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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-13</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Pacheco</ns0:AuthorText>
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<ns0:Name>Pacheco</ns0:Name>
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<ns0:Title> An act to repeal Sections 2924m and 2924o of, and to repeal and amend Sections 2924d, 2924f, 2924g, and 2924h of, the Civil Code, and to amend Sections 50612, 50720.2, 50720.6, 50720.8, and 50720.12 of the Health and Safety Code, relating to mortgages.</ns0:Title>
<ns0:RelatingClause>mortgages</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Mortgages: foreclosure.</ns0:Subject>
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<ns0:DigestText>
<html:p>Existing law generally regulates foreclosures of real property under the power of sale contained in the mortgage or deed of trust. Existing law prohibits a trustee from bundling properties for the purpose of sale, instead requiring each property to bid on separately, unless the deed of trust or mortgage requires otherwise.</html:p>
<html:p>Existing law imposes certain restrictions on a trustee’s sale of real property containing one to 4 residential units. Specifically, existing law provides tenants of that property, prospective owner-occupants, and specified nonprofit housing entities 45 days to purchase the property before a sale to any other bidder becomes final, as specified. If one of those specified nonprofit housing entities purchases the property pursuant to that provision, existing law requires the property to be subject to a recorded covenant that
requires the property be sold at an affordable housing cost or rented at an affordable rent for lower income households, as specified.</html:p>
<html:p>Under existing law, the above-described prohibition on bundling properties for sale and the above-described provisions relating to the sale of those specified residential properties are repealed on January 1, 2031.</html:p>
<html:p>This bill would instead repeal these provisions on January 1, 2027. The bill would also make technical conforming changes.</html:p>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Section 2924d of the
<ns0:DocName>Civil Code</ns0:DocName>
, as amended by Section 1 of Chapter 642 of the Statutes of 2022, is repealed.
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<ns0:Num>SEC. 2.</ns0:Num>
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Section 2924d of the
<ns0:DocName>Civil Code</ns0:DocName>
, as added by Section 2 of Chapter 642 of the Statutes of 2022, is amended to read:
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<ns0:Num>2924d.</ns0:Num>
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<html:p>
(a)
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(1)
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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 their agent or successor in interest may demand and receive from a trustor, mortgagor, or their 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, that are actually incurred in enforcing the terms of the obligation and trustee’s or attorney’s fees that are hereby authorized to be in an amount as follows:
</html:p>
<html:p>
(A)
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If the unpaid principal sum secured is fifty thousand dollars ($50,000) or less, then in a base amount that does not exceed four hundred seventy-five dollars ($475).
</html:p>
<html:p>
(B)
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If the unpaid principal sum secured is greater than fifty thousand dollars ($50,000) but does not exceed one hundred fifty thousand dollars ($150,000), then in a base amount that does not exceed four hundred seventy-five dollars ($475) plus 1 percent of the unpaid principal sum secured exceeding fifty thousand dollars ($50,000).
</html:p>
<html:p>
(C)
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If the unpaid principal sum secured is greater than one hundred fifty thousand dollars ($150,000) but does not exceed five hundred thousand dollars ($500,000), then in a base amount that does not exceed four hundred ten dollars ($410) plus 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-half of 1 percent of any portion of the unpaid principal sum secured exceeding one hundred fifty thousand dollars ($150,000).
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
If the unpaid principal sum secured exceeds five hundred thousand dollars ($500,000), then in a base amount that does not exceed four hundred ten dollars ($410) plus 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-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).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
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 in this subdivision. 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.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Upon the sale of property pursuant to a power of sale, a trustee, or their agent or successor in interest, may demand and receive from a beneficiary, or their 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, that are actually incurred in enforcing the terms of the obligation and trustee’s or attorney’s fees that are hereby authorized to be in an amount which does not
exceed four hundred seventy-five dollars ($475) or 1 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.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
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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.
</html:p>
<html:p>
(2)
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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.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(f)
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This section shall be operative January 1, 2027.
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<ns0:Num>SEC. 3.</ns0:Num>
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Section 2924f of the
<ns0:DocName>Civil Code</ns0:DocName>
, as amended by Section 7 of Chapter 200 of the Statutes of 2025, is repealed.
