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CIVIL
CODE
SECTION 2920-2944.5 |
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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 for the 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. 2923.5. (a) (1) A mortgagee, trustee,
beneficiary, or authorized agent may not file a notice of default
pursuant to Section 2924 until 30 days after contact is made as required
by paragraph (2) or 30 days after satisfying the due diligence requirements
as described in subdivision (g). (2) A mortgagee, beneficiary, or
authorized agent shall contact the borrower in person or by telephone
in order to assess the borrower's financial situation and explore
options for the borrower to avoid foreclosure. During the initial
contact, the mortgagee, beneficiary, or authorized agent shall advise
the borrower that he or she has the right to request a subsequent
meeting and, if requested, the mortgagee, beneficiary, or authorized
agent shall schedule the meeting to occur within 14 days. The assessment
of the borrower's financial situation and discussion of options may
occur during the first contact, or at the subsequent meeting scheduled
for that purpose. In either case, the borrower shall be provided the
toll-free telephone number made available by the United States Department
of Housing and Urban Development (HUD) to find a HUD-certified housing
counseling agency. Any meeting may occur telephonically. (b) A notice
of default filed pursuant to Section 2924 shall include a declaration
from the mortgagee, beneficiary, or authorized agent that it has contacted
the borrower, tried with due diligence to contact the borrower as
required by this section, or the borrower has surrendered the property
to the mortgagee, trustee, beneficiary, or authorized agent. (c) If
a mortgagee, trustee, beneficiary, or authorized agent had already
filed the notice of default prior to the enactment of this section
and did not subsequently file a notice of rescission, then the mortgagee,
trustee, beneficiary, or authorized agent shall, as part of the notice
of sale filed pursuant to Section 2924f, include a declaration that
either: (1) States that the borrower was contacted to assess the borrower'
s financial situation and to explore options for the borrower to avoid
foreclosure. (2) Lists the efforts made, if any, to contact the borrower
in the event no contact was made. (d) A mortgagee's, beneficiary's,
or authorized agent's loss mitigation personnel may participate by
telephone during any contact required by this section. (e) For purposes
of this section, a "borrower" shall include a mortgagor or trustor.
(f) A borrower may designate a HUD-certified housing counseling agency,
attorney, or other advisor to discuss with the mortgagee, beneficiary,
or authorized agent, on the borrower's behalf, options for the borrower
to avoid foreclosure. That contact made at the direction of the borrower
shall satisfy the contact requirements of paragraph (2) of subdivision
(a). Any loan modification or workout plan offered at the meeting
by the mortgagee, beneficiary, or authorized agent is subject to approval
by the borrower. (g) A notice of default may be filed pursuant to
Section 2924 when a mortgagee, beneficiary, or authorized agent has
not contacted a borrower as required by paragraph (2) of subdivision
(a) provided that the failure to contact the borrower occurred despite
the due diligence of the mortgagee, beneficiary, or authorized agent.
For purposes of this section, "due diligence" shall require and mean
all of the following: (1) A mortgagee, beneficiary, or authorized
agent shall first attempt to contact a borrower by sending a first-class
letter that includes the toll-free telephone number made available
by HUD to find a HUD-certified housing counseling agency. (2) (A)
After the letter has been sent, the mortgagee, beneficiary, or authorized
agent shall attempt to contact the borrower by telephone at least
three times at different hours and on different days. Telephone calls
shall be made to the primary telephone number on file. (B) A mortgagee,
beneficiary, or authorized agent may attempt to contact a borrower
using an automated system to dial borrowers, provided that, if the
telephone call is answered, the call is connected to a live representative
of the mortgagee, beneficiary, or authorized agent. (C) A mortgagee,
beneficiary, or authorized agent satisfies the telephone contact requirements
of this paragraph if it determines, after attempting contact pursuant
to this paragraph, that the borrower's primary telephone number and
secondary telephone number or numbers on file, if any, have been disconnected.
(3) If the borrower does not respond within two weeks after the telephone
call requirements of paragraph (2) have been satisfied, the mortgagee,
beneficiary, or authorized agent shall then send a certified letter,
with return receipt requested. (4) The mortgagee, beneficiary, or
authorized agent shall provide a means for the borrower to contact
it in a timely manner, including a toll-free telephone number that
will provide access to a live representative during business hours.
(5) The mortgagee, beneficiary, or authorized agent has posted a prominent
link on the homepage of its Internet Web site, if any, to the following
information: (A) Options that may be available to borrowers who are
unable to afford their mortgage payments and who wish to avoid foreclosure,
and instructions to borrowers advising them on steps to take to explore
those options. (B) A list of financial documents borrowers should
collect and be prepared to present to the mortgagee, beneficiary,
or authorized agent when discussing options for avoiding foreclosure.
(C) A toll-free telephone number for borrowers who wish to discuss
options for avoiding foreclosure with their mortgagee, beneficiary,
or authorized agent. (D) The toll-free telephone number made available
by HUD to find a HUD-certified housing counseling agency. (h) Subdivisions
(a), (c), and (g) shall not apply if any of the following occurs:
(1) The borrower has surrendered the property as evidenced by either
a letter confirming the surrender or delivery of the keys to the property
to the mortgagee, trustee, beneficiary, or authorized agent. (2) The
borrower has contracted with an organization, person, or entity whose
primary business is advising people who have decided to leave their
homes on how to extend the foreclosure process and avoid their contractual
obligations to mortgagees or beneficiaries. (3) The borrower has filed
for bankruptcy, and the proceedings have not been finalized. (i) This
section shall apply only to loans made from January 1, 2003, to December
31, 2007, inclusive, that are secured by residential real property
and are for owner-occupied residences. For purposes of this subdivision,
"owner-occupied" means that the residence is the principal residence
of the borrower. (j) This section shall remain in effect only until
January 1, 2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date. 2923.6. (a) The Legislature finds and declares that any
duty servicers may have to maximize net present value under their
pooling and servicing agreements is owed to all parties in a loan
pool, not to any particular parties, and that a servicer acts in the
best interests of all parties if it agrees to or implements a loan
modification or workout plan for which both of the following apply:
(1) The loan is in payment default, or payment default is reasonably
foreseeable. (2) Anticipated recovery under the loan modification
or workout plan exceeds the anticipated recovery through foreclosure
on a net present value basis. (b) It is the intent of the Legislature
that the mortgagee, beneficiary, or authorized agent offer the borrower
a loan modification or workout plan if such a modification or plan
is consistent with its contractual or other authority. (c) This section
shall remain in effect only until January 1, 2013, and as of that
date is repealed, unless a later enacted statute, that is enacted
before January 1, 2013, deletes or extends that date. 2924. (a) 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 all of
the following apply: (1) 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.
That notice of default shall include all of the following: (A) A statement
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 mortgage or deed of trust is recorded
or a description of the mortgaged or trust property. (B) A statement
that a breach of the obligation for which the mortgage or transfer
in trust is security has occurred. (C) A statement 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. (D) If the default is curable pursuant
to Section 2924c, the statement specified in paragraph (1) of subdivision
(b) of Section 2924c. (2) Not less than three months shall elapse
from the filing of the notice of default. (3) After the lapse of the
three months described in paragraph (2), 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. (b) 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.
(c) 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. (d) All
of the following shall constitute privileged communications pursuant
to Section 47: (1) The mailing, publication, and delivery of notices
as required by this section. (2) Performance of the procedures set
forth in this article. (3) Performance of the functions and procedures
set forth in this article if those functions and procedures are necessary
to carry out the duties described in Sections 729.040, 729.050, and
729.080 of the Code of Civil Procedure. (e) 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. 2924.8.
(a) Upon posting a notice of sale pursuant to Section 2924f, a trustee
or authorized agent shall also post the following notice, in the manner
required for posting the notice of sale on the property to be sold,
and a mortgagee, trustee, beneficiary, or authorized agent shall mail,
at the same time in an envelope addressed to the "Resident of property
subject to foreclosure sale" the following notice in English and the
languages described in Section 1632: "Foreclosure process has begun
on this property, which may affect your right to continue to live
in this property. Twenty days or more after the date of this notice,
this property may be sold at foreclosure. If you are renting this
property, the new property owner may either give you a new lease or
rental agreement or provide you with a 60-day eviction notice. However,
other laws may prohibit an eviction in this circumstance or provide
you with a longer notice before eviction. You may wish to contact
a lawyer or your local legal aid or housing counseling agency to discuss
any rights you may have." (b) It shall be an infraction to tear down
the notice described in subdivision (a) within 72 hours of posting.
Violators shall be subject to a fine of one hundred dollars ($100).
(c) A state government entity shall make available translations of
the notice described in subdivision (a) which may be used by a mortgagee,
trustee, beneficiary, or authorized agent to satisfy the requirements
of this section. (d) This section shall only apply to loans secured
by residential real property, and if the billing address for the mortgage
note is different than the property address. (e) This section shall
remain in effect only until January 1, 2013, and as of that date is
repealed, unless a later enacted statute, that is enacted before January
1, 2013, deletes or extends that date. 2924a. If, by the terms of
any trust or deed of trust a power of sale is conferred upon the trustee,
the attorney for the trustee, or any duly authorized agent, may conduct
the sale and act in the 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 ______, ____, 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 or the notice of sale 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 physical address actually
known by the mortgagee, beneficiary, trustee, or other person authorized
to record the notice of default. For the purposes of this subdivision,
an address is "actually known" if it is contained in the original
deed of trust or mortgage, or in any subsequent written notification
of a change of physical address from the trustor or mortgagor pursuant
to the deed of trust or mortgage. For the purposes of this subdivision,
"physical address" does not include an e-mail or any form of electronic
address for a trustor or mortgagor. 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. (4) A "person authorized to record the notice of default or
the notice of sale" shall include an agent for the mortgagee or beneficiary,
an agent of the named trustee, any person designated in an executed
substitution of trustee, or an agent of that substituted trustee.
