As many of you know, SB 1137 was recently enacted. The provisions are applicable to loans that were originated between January 1, 2003 and December 31, 2007, when security is taken on a borrower’s principal residence. There are many facets to the bill. The most important is that effective September 8, 2008, any lender seeking to initiate a foreclosure by filing a notice of default (NOD) or notice a sale (NOS), will have to file a declaration along with the NOD or NOS evidencing that the lender has complied with the statute. This will create many problems for those who are not prepared.
A Declaration evidencing Compliance with the Statute must be recorded.
It is important that all SLG clients and affiliates are aware of this new law. If you attempt to initiate foreclosure after 9.8.08, without satisfying these requirements, you will have an invalid foreclosure. If you have initiated a foreclosure (NOD) prior to 9.8.08, but have not satisfied these requirements, then you will have to specify in the NOS that you have done so.
Foreclosing lenders and servicers should review their existing pending foreclosures now, to ensure compliance and must ensure that all foreclosures initiated after 9.8.08, are in compliance with the statute. If you need assistance preparing the compliance declaration you should check with your foreclosure trustee or contact SLG and we will assist you.
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