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<ns0:Num>SEC. 4.</ns0:Num>
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Section 2924f of the
<ns0:DocName>Civil Code</ns0:DocName>
, as amended by Section 8 of Chapter 200 of the Statutes of 2025, is amended to read:
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<ns0:Num>2924f.</ns0:Num>
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<html:p>
(a)
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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.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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 county seat of the county where the property is to be sold, and publishing a copy once a week for three consecutive calendar weeks.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The first publication to be at least 20 days before the date of sale, in a newspaper of general circulation published in the public notice district in which the property or some part thereof is situated, or in case no newspaper of general circulation is published in the public notice district, 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 public notice district or county, as the case may be, in a newspaper of general circulation published in the county in this state that is contiguous to the county in which the property or some part thereof is situated
and 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. For the purposes of this section, publication of notice in a public notice district is governed by Chapter 1.1 (commencing with Section 6080) of Division 7 of Title 1 of the Government Code.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
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 20 days prior to the date of sale.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(7)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(8)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
On and after April 1, 2012, if the deed of trust or mortgage containing a power of sale is secured by real property containing from one to four single-family residences, the notice of sale shall contain substantially the following language, in addition to the language required pursuant to paragraphs (1) to (7), inclusive:
</html:p>
<html:br/>
<html:p>NOTICE TO POTENTIAL BIDDERS: If you are considering bidding on this property lien, you should understand that there are risks involved in bidding at a trustee auction. You will be bidding on a lien, not on the property itself. Placing the
highest bid at a trustee auction does not automatically entitle you to free and clear ownership of the property. You should also be aware that the lien being auctioned off may be a junior lien. If you are the highest bidder at the auction, you are or may be responsible for paying off all liens senior to the lien being auctioned off, before you can receive clear title to the property. You are encouraged to investigate the existence, priority, and size of outstanding liens that may exist on this property by contacting the county recorder’s office or a title insurance company, either of which may charge you a fee for this information. If you consult either of these resources, you should be aware that the same lender may hold more than one mortgage or deed of trust on the property.</html:p>
<html:br/>
<html:p>NOTICE TO PROPERTY OWNER: The sale date shown on this notice of sale may be postponed one or more times by the mortgagee, beneficiary, trustee, or a
court, pursuant to Section 2924g of the California Civil Code. The law requires that information about trustee sale postponements be made available to you and to the public, as a courtesy to those not present at the sale. If you wish to learn whether your sale date has been postponed, and, if applicable, the rescheduled time and date for the sale of this property, you may call [telephone number for information regarding the trustee’s sale] or visit this internet website [internet website address for information regarding the sale of this property], using the file number assigned to this case [case file number]. Information about postponements that are very short in duration or that occur close in time to the scheduled sale may not immediately be reflected in the telephone information or on the internet website. The best way to verify postponement information is to attend the scheduled sale.</html:p>
<html:br/>
<html:p>
(B)
<html:span class="EnSpace"/>
A
mortgagee, beneficiary, trustee, or authorized agent shall make a good faith effort to provide up-to-date information regarding sale dates and postponements to persons who wish this information. This information shall be made available free of charge. It may be made available via an internet website, a telephone recording that is accessible 24 hours a day, seven days a week, or through any other means that allows 24 hours a day, seven days a week, no-cost access to updated information. A disruption of any of these methods of providing sale date and postponement information to allow for reasonable maintenance or due to a service outage shall not be deemed to be a violation of the good faith standard.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Except as provided in subparagraph (B), nothing in the wording of the notices required by subparagraph (A) is intended to modify or create any substantive rights or obligations for any person providing, or specified in, either of the required
notices. Failure to comply with subparagraph (A) or (B) shall not invalidate any sale that would otherwise be valid under this section.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Information provided pursuant to subparagraph (A) does not constitute the public declaration required by subdivision (d) of Section 2924g.
</html:p>
<html:p>
(9)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
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).
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
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 their last known address, a copy of the following statement:
</html:p>
<html:table class="convertedTable" id="id_CA4DB942-1680-45FB-963E-F6648D0FBA9C">
<html:colgroup>
<html:col width="412.0"/>
</html:colgroup>
<html:tbody>
<html:tr>
<html:td>
<html:p class="Left10Point" style="font-size:10pt; text-align:left; ; text-indent:0pt;">YOU ARE IN DEFAULT UNDER A</html:p>
</html:td>
</html:tr>
<html:tr>
<html:td>
<html:p class="Left10Point" style="font-size:10pt; text-align:left; ; text-indent:0pt;">
<html:span class="UnderlinedLeaders"/>
,
</html:p>
</html:td>
</html:tr>
<html:tr>
<html:th>
<html:p class="Center10Point" style="font-size:10pt; text-align:center; text-indent:0pt;">(Deed of trust or mortgage)</html:p>
</html:th>
</html:tr>
<html:tr>
<html:td>
<html:p class="Justify10Point" style="font-size:10pt; text-align:justify; hyphenation: yes;">
DATED
<html:span class="EnSpace"/>
____. UNLESS YOU TAKE ACTION TO PROTECT
<html:br/>
YOUR PROPERTY, IT MAY BE SOLD AT A PUBLIC SALE.