(c) The mortgagee, trustee, or other person authorized to record the
notice of default or the notice of sale 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, subsequent to the deed
of trust or mortgage being foreclosed, 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, subsequent to the deed of trust or mortgage
being foreclosed, against the real property to which the notice of
sale applies. The failure to provide the Internal Revenue Service
with a copy of the notice of sale pursuant to this paragraph shall
be sufficient cause to rescind the trustee's sale and invalidate the
trustee's deed, at the option of either the successful bidder at the
trustee's sale or the trustee, and in either case with the consent
of the beneficiary. Any option to rescind the trustee's sale pursuant
to this paragraph shall be exercised prior to any transfer of the
property by the successful bidder to a bona fide purchaser for value.
A recision of the trustee' s sale pursuant to this paragraph may be
recorded in a notice of recision pursuant to Section 1058.5. (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 mailing address of the trustor
or mortgagor therein named, 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
or mortgagor. (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 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: (A) Upon the order of any court of competent
jurisdiction. (B) If stayed by operation of law. (C) By mutual agreement,
whether oral or in writing, of any trustor and any beneficiary or
any mortgagor and any mortgagee. (D) At the discretion of the trustee.
(2) 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. (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 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. (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 or bids
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 court 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 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 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
or, if a bank account has been established for moneys held in trust
under paragraph (2) of subdivision (a) of Section 77009 of the Government
Code, in that account, subject to order of the 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 Chapter 5.8
(commencing with Section 70600) of Title 8 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 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 court 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 telephone 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 trustee's declaration at the addresses
specified therein. Where the amount of the deposit is twenty-five
thousand dollars ($25,000) or less, a proceeding pursuant to this
section is a limited civil case. 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 do 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) The
trustee, beneficiary, or counsel to the trustee or beneficiary, is
not liable for providing to any person who is entitled to notice pursuant
to this section, information set forth in, or a copy of, subdivision
(h) of Section 2945.3. 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, 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, and the court shall provide
sufficient time prior to trial for the trustee to be able to respond
to the complaint, to conduct discovery, and to bring other pretrial
motions in accordance with the Code of Civil Procedure. (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,
and includes substituted trustees and agents of the beneficiary or
trustee. 2925. The fact that a transfer was made subject to defeasance
on a condition, may, for the purpose of showing such transfer to be
a mortgage, be proved (except as against a subsequent purchaser or
incumbrancer for value and without notice), though the fact does not
appear by the terms of the instrument. 2926. A mortgage is a lien
upon everything that would pass by a grant of the property. 2927.
A mortgage does not entitle the mortgagee to the possession of the
property, unless authorized by the express terms of the mortgage;
but after the execution of the mortgage the mortgagor may agree to
such change of possession without a new consideration. 2928. A mortgage
does not bind the mortgagor personally to perform the act for the
performance of which it is a security, unless there is an express
covenant therein to that effect. 2929. No person whose interest is
subject to the lien of a mortgage may do any act which will substantially
impair the mortgagee's security. 2929.3. (a) (1) A legal owner shall
maintain vacant residential property purchased by that owner at a
foreclosure sale, or acquired by that owner through foreclosure under
a mortgage or deed of trust. A governmental entity may impose a civil
fine of up to one thousand dollars ($1,000) per day for a violation.
If the governmental entity chooses to impose a fine pursuant to this
section, it shall give notice of the alleged violation, including
a description of the conditions that gave rise to the allegation,
and notice of the entity' s intent to assess a civil fine if action
to correct the violation is not commenced within a period of not less
than 14 days and completed within a period of not less than 30 days.
The notice shall be mailed to the address provided in the deed or
other instrument as specified in subdivision (a) of Section 27321.5
of the Government Code, or, if none, to the return address provided
on the deed or other instrument. (2) The governmental entity shall
provide a period of not less than 30 days for the legal owner to remedy
the violation prior to imposing a civil fine and shall allow for a
hearing and opportunity to contest any fine imposed. In determining
the amount of the fine, the governmental entity shall take into consideration
any timely and good faith efforts by the legal owner to remedy the
violation. The maximum civil fine authorized by this section is one
thousand dollars ($1,000) for each day that the owner fails to maintain
the property, commencing on the day following the expiration of the
period to remedy the violation established by the governmental entity.
(3) Subject to the provisions of this section, a governmental entity
may establish different compliance periods for different conditions
on the same property in the notice of alleged violation mailed to
the legal owner. (b) For purposes of this section, "failure to maintain"
means failure to care for the exterior of the property, including,
but not limited to, permitting excessive foliage growth that diminishes
the value of surrounding properties, failing to take action to prevent
trespassers or squatters from remaining on the property, or failing
to take action to prevent mosquito larvae from growing in standing
water or other conditions that create a public nuisance. (c) Notwithstanding
subdivisions (a) and (b), a governmental entity may provide less than
30 days' notice to remedy a condition before imposing a civil fine
if the entity determines that a specific condition of the property
threatens public health or safety and provided that notice of that
determination and time for compliance is given. (d) Fines and penalties
collected pursuant to this section shall be directed to local nuisance
abatement programs. (e) A governmental entity may not impose fines
on a legal owner under both this section and a local ordinance. (f)
These provisions shall not preempt any local ordinance. (g) This section
shall only apply to residential real property. (h) The rights and
remedies provided in this section are cumulative and in addition to
any other rights and remedies provided by law. (i) This section shall
remain in effect only until January 1, 2013, and as of that date is
repealed, unless a later enacted statute, that is enacted before January
1, 2013, deletes or extends that date. 2929.5. (a) A secured lender
may enter and inspect the real property security for the purpose of
determining the existence, location, nature, and magnitude of any
past or present release or threatened release of any hazardous substance
into, onto, beneath, or from the real property security on either
of the following: (1) Upon reasonable belief of the existence of a
past or present release or threatened release of any hazardous substance
into, onto, beneath, or from the real property security not previously
disclosed in writing to the secured lender in conjunction with the
making, renewal, or modification of a loan, extension of credit, guaranty,
or other obligation involving the borrower. (2) After the commencement
of nonjudicial or judicial foreclosure proceedings against the real
property security. (b) The secured lender shall not abuse the right
of entry and inspection or use it to harass the borrower or tenant
of the property. Except in case of an emergency, when the borrower
or tenant of the property has abandoned the premises, or if it is
impracticable to do so, the secured lender shall give the borrower
or tenant of the property reasonable notice of the secured lender's
intent to enter, and enter only during the borrower's or tenant's
normal business hours. Twenty-four hours' notice shall be presumed
to be reasonable notice in the absence of evidence to the contrary.
(c) The secured lender shall reimburse the borrower for the cost of
repair of any physical injury to the real property security caused
by the entry and inspection. (d) If a secured lender is refused the
right of entry and inspection by the borrower or tenant of the property,
or is otherwise unable to enter and inspect the property without a
breach of the peace, the secured lender may, upon petition, obtain
an order from a court of competent jurisdiction to exercise the secured
lender's rights under subdivision (a), and that action shall not constitute
an action within the meaning of subdivision (a) of Section 726 of
the Code of Civil Procedure. (e) For purposes of this section: (1)
"Borrower" means the trustor under a deed of trust, or a mortgagor
under a mortgage, where the deed of trust or mortgage encumbers real
property security and secures the performance of the trustor or mortgagor
under a loan, extension of credit, guaranty, or other obligation.
The term includes any successor-in-interest of the trustor or mortgagor
to the real property security before the deed of trust or mortgage
has been discharged, reconveyed, or foreclosed upon. (2) "Hazardous
substance" includes all of the following: (A) Any "hazardous substance"
as defined in subdivision (h) of Section 25281 of the Health and Safety
Code. (B) Any "waste" as defined in subdivision (d) of Section 13050
of the Water Code. (C) Petroleum, including crude oil or any fraction
thereof, natural gas, natural gas liquids, liquefied natural gas,
or synthetic gas usable for fuel, or any mixture thereof. (3) "Real
property security" means any real property and improvements, other
than a separate interest and any related interest in the common area
of a residential common interest development, as the terms "separate
interest," "common area," and "common interest development" are defined
in Section 1351, or real property consisting of one acre or less which
contains 1 to 15 dwelling units. (4) "Release" means any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping, or disposing into the environment, including
continuing migration, of hazardous substances into, onto, or through
soil, surface water, or groundwater. (5) "Secured lender" means the
beneficiary under a deed of trust against the real property security,
or the mortgagee under a mortgage against the real property security,
and any successor-in-interest of the beneficiary or mortgagee to the
deed of trust or mortgage. (2930.) Section Twenty-nine Hundred and
Thirty. Title acquired by the mortgagor subsequent to the execution
of the mortgage, inures to the mortgagee as security for the debt
in like manner as if acquired before the execution. 2931. A mortgagee
may foreclose the right of redemption of the mortgagor in the manner
prescribed by the CODE OF CIVIL PROCEDURE. 2931a. In any action brought
to determine conflicting claims to real property, or for partition
of real property or an estate for years therein, or to foreclose a
deed of trust, mortgage, or other lien upon real property, or in all
eminent domain proceedings under Section 1250.110 et seq., of the
Code of Civil Procedure against real property upon which exists a
lien to secure the payment of taxes or other obligations to an agency
of the State of California, other than ad valorem taxes upon the real
property, the state agency charged with the collection of the tax
obligation may be made a party. In such an action, the court shall
have jurisdiction to determine the priority and effect of the liens
described in the complaint in or upon the real property or estate
for years therein, but the jurisdiction of the court in the action
shall not include a determination of the validity of the tax giving
rise to the lien or claim of lien. The complaint or petition in the
action shall contain a description of the lien sufficient to enable
the tax or other obligation, payment of which it secures, to be identified
with certainty, and shall include the name and address of the person
owing the tax or other obligation, the name of the state agency that
recorded the lien, and the date and place where the lien was recorded.
