AB 1957

AB1957:v96#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Assembly Bill

No. 1957

An act to amend Sections 2924d, 2924h, and 2924m of the Civil Code, and to amend Sections 50612 and 50720.2 of the Health and Safety Code, relating to mortgages.

LEGISLATIVE COUNSEL'S DIGEST

AB 1957, as amended, Pacheco. Mortgages: foreclosure.

Existing law provides that a trustee’s sale of property under a power of sale contained in a deed of trust or mortgage on real property containing one to 4 residential units is not final until the earliest of various time periods. Existing law provides specified eligible bidders, defined to include eligible tenant buyers, prospective owner-occupants owner-occupants, and eligible nonprofit corporations with certain attributes, various rights in connection with those sales, and sets forth procedures for eligible bidders to submit bids after those sales. Existing law authorizes the Attorney General, a county counsel, a city attorney, or a district attorney to bring an action to enforce these provisions as specified.

This bill would instead provide that a trustee’s sale of eligible property, as defined, is not final until the earliest of various time periods. The bill would change the term “eligible tenant buyer” to “eligible tenant bidder,” and would redefine the term “eligible bidder” to remove prospective owner-occupants from the definition of “eligible bidder.” owner-occupants and to mean an eligible tenant bidder or an eligible community bidder, as defined. The bill would add an additional attribute to the eligible nonprofit corporations portion of “eligible community bidder.” The bill would apply the provisions described above only to trustee’s sales of eligible property, as defined. The bill would require certain eligible tenant bidders who submit bids pursuant to the procedures described above to include in the bid an amount equal to 1.2% of the last and highest bid at the trustee’s sale. The bill would authorize the persons described above to seek a civil penalty to enforce these provisions, as specified. The bill would make conforming changes.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

Section 2924d of the Civil Code, as amended by Section 1 of Chapter 642 of the Statutes of 2022, is amended to read:

2924d.

(a) (1) Commencing with the date that the notice of sale is deposited in the mail, as provided in Section 2924b, and until the property is sold pursuant to the power of sale contained in the mortgage or deed of trust, a beneficiary, trustee, mortgagee, or their agent or successor in interest may demand and receive from a trustor, mortgagor, or their agent or successor in interest or any beneficiary under a subordinate deed of trust, or any other person having a subordinate lien or encumbrance of record those reasonable costs and expenses, to the extent allowed by subdivision (c) of Section 2924c, that are actually incurred in enforcing the terms of the obligation and trustee’s or attorney’s fees that are hereby authorized to be in an amount as follows:

(A) If the unpaid principal sum secured is fifty thousand dollars ($50,000) or less, then in a base amount that does not exceed four hundred seventy-five dollars ($475).

(B) If the unpaid principal sum secured is greater than fifty thousand dollars ($50,000) but does not exceed one hundred fifty thousand dollars ($150,000), then in a base amount that does not exceed four hundred seventy-five dollars ($475) plus 1 percent of the unpaid principal sum secured exceeding fifty thousand dollars ($50,000).

(C) If the unpaid principal sum secured is greater than one hundred fifty thousand dollars ($150,000) but does not exceed five hundred thousand dollars ($500,000), then in a base amount that does not exceed four hundred ten dollars ($410) plus 1 percent of the unpaid principal sum secured exceeding fifty thousand dollars ($50,000) up to and including one hundred fifty thousand dollars ($150,000), plus one-half of 1 percent of any portion of the unpaid principal sum secured exceeding one hundred fifty thousand dollars ($150,000).

(D) If the unpaid principal sum secured exceeds five hundred thousand dollars ($500,000), then in a base amount that does not exceed four hundred ten dollars ($410) plus 1 percent of the unpaid principal sum secured exceeding fifty thousand dollars ($50,000) up to and including one hundred fifty thousand dollars ($150,000), plus one-half of 1 percent of any portion of the unpaid principal sum secured exceeding one hundred fifty thousand dollars ($150,000) up to and including five hundred thousand dollars ($500,000), plus one-quarter of 1 percent of any portion of the unpaid principal sum secured exceeding five hundred thousand dollars ($500,000).

