and including five hundred thousand dollars ($500,000), plus
one-eighth of 1 percent of any portion of the unpaid principal sum
secured exceeding five hundred thousand dollars ($500,000). Any
charge for trustee's or attorney's fees authorized by this
subdivision shall be conclusively presumed to be lawful and valid
where the charge does not exceed the amounts authorized herein. For
purposes of this subdivision, the unpaid principal sum secured shall
be determined as of the date the notice of default is recorded.
(e) Reinstatement of a monetary default under the terms of an
obligation secured by a deed of trust, or mortgage may be made at any
time within the period commencing with the date of recordation of
the notice of default until five business days prior to the date of
sale set forth in the initial recorded notice of sale.
In the event the sale does not take place on the date set
forth in
the initial recorded notice of sale or a subsequent recorded notice
of sale is required to be given, the right of reinstatement shall be
revived as of the date of recordation of the subsequent notice of
sale, and shall continue from that date until five business days
prior to the date of sale set forth in the subsequently recorded
notice of sale.
In the event the date of sale is postponed on the date of
sale set
forth in either an initial or any subsequent notice of sale, or is
postponed on the date declared for sale at an immediately preceding
postponement of sale, and, the postponement is for a period which
exceeds five business days from the date set forth in the notice of
sale, or declared at the time of postponement, then the right of
reinstatement is revived as of the date of postponement and shall
continue from that date until five business days prior to the date of
sale declared at the time of the postponement.
Nothing contained herein shall give rise to a right of
reinstatement during the period of five business days prior to the
date of sale, whether the date of sale is noticed in a notice of sale
or declared at a postponement of sale.
Pursuant to the terms of this subdivision, no beneficiary,
trustee, mortgagee, or their agents or successors shall be liable in
any manner to a trustor, mortgagor, their agents or successors or any
beneficiary under a subordinate deed of trust or mortgage or any
other person having a subordinate lien or encumbrance of record
thereon for the failure to allow a reinstatement of the obligation
secured by a deed of trust or mortgage during the period of five
business days prior to the sale of the security property, and no such
right of reinstatement during this period is created by this
section. Any right of reinstatement created by this section is
terminated five business days prior to the date of sale set forth in
the initial date of sale, and is revived only as prescribed herein
and only as of the date set forth herein.
As used in this subdivision, the term "business
day" has the same
meaning as specified in Section 9.
2924d. (a) Commencing with the date that the notice of sale is
deposited in the mail, as provided in Section 2924b, and until the
property is sold pursuant to the power of sale contained in the
mortgage or deed of trust, a beneficiary, trustee, mortgagee, or his
or her agent or successor in interest, may demand and receive from a
trustor, mortgagor, or his or her agent or successor in interest, or
any beneficiary under a subordinate deed of trust, or any other
person having a subordinate lien or encumbrance of record those
reasonable costs and expenses, to the extent allowed by subdivision
(c) of Section 2924c, which are actually incurred in enforcing the
terms of the obligation and trustee's or attorney's fees which are
hereby authorized to be in a base amount which does not exceed four
hundred twenty-five dollars ($425) if the unpaid principal sum
secured is one hundred fifty thousand dollars ($150,000) or less, or
three hundred sixty dollars ($360) if the unpaid principal sum
secured exceeds one hundred fifty thousand dollars ($150,000), plus 1
percent of any portion of the unpaid principal sum secured exceeding
fifty thousand dollars ($50,000) up to and including one hundred
fifty thousand dollars ($150,000), plus one-half of 1 percent of any
portion of the unpaid principal sum secured exceeding one hundred
fifty thousand dollars ($150,000) up to and including five hundred
thousand dollars ($500,000), plus one-quarter of 1 percent of any
portion of the unpaid principal sum secured exceeding five hundred
thousand dollars ($500,000). For purposes of this subdivision, the
unpaid principal sum secured shall be determined as of the date the
notice of default is recorded. Any charge for trustee's or attorney'
s fees authorized by this subdivision shall be conclusively presumed
to be lawful and valid where that charge does not exceed the amounts
authorized herein. Any charge for trustee's or attorney's fees made
pursuant to this subdivision shall be in lieu of and not in addition
to those charges authorized by subdivision (d) of Section 2924c.
(b) Upon the sale of property pursuant to a power of sale, a
trustee, or his or her agent or successor in interest, may demand and
receive from a beneficiary, or his or her agent or successor in
interest, or may deduct from the proceeds of the sale, those
reasonable costs and expenses, to the extent allowed by subdivision
(c) of Section 2924c, which are actually incurred in enforcing the
terms of the obligation and trustee's or attorney's fees which are
hereby authorized to be in an amount which does not exceed four
hundred twenty-five dollars ($425) or one percent of the unpaid
principal sum secured, whichever is greater. For purposes of this
subdivision, the unpaid principal sum secured shall be determined as
of the date the notice of default is recorded. Any charge for
trustee's or attorney's fees authorized by this subdivision shall be
conclusively presumed to be lawful and valid where that charge does
not exceed the amount authorized herein. Any charges for trustee's
or attorney's fees made pursuant to this subdivision shall be in lieu
of and not in addition to those charges authorized by subdivision
(a) of this section and subdivision (d) of Section 2924c.
(c) (1) No person shall pay or offer to pay or collect any
rebate
or kickback for the referral of business involving the performance of
any act required by this article.
