Despite opposition from consumer and seniors organizations, UTA-sponsored AB 2624 has been approved by the California Assembly and forwarded on to the Senate for further action. The bill, which contains clarifications on “ancient mortgages” and cashiers checks presented at trustees sales, also includes a variety of clean-up provisions relating to nonjudicial foreclosures of HOA assessment liens. The vote in the Assembly was 62-7.

The last issue of UTA News reported extensively on the HOA issues raised by AB 2624. In simple terms, current law provides for a right of redemption following nonjudicial foreclosures of assessment liens, but fails to answer a host of operational questions surrounding this redemption “right”. For example, redemption rights following judicial foreclosures are handled by sheriffs acting as “levying officers”. But sheriffs are not involved in nonjudicial foreclosures, raising the basic question of who is supposed to administer the redemption process. AB 2624 is designed to answer this and many other equally necessary questions.

The bill was actually heard in two different policy committees in the Assembly. Both the Housing and Judiciary committees approved the bill over the opposition of the Congress of California Seniors, Consumers Union, and other groups. While the seniors’ organizations in particular raise a large number of objections, the most fundamental is that trustees are not sufficiently independent to act as levying officers following nonjudicial foreclosures. Thus far, the committees have agreed that trustees are the logical choice to act as levying officers, but they have seemed slightly uncomfortable in rejecting the arguments of the opposition. The committee process in the Senate should be quite interesting.

The month of June will also see hearings on hundreds of other bills approved by their “first houses”, meaning Senate hearings on bills sent over by the Assembly, and Assembly hearings on bills sent over by the Senate. Among these bills are the following:

• AB 2416 (Torrico): Appraisal Fees. Amends the law concerning permissible appraisal fees charged by California Finance Lenders. Permits the imposition of actual costs for automated valuation models employed by CFL’s in lieu of full appraisals.
• AB 2587 (Liu): Contaminated Property: Mobilehomes. Extends the provisions of current law relating to clean-up of methamphetamine-contaminated residential property to mobilehome parks. In certain cases, lenders could be liable for clean-up costs following foreclosure.
• AB 2781 (Leno): Child Support Collectors. Enacts the Private Child Support Enforcement Act. Among other provisions, provides for child support agreements to include provisions relating to fees for private child support collectors, which would have the force and effect of money judgments.
• AB 2581 (DeVore): Common Interest Developments. Amends the Davis-Stirling Common Interest Development Act to provide for new procedures to amend or revoke provisions of condominium plans. The intent is to provide for special procedures when necessary to repair, rebuild, or reconstruct portions of condominium developments.
• SB 1609 (Simitian): Reverse Mortgages. Adds new regulation of reverse mortgage instruments, including a prohibition against lenders requiring purchase of annuities as a condition of receiving the reverse mortgage.

Although 2006 is less than half over chronologically, the legislative year is much further along. Assuming passage of a state budget, the Assembly and Senate will be on recess from July 7 until August 7. They will return in August for only a few weeks before the California Constitution requires them to adjourn on August 31. In other words, there are less that eight weeks remaining in the session to act on UTA-sponsored AB 2624 and the hundreds of other bills remaining alive. Historically, the bills undergo lots of changes in the final weeks. The final outcome on the UTA bill and others will probably be known by the next issue of this publication.

For previous articles by Michael Belote, click here.