(2) For purposes of this subdivision, the unpaid principal sum secured shall be determined as of the date the notice of default is recorded. Any charge for trustee’s or attorney’s fees authorized by this subdivision shall be conclusively presumed to be lawful and valid where that charge does not exceed the amounts authorized in this subdivision. Any charge for trustee’s or attorney’s fees made pursuant to this subdivision shall be in lieu of and not in addition to those charges authorized by subdivision (d) of Section 2924c.

(b) (1) Upon the sale of property pursuant to a power of sale, a trustee, or their agent or successor in interest, may demand and receive from a beneficiary, or their agent or successor in interest, or may deduct from the proceeds of the sale, those reasonable costs and expenses, to the extent allowed by subdivision (c) of Section 2924c, that are actually incurred in enforcing the terms of the obligation and trustee’s or attorney’s fees that are hereby authorized to be in an amount which does not exceed four hundred seventy-five dollars ($475) or 1 percent of the unpaid principal sum secured, whichever is greater. For purposes of this subdivision, the unpaid principal sum secured shall be determined as of the date the notice of default is recorded.

(2) In addition to the amounts authorized under paragraph (1), if at least one eligible tenant buyer or eligible bidder submits to the trustee either a bid or a nonbinding written notice of intent to place a bid pursuant to paragraph (1) of subdivision (b) of Section 2924m, the trustee may deduct from the proceeds of the sale trustee’s or attorney’s fees for providing services pursuant to Section 2924m that are hereby authorized to be in an amount which does not exceed two hundred dollars ($200) or one-sixth of 1 percent of the unpaid principal sum secured, whichever is greater.

(3) Any charge for trustee’s or attorney’s fees authorized by this subdivision shall be conclusively presumed to be lawful and valid where that charge does not exceed the amount authorized herein. Any charges for trustee’s or attorney’s fees made pursuant to this subdivision shall be in lieu of and not in addition to those charges authorized by subdivision (a) of this section and subdivision (d) of Section 2924c.

(c) (1) No person shall pay or offer to pay or collect any rebate or kickback for the referral of business involving the performance of any act required by this article.

(2) Any person who violates this subdivision shall be liable to the trustor for three times the amount of any rebate or kickback, plus reasonable attorney’s fees and costs, in addition to any other remedies provided by law.

(3) No violation of this subdivision shall affect the validity of a sale in favor of a bona fide purchaser or the rights of an encumbrancer for value without notice.

(d) It shall not be unlawful for a trustee to pay or offer to pay a fee to an agent or subagent of the trustee for work performed by the agent or subagent in discharging the trustee’s obligations under the terms of the deed of trust. Any payment of a fee by a trustee to an agent or subagent of the trustee for work performed by the agent or subagent in discharging the trustee’s obligations under the terms of the deed of trust shall be conclusively presumed to be lawful and valid if the fee, when combined with other fees of the trustee, does not exceed in the aggregate the trustee’s fee authorized by subdivision (d) of Section 2924c or subdivision (a) or (b) of this section.

(e) When a court issues a decree of foreclosure, it shall have discretion to award attorney’s fees, costs, and expenses as are reasonable, if provided for in the note, deed of trust, or mortgage, pursuant to Section 580c of the Code of Civil Procedure.

(f) This section shall remain in effect only until January 1, 2031, and as of that date is repealed.

SEC. 2.

Section 2924h of the Civil Code, as amended by Section 8 of Chapter 601 of the Statutes of 2024, is amended to read:

2924h.

(a) Each and every bid made by a bidder at a trustee’s sale under a power of sale contained in a deed of trust or mortgage shall be deemed to be an irrevocable offer by that bidder to purchase the property being sold by the trustee under the power of sale for the amount of the bid. Any second or subsequent bid by the same bidder or any other bidder for a higher amount shall be a cancellation of the prior bid.