(2) Any person who violates this subdivision shall be liable
to
the trustor for three times the amount of any rebate or kickback,
plus reasonable attorney's fees and costs, in addition to any other
remedies provided by law.
(3) No violation of this subdivision shall affect the
validity of
a sale in favor of a bona fide purchaser or the rights of an
encumbrancer for value without notice.
(d) It shall not be unlawful for a trustee to pay or offer to
pay
a fee to an agent or subagent of the trustee for work performed by
the agent or subagent in discharging the trustee's obligations under
the terms of the deed of trust. Any payment of a fee by a trustee to
an agent or subagent of the trustee for work performed by the agent
or subagent in discharging the trustee's obligations under the terms
of the deed of trust shall be conclusively presumed to be lawful and
valid if the fee, when combined with other fees of the trustee, does
not exceed in the aggregate the trustee's fee authorized by
subdivision (d) of Section 2924c or subdivision (a) or (b) of this
section.
(e) When a court issues a decree of foreclosure, it shall
have
discretion to award attorney's fees, costs, and expenses as are
reasonable, if provided for in the note, deed of trust, or mortgage,
pursuant to Section 580c of the Code of Civil Procedure.
2924e. (a) The beneficiary or mortgagee of any deed of trust or
mortgage on real property either containing one to four residential
units or given to secure an original obligation not to exceed three
hundred thousand dollars ($300,000) may, with the written consent of
the trustor or mortgagor that is either effected through a signed and
dated agreement which shall be separate from other loan and security
documents or disclosed to the trustor or mortgagor in at least
10-point type, submit a written request by certified mail to the
beneficiary or mortgagee of any lien which is senior to the lien of
the requester, for written notice of any or all delinquencies of four
months or more, in payments of principal or interest on any
obligation secured by that senior lien notwithstanding that the loan
secured by the lien of the requester is not then in default as to
payments of principal or interest.
The request shall be sent to the beneficiary or mortgagee, or
agent which it might designate for the purpose of receiving loan
payments, at the address specified for the receipt of these payments,
if known, or, if not known, at the address shown on the recorded
deed of trust or mortgage.
(b) The request for notice shall identify the ownership or
security interest of the requester, the date on which the interest of
the requester will terminate as evidenced by the maturity date of
the note of the trustor or mortgagor in favor of the requester, the
name of the trustor or mortgagor and the name of the current owner of
the security property if different from the trustor or mortgagor,
the street address or other description of the security property, the
loan number (if available to the requester) of the loan secured by
the senior lien, the name and address to which notice is to be sent,
and shall include or be accompanied by the signed written consent of
the trustor or mortgagor, and a fee of forty dollars ($40). For
obligations secured by residential properties, the request shall
remain valid until withdrawn in writing and shall be applicable to
all delinquencies as provided in this section, which occur prior to
the date on which the interest of the requester will terminate as
specified in the request or the expiration date, as appropriate. For
obligations secured by nonresidential properties, the request shall
remain valid until withdrawn in writing and shall be applicable to
all delinquencies as provided in this section, which occur prior to
the date on which the interest of the requester will terminate as
specified in the request or the expiration date, as appropriate. The
beneficiary or mortgagee of obligations secured by nonresidential
properties that have sent five or more notices prior to the
expiration of the effective period of the request may charge a fee up
to fifteen dollars ($15) for each subsequent notice. A request for
notice shall be effective for five years from the mailing of the
request or the recording of that request, whichever occurs later, and
may be renewed within six months prior to its expiration date by
sending the beneficiary or mortgagee, or agent, as the case may be,
at the address to which original requests for notice are to be sent,
a copy of the earlier request for notice together with a signed
statement that the request is renewed and a renewal fee of fifteen
dollars ($15). Upon timely submittal of a renewal request for
notice, the effectiveness of the original request is continued for
five years from the time when it would otherwise have lapsed.
Succeeding renewal requests may be submitted in the same manner. The
request for notice and renewals thereof shall be recorded in the
office of the county recorder of the county in which the security
real property is situated. The rights and obligations specified in
this section shall inure to the benefit of, or pass to, as the case
may be, successors in interest of parties specified in this section.
Any successor in interest of a party entitled to notice under this
section shall file a request for that notice with any beneficiary or
mortgagee of the senior lien and shall pay a processing fee of
fifteen dollars ($15). No new written consent shall be required from
the trustor or mortgagor.
(c) Unless the delinquency has been cured, within 15 days
following the end of four months from any delinquency in payments of
principal or interest on any obligation secured by the senior lien
which delinquency exists or occurs on or after 10 days from the
mailing of the request for notice or the recording of that request,
whichever occurs later, the beneficiary or mortgagee shall give
written notice to the requester of the fact of any delinquency and
the amount thereof.
The notice shall be given by personal service, or by deposit
in
the mail, first-class postage paid. Following the recording of any
notice of default pursuant to Section 2924 with respect to the same
delinquency, no notice or further notice shall be required pursuant
to this section.
(d) If the beneficiary or mortgagee of any such senior lien
fails
to give notice to the requester as required in subdivision (c), and a
subsequent foreclosure or trustee's sale of the security property
occurs, the beneficiary or mortgagee shall be liable to the requester
for any monetary damage due to the failure to provide notice within
the time period specified in subdivision (c) which the requester has
sustained from the date on which notice should have been given to the
earlier of the date on which the notice is given or the date of the
recording of the notice of default under Section 2924, and shall also
forfeit to the requester the sum of three hundred dollars ($300). A
showing by the beneficiary or mortgagee by a preponderance of the
evidence that the failure to provide timely notice as required by
subdivision (c) resulted from a bona fide error notwithstanding the
maintenance of procedures reasonably adapted to avoid any such error
shall be a defense to any liability for that failure.