Services of process in the action shall be made upon the agency, officer,
board, commission, department, division, or other body charged with
the collection of the tax or obligation. It shall be the duty of the
Attorney General to represent the state agency in the action. 2931b.
In all actions in which the State of California is named a party pursuant
to the provisions of Section 2931a and in which real property or an
estate for years therein is sought to be sold, the Attorney General
may, with the consent of the Department of Finance, bid upon and purchase
that real property or estate for years. 2931c. The Attorney General
may bring an action in the courts of this or any other state or of
the United States to enforce any lien to secure the payment of taxes
or other obligations to the State of California under the Unemployment
Insurance Code, the Revenue and Taxation Code, or Chapter 6 (commencing
with Section 16180) of Part 1 of Division 4 of Title 2 of the Government
Code or to subject to payment of the liability giving rise to the
lien any property in which the debtor has any right, title, or interest.
In any action brought under this section the court shall have jurisdiction
to determine the priority and effect of the lien in or upon the property,
but the jurisdiction of the court in such action shall not extend
to a determination of the validity of the liability giving rise to
the lien. 2932. A power of sale may be conferred by a mortgage upon
the mortgagee or any other person, to be exercised after a breach
of the obligation for which the mortgage is a security. 2932.5. Where
a power to sell real property is given to a mortgagee, or other encumbrancer,
in an instrument intended to secure the payment of money, the power
is part of the security and vests in any person who by assignment
becomes entitled to payment of the money secured by the instrument.
The power of sale may be exercised by the assignee if the assignment
is duly acknowledged and recorded. 2932.6. (a) Notwithstanding any
other provision of law, a financial institution may undertake to repair
any property acquired through foreclosure under a mortgage or deed
of trust. (b) As used in this section, the term "financial institution"
includes, but is not limited to, banks, savings associations, credit
unions, and industrial loan companies. (c) The rights granted to a
financial institution by this section are in addition to, and not
in derogation of, the rights of a financial institution which otherwise
exist. 2933. A power of attorney to execute a mortgage must be in
writing, subscribed, acknowledged, or proved, certified, and recorded
in like manner as powers of attorney for grants of real property.
2934. Any assignment of a mortgage and any assignment of the beneficial
interest under a deed of trust may be recorded, and from the time
the same is filed for record operates as constructive notice of the
contents thereof to all persons; and any instrument by which any mortgage
or deed of trust of, lien upon or interest in real property, (or by
which any mortgage of, lien upon or interest in personal property
a document evidencing or creating which is required or permitted by
law to be recorded), is subordinated or waived as to priority may
be recorded, and from the time the same is filed for record operates
as constructive notice of the contents thereof, to all persons. 2934a.
(a) (1) The trustee under a trust deed upon real property or an estate
for years therein given to secure an obligation to pay money and conferring
no other duties upon the trustee than those which are incidental to
the exercise of the power of sale therein conferred, may be substituted
by the recording in the county in which the property is located of
a substitution executed and acknowledged by: (A) all of the beneficiaries
under the trust deed, or their successors in interest, and the substitution
shall be effective notwithstanding any contrary provision in any trust
deed executed on or after January 1, 1968; or (B) the holders of more
than 50 percent of the record beneficial interest of a series of notes
secured by the same real property or of undivided interests in a note
secured by real property equivalent to a series transaction, exclusive
of any notes or interests of a licensed real estate broker that is
the issuer or servicer of the notes or interests or of any affiliate
of that licensed real estate broker. (2) A substitution executed pursuant
to subparagraph (B) of paragraph (1) is not effective unless all the
parties signing the substitution sign, under penalty of perjury, a
separate written document stating the following: (A) The substitution
has been signed pursuant to subparagraph (B) of paragraph (1). (B)
None of the undersigned is a licensed real estate broker or an affiliate
of the broker that is the issuer or servicer of the obligation secured
by the deed of trust. (C) The undersigned together hold more than
50 percent of the record beneficial interest of a series of notes
secured by the same real property or of undivided interests in a note
secured by real property equivalent to a series transaction. (D) Notice
of the substitution was sent by certified mail, postage prepaid, with
return receipt requested to each holder of an interest in the obligation
secured by the deed of trust who has not joined in the execution of
the substitution or the separate document. The separate document shall
be attached to the substitution and be recorded in the office of the
county recorder of each county in which the real property described
in the deed of trust is located. Once the document required by this
paragraph is recorded, it shall constitute conclusive evidence of
compliance with the requirements of this paragraph in favor of substituted
trustees acting pursuant to this section, subsequent assignees of
the obligation secured by the deed of trust, and subsequent bona fide
purchasers or encumbrancers for value of the real property described
therein. (3) For purposes of this section, "affiliate of the licensed
real estate broker" includes any person as defined in Section 25013
of the Corporations Code that is controlled by, or is under common
control with, or who controls, a licensed real estate broker. "Control"
means the possession, direct or indirect, of the power to direct or
cause the direction of management and policies. (4) The substitution
shall contain the date of recordation of the trust deed, the name
of the trustor, the book and page or instrument number where the trust
deed is recorded, and the name of the new trustee. From the time the
substitution is filed for record, the new trustee shall succeed to
all the powers, duties, authority, and title granted and delegated
to the trustee named in the deed of trust. A substitution may be accomplished,
with respect to multiple deeds of trust which are recorded in the
same county in which the substitution is being recorded and which
all have the same trustee and beneficiary or beneficiaries, by recording
a single document, complying with the requirements of this section,
substituting trustees for all those deeds of trust. (b) If the substitution
is effected after a notice of default has been recorded but prior
to the recording of the notice of sale, the beneficiary or beneficiaries
shall cause a copy of the substitution to be mailed, prior to the
recording thereof, in the manner provided in Section 2924b, to the
trustee then of record and to all persons to whom a copy of the notice
of default would be required to be mailed by the provisions of Section
2924b. An affidavit shall be attached to the substitution that notice
has been given to those persons and in the manner required by this
subdivision. (c) Notwithstanding any provision of this section or
any provision in any deed of trust, unless a new notice of sale containing
the name, street address, and telephone number of the substituted
trustee is given pursuant to Section 2924f, any sale conducted by
the substituted trustee shall be void. (d) This section shall remain
in effect only until January 1, 1998, and shall have no force or effect
after that date, unless a later enacted statute, which is enacted
before January 1, 1998, deletes or extends that date. 2934a. (a) (1)
The trustee under a trust deed upon real property or an estate for
years therein given to secure an obligation to pay money and conferring
no other duties upon the trustee than those which are incidental to
the exercise of the power of sale therein conferred, may be substituted
by the recording in the county in which the property is located of
a substitution executed and acknowledged by: (A) all of the beneficiaries
under the trust deed, or their successors in interest, and the substitution
shall be effective notwithstanding any contrary provision in any trust
deed executed on or after January 1, 1968; or (B) the holders of more
than 50 percent of the record beneficial interest of a series of notes
secured by the same real property or of undivided interests in a note
secured by real property equivalent to a series transaction, exclusive
of any notes or interests of a licensed real estate broker that is
the issuer or servicer of the notes or interests or of any affiliate
of that licensed real estate broker. (2) A substitution executed pursuant
to subparagraph (B) of paragraph (1) is not effective unless all the
parties signing the substitution sign, under penalty of perjury, a
separate written document stating the following: (A) The substitution
has been signed pursuant to subparagraph (B) of paragraph (1). (B)
None of the undersigned is a licensed real estate broker or an affiliate
of the broker that is the issuer or servicer of the obligation secured
by the deed of trust. (C) The undersigned together hold more than
50 percent of the record beneficial interest of a series of notes
secured by the same real property or of undivided interests in a note
secured by real property equivalent to a series transaction. (D) Notice
of the substitution was sent by certified mail, postage prepaid, with
return receipt requested to each holder of an interest in the obligation
secured by the deed of trust who has not joined in the execution of
the substitution or the separate document. The separate document shall
be attached to the substitution and be recorded in the office of the
county recorder of each county in which the real property described
in the deed of trust is located. Once the document required by this
paragraph is recorded, it shall constitute conclusive evidence of
compliance with the requirements of this paragraph in favor of substituted
trustees acting pursuant to this section, subsequent assignees of
the obligation secured by the deed of trust and subsequent bona fide
purchasers or encumbrancers for value of the real property described
therein. (3) For purposes of this section, "affiliate of the licensed
real estate broker" includes any person as defined in Section 25013
of the Corporations Code that is controlled by, or is under common
control with, or who controls, a licensed real estate broker. "Control"
means the possession, direct or indirect, of the power to direct or
cause the direction of management and policies. (4) The substitution
shall contain the date of recordation of the trust deed, the name
of the trustor, the book and page or instrument number where the trust
deed is recorded, and the name of the new trustee. From the time the
substitution is filed for record, the new trustee shall succeed to
all the powers, duties, authority, and title granted and delegated
to the trustee named in the deed of trust. A substitution may be accomplished,
with respect to multiple deeds of trust which are recorded in the
same county in which the substitution is being recorded and which
all have the same trustee and beneficiary or beneficiaries, by recording
a single document, complying with the requirements of this section,
substituting trustees for all those deeds of trust. (b) If the substitution
is executed, but not recorded, prior to or concurrently with the recording
of the notice of default, the beneficiary or beneficiaries or their
authorized agents shall cause notice of the substitution to be mailed
prior to or concurrently with the recording thereof, in the manner
provided in Section 2924b, to all persons to whom a copy of the notice
of default would be required to be mailed by the provisions of Section
2924b. An affidavit shall be attached to the substitution that notice
has been given to those persons and in the manner required by this
subdivision. (c) If the substitution is effected after a notice of
default has been recorded but prior to the recording of the notice
of sale, the beneficiary or beneficiaries or their authorized agents
shall cause a copy of the substitution to be mailed, prior to, or
concurrently with, the recording thereof, in the manner provided in
Section 2924b, to the trustee then of record and to all persons to
whom a copy of the notice of default would be required to be mailed
by the provisions of Section 2924b. An affidavit shall be attached
to the substitution that notice has been given to those persons and
in the manner required by this subdivision. (d) A trustee named in
a recorded substitution of trustee shall be deemed to be authorized
to act as the trustee under the mortgage or deed of trust for all
purposes from the date the substitution is executed by the mortgagee,
beneficiaries, or by their authorized agents. Nothing herein requires
that a trustee under a recorded substitution accept the substitution.
