|
### Short Bio AB130 Zombie Mortgages Ca Attorney Richard Rydstrom: Background and Expertise
Richard Ivar Rydstrom is a California attorney based in Newport Beach with over 33 years of experience in civil litigation, business law, and the mortgage banking industry. He holds a J.D. in Law and a B.S. in Public Accounting, and is rated "Superb" (10/10) by Avvo. Rydstrom is recognized as a national expert in real estate, contracts, foreclosures, and consumer rights, particularly in defending against "zombie mortgages" or "zombie debt traps." These refer to old second mortgages (often from the 2008 financial crisis) that were charged off or seemingly forgiven but later resurface as demands for payment or foreclosure threats when home equity rises.
Rydstrom chaired the Coalition for Mortgage Industry Solutions (CMIS) during the Great Recession, testified before the U.S. Congress in 2007 warning of the crisis, and won the landmark California case *West v. JPMorgan Chase Bank, N.A.* (2013), establishing rights under the Home Affordable Modification Program (HAMP). He advocates for homeowners against practices like lenders steering borrowers away from HAMP's second lien modifications (2MP), violating the National Mortgage Settlement (NMS), or transferring debts to third-party buyers who ignore forgiveness agreements. His work includes authoring resources on crushing zombie debts and testifying before the California State Assembly on related legislation, such as on January 10, 2026, for SB 681 (a companion bill to AB 130).
### Summary of the New California Zombie Foreclosure Defense Law (AB 130 and Civil Code § 2924.13)
Assembly Bill 130 (AB 130), signed into law and effective July 1, 2025, adds Section 2924.13 to the California Civil Code to combat "zombie mortgages."[5][6][7][19] This law targets subordinate (junior) mortgages on residential properties, defined as any security instrument junior to a primary mortgage. Zombie mortgages typically involve second liens from the housing bubble era that lenders charged off for tax purposes but did not formally forgive, allowing them to "revive" years later with accrued interest and fees, leading to surprise foreclosures.
Key provisions of AB 130 / CC § 2924.13:
- **Servicer Certification Requirement**: Before recording a notice of default on a subordinate mortgage, the servicer must certify under penalty of perjury that the current and all prior servicers have complied with specific servicing standards. This includes providing annual account statements to borrowers (unless the debt was charged off and no payments were accepted for 3+ years) and adhering to loss mitigation rules.[5][9][10]
- **Defenses for Homeowners**: The law declares certain zombie debt practices unlawful, unfair, and fraudulent, violating California public policy. It mandates compliance with programs like HAMP 2MP, NMS, and the California Homeowner Bill of Rights (HOBR) for all successors (including debt buyers). Homeowners can seek equitable tolling of statutes of limitations for ongoing misconduct, sue for damages (e.g., compensatory, statutory, emotional distress, lost equity), and obtain relief like debt cancellation or lien release.[19]
- **Broader Impact**: Related bills like AB 131 and SB 681 (advocated by Rydstrom) expand protections, such as requiring proportionate modification or cancellation of second liens and allowing juries to determine liability. The law aims to prevent lenders from imposing "periods of silence" (10–12 years) to lull homeowners before demanding inflated payments.[19] Critics argue it may hinder legitimate second-lien foreclosures and increase costs for borrowers seeking new junior loans.[8][12]
This legislation builds on federal efforts to address zombie debts but focuses on California's high foreclosure risks amid rising equity. Rydstrom has commented extensively, emphasizing accountability for lenders and urging passage of companion bills to fully protect homeowners from these "malicious debt traps."[19]
### Relevant Links
- **Rydstrom's Law Firm Site**: https://rydstromlaw.com/ – Includes his bio, expertise in zombie foreclosures, and links to resources like "2025 New California Zombie Mortgage Law AB130."
- **Zombie Debt Traps Site**: https://zombiedebttraps.com/ – Dedicated to zombie mortgage defenses, with articles, a free booklet ("How to Crush Zombie Debt-Traps™"), and details on AB 130 (CC § 2924.13).
- **Litigation Monster Site**: https://litigationmonster.com/ – Focuses on Rydstrom's litigation successes, including zombie debt cases, and references to AB 130, AB 131, and SB 681.
- **Detailed Zombie Mortgage Law Page (Rydstrom's Commentary)**: https://zombiedebttraps.com/zombie-mortgage-law/ – In-depth on AB 130's provisions, defenses, and Rydstrom's advocacy.
- **Official Bill Text (AB 130)**: https://legiscan.com/CA/text/AB130/id/3260236 – Full text of the law adding CC § 2924.13.[15]
- **Additional Articles**:
- https://www.dosslaw.com/junior-mortgages-doomed-after-ab-130/ – Analysis of impacts on junior mortgages.[5]
- https://www.financialservicesperspectives.com/2025/07/new-california-law-threatens-to-stall-all-second-lien-foreclosures/ – Discussion on how it may stall foreclosures.[6]
- https://www.mitchellsandler.com/news/california-enacts-law-targeting-servicing-and-foreclosure-of-so-called-zombie-second-mortgage – Overview of targeting zombie seconds.[7]
|
