California Foreclosure: 90 More Days Added under 2923.52(a)

19 Jun California Foreclosure: 90 More Days Added under 2923.52(a)

Good news for California Homeowners who are in default on their mortgages. On February 20, 2009, Governor Schwarzenegger signed ABX2 7 and SBX2 7. These new laws provide additional time for borrowers to work out loan modifications who are presently facing foreclosure. This law went into effect June 15, 2009.

Essentially, Civil Code Section 2923.52(a) now requires an additional ninety (90) day period to be added to the previous 90 day period that must pass after a Notice of Default has been recorded, before a Notice of Sale can be recorded, in order to allow all parties time to pursue a loan modification. If a Notice of Sale has already been recorded prior to June 15, 2009, this provision will not apply.Thus the typical 90 day timeframe required between a Notice of Default and Notice of Sale has now been extended to 180 days in many cases.

Nevertheless, this provision does not apply to all Lenders and Servicers. If a mortgage loan servicer has implemented a comprehensive loan modification program, it may file an application for exemption from the provisions of Civil Code Section 2923.52(a).

If granted approval, it will then exempt the mortgage loan servicer from the additional 90 day requirement.

While a mortgage loan servicer is not required to apply for the exemption, many already have. One can verify whether their lender or servicer has been granted an exemption by clicking Exemptions under the Department of Corporations orExemptions under the Department of Financial Institutions.

Additionally, other restrictions apply.

  • The loan was recorded from January 1, 2003 to January 1, 2008, inclusive;
  • The loan is secured by a first deed of trust for residential real property;
  • The borrower occupied the property as a principal residence at the time the loan became delinquent;
  • A notice of default has been recorded on the property.

Thus, this additional 90 days may have now extended some foreclosures to 18 months in California when added to the previous time frames I previously commented on.

Written by Michael. G. Doan

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