Solano Real Estate Scene: Jim Porter
Article By: Jim Porter – March 26, 2025
The California Legislature made Senate Bill 1079 law in 2021 and since then professional investors and flippers have been frustrated and some are furious. SB 1079 has changed everything for bidders hoping to buy houses at trustee sales on court steps across California. Now, when a bidder wins with the highest bid at a 1-to-4-unit residential foreclosure auction, qualified bidders now have 15 days after the auction to win the property and take it away from the professional investor at ONE DOLLAR over the winning bid.
A qualified bidder can be someone that is a tenant occupant of the property or a person that simply agrees to buy the property and make it their primary residence, or a NON-PROFIT that is focused on affordable housing. The purpose of this law was to reduce the number of corporate buyers with deep pockets that have been buying properties at auctions over the last 15 years, renovating the houses and then converting them to single family rentals. California wants more housing inventory for homeowners to experience the American Dream and neighborhoods filled with people that take pride in their home-ownership and community.
In 2010, there were 333,000 foreclosures filed in California and in 2024 there were only 30,000 so this is nowhere near as big a story as the great recession era but it’s interesting how SB1079 had good intentions but is now being taken advantage of by some fraudsters. Very few home buyers can buy one of these houses because a cashier’s check large enough to become the winning bidder is required to BEAT OUT the investor that paid CASH to the trustee on the court steps after winning the auction.
The flippers and investors that win on the court steps are not given the deed to the house until 15 days has passed and if during the 15 days, a qualified bidder notifies the trustee that they intend to bid 1 dollar over the published winning bid on the court steps, the new buyer has 30 additional days to present a cashier’s check for the amount of the bid. This pretty much wipes out 99.9% of the first-time homebuyers that need a VA, FHA, or conventional loan because the trustee requires all CASH. The only qualified bidder that could buy this house would be someone that has an investor or family member backing them with the cash and only 1% of the population has this kind of cash on hand. The word on the street is that some unscrupulous investors are using straw-buyers that are willing to say they are moving into the house and some of the non-profits are questionable too.
The investor that won the bidding war on what used to be called the “competitive court steps” now has to wait 45 days to get his or her CASH money back from the trustee, which is why investors and flippers are frustrated, and some are no longer buying on the court steps. If nobody bids at the auction, the house goes back to the bank-lender.
Hey everyone, remember my column a few months ago about flipping houses. Buying houses on the court steps can be hazardous and even dangerous. Once the trustee signs the grant deed to the new owner and the deed is recorded, it is then and only then, the new owner can change the locks on the property and secure the home and this can only be done if there is no tenant living in the house. Tenants have rights and 4 million Californians own guns, and many have big dogs too.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
