California Code of Regulations
Title 10 - Investment
Chapter 6 - Real Estate Commissioner
Article 16.5 - California Foreclosure Prevention Act
Subarticle 1 - Requirements
Section 2850.2 - Eligibility

Universal Citation: 10 CA Code of Regs 2850.2

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) For an applicant to obtain an order of exemption from Civil Code Section 2923.52, the comprehensive loan modification program shall, at a minimum, be available for borrowers and residential mortgage loans meeting the following requirements:

(1) The residential mortgage loan to be modified was recorded during the period of January 1, 2003 to January 1, 2008.

(2) The borrower occupies the property as his or her principal residence, and occupied the property as his or her principal residence at the time the loan became delinquent.

(3) The loan is in default, and a notice of default has been filed with the county recorder under Civil Code Section 2924 for the mortgaged property.

(4) The residential mortgage loan is the first lien on the property, and either the property is not subject to a subordinate lien, the subordinate lien holder has agreed to subordinate to the modified first lien, or an agreement from the subordinate lien holder is not necessary for the first lien to remain in first position upon the modification of the loan.

(5) The mortgaged property is located in California.

(6) The borrower can document assets, income or likelihood of future earnings to establish the ability to repay the modified loan, using customary underwriting criteria and analysis or current industry standards.

(7) The borrower has not surrendered the property.

(8) The borrower has not contracted with an organization, person or entity whose primary business is advising people who have decided to leave their homes regarding how to extend the foreclosure process and avoid their contractual obligations to mortgagees or beneficiaries.

(9) The borrower does not currently have a bankruptcy action pending under Chapter 7, 11, 12, or 13 of Title 11 of the United States Code.

(b) Nothing in this section prohibits a mortgage loan servicer from including more residential mortgage loans and more borrowers in a comprehensive loan modification program than the minimum set forth in this section, including the borrowers described in paragraphs 8 and 9 of subsection (a) of this rule. For example, the Commissioner will consider a program that includes borrowers whose loans have not yet become delinquent, but such delinquency is reasonably imminent. For purposes of this subchapter, "delinquent" means that the borrower has defaulted on an obligation in the note, deed of trust, mortgage or related loan documents for 30 or more days. "Delinquent" does not include defaults based upon failure to pay at maturity except where maturity has been accelerated and is subject to reinstatement pursuant to Civil Code Section 2924c.

(c) A mortgage loan servicer that has obtained an order from the Commissioner exempting it from Civil Code Section 2923.52(a) is not required to provide a borrower identified in subsection (a) of this rule with an additional 90 days in the foreclosure process.

(d) A comprehensive loan modification program may, but need not, provide for the modification of a loan for a borrower or residential mortgage loan that does not meet the eligibility requirements in subsection (a) of this rule.

1. New section filed 6-1-2009 as an emergency; operative 6-1-2009 (Register 2009, No. 23). A Certificate of Compliance must be transmitted to OAL by 11-30-2009 or emergency language will be repealed by operation of law on the following day.
2. New section refiled 12-1-2009 as an emergency; operative 12-1-2009 (Register 2009, No. 49). A Certificate of Compliance must be transmitted to OAL by 3-1-2010 or emergency language will be repealed by operation of law on the following day.
3. Certificate of Compliance as to 12-1-2009 order transmitted to OAL 2-22-2010 and filed 4-6-2010 (Register 2010, No. 15).

Note: Authority cited: Section 2923.53(d), Civil Code. Reference: Sections 2923.52 and 2923.53, Civil Code.

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