Date: December 17, 2019
To: All Scheer Law Group Clients and Affiliates:
Subject: HOBR: On Again, off Again. Successor/Survivor Bill of Rights to Sunset on January 1, 2020.
For those keeping score, the California Homeowners Bill of Rights (“HOBR”), enacted in 2012, was significantly scaled back in 2018, and was largely reinstated to its original form on January 1, 2019.
The Successor/Survivor Bill of Rights (SB 1150, codified in CA Civ. Code §2920.7) was subsequently added to the original HOBR. This legislation required that covered lenders implement procedures on covered loans to establish the identity of a successor to a deceased borrower on a mortgage loan, and to provide the confirmed successor with information about the loan, and in some instances, the right to foreclosure alternatives i.e. loan modifications.
The provisions of §2920.7 were to sunset on January 1, 2020, unless extended. The provisions were not extended in the 2019 CA legislative session so they expire after this month.
You should note that there are federal procedures governing successor rights and servicer obligations under TILA/RESPA (See generally 12 CFR §1024.36). These federal provisions are not the same as those contained in CA Civ. Code §2920.7.
The bottom line is that the Successor/Survivor Bill of Rights will be gone after this month. However, the issue of successor rights will not go away. Whether your continue to be covered under Federal law concerning servicer communications and applicability of the mortgage servicing rules, or whether you want to generally determine if a successor can assume a loan, all lenders and servicers on consumer loans must have a consistent action plan to identify successors and to promptly determine their intentions and your obligations on the loan. Conversely, extending successor rights that were allowed under the Successor/Survivor Bill of Rights, are not required and continuing to follow them after 12.31.19, will result in delay. Know and understand you rights and obligations.
Please call or email if you would like to discuss.