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AB 1158

Mortgages.

2025-2026 Regular Session Introduced by Phillip Chen

AB 1158 narrows post-foreclosure bidding by removing owner-occupant and nonprofit bidders, imposes a 1.2% bid deposit for eligible bidders, and lets the top bidder sue others.

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
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Bill Summary · AB 1158

AB 1158 (Chen) — Mortgages: trustee’s sale bidding rules (2025)

Status: In committee — Held under submission (last action: 2025-05-23)
Introduced: February 20, 2025
Primary code affected: Civil Code §2924d
Fiscal: Referred to fiscal committee (fiscal committee: YES)

Purpose / intent

AB 1158 narrows and modifies post-foreclosure bidding rights and related procedures tied to trustee’s sales under a deed of trust or mortgage on one- to four-unit residential real property. The bill removes certain types of post-sale bidders from eligibility, limits the statute’s reach to specified “eligible property,” and adds a fee/deposit requirement and a new private cause of action related to post-sale bids.

Key provisions

  • Removes “prospective owner-occupants” and “eligible nonprofit corporations” from the statutory definition of “eligible bidder.” (These previously had special post-sale bidding rights.)
  • Limits the application of the post-sale bidding procedures to trustee’s sales of “eligible property” (the bill references that term as defined in the statute; the provided excerpt does not reproduce that full definition).
  • Requires any eligible bidder who submits a post-sale bid under the existing procedures to include in the bid an amount equal to 1.2% of the last and highest bid at the trustee’s sale.
  • Authorizes the last and highest bidder at the trustee’s sale to bring an action against an eligible bidder in specified circumstances (text references such an action but the excerpt does not include full pleading/relief specifics).
  • Makes conforming statutory changes to reflect the narrowed eligible-bidder definition and the new 1.2% bid requirement.
  • The bill amends provisions in Civil Code §2924d, which also includes trustee/attorney fee schedules and related deductions already in statute (examples in the section: base fee limits of $475, supplemental fees up to $200 or 1/6 of 1% of unpaid principal when eligible tenant buyers or bidders participate). The section continues to show a statutory sunset of Jan 1, 2031 for that section as currently drafted.

Who is affected

  • Formerly eligible post-sale bidders: prospective owner-occupants and certain nonprofit corporations would lose their status as “eligible bidders.”
  • Other eligible bidders (as retained by statute) would face a new 1.2% bid payment requirement.
  • The last/highest bidder at a trustee’s sale would gain standing to sue an eligible bidder under circumstances created or preserved by the bill.
  • Trustees, beneficiaries, mortgagees, and borrowers may be affected by related fee/deduction language in §2924d (unchanged fee amounts are reproduced in the amended section).

Procedural / timeline notes

  • Bill introduced 2/20/2025; printed 2/21/2025.
  • Referred to Judiciary and Budget & Finance committees; multiple amendments and re-referrals occurred in April 2025.
  • 4/22/2025: Judiciary committee voted do pass and re-refer to Appropriations (Ayes 12–Noes 0).
  • 5/7/2025: Referred to Appropriations suspense file; first hearing set.
  • 5/23/2025: Assembly Appropriations — Held under submission (current status).

Practical considerations

  • The 1.2% requirement increases the up-front cost of post-sale bids (amount tied to the last/highest sale bid).
  • Removing owner-occupant and nonprofit bidder status reduces avenues for post-sale acquisition by those groups; the practical scope depends on the bill’s “eligible property” definition and other retained eligible-bidder categories.
  • The new private enforcement right for the last/highest bidder could increase litigation around post-sale bidding disputes.

Compiled from official sources — confirm details with the bill’s official record.

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