Christy Hancock Quoted in Bloomberg Law on California Law Addressing Foreclosures on Second Mortgages

Bradley attorney Christy Hancock was quoted in Bloomberg Law on the recent housing package that Gov. Gavin Newsom signed into law, which targets secondary loans made during the early 2000s that lenders never acted upon when home prices dropped during the 2008 financial crisis.

A mortgage servicer seeking to foreclose must also attest under penalty of perjury that it has complied with these rules, that all previous holders of the mortgage have as well, or detail any failures to follow the law.

The industry has flagged the “penalty of perjury” language for concern because it requires servicers be able to attest to the actions of previous mortgage holders, according to Hancock.

“That’s the piece that is giving people the most pause. It’s not that mortgage servicers have any concerns about their own acts, it’s that they now have to attest to the actions and inactions of anyone who has ever held that loan,” she said.

California courts will have a range of options if a mortgage servicer doesn’t follow the new law. A judge could bar foreclosure altogether or slash the amount of money that a borrower owes.

The full article, “California Law Curbs Foreclosures on ‘Zombie’ Second Mortgages,” was published by Bloomberg Law on July 11, 2025.