On June 30, 2020, Governor Brown signed House Bill 4204, limiting foreclosures and other remedies for defaulting on by mortgages, trust deeds, and land sale contracts. In very broad terms, HB 4204 forbids lenders from declaring a default based on certain borrowers’ failure to pay, prohibits lenders from collecting penalties, and forbids certain foreclosures during an “emergency period” from March 8 through September 30, 2020.
Notably, the law also imposes an affirmative obligation to lenders to provide notice to their borrowers. Within 60 days following the effective date of this Act, every lender must provide written notice to all of the lender’s borrowers of a borrower’s rights for accommodation. The Bill does not list specific requirements for this notice or provide a statutory form.
Should lenders fail to follow the requirements of the new law, borrowers may sue to recover any financial damages that they have suffered, along with their costs and attorney fees.
You can read the bill in its entirety here, House Bill 4204. If you have questions about the Bill or to ensure compliance, we encourage you to seek legal counsel.