California Exempts Reverse Mortgages from Successor in Interest Requirements

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On July 18, 2018, California enacted Senate Bill 1183.  The new law amends section 2920.7(i) of the California Civil Code and specifies that reverse mortgages are exempt from certain provisions related to successors in interest under the section.  Existing law prohibits a mortgage servicer from recording a notice of default based on a notification that a borrower has died from a successor in interest without first requesting certain proof of the claimant’s status as a successor in interest.  Within 10 days of determining the claimant is a successor in interest, current law requires the mortgage servicer to provide certain loan information to the claimant.  Additionally, a mortgage servicer is required to allow the successor in interest to assume the loan obligation of the deceased borrower or apply for other alternatives.  Under Senate Bill 1183, reverse mortgages are now explicitly exempt from the above provisions.

California Senate Bill 1183 is available here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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