Frequently Asked Questions for Commercial and Industrial Banks, Savings Associations and Credit Unions
- What is the California Foreclosure Prevention Act (CFPA)?
- Where are the legal provisions of the CFPA found?
- What is the effective date of the CFPA?
- Who is subject to the CFPA?
- Which agency do I submit my application for an exemption to?
- Who should file an application with the Department of Financial Institutions?
- How do I obtain an exemption from the provisions of Civil Code Section 2923.52(a)?
- Where do I get the form for the Application for Exemption?
- How do I file the application?
- How long does it take after an application is filed to obtain an exemption?
1. What is the California Foreclosure Prevention Act (CFPA)?
The CFPA modifies the foreclosure process to provide additional time for borrowers to work out loan modifications. Civil Code Section 2923.52(a) requires an additional 90 day period beyond the period already provided before a Notice of Sale can be given in order to allow all parties time to pursue a loan modification to prevent foreclosure of loans meeting certain criteria identified in that section. An exemption from the additional 90 days is available for mortgage loan servicers that have implemented a comprehensive loan modification program.
A mortgage loan servicer who has implemented a comprehensive loan modification program may file an application for exemption from the provisions of Civil Code Section 2923.52(a). A mortgage loan servicer is not required to apply for the exemption; however, beginning June 15, 2009 all mortgage loan servicers who have not applied for an exemption are required to wait an additional 90 days before filing the Notice of Sale when foreclosing on a residential mortgage loan meeting the criteria established in Civil Code Section 2923.52(a).
2. Where are the legal provisions of the CFPA found?
On February 20, 2009, the Governor, signed ABX2 7 and SBX2 7, which established the California Foreclosure Prevention Act in the Civil Code. On June 1, 2009, Subchapter 4, Chapter 1 was added to the California Code of Regulations (CCR). These emergency regulations clarify the application of Sections 2923.52 and 2923.53 of the Civil Code.
The law and rules are available on our website www.dfi.ca.gov/cfpa or can be found at www.leginfo.ca.gov or www.oal.ca.gov.
3. What is the effective date of the CFPA?
Beginning June 15, 2009 all mortgage loan servicers who have not applied for any exemption are required to wait an additional 90 day period before filing the Notice of Sale when foreclosing on a residential mortgage loan meeting the criteria established in Civil Code Section 2923.52(a).
4. Who is subject to the CFPA?
All entities that service residential mortgage loans on properties located in California are subject to the CFPA. This includes companies licensed by the Department of Corporations, Department of Financial Institutions, the Department of Real Estate and any other entity that services loans on properties located in California, such as national banks.
5. Which agency do I submit my application for an exemption to?
Department of Financial Institutions
Foreclosure Exemptions
1810 13th Street
Sacramento, CA 95811-7118
Electronic mail to foreclosures@dfi.ca.gov
6. Who should file an application with the Department of Financial Institutions?
Commercial and industrial banks, savings associations and credit unions who wish to obtain an exemption from the additional 90 days required under Civil Code Section 2923.52(a) should file an application with the Department of Financial Institutions.
In addition, any other entities servicing residential mortgage loans on properties located in California that wish to obtain the exemption, and are not required to file with the Department of Financial Institutions, Department of Corporations or Department of Real Estate as indicated in Section 2031.7 of the California Code of Regulations should file an application with the Department of Corporations. This would include entities such as national banks that are not licensed by the Department of Financial Institutions, and are not headquartered in this state.
Organized in this state servicing mortgage loans (for purposes of this regulation, the phrase "organized in this state" means institutions headquartered in this state)
An application will not be rejected by a department based upon an applicant’s inadvertent failure to file with the designated department.
7. How do I obtain an exemption from the provisions of Civil Code Section 2923.52(a)?
The licensee must submit the Application for Exemption from the Section 2031.7 of Subchapter 4, Chapter 1 of the California Code of Regulations (CCR).
8. Where do I get the form for the Application for Exemption?
The form is available for download on the Department’s website www.dfi.ca.gov/cfpa.
9. How do I file the application?
The application must be downloaded, completed and mailed to the following address:
Department of Financial Institutions
Foreclosure Exemptions
1810 13th Street
Sacramento, CA 95811-7118
Electronic mail to foreclosures@dfi.ca.gov
10. How long does it take after an application is filed to obtain an exemption?
A temporary order exempting the applicant will be issued effective the same day the Department receives an application that is substantially complete. After review of the application, once it is determined that the company has a comprehensive loan modification program, a final order exempting the applicant will be issued.
A list of temporary and permanent exemptions is posted on the DFI Web site www.dfi.ca.gov/cfpa.
This information was obtained directly off of the State of California DFI Website
