Foreclosure Paperwork Is Changing: New Certifications and Borrower Notices in California

What should you watch for when a California listing has a Notice of Default?

In some subordinate mortgage foreclosures, you may see a new recorded certification and a new borrower notice served with the Notice of Default, which can change timelines and due diligence.

Foreclosure properties already come with extra moving parts. However, California is adding new paperwork steps in a narrow but important slice of nonjudicial foreclosures. Because of this, you need a fast way to spot the new documents, explain them in plain English, and keep your client expectations realistic.

This article shares trusted advice from 805title for Realtors and listing agents working across Southern California. You will learn what is changing, what you might see in the public record, and how to protect your deal without stepping outside your licensed scope.

 

California foreclosure paperwork changes: the short version

The change centers on certain subordinate mortgage foreclosures, such as second liens and some HELOC scenarios. In addition to the standard Notice of Default (NOD) process, the mortgage servicer must add (1) a recorded certification under penalty of perjury, and (2) a borrower notice that points to a court petition option before the sale. As a result, you may see new recorded attachments and a higher chance of borrower challenges that affect scheduling.

 

Where this comes from: AB 130 (Chapter 22) in CLTA’s 2025 summary

The California Land Title Association (CLTA) highlights these updates in its 2025 Summary of Legislation under Chapter 22 (AB 130). The law identifies specific “unlawful practices” by a mortgage servicer connected to a subordinate mortgage, and then it requires new documentation before the servicer can conduct or threaten to conduct a nonjudicial foreclosure.

What the law treats as “unlawful practices” (examples you should recognize)

You do not need to investigate servicing. However, you should understand what the certification is tied to. According to CLTA’s summary, the law flags patterns like these:

• No written communication about the loan for at least three years.
• Missing required transfer of servicing notice (including notices required by RESPA).
• Missing required transfer of loan ownership notice (including notices required by the Truth in Lending Act).
• Foreclosure actions after a write-off or discharge indicator (for example, IRS Form 1099).
• Foreclosure actions after the statute of limitations expired.
• Missing required periodic account statements (including statements required by the Truth in Lending Act).

 

New recorded certification: what you will see in the chain of title

When the rule applies, the servicer must record a certification at the same time it records the Notice of Default. Importantly, the certification is made under penalty of perjury. Because it is recorded, it can show up in a preliminary title report or a recorder search.

The certification does one of two things. Either it states the servicer did not engage in an unlawful practice, or it lists each instance when it did. Therefore, the document can act like a “this file may be contested” sign, even if you never see the servicing history.

Why this matters to you as an agent

• Timelines: A borrower may challenge compliance, which can slow postponement decisions and marketing plans.
• Client confidence: Buyers may ask what the certification means, especially when they plan to bid at auction.
• Deal coordination: Your title partner can flag the recorded items early so you do not discover them after contingencies harden.

If you work with 805title, ask for trusted advice from 805title on what the record shows, and which questions belong with the trustee, servicer, or legal counsel.

 

Fast scan table: what to look for and what to do next

Use this table as a quick guide when you review a title report or a foreclosure profile. Then, confirm details with your title officer.

Signal	What it likely is	Why it matters	Next step
Certification recorded with NOD	Perjury certification tied to unlawful practice history	May indicate higher dispute risk or delay	Flag it, ask 805title to confirm applicability
Borrower notice served with NOD	Notice of right to petition court before sale	Borrower may seek relief before auction	Set expectations, avoid date promises
Second lien/HELOC context	Subordinate mortgage lane	This is where the rule most often shows up	Confirm lien position early, update title
Investor/lender questions	Due diligence pressure	Buyers may need clarity before removing contingencies	Loop in title officer before contract deadlines

 

 

Your Southern California checklist for foreclosure-adjacent files

Because foreclosure status shifts quickly, build a repeatable routine. For example, use these steps the moment you see an NOD or a trustee sale date:

• Order an updated preliminary title report early, then refresh it before key deadlines.
• Confirm whether the issue involves a subordinate mortgage (second lien or HELOC).
• Scan for a recorded certification attached to, or recorded with, the NOD.
• Keep disclosures and marketing language factual, and avoid legal conclusions.
• Build timeline buffers into offers and escrow instructions when foreclosure status is active.
• Call your title partner early, so you do not learn about recorded surprises at the finish line.

 

Conclusion: keep it factual, keep it early

Foreclosures already test your process. Now, because of these California foreclosure paperwork changes, you should also watch for a recorded certification and a new borrower notice in certain subordinate mortgage files. As a result, your best move is early title review, calm client language, and strong coordination across the team.

With trusted advice from 805title, you can spot recorded foreclosure documents sooner, coordinate faster with escrow and lenders, and keep your client communication clean. For your next transaction, connect with 👉 805title