Once recorded, the substitution shall constitute conclusive evidence
of the authority of the substituted trustee or his or her agents to
act pursuant to this section. (e) Notwithstanding any provision of
this section or any provision in any deed of trust, unless a new notice
of sale containing the name, street address, and telephone number
of the substituted trustee is given pursuant to Section 2924f after
execution of the substitution, any sale conducted by the substituted
trustee shall be void. (f) This section shall become operative on
January 1, 1998. 2934b. Sections 15643 and 18102 of the Probate Code
apply to trustees under deeds of trust given to secure obligations.
2935. When a mortgage or deed of trust is executed as security for
money due or to become due, on a promissory note, bond, or other instrument,
designated in the mortgage or deed of trust, the record of the assignment
of the mortgage or of the assignment of the beneficial interest under
the deed of trust, is not of itself notice to the debtor, his heirs,
or personal representatives, so as to invalidate any payment made
by them, or any of them, to the person holding such note, bond, or
other instrument. 2936. The assignment of a debt secured by mortgage
carries with it the security. 2937. (a) The Legislature hereby finds
and declares that borrowers or subsequent obligors have the right
to know when a person holding a promissory note, bond, or other instrument
transfers servicing of the indebtedness secured by a mortgage or deed
of trust on real property containing one to four residential units
located in this state. The Legislature also finds that notification
to the borrower or subsequent obligor of the transfer may protect
the borrower or subsequent obligor from fraudulent business practices
and may ensure timely payments. It is the intent of the Legislature
in enacting this section to mandate that a borrower or subsequent
obligor be given written notice when a person transfers the servicing
of the indebtedness on notes, bonds, or other instruments secured
by a mortgage or deed of trust on real property containing one to
four residential units and located in this state. (b) Any person transferring
the servicing of indebtedness as provided in subdivision (a) to a
different servicing agent and any person assuming from another responsibility
for servicing the instrument evidencing indebtedness, shall give written
notice to the borrower or subsequent obligor before the borrower or
subsequent obligor becomes obligated to make payments to a new servicing
agent. (c) In the event a notice of default has been recorded or a
judicial foreclosure proceeding has been commenced, the person transferring
the servicing of the indebtedness and the person assuming from another
the duty of servicing the indebtedness shall give written notice to
the trustee or attorney named in the notice of default or judicial
foreclosure of the transfer. A notice of default, notice of sale,
or judicial foreclosure shall not be invalidated solely because the
servicing agent is changed during the foreclosure process. (d) Any
person transferring the servicing of indebtedness as provided in subdivision
(a) to a different servicing agent shall provide to the new servicing
agent all existing insurance policy information that the person is
responsible for maintaining, including, but not limited to, flood
and hazard insurance policy information. (e) The notices required
by subdivision (b) shall be sent by first-class mail, postage prepaid,
to the borrower's or subsequent obligor's address designated for loan
payment billings, or if escrow is pending, as provided in the escrow,
and shall contain each of the following: (1) The name and address
of the person to which the transfer of the servicing of the indebtedness
is made. (2) The date the transfer was or will be completed. (3) The
address where all payments pursuant to the transfer are to be made.
(f) Any person assuming from another responsibility for servicing
the instrument evidencing indebtedness shall include in the notice
required by subdivision (b) a statement of the due date of the next
payment. (g) The borrower or subsequent obligor shall not be liable
to the holder of the note, bond, or other instrument or to any servicing
agent for payments made to the previous servicing agent or for late
charges if these payments were made prior to the borrower or subsequent
obligor receiving written notice of the transfer as provided by subdivision
(e) and the payments were otherwise on time. (h) For purposes of this
section, the term servicing agent shall not include a trustee exercising
a power of sale pursuant to a deed of trust. 2937.7. In any action
affecting the interest of any trustor or beneficiary under a deed
of trust or mortgage, service of process to the trustee does not constitute
service to the trustor or beneficiary and does not impose any obligation
on the trustee to notify the trustor or beneficiary of the action.
2938. (a) A written assignment of an interest in leases, rents, issues,
or profits of real property made in connection with an obligation
secured by real property, irrespective of whether the assignment is
denoted as absolute, absolute conditioned upon default, additional
security for an obligation, or otherwise, shall, upon execution and
delivery by the assignor, be effective to create a present security
interest in existing and future leases, rents, issues, or profits
of that real property. As used in this section, "leases, rents, issues,
and profits of real property" include the cash proceeds thereof. The
term "cash proceeds" means cash, checks, deposit accounts, and the
like. (b) An assignment of an interest in leases, rents, issues, or
profits of real property may be recorded in the records of the county
recorder in which the underlying real property is located in the same
manner as any other conveyance of an interest in real property, whether
the assignment is in a separate document or part of a mortgage or
deed of trust, and when so duly recorded in accordance with the methods,
procedures, and requirements for recordation of conveyances of other
interests in real property, (1) the assignment shall be deemed to
give constructive notice of the content of the assignment with the
same force and effect as any other duly recorded conveyance of an
interest in real property and (2) the interest granted by the assignment
shall be deemed fully perfected as of the time of recordation with
the same force and effect as any other duly recorded conveyance of
an interest in real property, notwithstanding any provision of the
assignment or any provision of law that would otherwise preclude or
defer enforcement of the rights granted the assignee under the assignment
until the occurrence of a subsequent event, including, but not limited
to, a subsequent default of the assignor, or the assignee's obtaining
possession of the real property or the appointment of a receiver.
(c) Upon default of the assignor under the obligation secured by the
assignment of leases, rents, issues, and profits, the assignee shall
be entitled to enforce the assignment in accordance with this section.
On and after the date the assignee takes one or more of the enforcement
steps described in this subdivision, the assignee shall be entitled
to collect and receive all rents, issues, and profits that have accrued
but remain unpaid and uncollected by the assignor or its agent or
for the assignor's benefit on that date, and all rents, issues, and
profits that accrue on or after the date. The assignment shall be
enforced by one or more of the following: (1) The appointment of a
receiver. (2) Obtaining possession of the rents, issues, or profits.
(3) Delivery to any one or more of the tenants of a written demand
for turnover of rents, issues, and profits in the form specified in
subdivision (j), a copy of which demand shall also be delivered to
the assignor; and a copy of which shall be mailed to all other assignees
of record of the leases, rents, issues, and profits of the real property
at the address for notices provided in the assignment or, if none,
to the address to which the recorded assignment was to be mailed after
recording. (4) Delivery to the assignor of a written demand for the
rents, issues, or profits, a copy of which shall be mailed to all
other assignees of record of the leases, rents, issues, and profits
of the real property at the address for notices provided in the assignment
or, if none, to the address to which the recorded assignment was to
be mailed after recording. Moneys received by the assignee pursuant
to this subdivision, net of amounts paid pursuant to subdivision (g),
if any, shall be applied by the assignee to the debt or otherwise
in accordance with the assignment or the promissory note, deed of
trust, or other instrument evidencing the obligation; provided, however,
that neither the application nor the failure to so apply the rents,
issues, or profits shall result in a loss of any lien or security
interest which the assignee may have in the underlying real property
or any other collateral, render the obligation unenforceable, constitute
a violation of Section 726 of the Code of Civil Procedure, or otherwise
limit any right available to the assignee with respect to its security.
(d) If an assignee elects to take the action provided for under paragraph
(3) of subdivision (c), the demand provided for therein shall be signed
under penalty of perjury by the assignee or an authorized agent of
the assignee and shall be effective as against the tenant when actually
received by the tenant at the address for notices provided under the
lease or other contractual agreement under which the tenant occupies
the property or, if no address for notices is so provided, at the
property. Upon receipt of this demand, the tenant shall be obligated
to pay to the assignee all rents, issues, and profits that are past
due and payable on the date of receipt of the demand, and all rents,
issues, and profits coming due under the lease following the date
of receipt of the demand, unless either of the following occurs: (1)
The tenant has previously received a demand which is valid on its
face from another assignee of the leases, issues, rents, and profits
sent by the other assignee in accordance with this subdivision and
subdivision (c). (2) The tenant, in good faith and in a manner which
is not inconsistent with the lease, has previously paid, or within
10 days following receipt of the demand notice pays, the rent to the
assignor. Payment of rent to an assignee following a demand under
an assignment of leases, rents, issues, and profits shall satisfy
the tenant's obligation to pay the amounts under the lease. If a tenant
pays rent to the assignor after receipt of a demand other than under
the circumstances described in this subdivision, the tenant shall
not be discharged of the obligation to pay rent to the assignee, unless
the tenant occupies the property for residential purposes. The obligation
of a tenant to pay rent pursuant to this subdivision and subdivision
(c) shall continue until receipt by the tenant of a written notice
from a court directing the tenant to pay the rent in a different manner
or receipt by the tenant of a written notice from the assignee from
whom the demand was received canceling the demand, whichever occurs
first. Nothing in this subdivision shall affect the entitlement to
rents, issues, or profits as between assignees as set forth in subdivision
(h). (e) No enforcement action of the type authorized by subdivision
(c), and no collection, distribution, or application of rents, issues,
or profits by the assignee following an enforcement action of the
type authorized by subdivision (c), shall do any of the following:
(1) Make the assignee a mortgagee in possession of the property, except
if the assignee obtains actual possession of the real property, or
an agent of the assignor. (2) Constitute an action, render the obligation
unenforceable, violate Section 726 of the Code of Civil Procedure
or, other than with respect to marshaling requirements, otherwise
limit any rights available to the assignee with respect to its security.
