Financing statements: mortgages.

Plain English Breakdown

The official source material does not provide specific details about the effective date of the law, leaving this aspect uncertain.

Mortgage Financing Statements

This law changes how mortgage records name individual debtors to be considered valid financing statements.

What This Bill Does

• Changes the rules about what information is needed in a mortgage record to be considered a valid financing statement for an individual debtor.
• Allows mortgage records to use just the first and last names of an individual debtor, even if they have a driver's license or ID card with different details.
• Updates existing laws about how mortgages are recorded and treated as financing statements.

Who It Names or Affects

• People who take out mortgages and need their mortgage records to be valid financing statements.
• Financial institutions that record mortgages and use them for securing loans.

Terms To Know

Financing Statement

A document used to show that a lender has an interest in property or assets of a borrower as security for a loan.

Uniform Commercial Code-Secured Transactions (UCC)

A set of laws that governs secured transactions, including mortgages and other types of loans backed by collateral.

Limits and Unknowns

• The law does not specify when it will take effect.
• It only applies to mortgage records for individual debtors, not businesses or organizations.

Official Summary Text

AB 771, Macedo.
Financing statements: mortgages.
Existing law, the Uniform Commercial Code-Secured Transactions (UCC), provides that a financing statement is sufficient only if it provides, among other things, the name of the debtor and that, if the debtor is an individual to whom the Department of Motor Vehicles has issued a driver’s license that has not expired or an identification card that has not expired, a financing statement sufficiently provides the name of the debtor only if it provides the name of the individual indicated on that driver’s license or identification card, as specified.
Existing law makes a record of a mortgage effective, from the date of recording, as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut only if certain conditions are met, including that the record satisfies the conditions for a
financing statement referenced above, as specified.
This bill would, instead, provide that a record of a mortgage sufficiently names the debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, even if the debtor is an individual to whom the Department of Motor Vehicles has issued an unexpired driver’s license or identification card.

Current Bill Text

Download Bill PDF