(e) If any beneficiary or mortgagee, or agent which it had
designated for the purpose of receiving loan payments, has been
succeeded in interest by any other person, any request for notice
received pursuant to this section shall be transmitted promptly to
that person.
(f) Any failure to comply with the provisions of this section
shall not affect the validity of a sale in favor of a bona fide
purchaser or the rights of an encumbrancer for value and without
notice.
(g) Upon satisfaction of an obligation secured by a junior
lien
with respect to which a notice request was made pursuant to this
section, the beneficiary or mortgagee that made the request shall
communicate that fact in writing to the senior lienholder to whom the
request was made. The communication shall specify that provision of
notice pursuant to the prior request under this section is no longer
required.
2924f. (a) As used in this section and Sections 2924g and 2924h,
"property" means real property or a leasehold estate therein,
and
"calendar week" means Monday through Saturday, inclusive.
(b) (1) Except as provided in subdivision (c), before any
sale of
property can be made under the power of sale contained in any deed of
trust or mortgage, or any resale resulting from a rescission for a
failure of consideration pursuant to subdivision (c) of Section
2924h, notice of the sale thereof shall be given by posting a written
notice of the time of sale and of the street address and the
specific place at the street address where the sale will be held, and
describing the property to be sold, at least 20 days before the date
of sale in one public place in the city where the property is to be
sold, if the property is to be sold in a city, or, if not, then in
one public place in the judicial district in which the property is to
be sold, and publishing a copy once a week for three consecutive
calendar weeks, the first publication to be at least 20 days before
the date of sale, in a newspaper of general circulation published in
the city in which the property or some part thereof is situated, if
any part thereof is situated in a city, if not, then in a newspaper
of general circulation published in the judicial district in which
the property or some part thereof is situated, or in case no
newspaper of general circulation is published in the city or judicial
district, as the case may be, in a newspaper of general circulation
published in the county in which the property or some part thereof is
situated, or in case no newspaper of general circulation is
published in the city or judicial district or county, as the case may
be, in a newspaper of general circulation published in the county in
this state that (A) is contiguous to the county in which the
property or some part thereof is situated and (B) has, by comparison
with all similarly contiguous counties, the highest population based
upon total county population as determined by the most recent federal
decennial census published by the Bureau of the Census. A copy of
the notice of sale shall also be posted in a conspicuous place on the
property to be sold at least 20 days before the date of sale, where
possible and where not restricted for any reason. If the property is
a single-family residence the posting shall be on a door of the
residence, but, if not possible or restricted, then the notice shall
be posted in a conspicuous place on the property; however, if access
is denied because a common entrance to the property is restricted by
a guard gate or similar impediment, the property may be posted at
that guard gate or similar impediment to any development community.
Additionally, the notice of sale shall conform to the minimum
requirements of Section 6043 of the Government Code and be recorded
with the county recorder of the county in which the property or some
part thereof is situated at least 14 days prior to the date of sale.
The notice of sale shall contain the name, street address in this
state, which may reflect an agent of the trustee, and either a
toll-free telephone number or telephone number in this state of the
trustee, and the name of the original trustor, and also shall contain
the statement required by paragraph (3) of subdivision (c). In
addition to any other description of the property, the notice shall
describe the property by giving its street address, if any, or other
common designation, if any, and a county assessor's parcel number;
but if the property has no street address or other common
designation, the notice shall contain a legal description of the
property, the name and address of the beneficiary at whose request
the sale is to be conducted, and a statement that directions may be
obtained pursuant to a written request submitted to the beneficiary
within 10 days from the first publication of the notice. Directions
shall be deemed reasonably sufficient to locate the property if
information as to the location of the property is given by reference
to the direction and approximate distance from the nearest
crossroads, frontage road, or access road. If a legal description or
a county assessor's parcel number and either a street address or
another common designation of the property is given, the validity of
the notice and the validity of the sale shall not be affected by the
fact that the street address, other common designation, name and
address of the beneficiary, or the directions obtained therefrom are
erroneous or that the street address, other common designation, name
and address of the beneficiary, or directions obtained therefrom are
omitted. The term "newspaper of general circulation," as
used in
this section, has the same meaning as defined in Article 1
(commencing with Section 6000) of Chapter 1 of Division 7 of Title 1
of the Government Code.
The notice of sale shall contain a statement of the total
amount
of the unpaid balance of the obligation secured by the property to be
sold and reasonably estimated costs, expenses, advances at the time
of the initial publication of the notice of sale, and, if republished
pursuant to a cancellation of a cash equivalent pursuant to
subdivision (d) of Section 2924h, a reference of that fact; provided,
that the trustee shall incur no liability for any good faith error
in stating the proper amount, including any amount provided in good
faith by or on behalf of the beneficiary. An inaccurate statement of
this amount shall not affect the validity of any sale to a bona fide
purchaser for value, nor shall the failure to post the notice of
sale on a door as provided by this subdivision affect the validity of
any sale to a bona fide purchaser for value.
