California Legislative Update

California Legislative Update

The California legislature recently amended its laws governing military service member relief of mortgage obligations and deferral of reservists’ payments.  The legislature also amended its laws governing borrowers’ internet privacy.  All of the amendments are effective January 1, 2014.




Interest must not be charged or accumulated on the principal or interest on which a payment was delayed.  Foreclosure or repossession of property on which a payment has been deferred must not take place during a service member’s most current period of military service or within 6 months thereafter.



Any deferred mortgage payments are due and payable upon the earlier of the following:

  • The sale of the property or other event specified in the documents creating the obligation permitting the lender to accelerate the loan, other than a deferment of payments;
  • Further encumbrance of the property other than for preservation or protection of the property; or
  • The maturity of the obligation, as defined under the terms of the documents creating the obligation, or, if applicable, as extended.


The provisions above do not relieve a service member with a mortgage subject to an impound account for the payment of property taxes, special assessments, mortgage insurance, and hazard insurance from making monthly payments of an amount that is at least sufficient to pay these amounts, unless the borrower and lender agree to a lesser amount.



The provisions above allow a service member to make payments toward the mortgage payments deferred before relief is granted.




“Reservist” means either of the following:

  • A member of the militia called or ordered into state or federal military service; or
  • A reservist of the U.S. Military Reserve who has been ordered to full-time federal active duty.


“Military service” means either of the following:

  • Full-time active state service or full-time active federal service of a service member who is a member of the militia; or
  • Full-time active duty of a service member who is a reservist for a period of 30 consecutive days.


In addition to any other benefits provided by law and to the extent permitted by federal law, a reservist who is called to active duty on and after January 1, 2014, may defer payments on the following obligations while serving on active duty:

  • An obligation secured by a mortgage or deed of trust; and
  • Any payment of property tax or any special assessment in-lieu of property tax imposed on real property that is assessed on residential property owned by the reservist and used as that reservist’s primary place of residence on the date the reservist was ordered to active duty.


The reservist or the reservist’s designee must deliver to the lender both of the following:

  • A letter signed by the reservist, under penalty of perjury, requesting a deferment of financial obligations; and
  • A copy of the reservist’s activation or deployment order and any other information that substantiates the duration of the service member’s military service.


The total period of a deferment on a financial obligation must not exceed 180 days within a 365-day period.





In addition to the current requirements, the privacy policy required to be conspicuously posted on the commercial website or online service of an operator that collects personally identifiable information through the internet about individual borrowers residing in California must:

  • Disclose how the operator responds to web browser “do not track” signals or other mechanisms that provide borrowers the ability to exercise choice regarding the collection of personally identifiable information about an individual borrower’s online activities over time and across third-party websites or online services, if the operator engages in that collection.  An operator may satisfy this requirement by providing a clear and conspicuous hyperlink in the operator’s privacy policy to an online location containing a description, including the effects, of any program or protocol the operator follows that offers the borrower that choice; and
  • Disclose whether other parties may collect personally identifiable information about an individual borrower’s online activities over time and across different websites when a borrower uses the operator’s website or service.