(3) Be deemed to create any bar to a deficiency judgment pursuant
to any provision of law governing or relating to deficiency judgments
following the enforcement of any encumbrance, lien, or security interest,
notwithstanding that the action, collection, distribution, or application
may reduce the indebtedness secured by the assignment or by any deed
of trust or other security instrument. The application of rents, issues,
or profits to the secured obligation shall satisfy the secured obligation
to the extent of those rents, issues, or profits, and, notwithstanding
any provisions of the assignment or other loan documents to the contrary,
shall be credited against any amounts necessary to cure any monetary
default for purposes of reinstatement under Section 2924c. (f) If
cash proceeds of rents, issues or profits to which the assignee is
entitled following enforcement as set forth in subdivision (c) are
received by the assignor or its agent for collection or by any other
person who has collected such rents, issues, or profits for the assignor's
benefit, or for the benefit of any subsequent assignee under the circumstances
described in subdivision (h), following the taking by the assignee
of either of the enforcement actions authorized in paragraph (3) or
(4) of subdivision (c), and the assignee has not authorized the assignor's
disposition of the cash proceeds in a writing signed by the assignee,
the rights to the cash proceeds and to the recovery of the cash proceeds
shall be determined by the following: (1) The assignee shall be entitled
to an immediate turnover of the cash proceeds received by the assignor
or its agent for collection or any other person who has collected
the rents, issues, or profits for the assignor's benefit, or for the
benefit of any subsequent assignee under the circumstances described
in subdivision (h), and the assignor or other described party in possession
of such cash proceeds shall turn over the full amount of cash proceeds
to the assignee, less any amount representing payment of expenses
authorized by the assignee in writing. The assignee shall have a right
to bring an action for recovery of the cash proceeds, and to recover
the cash proceeds, without the necessity of bringing an action to
foreclose any security interest which it may have in the real property.
This action shall not violate Section 726 of the Code of Civil Procedure
or otherwise limit any right available to the assignee with respect
to its security. (2) As between an assignee with an interest in cash
proceeds perfected in the manner set forth in subdivision (b) and
enforced in accordance with paragraph (3) or (4) of subdivision (c)
and any other person claiming an interest in the cash proceeds, other
than the assignor or its agent for collection or one collecting rents,
issues, and profits for the benefit of the assignor, and subject to
subdivision (h), the assignee shall have a continuously perfected
security interest in the cash proceeds to the extent that the cash
proceeds are identifiable. For purposes hereof, cash proceeds are
identifiable if they are either (A) segregated or (B) if commingled
with other funds of the assignor or its agent or one acting on its
behalf, can be traced using the lowest intermediate balance principle,
unless the assignor or other party claiming an interest in proceeds
shows that some other method of tracing would better serve the interests
of justice and equity under the circumstances of the case. The provisions
of this paragraph are subject to any generally applicable law with
respect to payments made in the operation of the assignor's business.
(g) (1) If the assignee enforces the assignment under subdivision
(c) by any means other than the appointment of a receiver and receives
rents, issues, or profits pursuant to this enforcement, the assignor
or any other assignee of the affected real property may make written
demand upon the assignee to pay the reasonable costs of protecting
and preserving the property, including payment of taxes and insurance
and compliance with building and housing codes, if any. (2) On and
after the date of receipt of the demand, the assignee shall pay for
the reasonable costs of protecting and preserving the real property
to the extent of any rents, issues, or profits actually received by
the assignee; provided, however, that no such acts by the assignee
shall cause the assignee to become a mortgagee in possession and the
assignee's duties under this subdivision, upon receipt of a demand
from the assignor or any other assignee of the leases, rents, issues,
and profits pursuant to paragraph (1), shall not be construed to require
the assignee to operate or manage the property, which obligation shall
remain that of the assignor. (3) The obligation of the assignee hereunder
shall continue until the earlier of (A) the date on which the assignee
obtains the appointment of a receiver for the real property pursuant
to application to a court of competent jurisdiction, or (B) the date
on which the assignee ceases to enforce the assignment. (4) Nothing
in this subdivision shall be construed to supersede or diminish the
right of the assignee to the appointment of a receiver. (h) The lien
priorities, rights, and interests among creditors concerning rents,
issues, or profits collected before the enforcement by the assignee
shall be governed by subdivisions (a) and (b). Without limiting the
generality of the foregoing, if an assignee who has recorded its interest
in leases, rents, issues, and profits prior to the recordation of
such interest by a subsequent assignee seeks to enforce its interest
in those rents, issues, or profits in accordance with this section
after any enforcement action has been taken by a subsequent assignee,
the prior assignee shall be entitled only to the rents, issues, and
profits that are accrued and unpaid as of the date of its enforcement
action and unpaid rents, issues, and profits accruing thereafter.
The prior assignee shall have no right to rents, issues, or profits
paid prior to the date of the enforcement action, whether in the hands
of the assignor or any subsequent assignee. Upon receipt of notice
that the prior assignee has enforced its interest in the rents, issues,
and profits, the subsequent assignee shall immediately send a notice
to any tenant to whom it has given notice under subdivision (c). The
notice shall inform the tenant that the subsequent assignee cancels
its demand that the tenant pay rent to the subsequent assignee. (i)
This section shall apply to contracts entered into on or after January
1, 1997. Sections 2938 and 2938.1, as these sections were in effect
prior to January 1, 1997, shall govern contracts entered into prior
to January 1, 1997, and shall govern actions and proceedings initiated
on the basis of these contracts. (j) "Real property," as used in this
section, shall mean real property or any estate or interest therein.
(k) The demand required by paragraph (3) of subdivision (c) shall
be in the following form: DEMAND TO PAY RENT TO PARTY OTHER THAN LANDLORD
(SECTION 2938 OF THE CIVIL CODE) Tenant: (Name of Tenant) Property
Occupied by Tenant: (Address) Landlord: (Name of Landlord) Secured
Party: (Name of Secured Party) Address: (Address for Payment of Rent
to Secured Party and for Further Information): The secured party named
above is the assignee of leases, rents, issues, and profits under
(name of document) dated ______, and recorded at (recording information)
in the official records of ___________ County, California. You may
request a copy of such assignment from the secured party at ____ (address).
THIS NOTICE AFFECTS YOUR LEASE OR RENTAL AGREEMENT RIGHTS AND OBLIGATIONS.
YOU ARE THEREFORE ADVISED TO CONSULT AN ATTORNEY CONCERNING THOSE
RIGHTS AND OBLIGATIONS IF YOU HAVE ANY QUESTIONS REGARDING YOUR RIGHTS
AND OBLIGATIONS UNDER THIS NOTICE. IN ACCORDANCE WITH SUBDIVISION
(C) OF SECTION 2938 OF THE CIVIL CODE, YOU ARE HEREBY DIRECTED TO
PAY TO THE SECURED PARTY, ____ (NAME OF SECURED PARTY) AT ____ (ADDRESS),
ALL RENTS UNDER YOUR LEASE OR OTHER RENTAL AGREEMENT WITH THE LANDLORD
OR PREDECESSOR IN INTEREST OF LANDLORD, FOR THE OCCUPANCY OF THE PROPERTY
AT ____ (ADDRESS OF RENTAL PREMISES) WHICH ARE PAST DUE AND PAYABLE
ON THE DATE YOU RECEIVE THIS DEMAND, AND ALL RENTS COMING DUE UNDER
THE LEASE OR OTHER RENTAL AGREEMENT FOLLOWING THE DATE YOU RECEIVE
THIS DEMAND UNLESS YOU HAVE ALREADY PAID THIS RENT TO THE LANDLORD
IN GOOD FAITH AND IN A MANNER NOT INCONSISTENT WITH THE AGREEMENT
BETWEEN YOU AND THE LANDLORD. IN THIS CASE, THIS DEMAND NOTICE SHALL
REQUIRE YOU TO PAY TO THE SECURED PARTY ____, (NAME OF THE SECURED
PARTY), ALL RENTS THAT COME DUE FOLLOWING THE DATE OF THE PAYMENT
TO THE LANDLORD. IF YOU PAY THE RENT TO THE UNDERSIGNED SECURED PARTY,
____ (NAME OF SECURED PARTY), IN ACCORDANCE WITH THIS NOTICE, YOU
DO NOT HAVE TO PAY THE RENT TO THE LANDLORD. YOU WILL NOT BE SUBJECT
TO DAMAGES OR OBLIGATED TO PAY RENT TO THE SECURED PARTY IF YOU HAVE
PREVIOUSLY RECEIVED A DEMAND OF THIS TYPE FROM A DIFFERENT SECURED
PARTY. (For other than residential tenants). IF YOU PAY ANY RENT TO
THE LANDLORD THAT BY THE TERMS OF THIS DEMAND YOU ARE REQUIRED TO
PAY TO THE SECURED PARTY, YOU MAY BE SUBJECT TO DAMAGES INCURRED BY
THE SECURED PARTY BY REASON OF YOUR FAILURE TO COMPLY WITH THIS DEMAND,
AND YOU MAY NOT BE DISCHARGED FROM YOUR OBLIGATION TO PAY SUCH RENT
TO THE SECURED PARTY. YOU WILL NOT BE SUBJECT TO SUCH DAMAGES OR OBLIGATED
TO PAY SUCH RENT TO THE SECURED PARTY IF YOU HAVE PREVIOUSLY RECEIVED
A DEMAND OF THIS TYPE FROM A DIFFERENT ASSIGNEE. Your obligation to
pay rent under this demand shall continue until you receive either
(1) a written notice from a court directing you to pay the rent in
a manner provided therein, or (2) a written notice from the secured
party named above canceling this demand. The undersigned hereby certifies,
under penalty of perjury, that the undersigned is an authorized officer
or agent of the secured party and that the secured party is the assignee,
or the current successor to the assignee, under an assignment of leases,
rents, issues, or profits executed by the landlord, or a predecessor
in interest, that is being enforced pursuant to and in accordance
with Section 2938 of the Civil Code. Executed at _________, California,
this ____ day of _________, _____. (Secured Party) Name: _____________________________
Title: ____________________________ 2939. A recorded mortgage must
be discharged by a certificate signed by the mortgagee, his personal
representatives or assigns, acknowledged or proved and certified as
prescribed by the chapter on "recording transfers," stating that the
mortgage has been paid, satisfied, or discharged. Reference shall
be made in said certificate to the book and page where the mortgage
is recorded. 2939.5. Foreign executors, administrators and guardians
may satisfy mortgages upon the records of any county in this state,
upon producing and recording in the office of the county recorder
of the county in which such mortgage is recorded, a duly certified
and authenticated copy of their letters testamentary, or of administration
or of guardianship, and which certificate or authentication shall
also recite that said letters have not been revoked. For the purposes
of this section, "guardian" includes a foreign conservator, committee,
or comparable fiduciary. 2940. A certificate of the discharge of a
mortgage, and the proof or acknowledgment thereof, must be recorded
in the office of the county recorder in which the mortgage is recorded.
