1. (a) The junior lienholder may cure the default, bring the Contract Holder's account current by paying any arrearages (including all costs of CalVet associated with the giving of the necessary notices) to CalVet, and keep the account current during the foreclosure or other proceeding necessary to protect the junior lienholder's interest. Any and all amounts so paid may be added to the Contract Holder's secured indebtedness to the junior lienholder. The junior lienholder shall commence and complete such proceeding as quickly as permitted by law, and the holder of the junior interest in the property upon completion of the proceeding shall have 30 days thereafter in which to pay CalVet in full. Upon such payment, and upon CalVet's verification that the proceeding was regular on its face, CalVet will issue its deed to the holder of the junior interest.
2. (b) CalVet and the junior lienholder may agree to complete their respective foreclosure or similar proceedings and offer the property for a cash sale jointly. In such event, only CalVet may accept an offer, and the junior lienholder may not act on CalVet's behalf nor bind CalVet in any way to act in any particular manner. Upon a sale for all cash, the proceeds shall be applied in the following order of priority: (1) costs of sale; (2) CalVet's demand, including its costs; and (3) the junior lienholder's demand, including its costs, up to the extent of the remaining proceeds. Any excess proceeds remaining after these disbursements may be divided between CalVet and the junior lienholder pursuant to their agreement, but in no event shall CalVet agree to receive nor actually receive less than its pro rata share based upon the respective interest of the parties, and in no case less than 50% of the proceeds.

3. (c) CalVet may give notice to the junior lienholder that it will complete its own foreclosure or other proceeding and sell the property unilaterally, in which case CalVet will pay the junior lienholder its interest in full, including principal, interest, and applicable advances and expenses, within 30 days after the sale of the property or within six (6) months after the date of such notice, whichever is earlier. Upon such payment, the junior lienholder shall deliver its deed of reconveyance or similar lien release to CalVet forthwith.

   CalVet shall include in its notice of intent a requirement that a junior lienholder respond in writing within 30 days, or as otherwise instructed by to CalVet, stating its interest in the property, the amount thereof, and the preferred alternative. Upon receipt of such response, to CalVet will notify the junior lienholder of the permitted alternative.

At the sole option of CalVet, junior lienholders shall have one of three alternatives upon issuance of a notice of intent to cancel contract.

Note: Authority cited: Section 700, Military and Veterans Code. Reference: Sections 987.6 and 987.78, Military and Veterans Code.

History

1. New section filed 4-4-88; operative 5-4-88 (Register 88, No. 17).

2. Amendment filed 3-24-2026; operative 7-1-2026 (Register 2026, No. 13).