The Role You May Be Playing—Without Knowing It

What California’s new foreclosure statute means for private money lenders

With over 23 years of experience in real estate litigation and foreclosure, I’ve seen how small definitions can carry massive legal consequences.

This month, we’re breaking down California’s new Civil Code § 2924.13, which applies to junior lienholders on residential property—even for business purpose loans.

Today’s focus: the term “mortgage servicer.”

According to the statute, a “mortgage servicer” includes the current mortgage servicer and any prior mortgage servicers.”

But here’s the part many private lenders miss:

If you’re servicing your own loan, you are the mortgage servicer.

You don’t need to hire a third-party company to fall into this definition. If you collect payments, send notices, or manage the loan in any way, you are self-servicing—and fully subject to the law.

And that means any compliance failures—even from a prior servicer—could expose your foreclosure to challenge.

Why it matters:
Under § 2924.13, the mortgage servicer must certify, under penalty of perjury, whether any unlawful practices occurred. That includes missteps by you, or by anyone else who serviced the loan before you.

Private lenders, this isn’t optional.
If you hold a junior lien and manage the loan, you’re wearing two hats: lender and servicer.

Understanding this distinction is key to staying compliant—and staying out of court.

Follow for more as we continue breaking down this powerful new statute.