2941. (a) Within 30 days after any mortgage has been satisfied, the
mortgagee or the assignee of the mortgagee shall execute a certificate
of the discharge thereof, as provided in Section 2939, and shall record
or cause to be recorded in the office of the county recorder in which
the mortgage is recorded. The mortgagee shall then deliver, upon the
written request of the mortgagor or the mortgagor' s heirs, successors,
or assignees, as the case may be, the original note and mortgage to
the person making the request. (b) (1) Within 30 calendar days after
the obligation secured by any deed of trust has been satisfied, the
beneficiary or the assignee of the beneficiary shall execute and deliver
to the trustee the original note, deed of trust, request for a full
reconveyance, and other documents as may be necessary to reconvey,
or cause to be reconveyed, the deed of trust. (A) The trustee shall
execute the full reconveyance and shall record or cause it to be recorded
in the office of the county recorder in which the deed of trust is
recorded within 21 calendar days after receipt by the trustee of the
original note, deed of trust, request for a full reconveyance, the
fee that may be charged pursuant to subdivision (e), recorder's fees,
and other documents as may be necessary to reconvey, or cause to be
reconveyed, the deed of trust. (B) The trustee shall deliver a copy
of the reconveyance to the beneficiary, its successor in interest,
or its servicing agent, if known. The reconveyance instrument shall
specify one of the following options for delivery of the instrument,
the addresses of which the recorder has no duty to validate: (i) The
trustor or successor in interest, and that person's last known address,
as the person to whom the recorder will deliver the recorded instrument
pursuant to Section 27321 of the Government Code. (ii) That the recorder
shall deliver the recorded instrument to the trustee's address. If
the trustee's address is specified for delivery, the trustee shall
mail the recorded instrument to the trustor or the successor in interest
to the last known address for that party. (C) Following execution
and recordation of the full reconveyance, upon receipt of a written
request by the trustor or the trustor's heirs, successors, or assignees,
the trustee shall then deliver, or caused to be delivered, the original
note and deed of trust to the person making that request. (D) If the
note or deed of trust, or any copy of the note or deed of trust, is
electronic, upon satisfaction of an obligation secured by a deed of
trust, any electronic original, or electronic copy which has not been
previously marked solely for use as a copy, of the note and deed of
trust, shall be altered to indicate that the obligation is paid in
full. (2) If the trustee has failed to execute and record, or cause
to be recorded, the full reconveyance within 60 calendar days of satisfaction
of the obligation, the beneficiary, upon receipt of a written request
by the trustor or trustor's heirs, successor in interest, agent, or
assignee, shall execute and acknowledge a document pursuant to Section
2934a substituting itself or another as trustee and issue a full reconveyance.
(3) If a full reconveyance has not been executed and recorded pursuant
to either paragraph (1) or paragraph (2) within 75 calendar days of
satisfaction of the obligation, then a title insurance company may
prepare and record a release of the obligation. However, at least
10 days prior to the issuance and recording of a full release pursuant
to this paragraph, the title insurance company shall mail by first-class
mail with postage prepaid, the intention to release the obligation
to the trustee, trustor, and beneficiary of record, or their successor
in interest of record, at the last known address. (A) The release
shall set forth: (i) The name of the beneficiary. (ii) The name of
the trustor. (iii) The recording reference to the deed of trust. (iv)
A recital that the obligation secured by the deed of trust has been
paid in full. (v) The date and amount of payment. (B) The release
issued pursuant to this subdivision shall be entitled to recordation
and, when recorded, shall be deemed to be the equivalent of a reconveyance
of a deed of trust. (4) Where an obligation secured by a deed of trust
was paid in full prior to July 1, 1989, and no reconveyance has been
issued and recorded by October 1, 1989, then a release of obligation
as provided for in paragraph (3) may be issued. (5) Paragraphs (2)
and (3) do not excuse the beneficiary or the trustee from compliance
with paragraph (1). Paragraph (3) does not excuse the beneficiary
from compliance with paragraph (2). (6) In addition to any other remedy
provided by law, a title insurance company preparing or recording
the release of the obligation shall be liable to any party for damages,
including attorney's fees, which any person may sustain by reason
of the issuance and recording of the release, pursuant to paragraphs
(3) and (4). (7) A beneficiary may, at its discretion, in accordance
with the requirements and procedures of Section 2934a, substitute
the title company conducting the escrow through which the obligation
is satisfied for the trustee of record, in which case the title company
assumes the obligation of a trustee under this subdivision, and may
collect the fee authorized by subdivision (e). (8) In lieu of delivering
the original note and deed of trust to the trustee within 30 days
of loan satisfaction, as required by paragraph (1) of subdivision
(b), a beneficiary who executes and delivers to the trustee a request
for a full reconveyance within 30 days of loan satisfaction may, within
120 days of loan satisfaction, deliver the original note and deed
of trust to either the trustee or trustor. If the note and deed of
trust are delivered as provided in this paragraph, upon satisfaction
of the note and deed of trust, the note and deed of trust shall be
altered to indicate that the obligation is paid in full. Nothing in
this paragraph alters the requirements and obligations set forth in
paragraphs (2) and (3). (c) For the purposes of this section, the
phrases "cause to be recorded" and "cause it to be recorded" include,
but are not limited to, sending by certified mail with the United
States Postal Service or by an independent courier service using its
tracking service that provides documentation of receipt and delivery,
including the signature of the recipient, the full reconveyance or
certificate of discharge in a recordable form, together with payment
for all required fees, in an envelope addressed to the county recorder's
office of the county in which the deed of trust or mortgage is recorded.
Within two business days from the day of receipt, if received in recordable
form together with all required fees, the county recorder shall stamp
and record the full reconveyance or certificate of discharge. Compliance
with this subdivision shall entitle the trustee to the benefit of
the presumption found in Section 641 of the Evidence Code. (d) The
violation of this section shall make the violator liable to the person
affected by the violation for all damages which that person may sustain
by reason of the violation, and shall require that the violator forfeit
to that person the sum of five hundred dollars ($500). (e) (1) The
trustee, beneficiary, or mortgagee may charge a reasonable fee to
the trustor or mortgagor, or the owner of the land, as the case may
be, for all services involved in the preparation, execution, and recordation
of the full reconveyance, including, but not limited to, document
preparation and forwarding services rendered to effect the full reconveyance,
and, in addition, may collect official fees. This fee may be made
payable no earlier than the opening of a bona fide escrow or no more
than 60 days prior to the full satisfaction of the obligation secured
by the deed of trust or mortgage. (2) If the fee charged pursuant
to this subdivision does not exceed forty-five dollars ($45), the
fee is conclusively presumed to be reasonable. (3) The fee described
in paragraph (1) may not be charged unless demand for the fee was
included in the payoff demand statement described in Section 2943.
(f) For purposes of this section, "original" may include an optically
imaged reproduction when the following requirements are met: (1) The
trustee receiving the request for reconveyance and executing the reconveyance
as provided in subdivision (b) is an affiliate or subsidiary of the
beneficiary or an affiliate or subsidiary of the assignee of the beneficiary,
respectively. (2) The optical image storage media used to store the
document shall be nonerasable write once, read many (WORM) optical
image media that does not allow changes to the stored document. (3)
The optical image reproduction shall be made consistent with the minimum
standards of quality approved by either the National Institute of
Standards and Technology or the Association for Information and Image
Management. (4) Written authentication identifying the optical image
reproduction as an unaltered copy of the note, deed of trust, or mortgage
shall be stamped or printed on the optical image reproduction. (g)
No fee or charge may be imposed on the trustor in connection with,
or relating to, any act described in this section except as expressly
authorized by this section. (h) The amendments to this section enacted
at the 1999-2000 Regular Session shall apply only to a mortgage or
an obligation secured by a deed of trust that is satisfied on or after
January 1, 2001. (i) (1) In any action filed before January 1, 2002,
that is dismissed as a result of the amendments to this section enacted
at the 2001-02 Regular Session, the plaintiff shall not be required
to pay the defendant's costs. (2) Any claimant, including a claimant
in a class action lawsuit, whose claim is dismissed or barred as a
result of the amendments to this section enacted at the 2001-02 Regular
Session, may, within 6 months of the dismissal or barring of the action
or claim, file or refile a claim for actual damages occurring before
January 1, 2002, that were proximately caused by a time lapse between
loan satisfaction and the completion of the beneficiary's obligations
as required under paragraph (1) of subdivision (b). In any action
brought under this section, the defendant may be found liable for
actual damages, but may not be found liable for any civil penalty
authorized by Section 2941. (j) Notwithstanding any other penalties,
if a beneficiary collects a fee for reconveyance and thereafter has
knowledge, or should have knowledge, that no reconveyance has been
recorded, the beneficiary shall cause to be recorded the reconveyance,
or in the event a release of obligation is earlier and timely recorded,
the beneficiary shall refund to the trustor the fee charged to perform
the reconveyance. Evidence of knowledge includes, but is not limited
to, notice of a release of obligation pursuant to paragraph (3) of
subdivision (b). 2941.1. Notwithstanding any other provision of law,
if no payoff demand statement is issued pursuant to Section 2943,
nothing in Section 2941 shall be construed to prohibit the charging
of a reconveyance fee. 2941.5. Every person who willfully violates
Section 2941 is guilty of a misdemeanor punishable by fine of not
less than fifty dollars ($50) nor more than four hundred dollars ($400),
or by imprisonment in the county jail for not to exceed six months,
or by both such fine and imprisonment. For purposes of this section,
"willfully" means simply a purpose or willingness to commit the act,
or make the omission referred to. It does not require an intent to
violate the law, to injure another, or to acquire any advantage. 2941.7.