<html:br/>
IF YOU NEED AN EXPLANATION OF THE NATURE OF THE
<html:br/>
PROCEEDING AGAINST YOU, YOU SHOULD CONTACT
<html:br/>
A LAWYER.
</html:p>
</html:td>
</html:tr>
</html:tbody>
</html:table>
<html:p>
(4)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
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).
</html:p>
<html:p>
(6)
<html:span class="EnSpace"/>
This subdivision applies only to property on which notices of default were filed on or after the effective date of this subdivision.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
With respect to residential real property containing no more than four dwelling units, a separate document containing a summary of the notice of sale information in English and the languages described in Section 1632 shall be attached to the notice of sale provided to the mortgagor or trustor pursuant to
Section 2923.3.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
With respect to residential real property containing no more than four dwelling units that is subject to a power of sale contained in any deed of trust or mortgage, a sale of the property under the power of sale shall not be conducted until the expiration of an additional 45 days following the scheduled date of sale pursuant to subdivision (a) or (c) of Section 2924g if the trustee receives, at least five business days before the scheduled date of sale, from the mortgagor or trustor, by certified mail with the United States Postal Service or by another overnight mail courier service with tracking information that confirms the recipient’s signature and the date and time of receipt and delivery, a listing agreement with a California licensed real estate broker to be placed in a publicly available marketing platform for the sale of the property at least five business days before the scheduled date of
sale. The provisions of this paragraph shall not be used to postpone the scheduled sale date more than once.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If a scheduled date of sale is postponed pursuant to paragraph (1), the trustor’s or mortgagor’s right to reinstate the account shall be extended, calculated pursuant to subdivision (e) of Section 2924c based on the new scheduled date of sale.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
If a scheduled date of sale has been postponed pursuant to paragraph (1) and the trustee receives, at least five business days before the scheduled date of sale, from the mortgagor or trustor, by certified mail with the United States Postal Service or by another overnight mail courier service with tracking information that confirms the recipient’s signature and the date and time of receipt and delivery, a copy of a purchase agreement for the sale of the property at least five business days before the scheduled sale, the
trustee shall postpone the scheduled date of sale to a date that is at least 45 days after the date on which the purchase agreement was received by the trustee. The provisions of this paragraph shall not be used to postpone the scheduled sale date more than once.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
For purposes of this subdivision, “purchase agreement” means a bona fide and fully executed contract for the sale of the property that is subject to a power of sale with a purchase price amount equal to or greater than the amount of the unpaid balance of all obligations of record secured by the property that includes the name of the buyer, the sales price, the agreed closing date, and acceptance by the designated escrow agent.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
With respect to residential real property containing no more than four dwelling units that is subject to a power of sale contained in a first lien deed of trust or
mortgage, the mortgagee, beneficiary, or authorized agent shall provide to the trustee a fair market value of the property at least 10 days prior to the initially scheduled date of sale, and the trustee shall not sell the property at the first sale at which a bid can be made for less than 67 percent of that fair market value of the property. The trustee may rely on the fair market value provided pursuant to this paragraph, and shall not have a duty to verify the source or accuracy of the valuation.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
If the property remains unsold after the first sale at which a bid can be made pursuant to paragraph (1), then the trustee shall postpone the sale for at least seven days, and the property may be sold to the highest bidder.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
For purposes of this subdivision, “fair market value of the
property” means an estimate of the fair market value of the property made within six months of the initially scheduled date of sale and determined by an opinion of a licensed real estate broker, an appraisal from a licensed appraiser, a value from a commercially utilized automated valuation model, or a value from a computerized property valuation system that is used to derive a real property value.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A failure to comply with the provisions of paragraph (1) shall not affect the validity of a trustee’s sale or a sale to a bona fide purchaser for value.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The provisions of this subdivision shall apply to the initial trustee’s sale for each notice of sale issued pursuant to subdivision (b) of Section 2924f.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
This section shall be operative January 1,
2027.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_D3251B51-5B54-4449-87B2-19B782F723ED">
<ns0:Num>SEC. 5.</ns0:Num>
<ns0:ActionLine action="IS_REPEALED" ns3:type="locator" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'14.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'2924g.'%5D)" ns3:label="fractionType: LAW_SECTION||version: Amended (as amended by Stats. 2022, Ch. 642, Sec. 5) by Stats. 2024, Ch. 601, Sec. 6. [id_2b5f3755-a868-11ef-a579-af09e4d01935]">
Section 2924g of the
<ns0:DocName>Civil Code</ns0:DocName>
, as amended by Section 6 of Chapter 601 of the Statutes of 2024, is repealed.