(b) At the trustee’s sale, the trustee shall have the right to require any of the following:

(1) Every bidder to show evidence of the bidder’s ability to deposit with the trustee the full amount of their final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee prior to, and as a condition to, the recognizing of the bid, and to conditionally accept and hold these amounts for the duration of the sale.

(2) Any bid that is not cash to be made directly payable to the trustee, if the requirement is set forth by the trustee in the notice of sale.

(3) The last and highest bidder to deposit, if not deposited previously, the full amount of the bidder’s final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee, immediately prior to the completion of the sale, the completion of the sale being so announced by the fall of the hammer or in another customary manner. The present beneficiary of the deed of trust under foreclosure shall have the right to offset their bid or bids only to the extent of the total amount due the beneficiary including the trustee’s fees and expenses.

(c) In the event the trustee accepts a check drawn by a credit union or a savings and loan association pursuant to this subdivision or a cash equivalent designated in the notice of sale, the trustee may withhold the issuance of the trustee’s deed to the successful bidder submitting the check drawn by a state or federal credit union or savings and loan association or the cash equivalent until funds become available to the payee or endorsee as a matter of right. The trustee may require the successful bidder to replace the check drawn by a credit union or a savings and loan association or cash equivalent pursuant to this subdivision with a check drawn by a credit union or a savings and loan association or cash equivalent to this subdivision made directly payable to the trustee if necessary for the funds to be made available to the trustee.

For the purposes of this subdivision, the trustee’s sale shall be deemed final upon the acceptance of the last and highest bid, and shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 21 calendar days after the sale, or the next business day following the 21st day if the county recorder in which the property is located is closed on the 21st day. If an eligible bidder submits a written notice of intent to bid pursuant to paragraph (1) of subdivision (b) of Section 2924m, the trustee’s sale shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 60 calendar days after the sale or the next business day following the 60th day if the county recorder in which the property is located is closed on the 60th day. However, the sale is subject to an automatic rescission for a failure of consideration in the event the funds are not “available for withdrawal” as defined in Section 12413.1 of the Insurance Code. The trustee shall send a notice of rescission for a failure of consideration to the last and highest bidder submitting the check or alternative instrument, if the address of the last and highest bidder is known to the trustee.

If a sale results in an automatic right of rescission for failure of consideration pursuant to this subdivision, the interest of any lienholder shall be reinstated in the same priority as if the previous sale had not occurred.

(d) If the trustee has not required the last and highest bidder to deposit the cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee in the manner set forth in paragraph (2) of subdivision (b), the trustee shall complete the sale. If the last and highest bidder then fails to deliver to the trustee, when demanded, the amount of their final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee, that bidder shall be liable to the trustee for all damages which the trustee may sustain by the refusal to deliver to the trustee the amount of the final bid, including any court costs and reasonable attorney’s fees.

If the last and highest bidder willfully fails to deliver to the trustee the amount of their final bid in cash, a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent which has been designated in the notice of sale as acceptable to the trustee, or if the last and highest bidder cancels a cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state, or a cash equivalent that has been designated in the notice of sale as acceptable to the trustee, that bidder shall be guilty of a misdemeanor punishable by a fine of not more than two thousand five hundred dollars ($2,500).

In the event the last and highest bidder cancels an instrument submitted to the trustee as a cash equivalent, the trustee shall provide a new notice of sale in the manner set forth in Section 2924f and shall be entitled to recover the costs of the new notice of sale as provided in Section 2924c.

(e) Any postponement or discontinuance of the sale proceedings shall be a cancellation of the last bid.

(f) Except as specifically provided in Section 2924m, in the event that this section conflicts with any other statute, then this section shall prevail.

(g) It shall be unlawful for any person, acting alone or in concert with others, (1) to offer to accept or accept from another, any consideration of any type not to bid, or (2) to fix or restrain bidding in any manner, at a sale of property conducted pursuant to a power of sale in a deed of trust or mortgage. However, it shall not be unlawful for any person, including a trustee, to state that a property subject to a recorded notice of default or subject to a sale conducted pursuant to this chapter is being sold in an “as-is” condition.

