(a) Before the first default, delinquency, or late payment charge may be assessed by any lender on a delinquent payment of a loan, other than a loan made pursuant to Division 9 (commencing with Section 22000) of the Financial Code, secured by real property, and before the borrower becomes obligated to pay this charge, the borrower shall either (1) be notified in writing and given at least 10 days from mailing of the notice in which to cure the delinquency, or (2) be informed, by a billing or notice sent for each payment due on the loan, of the date after which this charge will be assessed.
The notice provided in either paragraph (1) or (2) shall contain the amount of the charge or the method by which it is calculated.
(b) If a subsequent payment becomes delinquent the borrower shall be notified in writing, before the late charge is to be imposed, that the charge will be imposed if payment is not received, or the borrower shall be notified at least semiannually of the total amount of late charges imposed during the period covered by the notice.
(c) Notice provided by this section shall be sent to the address specified by the borrower, or, if no address is specified, to the borrower’s address as shown in the lender’s records.
(d) In case of multiple borrowers obligated on the same loan, a notice mailed to one shall be deemed to comply with this section.
(e) The failure of the lender to comply with the requirements of this section does not excuse or defer the borrower’s performance of any obligation incurred in the loan transaction, other than his or her obligation to pay a late payment charge, nor does it impair or defer the right of the lender to enforce any other obligation including the costs and expenses incurred in any enforcement authorized by law.
(f) The provisions of this section as added by Chapter 1430 of the Statutes of 1970 shall only affect loans made on and after January 1, 1971.
The amendments to this section made at the 1975–76 Regular Session of the Legislature shall only apply to loans executed on and after January 1, 1976.
(Amended by Stats. 2001, Ch. 159, Sec. 36. Effective January 1, 2002.)
Last modified: October 25, 2018