(2) If the sale of the property is to be a unified sale as
provided in subparagraph (B) of paragraph (1) of subdivision (a) of
Section 9604 of the Commercial Code, the notice of sale shall also
contain a description of the personal property or fixtures to be
sold. In the case where it is contemplated that all of the personal
property or fixtures are to be sold, the description in the notice of
the personal property or fixtures shall be sufficient if it is the
same as the description of the personal property or fixtures
contained in the agreement creating the security interest in or
encumbrance on the personal property or fixtures or the filed
financing statement relating to the personal property or fixtures.
In all other cases, the description in the notice shall be sufficient
if it would be a sufficient description of the personal property or
fixtures under Section 9108 of the Commercial Code. Inclusion of a
reference to or a description of personal property or fixtures in a
notice of sale hereunder shall not constitute an election by the
secured party to conduct a unified sale pursuant to subparagraph (B)
of paragraph (1) of subdivision (a) of Section 9604 of the Commercial
Code, shall not obligate the secured party to conduct a unified sale
pursuant to subparagraph (B) of paragraph (1) of subdivision (a) of
Section 9604 of the Commercial Code, and in no way shall render
defective or noncomplying either that notice or a sale pursuant to
that notice by reason of the fact that the sale includes none or less
than all of the personal property or fixtures referred to or
described in the notice. This paragraph shall not otherwise affect
the obligations or duties of a secured party under the Commercial
Code.
(c) (1) This subdivision applies only to deeds of trust or
mortgages which contain a power of sale and which are secured by real
property containing a single-family, owner-occupied residence, where
the obligation secured by the deed of trust or mortgage is contained
in a contract for goods or services subject to the provisions of the
Unruh Act (Chapter 1 (commencing with Section 1801) of Title 2 of
Part 4 of Division 3).
(2) Except as otherwise expressly set forth in this
subdivision,
all other provisions of law relating to the exercise of a power of
sale shall govern the exercise of a power of sale contained in a deed
of trust or mortgage described in paragraph (1).
(3) If any default of the obligation secured by a deed of
trust or
mortgage described in paragraph (1) has not been cured within 30
days after the recordation of the notice of default, the trustee or
mortgagee shall mail to the trustor or mortgagor, at his or her last
known address, a copy of the following statement:
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.
(4) All sales of real property pursuant to a power of sale
contained in any deed of trust or mortgage described in paragraph (1)
shall be held in the county where the residence is located and shall
be made to the person making the highest offer. The trustee may
receive offers during the 10-day period immediately prior to the date
of sale and if any offer is accepted in writing by both the trustor
or mortgagor and the beneficiary or mortgagee prior to the time set
for sale, the sale shall be postponed to a date certain and prior to
which the property may be conveyed by the trustor to the person
making the offer according to its terms. The offer is revocable
until accepted. The performance of the offer, following acceptance,
according to its terms, by a conveyance of the property to the
offeror, shall operate to terminate any further proceeding under the
notice of sale and it shall be deemed revoked.
(5) In addition to the trustee fee pursuant to Section 2924c,
the
trustee or mortgagee pursuant to a deed of trust or mortgage subject
to this subdivision shall be entitled to charge an additional fee of
fifty dollars ($50).
(6) This subdivision applies only to property on which
notices of
default were filed on or after the effective date of this
subdivision.
2924g. (a) All sales of property under the power of sale contained
in any deed of trust or mortgage shall be held in the county where
the property or some part thereof is situated, and shall be made at
auction, to the highest bidder, between the hours of 9 a.m. and 5
p.m. on any business day, Monday through Friday.
The sale shall commence at the time and location specified in
the
notice of sale. Any postponement shall be announced at the time and
location specified in the notice of sale for commencement of the sale
or pursuant to paragraph (1) of subdivision (c).
If the sale of more than one parcel of real property has been
scheduled for the same time and location by the same trustee, (1) any
postponement of any of the sales shall be announced at the time
published in the notice of sale, (2) the first sale shall commence at
the time published in the notice of sale or immediately after the
announcement of any postponement, and (3) each subsequent sale shall
take place as soon as possible after the preceding sale has been
completed.
(b) When the property consists of several known lots or
parcels
they shall be sold separately unless the deed of trust or mortgage
provides otherwise. When a portion of the property is claimed by a
third person, who requires it to be sold separately, the portion
subject to the claim may be thus sold. The trustor, if present at
the sale, may also, unless the deed of trust or mortgage otherwise
provides, direct the order in which property shall be sold, when the
property consists of several known lots or parcels which may be sold
to advantage separately, and the trustee shall follow that direction.
After sufficient property has been sold to satisfy the indebtedness
no more can be sold.
If the property under power of sale is in two or more
counties the
public auction sale of all of the property under the power of sale
may take place in any one of the counties where the property or a
portion thereof is located.
(c) (1) There may be a postponement of the sale proceedings
at any
time prior to the completion of the sale at the discretion of the
trustee, or upon instruction by the beneficiary to the trustee that
the sale proceedings be postponed.
There may be a maximum of three postponements of the sale
proceedings pursuant to this subdivision. In the event that the sale
proceedings are postponed more than three times, the scheduling of
any further sale proceedings shall be preceded by the giving of a new
notice of sale in the manner prescribed by Section 2924f.
