COVID-19: homeowner, tenant, and consumer relief.

(1) Existing law prescribes various requirements to be satisfied before the exercise of a power of sale under a mortgage or deed of trust. In this regard, existing law requires that a notice of default and a notice of sale be recorded and that specified periods of time elapse between the recording and the sale. Existing law establishes certain requirements in connection with foreclosures on mortgages and deeds of trust, including restrictions on the actions mortgage servicers while a borrower is attempting to secure a loan modification or has submitted a loan modification application. Existing law also imposes requirements on loans secured by liens on motor vehicles. This bill would enact the COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020. The bill, with respect to residential mortgage loans, would prohibit a mortgage servicer, mortgagee, trustee, beneficiary, or authorized agent from taking specified actions during the covered period. The "covered period" would be defined as the 12 months following the operational date of the act. The bill would prohibit the above persons from commencing or continuing any judicial foreclosure action, recording a notice of default, or taking any action to evict a person following a foreclosure. The bill would also require the above persons to stay all foreclosure proceedings and time limits in a judicial or nonjudicial foreclosure on a property during the covered period. The bill would not apply these provisions to a mortgage secured by a dwelling that any of the above persons has determined, after exercising reasonable diligence, is vacant or abandoned. The bill, with respect to residential mortgage loans, would authorize a borrower experiencing a financial hardship during the covered period to request forbearance from any mortgage obligation by submitting a request to the borrower's mortgage servicer. The bill would require the mortgage servicer to provide the forbearance requested for the period requested by the borrower, up to an initial period of 180 days, the length of which would be required to be extended at the request of the borrower for a total forbearance period of up to 12 months. If the borrower requests a forbearance period greater than 90 days, the servicer would be required to provide an initial forbearance term of not less than 90 days, and automatically extend it for an additional 90 days, unless the servicer confirms the borrower does not want to renew the forbearance. The bill would prohibit a mortgage servicer from misleading or making misrepresentations to a borrower about forbearance and repayment options. The bill would require a borrower receiving a forbearance with respect to a mortgage secured by a dwelling that has a tenant, regardless of whether the borrower also lives in the dwelling, to provide the tenant with rent relief for not less than the forbearance period. The bill would require a mortgage servicer, upon placing a mortgage obligation in forbearance, to provide the borrower written notification of the forbearance terms, treatment of payments, and other options available to the borrower at the end of the forbearance period. The bill would require the servicer, no later than 30 days before the end of the forbearance, to notify the borrower of their options to modify their loan or reinstate their mortgage account to current status, as provided, and provide a written notice, within 30 days of the original notification, of their rights and obligations with regard to their loan modification or reinstatement, as provided. The bill would prohibit a mortgage servicer from assessing, accruing, or applying fees, penalties, or additional interest to the borrower's account beyond specified scheduled or calculated amounts. The bill would require a mortgage servicer that claims investor guidelines or applicable law prohibit implementation of postforbearance modification or reinstatement on the required terms, to notify the borrower and the Commissioner of Business Oversight, as specified, and to present documentation. The commissioner would be required to develop a procedure for reviewing and determining the validity of the grounds for the exception, and the determination would be subject to judicial review. The bill would require the mortgage servicer, if the borrower is unable to return to making regular mortgage payments, to evaluate all loss mitigation and foreclosure prevention options, and, if the borrower qualifies, to implement the option with no penalties, late fees, modification fees, or additional interest beyond specified scheduled amounts. The bill would also authorize a mortgage servicer, if a borrower does not qualify for loss mitigation or foreclosure prevention options to pursue foreclosure after expiration of the covered period. This bill would provide that a mortgage servicer that violates the above requirements is in violation of the laws governing the servicer's license and subject to enforcement actions by its licensing agency. The bill would authorize a borrower harmed by a violation of the above requirements to bring an action for injunctive relief, damages, restitution, and any other remedies available. The bill would require a court to award attorney's fees and costs to a prevailing borrower. The bill, with respect to multifamily mortgage loans, would authorize a borrower to submit a request for forbearance to the borrower's mortgage servicers, affirming that the multifamily borrower is experiencing hardship during the COVID-19 emergency. The bill would require a mortgage servicer, upon request from a multifamily borrower, to request documentation of the financial hardship, provide the forbearance for not less than 180 days, subject to extension. The bill would require a multifamily borrower, during the forbearance term, to provide rent relief to tenants living in the property secured by the mortgage and would prohibit eviction for a tenant's nonpayment of rent or application or accrual of fees or other penalties on renters for nonpayment of rent. The bill would require a multifamily borrower to bring a loan placed in forbearance under these provisions current within a specified timeframe. This bill, with respect to vehicle-secured credit obligations, would prohibit a servicer of vehicle-secured credit from taking any action to use self-help to repossess, as provided, a mobilehome or motor vehicle that secures a vehicle-secured credit obligation, until January 1, 2023, except as provided. The bill would authorize a consumer experiencing a financial hardship during the covered period to request forbearance from any vehicle-secured credit obligation by submitting a request to the servicer of vehicle-secured credit, affirming that the consumer is experiencing hardship. The bill would require a servicer of vehicle-secured credit to provide the forbearance requested for a period of at least 90 days, and to extend the forbearance period upon request, if the consumer affirms that they continue to experience hardship. The bill would authorize a servicer of vehicle-secured credit to assess, accrue, or apply to a consumer's account a rate of interest of up to 7% per annum, but would prohibit a servicer of vehicle-secured credit from assessing, accruing, or applying additional fees, penalties, or other interest to a consumer's account beyond the amounts scheduled or calculated, as specified. The bill would require the holder of a vehicle-secured credit obligation to evaluate a consumer's ability return to making regular payments before the completion of a forbearance period, and if the consumer is able to return to making regular payments, modify the consumer's vehicle-secured credit obligation to extend the term, modify the obligation, notify the borrower, and take other specified actions, including proceeding with a written notice of intent to repossess the vehicle only after January 1, 2023. The bill would provide that a repossession of a mobilehome or motor vehicle by a servicer of a vehicle-secured credit obligation that has failed to comply with all of these provisions constitutes an acceptance of the collateral in full satisfaction of the vehicle-secured credit obligation. (2) The California Deferred Deposit Transaction Law provides for the licensure and regulation by the Commissioner of Business Oversight of persons engaged in the business of making or arranging deferred deposit transactions. A knowing and willful violation of the provisions of this law is a crime. This bill, during the COVID-19 emergency and the 180-day period thereafter, would prohibit a fee for a deferred deposit transaction from exceeding 5% of the face amount of the check. The bill would require a licensee under that law to offer a customer the option to enter into a payment plan that provides an extension of time for repayment of an existing deferred deposit transaction in accordance with specified procedures. By expanding the scope of an existing crime, the bill would impose a state-mandated local program. The bill would also include related legislative findings. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.