The Signal · Key Highlights

A new law reportedly makes it tougher to access capital due to restrictions, causing jitters from banks.
The California Mortgage Association, California Credit Union League, United Trustees Association and several businesses and individuals contend that Section 2924.13 and California housing regulations unconstitutionally impair existing contracts, strip away established property rights and violate due process and equal protection.
Buchalter and Wright, Finlay & Zak sued the California Attorney General Rob Bonta to challenge the constitutionality of the Golden State's newly enacted statute – Civil Code Section 2924.13.
On Dec. 15, plaintiffs moved for a preliminary injunction to preserve the status quo while the court considers the serious constitutional and federal law concerns raised by the statute.
The challenged provisions of AB 130 were intended to address abandoned loans known as “Zombie Mortgages."
Section 2924.13 broadly reduces—and, in many cases, eliminates—the enforceability of virtually all loans secured by subordinate liens on residential property.
Section 2924.13 redefines routine loan servicing practices as “unlawful” and imposes new restrictions on foreclosure rights, creating serious risks for junior lienholders and borrowers in need of foreclosure prevention alternatives. Logistics real estate is increasingly viewed as a platform for energy innovation, not just supply chain support. Site selection is now influenced as much by energy readiness as by proximity to transportation and labor. Companies are adopting on-site energy solutions and forming partnerships to enhance energy resilience.

⚠️ Why it matters

For CRE professionals, shifts in regulatory frameworks can introduce significant uncertainty regarding property rights, contract enforceability, and access to capital. The lens of regulatory alignment underscores the importance of understanding how new policies might conflict with established norms, potentially affecting transactions, underwriting, and risk assessment. Monitoring these dynamics is crucial for anticipating compliance challenges and maintaining operational stability.

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Key Takeaways

“Legal proceedings could clarify or reshape the boundaries between new policy initiatives and longstanding property rights. Stakeholders may need to adapt practices as courts determine whether the law aligns with constitutional standards. Continued debate and legal review are likely as parties seek greater certainty in the regulatory environment.”

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