(2) The trustee shall postpone the sale upon the order of any
court of competent jurisdiction, or where stayed by operation of law,
or by the mutual agreement, whether oral or in writing, of any
trustor and any beneficiary or any mortgagor and any mortgagee. Any
postponement pursuant to this paragraph shall not be a postponement
for purposes of determining the maximum number of postponements
permitted pursuant to this subdivision nor shall a postponement
resulting from the prohibition upon a sale within seven days from the
expiration of an injunction, restraining order, or stay as provided
in subdivision (d) be deemed a postponement for purposes of this
subdivision. In addition, one postponement by the trustee based upon
a reasonable belief that a petition for bankruptcy has been filed
shall not be a postponement for purposes of determining the maximum
number of postponements permitted pursuant to this subdivision.
(d) The notice of each postponement and the reason therefor
shall
be given by public declaration by the trustee at the time and place
last appointed for sale. A public declaration of postponement shall
also set forth the new date, time, and place of sale and the place of
sale shall be the same place as originally fixed by the trustee for
the sale. No other notice of postponement need be given.
However,
the sale shall be conducted no sooner than on the seventh day after
the earlier of (1) dismissal of the action or (2) expiration or
termination of the injunction, restraining order, or stay (which
required postponement of the sale), whether by entry of an order by a
court of competent jurisdiction, operation of law, or otherwise,
unless the injunction, restraining order, or subsequent order
expressly directs the conduct of the sale within that seven-day
period. For purposes of this subdivision, the seven-day period shall
not include the day on which the action is dismissed, or the day on
which the injunction, restraining order, or stay expires or is
terminated. If the sale had been scheduled to occur, but this
subdivision precludes its conduct during that seven-day period, a new
notice of postponement shall be given if the sale had been scheduled
to occur during that seven-day period. The trustee shall maintain
records of each postponement and the reason therefor.
(e) Notwithstanding the time periods established under
subdivision
(d), if postponement of a sale is based on a stay imposed by Title
11 of the United States Code (bankruptcy), the sale shall be
conducted no sooner than the expiration of the stay imposed by that
title and the seven-day provision of subdivision (d) shall not apply.
2924h. (a) Each and every bid made by a bidder at a trustee's sale
under a power of sale contained in a deed of trust or mortgage shall
be deemed to be an irrevocable offer by that bidder to purchase the
property being sold by the trustee under the power of sale for the
amount of the bid. Any second or subsequent bid by the same bidder
or any other bidder for a higher amount shall be a cancellation of
the prior bid.
(b) At the trustee's sale the trustee shall have the right
(1) to
require every bidder to show evidence of the bidder's ability to
deposit with the trustee the full amount of his or her final bid in
cash, a cashier's check drawn on a state or national bank, a check
drawn by a state or federal credit union, or a check drawn by a state
or federal savings and loan association, savings association, or
savings bank specified in Section 5102 of the Financial Code and
authorized to do business in this state, or a cash equivalent which
has been designated in the notice of sale as acceptable to the
trustee prior to, and as a condition to, the recognizing of the bid,
and to conditionally accept and hold these amounts for the duration
of the sale, and (2) to require the last and highest bidder to
deposit, if not deposited previously, the full amount of the bidder's
final bid in cash, a cashier's check drawn on a state or national
bank, a check drawn by a state or federal credit union, or a check
drawn by a state or federal savings and loan association, savings
association, or savings bank specified in Section 5102 of the
Financial Code and authorized to do business in this state, or a cash
equivalent which has been designated in the notice of sale as
acceptable to the trustee, immediately prior to the completion of the
sale, the completion of the sale being so announced by the fall of
the hammer or in another customary manner. The present
beneficiary
of the deed of trust under foreclosure shall have the right to offset
his or her bid(s) only to the extent of the total amount due the
beneficiary including the trustee's fees and expenses.
(c) In the event the trustee accepts a check drawn by a
credit
union or a savings and loan association pursuant to this subdivision
or a cash equivalent designated in the notice of sale, the trustee
may withhold the issuance of the trustee's deed to the successful
bidder submitting the check drawn by a state or federal credit union
or savings and loan association or the cash equivalent until funds
become available to the payee or endorsee as a matter of right.
For the purposes of this subdivision, the trustee's sale
shall be
deemed final upon the acceptance of the last and highest bid, and
shall be deemed perfected as of 8 a.m. on the actual date of sale if
the trustee's deed is recorded within 15 calendar days after the
sale, or the next business day following the 15th day if the county
recorder in which the property is located is closed on the 15th day.
However, the sale is subject to an automatic rescission for a
failure of consideration in the event the funds are not "available
for withdrawal" as defined in Section 12413.1 of the Insurance Code.
The trustee shall send a notice of rescission for a failure of
consideration to the last and highest bidder submitting the check or
alternative instrument, if the address of the last and highest bidder
is known to the trustee.
If a sale results in an automatic right of rescission for
failure
of consideration pursuant to this subdivision, the interest of any
lienholder shall be reinstated in the same priority as if the
previous sale had not occurred.
(d) If the trustee has not required the last and highest
bidder to
deposit the cash, a cashier's check drawn on a state or national
bank, a check drawn by a state or federal credit union, or a check
drawn by a state or federal savings and loan association, savings
association, or savings bank specified in Section 5102 of the
Financial Code and authorized to do business in this state, or a cash
equivalent which has been designated in the notice of sale as
acceptable to the trustee in the manner set forth in paragraph (2) of
subdivision (b), the trustee shall complete the sale. If the last
and highest bidder then fails to deliver to the trustee, when
demanded, the amount of his or her final bid in cash, a cashier's
check drawn on a state or national bank, a check drawn by a state or
federal credit union, or a check drawn by a state or federal savings
and loan association, savings association, or savings bank specified
in Section 5102 of the Financial Code and authorized to do business
in this state, or a cash equivalent which has been designated in the
notice of sale as acceptable to the trustee, that bidder shall be
liable to the trustee for all damages which the trustee may sustain
by the refusal to deliver to the trustee the amount of the final bid,
including any court costs and reasonable attorneys' fees.
