AB-1158 • 2026

Mortgages.

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Chen
Last action: 2026-02-02
Official status: From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
Effective date: Not listed

Plain English Breakdown

The official source does not provide details on the consequences if a highest bidder fails to follow new rules or how it affects ongoing/current sales.

Changes to Mortgage Sales Rules

This law removes certain individuals and organizations from being able to bid on homes during a mortgage sale and adds new rules for bidders.

What This Bill Does

Removes prospective owner-occupants and eligible nonprofit corporations from the definition of 'eligible bidder'.
Limits the rules only to trustee’s sales involving property with one to four residential units.
Requires bidders to include an extra amount, equal to 1.2% of the highest previous bid, when they submit their bids.
Allows the person who made the highest bid at a sale to sue other bidders if certain conditions are not met.

Who It Names or Affects

People and organizations that want to buy homes in foreclosure sales.
Government officials responsible for enforcing these rules.

Terms To Know

Eligible bidder: A person or organization allowed by law to bid on property during a trustee’s sale, excluding prospective owner-occupants and eligible nonprofit corporations.
Trustee’s sale: A public auction where property is sold when someone cannot pay their mortgage.

Limits and Unknowns

The bill does not specify what happens if the highest bidder fails to follow new rules.
It's unclear how this will affect current ongoing sales or those that have already happened.

Bill History

2026-02-02 California Legislative Information
From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
2026-01-31 California Legislative Information
Died pursuant to Art. IV, Sec. 10(c) of the Constitution.
2025-05-23 California Legislative Information
In committee: Held under submission.
2025-05-07 California Legislative Information
In committee: Set, first hearing. Referred to APPR. suspense file.
2025-04-22 California Legislative Information
From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 12. Noes 0.) (April 22). Re-referred to Com. on APPR.
2025-04-22 California Legislative Information
Re-referred to Com. on JUD.
2025-04-21 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended.
2025-04-10 California Legislative Information
Re-referred to Com. on JUD. pursuant to Assembly Rule 96.
2025-04-01 California Legislative Information
Re-referred to Com. on B. & F.
2025-03-28 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on B.&F. Read second time and amended.
2025-03-28 California Legislative Information
Referred to Coms. on B.&F. and JUD.
2025-02-21 California Legislative Information
From printer. May be heard in committee March 23.
2025-02-20 California Legislative Information
Read first time. To print.

Official Summary Text

AB 1158, as amended, Chen.
Mortgages.
Existing law provides that a trustee’s sale of property under a power of sale contained in a deed of trust or mortgage on real property containing one to 4 residential units is not final until the earliest of various time periods. Existing law provides specified eligible bidders, defined to include prospective owner-occupants and eligible nonprofit corporations with certain attributes, various rights in connection with those sales, and sets forth procedures for eligible bidders to submit bids after those sales. Existing law authorizes the Attorney General, a county counsel, a city attorney, or a district attorney to bring an action to enforce these provisions as specified.
This bill would remove prospective owner-occupants and eligible nonprofit corporations from the definition of “eligible bidder.” The bill would apply the provisions
described above only to trustee’s sales of eligible property, as defined. The bill would require eligible bidders who submit bids pursuant to the procedures described above to include in the bid an amount equal to 1.2% of the last and highest bid at the trustee’s sale. The bill would authorize the last and highest bidder at a trustee’s sale to bring an action against an eligible bidder, as specified. The bill would make conforming changes.

Current Bill Text

Read the full stored bill text

Download Bill PDF