New Foreclosure Law Finds Common Ground: Legislation changes way banks undertake foreclosure process.


California has seen an unprecedented rise in the number of residential foreclosures. In 2007 for example, more than 84,000 California properties were lost in foreclosure, and more than 250,000 loans on California properties went into default, the first step in the foreclosure process.

To address this extraordinary threat to California and local economies, the state Legislature started working in early 2008 on Senate Bill 1137 that was signed into law on July 8, 2008 by Gov. Arnold Schwarzenegger as emergency legislation. The new law makes major changes to non-judicial residential foreclosures in California by: (1) establishing additional, detailed procedures for lenders to follow in the foreclosure process; (2) requiring a purchaser to maintain vacant residential property purchased through foreclosure or be subject to monetary penalties; and (3) giving a renter 60 days' notice instead of 30 days' notice to vacate the property that has been foreclosed. The new law applies only to loans made between Jan. 1, 2003 and Dec. 31, 2007 for owner-occupied residential properties. Further, all provisions of the new law sunset by Jan.1, 2013, unless a later enacted statute extends or deletes that date.

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