</ns0:ActionLine>
<ns0:Fragment/>
</ns0:BillSection>
<ns0:BillSection id="id_ECD2EE5A-AC22-4635-86F5-2984ADD2234A">
<ns0:Num>SEC. 6.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:type="locator" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'14.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'2924g.'%5D)" ns3:label="fractionType: LAW_SECTION||version: Amended (as amended by Stats. 2022, Ch. 642, Sec. 6) by Stats. 2024, Ch. 601, Sec. 7. [id_41998617-a868-11ef-a579-af09e4d01935]">
Section 2924g of the
<ns0:DocName>Civil Code</ns0:DocName>
, as amended by Section 7 of Chapter 601 of the Statutes of 2024, is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_DA3A56A1-D18C-4D5C-8AF7-8A9890AA1B40">
<ns0:Num>2924g.</ns0:Num>
<ns0:LawSectionVersion id="id_71626D22-6FD6-4FBA-BFF6-3877F521CCA5">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
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).
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
If the sale of more than one parcel of real property has been scheduled for the same time and location by the same
trustee, all of the following conditions apply:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Any postponement of any of the sales shall be announced at the time published in the notice of sale.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The first sale shall commence at the time published in the notice of sale or immediately after the announcement of any postponement.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Each subsequent sale shall take place as soon as possible after the preceding sale has been completed.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
A sale that is postponed pursuant to subparagraph (E) of paragraph (1) of subdivision (c) shall be postponed seven calendar days at the same time and location.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>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.</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
There may be a postponement or postponements of the sale proceedings, including a
postponement upon instruction by the beneficiary to the trustee that the sale proceedings be postponed, at any time prior to the completion of the sale for any period of time not to exceed a total of 365 days from the date set forth in the notice of sale. The trustee shall postpone the sale in accordance with any of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Upon the order of any court of competent jurisdiction.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
If stayed by operation of law.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
By mutual agreement, whether oral or in writing, of any trustor and any beneficiary or any mortgagor and any mortgagee.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
At the discretion of the trustee.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
If an act of force majeure prevents access to the sale location at the time of the sale.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
In the event that the sale proceedings are postponed for a period or periods totaling more than 365 days, the scheduling of any further sale proceedings shall be preceded by giving a new notice of sale in the manner prescribed in Section 2924f. New fees incurred for the new notice of sale shall not exceed the amounts specified in Sections 2924c and 2924d, and shall not exceed reasonable costs that are necessary to comply with this paragraph.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
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 that 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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The public declaration described in paragraph (1) shall not be required if the sale is postponed because an act of force majeure prevented access to the sale location.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
For purposes of this section, “an act of force majeure” means an event that was unforeseeable at the time the sale was scheduled that is outside of the trustee’s control and renders completion of the sale impossible or impractical.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
This section shall be operative January 1,
2027.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_195FD9FB-588B-4F8A-B288-6AE53E052D62">
<ns0:Num>SEC. 7.</ns0:Num>
<ns0:ActionLine action="IS_REPEALED" ns3:type="locator" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'14.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'2924h.'%5D)" ns3:label="fractionType: LAW_SECTION||version: Amended (as amended by Stats. 2024, Ch. 142, Sec. 4) by Stats. 2024, Ch. 601, Sec. 8. [id_58237b79-a868-11ef-a579-af09e4d01935]">
Section 2924h of the
<ns0:DocName>Civil Code</ns0:DocName>
, as amended by Section 8 of Chapter 601 of the Statutes of 2024, is repealed.
</ns0:ActionLine>
<ns0:Fragment/>
</ns0:BillSection>
<ns0:BillSection id="id_20159E39-2AC3-4834-932E-860FBC43BBB8">
<ns0:Num>SEC. 8.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:type="locator" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'14.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'2924h.'%5D)" ns3:label="fractionType: LAW_SECTION||version: Amended (as amended by Stats. 2022, Ch. 642, Sec. 8) by Stats. 2024, Ch. 601, Sec. 9. [id_6e6d81ab-a868-11ef-a579-af09e4d01935]">
Section 2924h of the
<ns0:DocName>Civil Code</ns0:DocName>
, as amended by Section 9 of Chapter 601 of the Statutes of 2024, is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_BEF19954-FFF6-4CAB-A251-8F1C75B6BAE3">
<ns0:Num>2924h.</ns0:Num>
<ns0:LawSectionVersion id="id_0F4FCBE9-3FE0-463B-B9DD-8F691CFCF120">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
At the trustee’s sale, the trustee shall have the right to require any of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Every bidder to show evidence of the bidder’s ability to deposit with the trustee the full amount of their 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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Any bid that is not cash to be made directly payable to the trustee, if the requirement is set forth by the trustee in the notice of sale.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
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 their bid or bids only to the extent of the total amount due the beneficiary including the trustee’s fees and expenses.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
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. The trustee may require the successful bidder to replace the check drawn by a credit union or a savings and loan association or cash equivalent pursuant to this subdivision with a check drawn by a credit union or a savings and loan association or cash equivalent to this subdivision made directly payable to the trustee if necessary for the funds to be made available to the trustee.