In addition to any other remedies, any person committing any act declared unlawful by this subdivision or any act which would operate as a fraud or deceit upon any beneficiary, trustor, or junior lienor shall, upon conviction, be fined not more than ten thousand dollars ($10,000) or imprisoned in the county jail for not more than one year, or be punished by both that fine and imprisonment.

(h) This section shall remain in effect only until January 1, 2031, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2031, deletes or extends that date.

(i) The amendments made to this section by the bill adding this subdivision shall become operative on January 1, 2022.

(j) The amendments made to this section by the act adding this subdivision are declaratory of existing law.

SEC. 3.

Section 2924m of the Civil Code is amended to read:

2924m.

(a) For purposes of this section:

(1) “Eligible property” means a property that meets all either of the following requirements:

(A)The property is residential real property sold at a trustee’s sale pursuant to a power of sale contained in a first lien deed of trust or mortgage.

(A) If the party submitting a bid is an eligible community property, the property is residential real property that contains four or fewer units sold at a trustee’s sale pursuant to a power of sale contained in a first lien deed of trust or mortgage.(B) If the party submitting a bid is an eligible tenant bidder, the property is residential real property that contains four or fewer units sold at a trustee’s sale pursuant to a power of sale contained in a first lien deed of trust or mortgage and meets both of the following:

(B)

(i) The city or county in which the property is located has issued a certificate of occupancy that was valid on the date of the trustee’s sale and the property was not subject to a red tag or a substandard building code violation preventing occupancy on the date of the sale.

(C)The property contains four or fewer residential units.

(D)For a property containing only one residential unit, the

(ii) The fair market value of the property determined pursuant to subdivision (f) of Section 2924f is equal to or less than the maximum Federal Housing Administration loan limits established under Section 1709(b) of Title 12 of the United States Code and published by the United States Department of Housing and Urban Development for the specific metropolitan statistical area in which the property is located on the date of the sale.

(2) “Eligible tenant buyer” bidder” means a natural person who at the time of the trustee’s sale:

(A) Is occupying the real property as their primary residence.

(B) Is occupying the real property under a rental or lease agreement entered into as the result of an arm’s-length transaction with the mortgagor or trustor, or with the mortgagor or trustor’s predecessor in interest, on a date prior to the recording of the notice of default against the property, and who attaches evidence demonstrating the existence of the tenancy to the affidavit or declaration required pursuant to subparagraph (B) of paragraph (1) of subdivision (b).

(C) Is not the mortgagor or trustor, or the child, spouse, or parent of the mortgagor or trustor.

(D) Is not acting as the agent of any other person or entity in purchasing the real property. Submission of a bid pursuant to paragraph (2) of subdivision (b) does not violate this subparagraph.

(E) Has not filed a petition under Chapter 7, 11, 12, or 13 of Title 11 of the United States Code at any time during the period from the date of the trustee’s sale of the property to the 45th day after the trustee’s sale, or the next business day following the 45th day if the 45th day is a weekend or holiday.

(F) Will maintain occupancy for at least one year pursuant to a recorded deed restriction.

(3) “Eligible bidder” means any either of the following:

(A) An eligible tenant buyer. bidder.

(B) An eligible community bidder.(4) “Eligible community bidder” means any of the following:

(B)

(A) A nonprofit association, nonprofit corporation, or cooperative corporation in which an eligible tenant buyer bidder is a voting member or director.

(C)

(B) An eligible nonprofit corporation with all of the following attributes:

(i) It has a determination letter from the Internal Revenue Service affirming its tax-exempt status pursuant to Section 501(c)(3) of the Internal Revenue Code and is not a private foundation as that term is defined in Section 509 of the Internal Revenue Code.

(ii) It has its principal place of business in California.

(iii) The primary residences of all board members are located in California.

(iv) One of its primary activities is the development and preservation of affordable rental or home ownership housing in California.

