SB 1275 Summary

• Extends foreclosure prevention requirements until January 1, 2013, for mortgages recorded before January 1, 2009 on owner-occupied residential properties with no more than 4 dwelling units, applying to loans reviewed under federal Home Affordable Modification Program (HAMP) guidelines or recorded between January 1, 2003, and January 1, 2009.

• Requires mortgagees, beneficiaries, or authorized agents to provide borrowers with written notice of foreclosure avoidance options and borrower rights, contact borrowers by phone at least three times at different hours and days, and attempt in-person or telephone meetings within 15 days of sending initial notice.

• Mandates lenders provide borrowers at least 45 days to submit loan modification applications and 25 days to submit supplemental documentation, with denial explanation letters required within 10 business days if applications are rejected.

• Prohibits filing a notice of default until borrowers are evaluated and denied for loan modification or the application deadline passes, except when no loan modification option is available.

• Allows borrowers to file suit within one year of trustee sale to void foreclosure, obtain injunctions, or recover damages of up to $10,000 to $15,000 if lenders fail to comply with required procedures, unless lenders voluntarily rescind and cure violations within 180 days.