</html:p>
<html:p>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.</html:p>
<html:p>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.</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
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 their 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 attorney’s fees.
</html:p>
<html:p>If the last and highest bidder willfully fails to deliver to the trustee the amount of their 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 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 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).</html:p>
<html:p>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.</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Any postponement or discontinuance of the sale proceedings shall be a cancellation of the last bid.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
In the event that this section conflicts with any other statute, then this section shall prevail.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>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.</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
This section shall be operative January 1,
2027.
</html:p>
</ns0:Content>
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</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_8E504A5C-B7BE-4BE9-B880-3B0C670C6AFF">
<ns0:Num>SEC. 9.</ns0:Num>
<ns0:ActionLine action="IS_REPEALED" ns3:type="locator" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'14.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'2924m.'%5D)" ns3:label="fractionType: LAW_SECTION">
Section 2924m of the
<ns0:DocName>Civil Code</ns0:DocName>
is repealed.
</ns0:ActionLine>
<ns0:Fragment/>
</ns0:BillSection>
<ns0:BillSection id="id_C4D8B235-FAD5-4BDB-AF97-50539ABD52AD">
<ns0:Num>SEC. 10.</ns0:Num>
<ns0:ActionLine action="IS_REPEALED" ns3:type="locator" ns3:href="urn:caml:codes:CIV:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'3.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'4.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'TITLE'%20and%20caml%3ANum%3D'14.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'ARTICLE'%20and%20caml%3ANum%3D'1.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'2924o.'%5D)" ns3:label="fractionType: LAW_SECTION">
Section 2924o of the
<ns0:DocName>Civil Code</ns0:DocName>
is repealed.
</ns0:ActionLine>
<ns0:Fragment/>
</ns0:BillSection>
<ns0:BillSection id="id_74361A59-36FE-4FC7-B3C6-4CF2EA6A6186">
<ns0:Num>SEC. 11.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:type="locator" ns3:href="urn:caml:codes:HSC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'31.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'5.6.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'50612.'%5D)" ns3:label="fractionType: LAW_SECTION">
Section 50612 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_50ACCB99-77B4-4790-A22D-31FA562DCB1C">
<ns0:Num>50612.</ns0:Num>
<ns0:LawSectionVersion id="id_6CCB6274-BB12-4510-9E32-5B1063E68925">
<ns0:Content>
<html:p>For purposes of this chapter:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
“Afford” and “affordable” mean that a household pays no more than 30 percent of its household income on rent.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
“Affordable rent” has the same meaning as defined in Section 50675.2.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
“Department” means the Department of Housing and Community Development.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
“Extremely low income” has the same meaning as the term “extremely low income households” is defined in Section 50106.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
“Limited-equity housing cooperative” has the same meaning as the term is defined in Section 817 of the Civil
Code.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
“Low-income” has the same meaning as the term “lower income households” is defined in Section 50079.5.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
“Mission-driven nonprofit entity” includes both of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
An eligible nonprofit corporation with all of the following attributes:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
It has a determination letter from the Internal Revenue Service affirming its tax-exempt status pursuant to Section 501(c)(3) of the Internal Revenue Code and is not a private foundation as that term is defined in Section 509 of the Internal Revenue Code.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
It has its principal place of business in California.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The primary residences of all board members are located in California.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
One of its primary activities is the development and preservation of affordable rental or home ownership housing in California.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
It is registered and in good standing with the Attorney General’s Registry of Charities and Fundraisers, pursuant to the Supervision of Trustees and Fundraisers for Charitable Purposes Act (Article 7 (commencing with Section 12580) of Chapter 6 of Part 2 of Division 3 of Title 2 of the Government Code).
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Community land trust” as defined in Section 402.1 of the Revenue and Taxation Code.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
“Moderate income” has the same meaning as the term “persons and families of moderate income” is defined in Section 50093.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
“Public agency” means the state, any county, city, city and county, district, redevelopment agency, housing authority, or any other political
subdivision of the state.