If the last and highest bidder willfully fails to deliver to
the
trustee the amount of his or her final bid in cash, a cashier's check
drawn on a state or national bank, a check drawn by a state or
federal credit union, or a check drawn by a state or federal savings
and loan association, savings association, or savings bank specified
in Section 5102 of the Financial Code and authorized to do business
in this state, or a cash equivalent which has been designated in the
notice of sale as acceptable to the trustee, or if the last and
highest bidder cancels a cashiers check drawn on a state or national
bank, a check drawn by a state or federal credit union, or a check
drawn by a state or federal savings and loan association, savings
association, or savings bank specified in Section 5102 of the
Financial Code and authorized to do business in this state, or a cash
equivalent that has been designated in the notice of sale as
acceptable to the trustee, that bidder shall be guilty of a
misdemeanor punishable by a fine of not more than two thousand five
hundred dollars ($2,500).
In the event the last and highest bidder cancels an
instrument
submitted to the trustee as a cash equivalent, the trustee shall
provide a new notice of sale in the manner set forth in Section 2924f
and shall be entitled to recover the costs of the new notice of sale
as provided in Section 2924c.
(e) Any postponement or discontinuance of the sale
proceedings
shall be a cancellation of the last bid.
(f) In the event that this section conflicts with any other
statute, then this section shall prevail.
(g) It shall be unlawful for any person, acting alone or in
concert with others, (1) to offer to accept or accept from another,
any consideration of any type not to bid, or (2) to fix or restrain
bidding in any manner, at a sale of property conducted pursuant to a
power of sale in a deed of trust or mortgage. However, it shall not
be unlawful for any person, including a trustee, to state that a
property subject to a recorded notice of default or subject to a sale
conducted pursuant to this chapter is being sold in an "as-is"
condition.
In addition to any other remedies, any person committing any
act
declared unlawful by this subdivision or any act which would operate
as a fraud or deceit upon any beneficiary, trustor, or junior lienor
shall, upon conviction, be fined not more than ten thousand dollars
($10,000) or imprisoned in the county jail for not more than one
year, or be punished by both that fine and imprisonment.
2924i. (a) This section applies to loans secured by a deed of trust
or mortgage on real property containing one to four residential
units at least one of which at the time the loan is made is or is to
be occupied by the borrower if the loan is for a period in excess of
one year and is a balloon payment loan.
(b) This section shall not apply to (1) open end credit as
defined
in Regulation Z, whether or not the transaction is otherwise subject
to Regulation Z, (2) transactions subject to Section 2956, or (3)
loans made for the principal purpose of financing the construction of
one or more residential units.
(c) At least 90 days but not more than 150 days prior to the
due
date of the final payment on a loan that is subject to this section,
the holder of the loan shall deliver or mail by first-class mail,
with a certificate of mailing obtained from the United States Postal
Service, to the trustor, or his or her successor in interest, at the
last known address of that person, a written notice which shall
include all of the following:
(1) A statement of the name and address of the person to whom
the
final payment is required to be paid.
(2) The date on or before which the final payment is required
to
be paid.
(3) The amount of the final payment, or if the exact amount
is
unknown, a good faith estimate of the amount thereof, including
unpaid principal, interest and any other charges, such amount to be
determined assuming timely payment in full of all scheduled
installments coming due between the date the notice is prepared and
the date when the final payment is due.
(4) If the borrower has a contractual right to refinance the
final
payment, a statement to that effect.
If the due date of the final payment of a loan subject to
this
section is extended prior to the time notice is otherwise required
under this subdivision, this notice requirement shall apply only to
the due date as extended (or as subsequently extended).
(d) For purposes of this section:
(1) A "balloon payment loan" is a loan which
provides for a final
payment as originally scheduled which is more than twice the amount
of any of the immediately preceding six regularly scheduled payments
or which contains a call provision; provided, however, that if the
call provision is not exercised by the holder of the loan, the
existence of the unexercised call provision shall not cause the loan
to be deemed to be a balloon payment loan.
(2) "Call provision" means a loan contract term
that provides the
holder of the loan with the right to call the loan due and payable
either after a specified period has elapsed following closing or
after a specified date.
(3) "Regulation Z" means any rule, regulation, or
interpretation
promulgated by the Board of Governors of the Federal Reserve System
under the Federal Truth in Lending Act, as amended (15 U.S.C. Sec.
1601 et seq.), and any interpretation or approval thereof issued by
an official or employee of the Federal Reserve System duly authorized
by the board under the Truth in Lending Act, as amended, to issue
such interpretations or approvals.
(e) Failure to provide notice as required by subdivision (a)
does
not extinguish any obligation of payment by the borrower, except that
the due date for any balloon payment shall be the date specified in
the balloon payment note, or 90 days from the date of delivery or
mailing of the notice required by subdivision (a), or the due date
specified in the notice required by subdivision (a), whichever date
is later. If the operation of this section acts to extend the term
of any note, interest shall continue to accrue for the extended term
at the contract rate and payments shall continue to be due at any
periodic interval and on any payment schedule specified in the note
and shall be credited to principal or interest under the terms of the
note. Default in any extended periodic payment shall be considered
a default under terms of the note or security instrument.