Whenever the obligation secured by a mortgage or deed of trust has
been fully satisfied and the present mortgagee or beneficiary of record
cannot be located after diligent search, or refuses to execute and
deliver a proper certificate of discharge or request for reconveyance,
or whenever a specified balance, including principal and interest,
remains due and the mortgagor or trustor or the mortgagor's or trustor's
successor in interest cannot, after diligent search, locate the then
mortgagee or beneficiary of record, the lien of any mortgage or deed
of trust shall be released when the mortgagor or trustor or the mortgagor's
or trustor's successor in interest records or causes to be recorded,
in the office of the county recorder of the county in which the encumbered
property is located, a corporate bond accompanied by a declaration,
as specified in subdivision (b), and with respect to a deed of trust,
a reconveyance as hereinafter provided. (a) The bond shall be acceptable
to the trustee and shall be issued by a corporation lawfully authorized
to issue surety bonds in the State of California in a sum equal to
the greater of either (1) two times the amount of the original obligation
secured by the mortgage or deed of trust and any additional principal
amounts, including advances, shown in any recorded amendment thereto,
or (2) one-half of the total amount computed pursuant to (1) and any
accrued interest on such amount, and shall be conditioned for payment
of any sum which the mortgagee or beneficiary may recover in an action
on the obligation secured by the mortgage or deed of trust, with costs
of suit and reasonable attorneys' fees. The obligees under the bond
shall be the mortgagee or mortgagee's successor in interest or the
trustee who executes a reconveyance under this section and the beneficiary
or beneficiary's successor in interest. The bond recorded by the mortgagor
or trustor or mortgagor's or trustor's successor in interest shall
contain the following information describing the mortgage or deed
of trust: (1) Recording date and instrument number or book and page
number of the recorded instrument. (2) Names of original mortgagor
and mortgagee or trustor and beneficiary. (3) Amount shown as original
principal sum secured thereby. (4) The recording information and new
principal amount shown in any recorded amendment thereto. (b) The
declaration accompanying the corporate bond recorded by the mortgagor
or trustor or the mortgagor's or trustor's successor in interest shall
state: (1) That it is recorded pursuant to this section. (2) The name
of the original mortgagor or trustor and mortgagee or beneficiary.
(3) The name and address of the person making the declaration. (4)
That either the obligation secured by the mortgage or deed of trust
has been fully satisfied and the present mortgagee or beneficiary
of record cannot be located after diligent search, or refuses to execute
and deliver a proper certificate of discharge or request for reconveyance
as required under Section 2941; or that a specified balance, including
principal and interest, remains due and the mortgagor or trustor or
mortgagor's or trustor's successor in interest cannot, after diligent
search, locate the then mortgagee or beneficiary. (5) That the declarant
has mailed by certified mail, return receipt requested, to the last
address of the person to whom payments under the mortgage or deed
of trust were made and to the last mortgagee or beneficiary of record
at the address for such mortgagee or beneficiary shown on the instrument
creating, assigning, or conveying the interest, a notice of recording
a declaration and bond under this section and informing the recipient
of the name and address of the mortgagor or trustee, if any, and of
the right to record a written objection with respect to the release
of the lien of the mortgage or, with respect to a deed of trust, notify
the trustee in writing of any objection to the reconveyance of the
deed of trust. The declaration shall state the date any notices were
mailed pursuant to this section and the names and addresses of all
persons to whom mailed. The declaration provided for in this section
shall be signed by the mortgagor or trustor under penalty of perjury.
(c) With respect to a deed of trust, after the expiration of 30 days
following the recording of the corporate bond and accompanying declaration
provided in subdivisions (a) and (b), and delivery to the trustee
of the usual reconveyance fees plus costs and a demand for reconveyance
under this section, the trustee shall execute and record, or otherwise
deliver as provided in Section 2941, a reconveyance in the same form
as if the beneficiary had delivered to the trustee a proper request
for reconveyance, provided that the trustee has not received a written
objection to the reconveyance from the beneficiary of record. No trustee
shall have any liability to any person by reason of its execution
of a reconveyance in reliance upon a trustor's or trustor's successor's
in interest substantial compliance with this section. The sole remedy
of any person damaged by reason of the reconveyance shall be against
the trustor, the affiant, or the bond. With respect to a mortgage,
a mortgage shall be satisfied of record when 30 days have expired
following recordation of the corporate bond and accompanying declaration,
provided no objection to satisfaction has been recorded by the mortgagee
within that period. A bona fide purchaser or encumbrancer for value
shall take the interest conveyed free of such mortgage, provided there
has been compliance with subdivisions (a) and (b) and the deed to
the purchaser recites that no objections by the mortgagee have been
recorded. Upon recording of a reconveyance under this section, or,
in the case of a mortgage the expiration of 30 days following recordation
of the corporate bond and accompanying declaration without objection
thereto having been recorded, interest shall no longer accrue as to
any balance remaining due to the extent the balance due has been alleged
in the declaration recorded under subdivision (b). The sum of any
specified balance, including principal and interest, which remains
due and which is remitted to any issuer of a corporate bond in conjunction
with the issuance of a bond pursuant to this section shall, if unclaimed,
escheat to the state after three years pursuant to the Unclaimed Property
Law. From the date of escheat the issuer of the bond shall be relieved
of any liability to pay to the beneficiary or his or her heirs or
other successors in interest the escheated funds and the sole remedy
shall be a claim for property paid or delivered to the Controller
pursuant to the Unclaimed Property Law. (d) The term "diligent search,"
as used in this section, shall mean all of the following: (1) The
mailing of notices as provided in paragraph (5) of subdivision (b),
and to any other address that the declarant has used to correspond
with or contact the mortgagee or beneficiary. (2) A check of the telephone
directory in the city where the mortgagee or beneficiary maintained
the mortgagee's or beneficiary's last known address or place of business.
(3) In the event the mortgagee or beneficiary or the mortgagee's or
beneficiary's successor in interest is a corporation, a check of the
records of the California Secretary of State and the secretary of
state in the state of incorporation, if known. (4) In the event the
mortgagee or beneficiary is a state or national bank or a state or
federal savings and loan association, an inquiry of the regulatory
authority of such bank or savings and loan association. (e) This section
shall not be deemed to create an exclusive procedure for the issuance
of reconveyances and the issuance of bonds and declarations to release
the lien of a mortgage and shall not affect any other procedures,
whether or not such procedures are set forth in statute, for the issuance
of reconveyances and the issuance of bonds and declarations to release
the lien of a mortgage. (f) For purposes of this section, the trustor
or trustor's successor in interest may substitute the present trustee
of record without conferring any duties upon the trustee other than
those that are incidental to the execution of a reconveyance pursuant
to this section if all of the following requirements are met: (1)
The present trustee of record and the present mortgagee or beneficiary
of record cannot be located after diligent search. (2) The declaration
filed pursuant to subdivision (b) shall state in addition that it
is filed pursuant to this subdivision, and shall, in lieu of the provisions
of paragraph (4) of subdivision (b), state that the obligation secured
by the mortgage or deed of trust has been fully satisfied and the
present trustee of record and present mortgagee or beneficiary of
record cannot be located after diligent search. (3) The substitute
trustee is a title insurance company that agrees to accept the substitution.
This subdivision shall not impose a duty upon a title insurance company
to accept the substitution. (4) The corporate bond required in subdivision
(a) is for a period of five or more years. 2941.9. (a) The purpose
of this section is to establish a process through which all of the
beneficiaries under a trust deed may agree to be governed by beneficiaries
holding more than 50 percent of the record beneficial interest of
a series of notes secured by the same real property or of undivided
interests in a note secured by real property equivalent to a series
transaction, exclusive of any notes or interests of a licensed real
estate broker that is the issuer or servicer of the notes or interests
or any affiliate of that licensed real estate broker. (b) All holders
of notes secured by the same real property or a series of undivided
interests in notes secured by real property equivalent to a series
transaction may agree in writing to be governed by the desires of
the holders of more than 50 percent of the record beneficial interest
of those notes or interests, exclusive of any notes or interests of
a licensed real estate broker that is the issuer or servicer of the
notes or interests of any affiliate of the licensed real estate broker,
with respect to actions to be taken on behalf of all holders in the
event of default or foreclosure for matters that require direction
or approval of the holders, including designation of the broker, servicing
agent, or other person acting on their behalf, and the sale, encumbrance,
or lease of real property owned by the holders resulting from foreclosure
or receipt of a deed in lieu of foreclosure. (c) A description of
the agreement authorized in subdivision (b) of this section shall
be disclosed pursuant to Section 10232.5 of the Business and Professions
Code and shall be included in a recorded document such as the deed
of trust or the assignment of interests. (d) Any action taken pursuant
to the authority granted in this section is not effective unless all
the parties agreeing to the action sign, under penalty of perjury,
a separate written document entitled "Majority Action Affidavit" stating
the following: (1) The action has been authorized pursuant to this
section. (2) None of the undersigned is a licensed real estate broker
or an affiliate of the broker that is the issuer or servicer of the
obligation secured by the deed of trust. (3) The undersigned together
hold more than 50 percent of the record beneficial interest of a series
of notes secured by the same real property or of undivided interests
in a note secured by real property equivalent to a series transaction.
