Covid-19 Small Landlord and Homeowner Relief ActMortgages

Section § 3273.10

Explanation

This law outlines rules for mortgage servicers when they deny forbearance requests during a specific period related to COVID-19. If a borrower was current on payments as of February 1, 2020, and is now facing financial hardship due to COVID-19, the servicer must provide a detailed denial notice specifying reasons. If the issue is fixable, the borrower has 21 days to correct it, and the servicer must accept any corrections within this time, responding within five business days. Additionally, certain compliance with the federal CARES Act is deemed as compliance with this section for both federally and nonfederally backed mortgages.

(a)CA Civil Law Code § 3273.10(a) If a mortgage servicer denies a forbearance request made during the effective time period, the mortgage servicer shall provide written notice to the borrower that sets forth the specific reason or reasons that forbearance was not provided, if both of the following conditions are met:
(1)CA Civil Law Code § 3273.10(a)(1) The borrower was current on payment as of February 1, 2020.
(2)CA Civil Law Code § 3273.10(a)(2) The borrower is experiencing a financial hardship that prevents the borrower from making timely payments on the mortgage obligation due, directly or indirectly, to the COVID-19 emergency.
(b)CA Civil Law Code § 3273.10(b) If the written notice in subdivision (a) cites any defect in the borrower’s request, including an incomplete application or missing information, that is curable, the mortgage servicer shall do all of the following:
(1)CA Civil Law Code § 3273.10(b)(1) Specifically identify any curable defect in the written notice.
(2)CA Civil Law Code § 3273.10(b)(2) Provide 21 days from the mailing date of the written notice for the borrower to cure any identified defect.
(3)CA Civil Law Code § 3273.10(b)(3) Accept receipt of the borrower’s revised request for forbearance before the aforementioned 21-day period lapses.
(4)CA Civil Law Code § 3273.10(b)(4) Respond to the borrower’s revised request within five business days of receipt of the revised request.
(c)CA Civil Law Code § 3273.10(c) If a mortgage servicer denies a forbearance request made during the effective time period, the declaration required by subdivision (b) of Section 2923.5 shall include the written notice together with a statement as to whether forbearance was or was not subsequently provided.
(d)CA Civil Law Code § 3273.10(d) A mortgage servicer, mortgagee, or beneficiary of the deed of trust, or an authorized agent thereof, who, with respect to a borrower of a federally backed mortgage, complies with the relevant provisions regarding forbearance in Section 4022 of the federal Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) (Public Law 116-136), including any amendments or revisions to those provisions, shall be deemed to be in compliance with this section. A mortgage servicer of a nonfederally backed mortgage that provides forbearance that is consistent with the requirements of the CARES Act for federally backed mortgages shall be deemed to be in compliance with this section.
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Section § 3273.11

Explanation

This law requires mortgage servicers to follow federal guidelines on options for borrowers after they have paused mortgage payments due to COVID-19. If a mortgage involves a federal program like Fannie Mae or Freddie Mac, and the servicer follows the related federal guidance, they are in compliance. For loans not backed by federal programs, servicers must still review options based on similar federal guidelines to be compliant.

(a)CA Civil Law Code § 3273.11(a) A mortgage servicer shall comply with applicable federal guidance regarding borrower options following a COVID-19 related forbearance.
(b)CA Civil Law Code § 3273.11(b) Any mortgage servicer, mortgagee, or beneficiary of the deed of trust, or authorized agent thereof, who, with respect to a borrower of a federally backed loan, complies with the guidance to mortgagees regarding borrower options following a COVID-19-related forbearance provided by the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), the Federal Housing Administration of the United States Department of Housing and Urban Development, the United States Department of Veterans Affairs, or the Rural Development division of the United States Department of Agriculture, including any amendments, updates, or revisions to that guidance, shall be deemed to be in compliance with this section.
(c)CA Civil Law Code § 3273.11(c) With respect to a nonfederally backed loan, any mortgage servicer, mortgagee, or beneficiary of the deed of trust, or authorized agent thereof, who, regarding borrower options following a COVID-19 related forbearance, reviews a customer for a solution that is consistent with the guidance to servicers, mortgagees, or beneficiaries provided by Fannie Mae, Freddie Mac, the Federal Housing Administration of the Department of Housing and Urban Development, the Department of Veterans Affairs, or the Rural Development division of the Department of Agriculture, including any amendments, updates or revisions to such guidance, shall be deemed to be in compliance with this section.
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Section § 3273.12

Explanation

This law states that after a borrower has gone through a forbearance period, the mortgage servicer should offer them a way to manage any missed payments. This option should align with what the mortgage servicer is allowed to do based on their agreement or other powers they have.

It is the intent of the Legislature that a mortgage servicer offer a borrower a postforbearance loss mitigation option that is consistent with the mortgage servicer’s contractual or other authority.
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Section § 3273.14

Explanation

Mortgage servicers must discuss options for pausing payments and what happens afterward in the language the borrower prefers, as long as the servicer typically communicates in that language with any borrower.

A mortgage servicer shall communicate about forbearance and postforbearance options described in this article in the borrower’s preferred language when the mortgage servicer regularly communicates with any borrower in that language.
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Section § 3273.15

Explanation

This law says that if a borrower is harmed by a significant violation of certain rules, they can take legal action to stop the violation and possibly receive compensation or other remedies. If a borrower wins a case, the court can make the losing side pay for the borrower's attorney's fees and legal costs, even if it's just temporary relief like a restraining order to stop a sale. These protections and rights are in addition to any other legal rights the borrower may have, and this law doesn't take away any existing rights.

(a)CA Civil Law Code § 3273.15(a) A borrower who is harmed by a material violation of this title may bring an action to obtain injunctive relief, damages, restitution, and any other remedy to redress the violation.
(b)CA Civil Law Code § 3273.15(b) A court may award a prevailing borrower reasonable attorney’s fees and costs in any action based on any violation of this title in which injunctive relief against a sale, including a temporary restraining order, is granted. A court may award a prevailing borrower reasonable attorney’s fees and costs in an action for a violation of this article in which relief is granted but injunctive relief against a sale is not granted.
(c)CA Civil Law Code § 3273.15(c) The rights, remedies, and procedures provided to borrowers by this section are in addition to and independent of any other rights, remedies, or procedures under any other law. This section shall not be construed to alter, limit, or negate any other rights, remedies, or procedures provided to borrowers by law.
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Section § 3273.16

Explanation

This law states that if a borrower agrees to give up the protections provided by a certain set of rules, that agreement is not allowed and doesn't count.

Any waiver by a borrower of the provisions of this article is contrary to public policy and shall be void.
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