(v) It is registered and in good standing with the Attorney General’s Registry of Charities and Fundraisers, pursuant to the Supervision of Trustees and Fundraisers for Charitable Purposes Act (Article 7 (commencing with Section 12580) of Chapter 6 of Part 2 of Division 3 of Title 2 of the Government Code).

(vi) It has met the requirements of paragraphs (1) and (2) of subdivision (e) of Section 65863.11 of the Government Code.

(D)

(C) A limited liability company wholly owned by one or more eligible nonprofit corporations as described in subparagraph (B) or (C). (A), (B), or (D).

(E)

(D) A community land trust, as defined in clause (ii) of subparagraph (C) of paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code.

(F)

(E) A limited-equity housing cooperative as defined in Section 817.

(G)

(F) The state, the Regents of the University of California, a county, city, district, public authority, or public agency, and any other political subdivision or public corporation in the state.

(4)

(5) “Evidence demonstrating the existence of the tenancy” means a copy of the dated and signed rental or lease agreement or, if a copy of the dated and signed rental or lease agreement is not available, then one of the following:

(A) Evidence of rent payments made for the property by the person asserting that they are an eligible tenant buyer bidder for the six months prior to the recording of the notice of default.

(B) Copies of utility bills for the property payable by the person asserting that they are an eligible tenant buyer bidder for the six months prior to the recording of the notice of default.

(b) A trustee’s sale of eligible property shall not be deemed final until the earliest of the following:

(1) Fifteen days after the trustee’s sale unless at least one eligible tenant buyer or eligible bidder submits to the trustee either a bid pursuant to paragraph (2) or (3) or a nonbinding written notice of intent to place such a bid. The bid or written notice of intent to place a bid shall:

(A) Be sent to the trustee by certified mail, overnight delivery, or another method that allows for confirmation of the delivery date.

(B) Be accompanied by an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, identifying the eligible bidder category set forth in paragraph (3) of subdivision (a) to which the person or entity submitting the bid or nonbinding written notice of intent belongs and stating that the person meets the criteria for that category. If the winning bid is placed by an eligible bidder described in subparagraphs (B) to (E), inclusive, of paragraph (3) of subdivision (a), community bidder, the affidavit or declaration shall affirm the bidder’s duty to comply with subdivision (a) of Section 2924o for the benefit of tenants occupying the property.

(C) Be received by the trustee no later than 5 p.m. on the 15th day after the trustee’s sale, or the next business day following the 15th day if the 15th day is a weekend or holiday.

(D) Contain a current telephone number and return mailing address for the person submitting the bid or nonbinding written notice of intent.

(2) (A) The date upon which a representative of all of the eligible tenant buyers bidders submits to the trustee a bid in an amount equal to the full amount of the last and highest bid at the trustee’s sale, plus the amount required by subdivision (c), in the form of cash, a cashier’s check drawn on a state or national bank, a cashier’s check drawn by a state or federal credit union, or a cashier’s check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state. This bid shall:

(i) Be sent to the trustee by certified mail, overnight delivery, or another method that allows for confirmation of the delivery date.

(ii) Be accompanied by an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, stating that the persons represented meet the criteria set forth in paragraph (2) of subdivision (a), and that the persons represented are all of the eligible tenant buyers. bidders.

(iii) Meet either of the following criteria:

(I) Be received by the trustee no later than 5 p.m. on the 15th day after the trustee’s sale, or the next business day following the 15th day if the 15th day is a weekend or holiday.

(II) Be received by the trustee no later than 5 p.m. on the 45th day after the trustee’s sale, or the next business day following the 45th day if the 45th day is a weekend or holiday, if at least one of the eligible tenant buyers bidders submitted a nonbinding written notice of intent to place a bid pursuant to paragraph (1).

(iv) Contain a current telephone number and return mailing address for the person submitting the bid.

(B) If the conditions in this paragraph are satisfied, the eligible tenant buyers bidders shall be deemed the last and highest bidder pursuant to the power of sale.