(f) (1) The validity of any credit document or of any
security
document subject to the provisions of this section shall not be
invalidated solely because of the failure of any person to comply
with this section. However, any person who willfully violates any
provision of this section shall be liable in the amount of actual
damages suffered by the debtor as the proximate result of the
violation, and, if the debtor prevails in any suit to recover that
amount, for reasonable attorney's fees.
(2) No person may be held liable in any action under this
section
if it is shown by a preponderance of the evidence that the violation
was not intentional and resulted from a bona fide error
notwithstanding the maintenance of procedures reasonably adopted to
avoid any such error.
(g) The provisions of this section shall apply to any note
executed on or after January 1, 1984.
2924j. (a) Unless an interpleader action has been filed, within 30
days of the execution of the trustee's deed resulting from a sale in
which there are proceeds remaining after payment of the amounts
required by paragraphs (1) and (2) of subdivision (a) of Section
2924k, the trustee shall send written notice to all persons with
recorded interests in the real property as of the date immediately
prior to the trustee's sale who would be entitled to notice pursuant
to subdivisions (b) and (c) of Section 2924b. The notice shall be
sent by first-class mail in the manner provided in paragraph (1) of
subdivision (c) of Section 2924b and inform each entitled person of
each of the following:
(1) That there has been a trustee's sale of the described
real
property.
(2) That the noticed person may have a claim to all or a
portion
of the sale proceeds remaining after payment of the amounts required
by paragraphs (1) and (2) of subdivision (a) of Section 2924k.
(3) The noticed person may contact the trustee at the address
provided in the notice to pursue any potential claim.
(4) That before the trustee can act, the noticed person may
be
required to present proof that the person holds the beneficial
interest in the obligation and the security interest therefor. In
the case of a promissory note secured by a deed of trust, proof that
the person holds the beneficial interest may include the original
promissory note and assignment of beneficial interests related
thereto. The noticed person shall also submit a written claim to the
trustee, executed under penalty of perjury, stating the following:
(A) The amount of the claim to the date of trustee's sale.
(B) An itemized statement of the principal, interest, and
other
charges.
(C) That claims must be received by the trustee at the
address
stated in the notice no later than 30 days after the date the trustee
sends notice to the potential claimant.
(b) The trustee shall exercise due diligence to determine the
priority of the written claims received by the trustee to the trustee'
s sale surplus proceeds from those persons to whom notice was sent
pursuant to subdivision (a). In the event there is no dispute as to
the priority of the written claims submitted to the trustee, proceeds
shall be paid within 30 days after the conclusion of the notice
period. If the trustee has failed to determine the priority of
written claims within 90 days following the 30-day notice period,
then within 10 days thereafter the trustee shall deposit the funds
with the clerk of the court pursuant to subdivision (c) or file an
interpleader action pursuant to subdivision (e). Nothing in this
section shall preclude any person from pursuing other remedies or
claims as to surplus proceeds.
(c) If, after due diligence, the trustee is unable to
determine
the priority of the written claims received by the trustee to the
trustee's sale surplus of multiple persons or if the trustee
determines there is a conflict between potential claimants, the
trustee may file a declaration of the unresolved claims and deposit
with the clerk of the superior or municipal court, as applicable, of
the county in which the sale occurred, that portion of the sales
proceeds that cannot be distributed, less any fees charged by the
clerk pursuant to this subdivision. The declaration shall specify
the date of the trustee's sale, a description of the property, the
names and addresses of all persons sent notice pursuant to
subdivision (a), a statement that the trustee exercised due diligence
pursuant to subdivision (b), that the trustee provided written
notice as required by subdivisions (a) and (d) and the amount of the
sales proceeds deposited by the trustee with the superior or
municipal court. Further, the trustee shall submit a copy of the
trustee's sales guarantee and any information relevant to the
identity, location, and priority of the potential claimants with the
superior or municipal court and shall file proof of service of the
notice required by subdivision (d) on all persons described in
subdivision (a).
The clerk shall deposit the amount with the county treasurer
subject to order of the superior or municipal court upon the
application of any interested party. The clerk may charge a
reasonable fee for the performance of activities pursuant to this
subdivision equal to the fee for filing an interpleader action
pursuant to Article 2 (commencing with Section 26820) of Division 2
of Title 3 of the Government Code. Upon deposit of that portion of
the sale proceeds that cannot be distributed by due diligence, the
trustee shall be discharged of further responsibility for the
disbursement of sale proceeds. A deposit with the clerk of the
superior or municipal court pursuant to this subdivision may be
either for the total proceeds of the trustee's sale, less any fees
charged by the clerk, if a conflict or conflicts exist with respect
to the total proceeds, or that portion that cannot be distributed
after due diligence, less any fees charged by the clerk.
(d) Before the trustee deposits the funds with the clerk of
the
court pursuant to subdivision (c), the trustee shall send written
notice by first-class mail, postage prepaid, to all persons described
in subdivision (a) informing them that the trustee intends to
deposit the funds with the clerk of the superior or municipal court,
as applicable, and that a claim for the funds must be filed with the
court within 30 days from the date of the notice, providing the
address of the court in which the funds were deposited, and a phone
number for obtaining further information.
