AB 3088 is an omnibus law that brings together several past tenant and landlord protection bills. For months, the American Association of Private Lenders has been at the vanguard of the legislative fight against these measures, first with opposition to AB 828, then with opposition to AB 2501, and most recently with opposition to AB 1436. Each of these bills failed to pass on its own. Foreclosure moratoriums, obligatory lender forbearances, and a slew of other attacks on the mortgage lending industry were all part of the prior law.

With the newly passed AB3088, there are several modifications that lenders need to be well informed of. Some of which include;

  • There is no mandatory forbearance requirement: If a Covered Borrower asks for loan forbearance, the lender/loan servicer may decline the request if the lender/loan servicer gives the reason(s) for the denial, as well as any curable flaws in the request.
  • Expansion of Homeowner’s Bill of Rights: Before recording a Notice of Default on a first position consumer mortgage loan, the borrower was required to go through a notification period. The lender had an affirmative responsibility to make reasonable efforts to contact the borrower to inform them of their delinquency and the possibility of losing their home through foreclosure.
  • No Foreclosure Moratoriums: Private lenders may continue to foreclose, but they must adhere to the Homeowner Bill of Rights’ additional notice requirements for 1-4 family residential properties held by tenants. As a private lender, the passing of the AB3088 legislation has had several impacts on the lending process, which lenders need to be aware of. To read more about this legislation, click here.


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