(3) (A) Forty-five days after the trustee’s sale, except that during the 45-day period, an eligible bidder may submit to the trustee a bid in an amount that exceeds the last and highest bid at the trustee’s sale, plus the amount required by subdivision (c), in the form of cash, a cashier’s check drawn on a state or national bank, a cashier’s check drawn by a state or federal credit union, or a cashier’s check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state. The bid shall:

(i) Be sent to the trustee by certified mail, overnight delivery, or another method that allows for confirmation of the delivery date.

(ii) Be accompanied by an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, identifying the category set forth in paragraph (3) of subdivision (a) to which the eligible bidder belongs and stating that the eligible bidder meets the criteria for that category.

(iii) Be received by the trustee no later than 5 p.m. on the 45th day after the trustee’s sale, or the next business day following the 45th day if the 45th day is a weekend or holiday, if the eligible bidder submitted a nonbinding written notice of intent to bid pursuant to paragraph (1). Notwithstanding clause (i), on the last day that bids are eligible to be received by the trustee under this clause, the trustee shall not receive any bid that is not sent by certified mail with the United States Postal Service or by another overnight mail courier service with tracking information that confirms the recipient’s signature and the date and time of receipt and delivery.

(iv) Contain a current telephone number and return mailing address for the person submitting the bid.

(v) Be limited to a single bid amount and not contain instructions for successive bid amounts.

(B) As of 5 p.m. on the 45th day after the trustee’s sale, if one or more eligible bidders has submitted a bid that meets the conditions in this paragraph, the eligible bidder that submitted the highest bid shall be deemed the last and highest bidder pursuant to the power of sale. The trustee shall return any losing bid to the eligible bidder that submitted it.

(c) An eligible tenant bidder who is not an eligible nonprofit corporation as described in subparagraph (C) of paragraph (3) of subdivision (a) who submits a bid pursuant to this section shall include in the bid an amount equal to 1.2 percent of the last and highest bid at the trustee’s sale.

(d) (1) The trustee may reasonably rely on affidavits and declarations regarding bidder eligibility received under this section, shall not have a duty to investigate or verify the information contained therein or the bidder’s eligibility, and shall not be liable to any person or entity on any claim arising therefrom.

(2) The affidavit or declaration of the winning bidder shall be attached as an exhibit to the trustee’s deed and recorded. If the winning bidder is not required to submit an affidavit or declaration pursuant to this section, the trustee shall attach as an exhibit to the trustee’s deed a statement that no affidavit or declaration is required by this section, and the lack of an affidavit or declaration shall not prevent the deed from being recorded and shall not invalidate the transfer of title pursuant to the trustee’s deed.

(e) (1) Not later than 48 hours after the trustee’s sale of property under Section 2924g, the trustee or an authorized agent shall post on the internet website set forth on the notice of sale, as required under paragraph (8) of subdivision (b) of Section 2924f, the following information:

(A) The date on which the trustee’s sale took place.

(B) The amount of the last and highest bid at the trustee’s sale.

(C) An address at which the trustee can receive documents sent by United States mail and by a method of delivery providing for overnight delivery.

(2) The information required to be posted on the internet website under paragraph (1) shall also be made available not later than 48 hours after the trustee’s sale of property under Section 2924g by calling the telephone number set forth on the notice of sale as required under paragraph (8) of subdivision (b) of Section 2924f.

(3) The information required to be provided under paragraphs (1) and (2) shall be made available using the file number assigned to the case that is set forth on the notice of sale as required under paragraph (8) of subdivision (b) of Section 2924f.

(4) The information required to be provided under paragraphs (1) and (2) shall be made available for a period of not less than 45 days after the sale of property under Section 2924g.

(5) A disruption of any of these methods of providing the information required under paragraphs (1) and (2) to allow for reasonable maintenance or due to a service outage shall not be deemed to be a violation of this subdivision.

(6) The information to be provided by the trustee to eligible bidders or to persons considering whether to submit a bid or notice of intent to bid pursuant to this section is limited to the information set forth in paragraph (1).