</html:p>
<html:p>
(j)
<html:span class="EnSpace"/>
“Social housing” means housing that meets all of the following requirements:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The housing units are owned and managed by a public agency, a local authority, a limited-equity housing cooperative, or a mission-driven nonprofit entity solely for the benefit of residents and households unable to afford market rent.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Each social housing development contains housing units that accommodate a mix of household income ranges, including extremely low, very low, low-, and moderate-income households unable to afford market rent.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Residents of the housing units enjoy full protection against termination without just cause or for any discriminatory, retaliatory, or other arbitrary reason, and shall be afforded due process prior to
being subject to eviction procedures.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
The housing units are protected for the duration of their useful life, and the land associated with the housing units is protected permanently, from being sold or transferred to any private person or for-profit entity or a public-private partnership.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Residents have the right to participate directly and meaningfully in decisionmaking affecting the operation and management of the housing units in which they reside.
</html:p>
<html:p>
(k)
<html:span class="EnSpace"/>
“Social housing development” includes both newly constructed units of social housing and market units or other housing units preserved or rehabilitated as social housing.
</html:p>
<html:p>
(l)
<html:span class="EnSpace"/>
“Study” means the California Social Housing Study required by Section 50613.
</html:p>
<html:p>
(m)
<html:span class="EnSpace"/>
“Very low income” has the same meaning as the term “very low income households” is defined in Section 50105.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_974FE02B-8333-4986-A166-F745DCFE3B63">
<ns0:Num>SEC. 12.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:type="locator" ns3:href="urn:caml:codes:HSC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'31.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'8.6.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'50720.2.'%5D)" ns3:label="fractionType: LAW_SECTION">
Section 50720.2 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_66BA8B5A-82AB-4797-8E8F-2AA8A7AD9247">
<ns0:Num>50720.2.</ns0:Num>
<ns0:LawSectionVersion id="id_69132DC0-64E0-4E8C-8A4C-5279BF9DB50D">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The Foreclosure Intervention Housing Preservation Program is hereby established. The department shall administer the program for the purpose of preserving affordable housing and promoting resident ownership or nonprofit organization ownership of residential real property.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Upon appropriation by the Legislature, the program shall be administered by the department to provide loans and grants to eligible borrowers to support the acquisition of 1 to 25 unit properties meeting any of the following criteria:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Real property subject to a preforeclosure intervention sale.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Real property subject to a foreclosure risk intervention sale.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Real property subject to a recorded notice of default.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Eligible borrowers shall be any one of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
A natural person who at the time of a trustee’s sale of property under a power of sale contained in a deed of trust or mortgage
on real property containing one to four residential units pursuant to Section 2924g of the Civil Code:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Is occupying the real property as their primary residence.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Is occupying the real property under a rental or lease agreement entered into as the result of an arm’s-length transaction with the mortgagor or trustor, or with the mortgagor or trustor’s predecessor in interest, on a date prior to the recording of the notice of default against the property.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Is not the mortgagor or trustor, or the child, spouse, or parent of the mortgagor or trustor.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
Is not acting as the agent of any other person or entity in purchasing the real property.
</html:p>
<html:p>
(v)
<html:span class="EnSpace"/>
Has not filed a petition under Chapter 7, 11, 12, or 13 of Title 11 of the United States Code at any time during the period from the date of the trustee’s sale of the property to the 45th day after the trustee’s sale, or the next business day following the 45th day if the 45th day is a weekend or holiday.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
A nonprofit association, nonprofit corporation, or cooperative corporation in which a person described in subparagraph (A) is a voting member or director.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
An eligible nonprofit corporation with all of the following attributes:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
It has a determination letter from the Internal Revenue Service affirming its tax-exempt status pursuant to Section 501(c)(3) of the Internal Revenue Code and is not a private foundation as that term is defined in Section 509 of the Internal Revenue Code.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
It has its principal place of business in California.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
The primary residences of all board members are located in California.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
One of its primary activities is the development and preservation of affordable rental or home ownership housing in California.
</html:p>
<html:p>
(v)
<html:span class="EnSpace"/>
It is registered and in good standing with the Attorney General’s Registry of Charities and Fundraisers, pursuant to the Supervision of Trustees and Fundraisers for Charitable Purposes Act (Article 7 (commencing with Section 12580) of Chapter 6 of Part 2 of Division 3 of Title 2 of the Government Code).
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
A limited liability company wholly owned by one or more eligible nonprofit corporations as described in subparagraph (B) or (C).
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
A community land trust, as defined in clause (ii) of subparagraph (C) of paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
A limited-equity housing cooperative as defined in Section 817 of the Civil Code.
</html:p>
<html:p>
(G)
<html:span class="EnSpace"/>
The state, the Regents of the University of California, a county, city, district, public authority, or public agency, and any other political subdivision or public corporation in the state.
</html:p>
<html:p>
(H)
<html:span class="EnSpace"/>
An organization whose primary activity is the development and preservation of affordable housing that is at least one of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
An incorporated nonprofit organization as described in Section 501(c)(3) of the Internal Revenue Code (26 U.S.C. Sec. 501(c)(3)) that is exempt from taxation under Section 501(a) of that code (26 U.S.C. Sec. 501(a)).
