SB 1778 Summary

• Establishes "Foreclosure Bill of Rights" applying to homestead property foreclosures initiated after July 1, 2010, requiring lenders to obtain appraisals, provide loan documents within 60 days, and negotiate loan modifications before obtaining final judgment.

• Requires defendants to provide financial documentation (3-year tax returns, 3-month bank statements, and sworn affidavit) within 30 days and mandates court-ordered mediation at least 60 days after all other requirements are completed.

• Creates forbearance liens for difference between original and reduced principal if loans are refinanced at current market value, with lien satisfied through proceeds from first resale or refinance, and allowing foreclosure upon subsequent transfers.

• Requires landlords in foreclosed residential properties to disclose pending foreclosure to prospective tenants, hold security deposits and advance rent in interest-bearing accounts, and requires foreclosure sale purchasers to credit tenants for deposits and unexpired advance rent.

• Allows purchasers of foreclosed residential units to terminate tenant leases with written notice, providing tenants 90 days or until end of lease term (whichever is greater) to vacate, with exemptions for mortgagor-occupied properties and below-market-rate rentals.