Within 90 days after deposit with the clerk, the court shall
consider all claims filed at least 15 days before the date on which
the hearing is scheduled by the court, the clerk shall serve written
notice of the hearing by first-class mail on all claimants identified
in the trustees' declaration at the addresses specified therein.
The court shall distribute the deposited funds to any and all
claimants entitled thereto.
(e) Nothing in this section restricts the ability of a
trustee to
file an interpleader action in order to resolve a dispute about the
proceeds of a trustee's sale. Once an interpleader action has been
filed, thereafter the provisions of this section shall not apply.
(f) "Due diligence," for the purposes of this
section means that
the trustee researched the written claims submitted or other evidence
of conflicts and determined that a conflict of priorities exists
between two or more claimants which the trustee is unable to resolve.
(g) To the extent required by the Unclaimed Property Law, a
trustee in possession of surplus proceeds not required to be
deposited with the court pursuant to subdivision (b) shall comply
with the Unclaimed Property Law (Chapter 7 (commencing with Section
1500) of Title 10 of Part 3 of the Code of Civil Procedure).
(h) Prior to July 1, 2000, the Judicial Council shall adopt a
form
to accomplish the filing authorized by this section.
2924k. (a) The trustee, or the clerk of the court upon order to the
clerk pursuant to subdivision (d) of Section 2924j, shall distribute
the proceeds, or a portion of the proceeds, as the case may be, of
the trustee's sale conducted pursuant to Section 2924h in the
following order of priority:
(1) To the costs and expenses of exercising the power of sale
and
of sale, including the payment of the trustee's fees and attorney's
fees permitted pursuant to subdivision (b) of Section 2924d and
subdivision (b) of this section.
(2) To the payment of the obligations secured by the deed of
trust
or mortgage which is the subject of the trustee's sale.
(3) To satisfy the outstanding balance of obligations secured
by
any junior liens or encumbrances in the order of their priority.
(4) To the trustor or the trustor's successor in
interest. In the
event the property is sold or transferred to another, to the vested
owner of record at the time of the trustee's sale.
(b) A trustee may charge costs and expenses incurred for such
items as mailing and a reasonable fee for services rendered in
connection with the distribution of the proceeds from a trustee's
sale, including, but not limited to, the investigation of priority
and validity of claims and the disbursement of funds. If the fee
charged for services rendered pursuant to this subdivision does not
exceed one hundred dollars ($100), or one hundred twenty-five dollars
($125) where there are obligations specified in paragraph (3) of
subdivision (a), the fee is conclusively presumed to be reasonable.
2924l. (a) In the event that a trustee under a deed of trust is
named in an action or proceeding in which that deed of trust is the
subject, and in the event that the trustee maintains a reasonable
belief that it has been named in the action or proceeding solely in
its capacity as trustee, and not arising out of any wrongful acts or
omissions on its part in the performance of its duties as trustee,
then, at any time, the trustee may file a declaration of nonmonetary
status. The declaration shall be served on the parties in the manner
set forth in Chapter 5 (commencing with Section 1010) of Title 14 of
the Code of Civil Procedure.
(b) The declaration of nonmonetary status shall set forth the
status of the trustee as trustee under the deed of trust that is the
subject of the action or proceeding, that the trustee knows or
maintains a reasonable belief that it has been named as a defendant
in the proceeding solely in its capacity as a trustee under the deed
of trust, its reasonable belief that it has not been named as a
defendant due to any acts or omissions on its part in the performance
of its duties as trustee, the basis for that knowledge or reasonable
belief, and that it agrees to be bound by whatever order or judgment
is issued by the court regarding the subject deed of trust.
(c) The parties who have appeared in the action or proceeding
shall have 15 days from the service of the declaration by the trustee
in which to object to the nonmonetary judgment status of the
trustee. Any objection shall set forth the factual basis on which
the objection is based and shall be served on the trustee.
(d) In the event that no objection is served within the
15-day
objection period, then the trustee shall not be required to
participate any further in the action or proceeding, shall not be
subject to any monetary awards as and for damages, attorneys fees or
costs, shall be required to respond to any discovery requests as a
nonparty, and shall be bound by any court order relating to the
subject deed of trust that is the subject of the action or
proceeding.
(e) In the event of a timely objection to the declaration of
nonmonetary status, the trustee shall thereafter be required to
participate in the action or proceeding.
Additionally, in the event that the parties elect not to, or
fail
to, timely object to the declaration of nonmonetary status, but later
through discovery, or otherwise, determine that the trustee should
participate in the action because of the performance of its duties as
a trustee, the parties may file and serve on all parties and the
trustee a motion pursuant to Section 473 of the Code of Civil
Procedure that specifies the factual basis for the demand. Upon the
court's granting of the motion, the trustee shall thereafter be
required to participate in the action or proceeding.
(f) Upon the filing of the declaration of nonmonetary status,
the
time within which the trustee is required to file an answer or other
responsive pleading shall be tolled for the period of time within
which the opposing parties may respond to the declaration. Upon the
timely service of an objection to the declaration on nonmonetary
status, the trustee shall have 30 days from the date of service
within which to file an answer or other responsive pleading to the
complaint or cross-complaint.
(g) For purposes of this section, "trustee"
includes any agent or
employee of the trustee who performs some or all of the duties of a
trustee under this article.
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