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
A nonprofit corporation as that term is defined in Section 50091.
</html:p>
<html:p>
(I)
<html:span class="EnSpace"/>
A limited liability company that satisfies both of the following criteria:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
A community land trust holds a controlling interest in the company.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
A community land trust is the managing member of the company.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Up to 20 percent of the funds appropriated for this program may be expended for the costs to administer the program. Costs to administer the program include, but are not limited to, all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Costs to develop the guidelines required by this chapter, which may include, but is not limited to, the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Department staffing expenses incurred in developing the guidelines.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Contracting with one or more program fund managers to develop the guidelines.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Contracting with third-party consultants to develop guidelines.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Costs to develop lending criteria.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Costs to advertise the program.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Costs to develop technical assistance tools to support qualified entities in navigating the requirements and processes to apply for funding including, but not limited to, the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Training modules.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Acquisition-rehabilitation specific financing templates and guidance, such as pro formas and worksheets.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Best practice guides for engaging tenants before and after property acquisition, managing safe and
accessible rehabilitation of occupied buildings, facilitating resident ownership, and any other topic deemed appropriate by the department.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
Technical assistance with resident engagement and education, property assessment and due diligence, affordable housing operations management, acquisition-rehabilitation project financial assistance, construction, and property management.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
Administrative costs of fund managers to implement the program pursuant to Section 50720.6.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Funds not committed to fund managers pursuant to Section 50720.6 as of December 31, 2025, or any funds returned from fund managers, shall be deposited into the Housing Rehabilitation Loan Fund to be made available for loans authorized by Chapter 5.5 (commencing with Section 50606) or for loans authorized by Chapter 6.7 (commencing with Section
50675). Notwithstanding the requirements of Chapter 5.5, uncommitted or returned funds made available for purposes of Chapter 5.5 may be used to assist projects funded by the department or other public entities.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
Not later than May 15, 2023, the department shall report to the chairs of the Assembly Committee on Budget and the Senate Committee on Budget and Fiscal Review on the implementation of this program, including the amount of funding disbursed and number, location, and cost of acquired properties, as well as the number of units acquired.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
All repayments of program funds to fund managers, including loan principal and any interest collected on those loans, and any interest earned on the funds held by the fund managers shall be deposited into separately maintained reuse accounts held by fund managers for purposes of the program. Fund managers shall use funds held in those
reuse accounts for purposes of the program, which may include, but not be limited to, loans and grants to pay for repairs, maintenance, or improvements on properties acquired pursuant to the program.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_C88E0A25-B252-481F-9DE7-44DF1203E1ED">
<ns0:Num>SEC. 13.</ns0:Num>
<ns0:ActionLine action="IS_AMENDED" ns3:type="locator" ns3:href="urn:caml:codes:HSC:caml#xpointer(%2Fcaml%3ALawDoc%2Fcaml%3ACode%2Fcaml%3ALawHeading%5B%40type%3D'DIVISION'%20and%20caml%3ANum%3D'31.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'PART'%20and%20caml%3ANum%3D'2.'%5D%2Fcaml%3ALawHeading%5B%40type%3D'CHAPTER'%20and%20caml%3ANum%3D'8.6.'%5D%2Fcaml%3ALawSection%5Bcaml%3ANum%3D'50720.6.'%5D)" ns3:label="fractionType: LAW_SECTION">
Section 50720.6 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
</ns0:ActionLine>
<ns0:Fragment>
<ns0:LawSection id="id_664A55F5-3849-4411-B085-1C2DECCF6297">
<ns0:Num>50720.6.</ns0:Num>
<ns0:LawSectionVersion id="id_BD136385-65FC-4FE9-900C-EDC30184C001">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The department shall grant funds to one or more fund managers to implement the program until June 30, 2026, which shall include funds for all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Capitalized operating subsidy reserves.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Loans or grants awarded pursuant to this chapter.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Administrative costs authorized pursuant to paragraph (3) of subdivision (b) of Section 50720.2.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
A contract between the department and a fund manager to carry out the provisions of this chapter may be amended past June 30, 2026, if funds are available and if deemed appropriate by the department.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The fund manager or managers shall, in compliance with the guidelines adopted pursuant to this chapter, be responsible for all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Reviewing and approving loan or grant applications.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Originating and servicing loans or grants, including capitalized operating subsidy reserves.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Establishing terms and conditions for loan or grant applications pursuant to the guidelines adopted pursuant to this chapter.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Ensuring compliance with loan or grant terms and conditions.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
The fund manager or managers shall meet
both of the following criteria:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Be a nonprofit lender with experience making real estate loans in this state, or be a housing trust fund operated by a city, a county, a city and county, or a joint powers authority as described in Article I (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code operated for the purpose of funding the development, acquisition, rehabilitation, or preservation of affordable housing for low- or moderate-income residents.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Have originated and serviced loans to develop, maintain, improve, or acquire affordable housing, including at least five million dollars ($5,000,000) in acquisition loans.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
The department may, but is not required to, contract with one or more third-party consultants to assist with administering the program.
