(1) Existing law, the State Bar Act, provides for the licensure and regulation of attorneys by the State Bar of California, a public corporation, which is governed by its board of trustees. If an attorney violates specified requirements relating to negotiating or arranging mortgage loan modifications or other form of mortgage loan forbearance for a fee, it is a cause for discipline under the act.
This bill would provide that other actions relating to negotiating or arranging mortgage loan modifications or other form of mortgage loan forbearance for a fee would be a violation of the State Bar Act, including charging or collecting any compensation until after the person has fully performed every service that the person contracted to perform or represented that they would perform.
(2) Existing law defines foreclosure consultants and regulates their activities. Under existing law, a foreclosure consultant, among other things, is a person who solicits, represents, or offers to perform for compensation specified acts for a property owner, as defined, including stopping or postponing a foreclosure sale. Existing law makes a statement of legislative findings and declarations regarding foreclosure consultants.
This bill would revise the list of actions that define a foreclosure consultant to also include the act stopping or postponing a delinquency on a mortgage or deed of trust. The bill would also revise the statement of legislative findings and declarations regarding foreclosure consultants.
(3) Existing law prescribes various requirements to be satisfied before the exercise of a power of sale under a mortgage or deed of trust. In this regard, existing law requires that a notice of default and a notice of sale be recorded and that specified periods of time elapse between the recording and the sale. Certain laws, commonly referred to as the California Homeowner Bill of Rights (HOBR) , established a variety of requirements in connection with foreclosures on mortgages and deeds of trust, including restrictions on the actions of mortgage servicers while a borrower is attempting to secure a loan modification or has submitted a loan modification application. The foreclosure provisions of HOBR were generally limited to first lien mortgages and deeds of trust on owner-occupied residences, as specified.
This bill, until January 1, 2023, would extend protections of the HOBR to first lien mortgages or deeds of trust on properties that are secured by tenant-occupied residential real property containing no more than 4 dwelling units and that meet other specified conditions. In this regard, the bill would require that the property owner have no more than 3 residential real properties, each containing no more than 4 dwelling units, that the property is occupied by a tenant pursuant to an applicable lease, as defined, and that a tenant is unable to pay rent due to a reduction in income resulting from the novel coronavirus. The bill would require that the property remain the principal residence of a tenant for the prescribed relief to apply.

Statutes affected:
SB 1447: 6106.3 BPC, 2945 CIV, 2945.1 CIV, 2924.15 CIV, 25471 PRC
02/21/20 - Introduced: 25471 PRC
05/05/20 - Amended Senate: 6106.3 BPC, 2945 CIV, 2945.1 CIV, 2924.15 CIV, 25471 PRC
SB1447: 25471 PRC