(f) Within 30 days of a sale being deemed final pursuant to this section, the trustee shall do both of the following:

(1) Return any losing bid to the bidder that submitted it.

(2) Distribute to the last and highest bidder at the trustee’s sale the amount provided by the winning an eligible tenant bidder pursuant to subdivision (c).

(g) Title to the property shall remain with the mortgagor or trustor or successor in interest until the property sale is deemed final as provided in this section.

(h) This section shall prevail over any conflicting provision of Section 2924h.

(i) For trustee’s sales where the winning bidder is an eligible bidder under this section, the trustee or an authorized agent shall electronically send the following information to the office of the Attorney General within 15 days of the sale being deemed final:

(1) The dates when the trustee’s sale took place and when it was deemed final.

(2) The name of the winning bidder.

(3) The street address and assessor’s parcel number of the subject property.

(4) A copy of the trustee’s deed, as executed, including the attached affidavit or declaration of the winning bidder.

(5) The category set forth in paragraph (3) of subdivision (a) to which the eligible bidder belongs.

(j) The Attorney General, a county counsel, a city attorney, or a district attorney may bring an action to enforce this section and seek any of the following remedies:

(1) Specific performance.

(2) Where a bid was submitted by a person or entity that is not entitled to submit a bid pursuant to this section, a civil penalty equal to one-third of the fair market value of the property, as determined pursuant to subdivision (f) of Section 2924f.

(3) Any other remedy at equity or at law.

(k) The Department of Justice shall include a summary of information contained in the reports received pursuant to subdivision (i) in a searchable repository on its official internet website.

(l) The pendency of a determination of finality under subdivision (b) shall not cause termination of any hazard insurance coverage in effect at the time of the trustee’s sale.

(m) This section shall remain in effect only until January 1, 2031, and as of that date is repealed, unless a later enacted statute that is enacted before January 1, 2031, deletes or extends that date.

SEC. 4.

Section 50612 of the Health and Safety Code is amended to read:

50612.

For purposes of this chapter:

(a) “Afford” and “affordable” mean that a household pays no more than 30 percent of its household income on rent.

(b) “Affordable rent” has the same meaning as defined in Section 50675.2.

(c) “Department” means the Department of Housing and Community Development.

(d) “Extremely low income” has the same meaning as the term “extremely low income households” is defined in Section 50106.

(e) “Limited-equity housing cooperative” has the same meaning as the term is defined in Section 817 of the Civil Code.

(f) “Low-income” has the same meaning as the term “lower income households” is defined in Section 50079.5.

(g) “Mission-driven nonprofit entity” includes both of the following:

(1) “Eligible nonprofit corporation” as defined in subparagraph (C) of paragraph (3) of subdivision (a) of Section 2924m of the Civil Code.

(2) “Community land trust” as defined in Section 402.1 of the Revenue and Taxation Code.

(h) “Moderate income” has the same meaning as the term “persons and families of moderate income” is defined in Section 50093.

(i) “Public agency” means the state, any county, city, city and county, district, redevelopment agency, housing authority, or any other political subdivision of the state.

(j) “Social housing” means housing that meets all of the following requirements:

(1) The housing units are owned and managed by a public agency, a local authority, a limited-equity housing cooperative, or a mission-driven nonprofit entity solely for the benefit of residents and households unable to afford market rent.

(2) Each social housing development contains housing units that accommodate a mix of household income ranges, including extremely low, very low, low-, and moderate-income households unable to afford market rent.

(3) Residents of the housing units enjoy full protection against termination without just cause or for any discriminatory, retaliatory, or other arbitrary reason, and shall be afforded due process prior to being subject to eviction procedures.

(4) The housing units are protected for the duration of their useful life, and the land associated with the housing units is protected permanently, from being sold or transferred to any private person or for-profit entity or a public-private partnership.

(5) Residents have the right to participate directly and meaningfully in decisionmaking affecting the operation and management of the housing units in which they reside.

(k) “Social housing development” includes both newly constructed units of social housing and market units or other housing units preserved or rehabilitated as social housing.