(4) Notice of the action was sent by certified mail, postage prepaid,
with return receipt requested, to each holder of an interest in the
obligation secured by the deed of trust who has not joined in the
execution of the substitution or this document. This document shall
be recorded in the office of the county recorder of each county in
which the real property described in the deed of trust is located.
Once the document in this subdivision is recorded, it shall constitute
conclusive evidence of compliance with the requirements of this subdivision
in favor of trustees acting pursuant to this section, substituted
trustees acting pursuant to Section 2934a, subsequent assignees of
the obligation secured by the deed of trust, and subsequent bona fide
purchasers or encumbrancers for value of the real property described
therein. (e) For purposes of this section, "affiliate of the licensed
real estate broker" includes any person as defined in Section 25013
of the Corporations Code who is controlled by, or is under common
control with, or who controls, a licensed real estate broker. "Control"
means the possession, direct or indirect, of the power to direct or
cause the direction of management and policies. 2942. Contracts of
bottomry or respondentia, although in the nature of mortgages, are
not affected by any of the provisions of this Chapter. 2943. (a) As
used in this section: (1) "Beneficiary" means a mortgagee or beneficiary
of a mortgage or deed of trust, or his or her assignees. (2) "Beneficiary
statement" means a written statement showing: (A) The amount of the
unpaid balance of the obligation secured by the mortgage or deed of
trust and the interest rate, together with the total amounts, if any,
of all overdue installments of either principal or interest, or both.
(B) The amounts of periodic payments, if any. (C) The date on which
the obligation is due in whole or in part. (D) The date to which real
estate taxes and special assessments have been paid to the extent
the information is known to the beneficiary. (E) The amount of hazard
insurance in effect and the term and premium of that insurance to
the extent the information is known to the beneficiary. (F) The amount
in an account, if any, maintained for the accumulation of funds with
which to pay taxes and insurance premiums. (G) The nature and, if
known, the amount of any additional charges, costs, or expenses paid
or incurred by the beneficiary which have become a lien on the real
property involved. (H) Whether the obligation secured by the mortgage
or deed of trust can or may be transferred to a new borrower. (3)
"Delivery" means depositing or causing to be deposited in the United
States mail an envelope with postage prepaid, containing a copy of
the document to be delivered, addressed to the person whose name and
address is set forth in the demand therefor. The document may also
be transmitted by facsimile machine to the person whose name and address
is set forth in the demand therefor. (4) "Entitled person" means the
trustor or mortgagor of, or his or her successor in interest in, the
mortgaged or trust property or any part thereof, any beneficiary under
a deed of trust, any person having a subordinate lien or encumbrance
of record thereon, the escrowholder licensed as an agent pursuant
to Division 6 (commencing with Section 17000) of the Financial Code,
or the party exempt by virtue of Section 17006 of the Financial Code
who is acting as the escrowholder. (5) "Payoff demand statement" means
a written statement, prepared in response to a written demand made
by an entitled person or authorized agent, setting forth the amounts
required as of the date of preparation by the beneficiary, to fully
satisfy all obligations secured by the loan that is the subject of
the payoff demand statement. The written statement shall include information
reasonably necessary to calculate the payoff amount on a per diem
basis for the period of time, not to exceed 30 days, during which
the per diem amount is not changed by the terms of the note. (b) (1)
A beneficiary, or his or her authorized agent, shall, within 21 days
of the receipt of a written demand by an entitled person or his or
her authorized agent, prepare and deliver to the person demanding
it a true, correct, and complete copy of the note or other evidence
of indebtedness with any modification thereto, and a beneficiary statement.
(2) A request pursuant to this subdivision may be made by an entitled
person or his or her authorized agent at any time before, or within
two months after, the recording of a notice of default under a mortgage
or deed of trust, or may otherwise be made more than 30 days prior
to the entry of the decree of foreclosure. (c) A beneficiary, or his
or her authorized agent, shall, on the written demand of an entitled
person, or his or her authorized agent, prepare and deliver a payoff
demand statement to the person demanding it within 21 days of the
receipt of the demand. However, if the loan is subject to a recorded
notice of default or a filed complaint commencing a judicial foreclosure,
the beneficiary shall have no obligation to prepare and deliver this
statement as prescribed unless the written demand is received prior
to the first publication of a notice of sale or the notice of the
first date of sale established by a court. (d) (1) A beneficiary statement
or payoff demand statement may be relied upon by the entitled person
or his or her authorized agent in accordance with its terms, including
with respect to the payoff demand statement reliance for the purpose
of establishing the amount necessary to pay the obligation in full.
If the beneficiary notifies the entitled person or his or her authorized
agent of any amendment to the statement, then the amended statement
may be relied upon by the entitled person or his or her authorized
agent as provided in this subdivision. (2) If notification of any
amendment to the statement is not given in writing, then a written
amendment to the statement shall be delivered to the entitled person
or his or her authorized agent no later than the next business day
after notification. (3) Upon the dates specified in subparagraphs
(A) and (B) any sums that were due and for any reason not included
in the statement or amended statement shall continue to be recoverable
by the beneficiary as an unsecured obligation of the obligor pursuant
to the terms of the note and existing provisions of law. (A) If the
transaction is voluntary, the entitled party or his or her authorized
agent may rely upon the statement or amended statement upon the earlier
of (i) the close of escrow, (ii) transfer of title, or (iii) recordation
of a lien. (B) If the loan is subject to a recorded notice of default
or a filed complaint commencing a judicial foreclosure, the entitled
party or his or her authorized agent may rely upon the statement or
amended statement upon the acceptance of the last and highest bid
at a trustee's sale or a court supervised sale. (e) The following
provisions apply to a demand for either a beneficiary statement or
a payoff demand statement: (1) If an entitled person or his or her
authorized agent requests a statement pursuant to this section and
does not specify a beneficiary statement or a payoff demand statement
the beneficiary shall treat the request as a request for a payoff
demand statement. (2) If the entitled person or the entitled person's
authorized agent includes in the written demand a specific request
for a copy of the deed of trust or mortgage, it shall be furnished
with the written statement at no additional charge. (3) The beneficiary
may, before delivering a statement, require reasonable proof that
the person making the demand is, in fact, an entitled person or an
authorized agent of an entitled person, in which event the beneficiary
shall not be subject to the penalties of this section until 21 days
after receipt of the proof herein provided for. A statement in writing
signed by the entitled person appointing an authorized agent when
delivered personally to the beneficiary or delivered by registered
return receipt mail shall constitute reasonable proof as to the identity
of an agent. Similar delivery of a policy of title insurance, preliminary
report issued by a title company, original or photographic copy of
a grant deed or certified copy of letters testamentary, guardianship,
or conservatorship shall constitute reasonable proof as to the identity
of a successor in interest, provided the person demanding a statement
is named as successor in interest in the document. (4) If a beneficiary
for a period of 21 days after receipt of the written demand willfully
fails to prepare and deliver the statement, he or she is liable to
the entitled person for all damages which he or she may sustain by
reason of the refusal and, whether or not actual damages are sustained,
he or she shall forfeit to the entitled person the sum of three hundred
dollars ($300). Each failure to prepare and deliver the statement,
occurring at a time when, pursuant to this section, the beneficiary
is required to prepare and deliver the statement, creates a separate
cause of action, but a judgment awarding an entitled person a forfeiture,
or damages and forfeiture, for any failure to prepare and deliver
a statement bars recovery of damages and forfeiture for any other
failure to prepare and deliver a statement, with respect to the same
obligation, in compliance with a demand therefor made within six months
before or after the demand as to which the award was made. For the
purposes of this subdivision, "willfully" means an intentional failure
to comply with the requirements of this section without just cause
or excuse. (5) If the beneficiary has more than one branch, office,
or other place of business, then the demand shall be made to the branch
or office address set forth in the payment billing notice or payment
book, and the statement, unless it specifies otherwise, shall be deemed
to apply only to the unpaid balance of the single obligation named
in the request and secured by the mortgage or deed of trust which
is payable at the branch or office whose address appears on the aforesaid
billing notice or payment book. (6) The beneficiary may make a charge
not to exceed thirty dollars ($30) for furnishing each required statement.
The provisions of this paragraph shall not apply to mortgages or deeds
of trust insured by the Federal Housing Administrator or guaranteed
by the Administrator of Veterans Affairs. (f) The preparation and
delivery of a beneficiary statement or a payoff demand statement pursuant
to this section shall not change a date of sale established pursuant
to Section 2924g. 2944. None of the provisions of this chapter applies
to any transaction or security interest governed by the Commercial
Code, except to the extent made applicable by reason of an election
made by the secured party pursuant to subparagraph (B) of paragraph
(1) of subdivision (a) of Section 9604 of the Commercial Code. 2944.5.
No lender, mortgagee, or any third party having an interest in real
or personal property shall refuse to accept a policy issued by an
admitted insurer solely because the policy is issued for a continuous
period without a fixed expiration date even though the policy premium
is due and payable every six months, provided the lender, mortgagee,
or third party is entitled to receive (a) notice of renewal from the
insurer within 15 days of receipt of payment on the policy by the
insured or (b) notice of cancellation or nonrenewal under the terms
and conditions set forth in Sections 678 and 2074.8 of the Insurance
Code, whichever is applicable.
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