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
Any third-party consultant contracted with by the department pursuant to this subdivision must demonstrate expertise in a variety of property ownership and stewardship models, such as rental housing, home ownership, community land trusts, limited-equity housing cooperatives, workforce housing cooperative trusts, or nonprofit affordable housing cooperatives.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
In contracting with a third-party consultant pursuant to this subdivision the department shall prioritize to third-party consultants that demonstrate a commitment to and experience in advancing racial equity.
</html:p>
</ns0:Content>
</ns0:LawSectionVersion>
</ns0:LawSection>
</ns0:Fragment>
</ns0:BillSection>
<ns0:BillSection id="id_E66CF61C-E330-4513-834F-CA8B2C4A8079">
<ns0:Num>SEC. 14.</ns0:Num>
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Section 50720.8 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:Num>50720.8.</ns0:Num>
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<html:p>
(a)
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A borrower or grantee that receives funds from a loan or grant made pursuant to the program shall only use the funds as follows:
</html:p>
<html:p>
(1)
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To pay for property acquisition, rehabilitation, and repair costs and associated transaction costs for real property purchased through either of the following:
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<html:p>
(A)
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A preforeclosure intervention sale.
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<html:p>
(B)
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A foreclosure risk intervention sale.
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<html:p>
(2)
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To pay for transaction costs, so long as no more than 10 percent of a single loan or grant funded by the program is used toward transaction costs.
</html:p>
<html:p>
(3)
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To pay operating expenses from any capitalized operating subsidy reserve established pursuant to Section 50720.6.
</html:p>
<html:p>
(b)
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A borrower or grantee that receives funds from a loan or grant made pursuant to this program shall ensure that all vacant units are restricted in one of the following ways:
</html:p>
<html:p>
(1)
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By those conditions of a contract described in paragraph (10) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
</html:p>
<html:p>
(2)
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By those conditions of a contract described in paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.
</html:p>
<html:p>
(3)
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(A)
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To persons and families of extremely low, very low, low, or moderate income, with an affordable housing cost or an affordable rent, as defined in Sections 50052.5 and 50053, respectively, for a minimum of 55 years, or a longer duration as the department may require.
</html:p>
<html:p>
(B)
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A property may be restricted pursuant to this paragraph by recording a lease agreement, ground lease agreement, or other recorded contractual agreement between a borrower or grantee and the residents of the property, or between a borrower or grantee and a resident-controlled corporation or association.
</html:p>
<html:p>
(C)
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Any agreement made between a borrower or grantee and a resident-controlled corporation or association pursuant to subparagraph (B) shall ensure that the housing units are affordable to lower income households, as defined in Section 50079.5
</html:p>
<html:p>
(c)
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Occupied properties having a mix of incomes among tenants or owners may seek exemption from restrictions under subdivision (b) for units with over-income occupants, only until the unit is vacated due to natural turnover and available to be rerented or
resold.
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<ns0:BillSection id="id_F21EB2C1-E0D2-40B1-99A4-9751AE95583E">
<ns0:Num>SEC. 15.</ns0:Num>
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Section 50720.12 of the
<ns0:DocName>Health and Safety Code</ns0:DocName>
is amended to read:
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<ns0:LawSection id="id_9A32DF25-9826-4BDB-8464-2936FB2F7E5E">
<ns0:Num>50720.12.</ns0:Num>
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<ns0:Content>
<html:p>
(a)
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The department shall adopt guidelines for the administration of the program. The guidelines shall comply with all of the following:
</html:p>
<html:p>
(1)
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The guidelines shall not be subject to the requirements of Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.
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<html:p>
(2)
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The guidelines shall not be subject to the requirements of Chapter 8.3 (commencing with Section 50705) of Part 2 of Division 31.
</html:p>
<html:p>
(3)
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The guidelines shall ensure that loan interest rates on loans made pursuant to the program are no higher than those of other loan programs for affordable housing overseen by the department.
</html:p>
<html:p>
(4)
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The guidelines shall ensure, to the extent possible, geographic equity in allocating funding across the state.
</html:p>
<html:p>
(b)
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The department may include in the guidelines reasonable procedures for a borrower to apply for all or a portion of its loan to be converted to a grant and to verify eligibility for such a conversion pursuant to this section.
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