(l) “Study” means the California Social Housing Study required by Section 50613.

(m) “Very low income” has the same meaning as the term “very low income households” is defined in Section 50105.

SEC. 5.

Section 50720.2 of the Health and Safety Code is amended to read:

50720.2.

(a) The Foreclosure Intervention Housing Preservation Program is hereby established. The department shall administer the program for the purpose of preserving affordable housing and promoting resident ownership or nonprofit organization ownership of residential real property.

(b) (1) Upon appropriation by the Legislature, the program shall be administered by the department to provide loans and grants to eligible borrowers to support the acquisition of 1 to 25 unit properties meeting any of the following criteria:

(A) Real property subject to a trustee’s sale pursuant to Section 2924m of the Civil Code wherein an eligible bidder has made a bid or represents an intention to bid using funds from the program.

(B) Real property subject to a preforeclosure intervention sale.

(C) Real property subject to a foreclosure risk intervention sale.

(D) Real property subject to a recorded notice of default.

(2) Eligible borrowers shall be any one of the following:

(A) Eligible bidders in Section 2924m of the Civil Code.

(B) An organization whose primary activity is the development and preservation of affordable housing that is at least one of the following:

(i) An incorporated nonprofit organization as described in Section 501(c)(3) of the Internal Revenue Code (26 U.S.C. Sec. 501(c)(3)) that is exempt from taxation under Section 501(a) of that code (26 U.S.C. Sec. 501(a)).

(ii) A nonprofit corporation as that term is defined in Section 50091.

(C) A limited liability company that satisfies both of the following criteria:

(i) A community land trust holds a controlling interest in the company.

(ii) A community land trust is the managing member of the company.

(3) Up to 20 percent of the funds appropriated for this program may be expended for the costs to administer the program. Costs to administer the program include, but are not limited to, all of the following:

(A) Costs to develop the guidelines required by this chapter, which may include, but is not limited to, the following:

(i) Department staffing expenses incurred in developing the guidelines.

(ii) Contracting with one or more program fund managers to develop the guidelines.

(iii) Contracting with third-party consultants to develop guidelines.

(B) Costs to develop lending criteria.

(C) Costs to advertise the program.

(D) Costs to develop technical assistance tools to support qualified entities in navigating the requirements and processes to apply for funding, including, but not limited to, the following:

(i) Training modules.

(ii) Acquisition-rehabilitation specific financing templates and guidance, such as pro formas and worksheets.

(iii) Best practice guides for engaging tenants before and after property acquisition, managing safe and accessible rehabilitation of occupied buildings, facilitating resident ownership, and any other topic deemed appropriate by the department.

(iv) Technical assistance with resident engagement and education, property assessment and due diligence, affordable housing operations management, acquisition-rehabilitation project financial assistance, construction, and property management.

(E) Administrative costs of fund managers to implement the program pursuant to Section 50720.6.

(4) Funds not committed to fund managers pursuant to Section 50720.6 as of December 31, 2025, or any funds returned from fund managers, shall be deposited into the Housing Rehabilitation Loan Fund to be made available for loans authorized by Chapter 5.5 (commencing with Section 50606) or for loans authorized by Chapter 6.7 (commencing with Section 50675). Notwithstanding the requirements of Chapter 5.5, uncommitted or returned funds made available for purposes of Chapter 5.5 may be used to assist projects funded by the department or other public entities.

(5) Not later than May 15, 2023, the department shall report to the Chairs of the Assembly Committee on Budget and the Senate Committee on Budget and Fiscal Review on the implementation of this program, including the amount of funding disbursed and number, location, and cost of acquired properties, as well as the number of units acquired.

(c) All repayments of program funds to fund managers, including loan principal and any interest collected on those loans, and any interest earned on the funds held by the fund managers shall be deposited into separately maintained reuse accounts held by fund managers for purposes of the program. Fund managers shall use funds held in those reuse accounts for purposes of the program, which may include, but not be limited to, loans and grants to pay for repairs, maintenance, or improvements on properties acquired pursuant to the program.