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Donald
Davidson of The Wolf Firm
(USFN Network News)
Many servicers are familiar with the California laws pertaining to Spanish language translations of loan documents. Under new Fannie Mae and FHA policies, loan applications are being written in English and Spanish as part of the federal government's effort to remove information barriers to home ownership by minorities. Bilingual forms such as the Residential Loan Application, Statement of Assets and Liabilities, and Verifications of Employment and Deposits are already in use for Spanish speaking borrowers. Use of the bilingual forms is optional. However, the use of these forms may raise unique and unforeseen problems when it comes to foreclosure of loans secured by California real property.
California Civil Code ]924c (b) (1), which is the foreclosure statute, mandates that the Notice of Default must be in Spanish if the Agreement is one covered by Civil Code ]632 and the borrower requested a Spanish translation of the agreement pursuant to ]632 when the loan was originated. Lenders and servicers must analyze if the agreement is one that falls within the ambit of Civil Code ]632 before commencing with foreclosure.
The use of the new Fannie Mae and FHA forms may trigger a requirement to use a Spanish language foreclosure document. Lenders are cautioned that they should carefully review their California loan files to ascertain if the loan was negotiated in Spanish and if so, to advise the California trustees that the loan may be subject to ]924c. California lenders should also note that there are a host of other issues involving foreclosure of this loan type and should insure that their California trustees have carefully reviewed these issues.
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