Mortgage Grapevine

NEW CALIFORNIA LAWS EFFECTIVE JAN. 1, 2009 AND JULY 1, 2009. OBEY OR PAY . . . THE PENALTY

ASSEMBLY BILL 180 CHAPTERED AMENDING CALIFORNIA FORECLOSURE CONSULTANT LAW TO TAKE EFFECT JULY 1, 2009

FACTS

AB 180 has been chaptered and amends Sections 1632, 2945.2, 2945.3, and 2945.4 of, and adds Section 2945.45 to, the Civil Code governing foreclosure consultants.

Existing law defines a foreclosure consultant as a person who offers, for compensation, to perform specified services for a homeowner relating to a foreclosure sale, except as specified. Existing law prohibits a foreclosure consultant from entering into an agreement to assist the owner in arranging, or arrange for the owner, the release of surplus funds prior to 65 days after the trustee's sale is conducted.

Effective July 1, 2009 a foreclosure consultant is prohibited from entering into the agreement described above at any time.

Existing law allows a homeowner to cancel a contract with a foreclosure consultant within 3 days after signing the contract by providing written notice of the cancellation at the address provided by the foreclosure consultant. Existing law requires that the contract be written in the same language as principally used by the foreclosure consultant to describe his or her services or to negotiate the contract. Existing law prohibits a foreclosure consultant from taking any power of attorney from an owner, except to inspect documents as provided by law.

Effective July 1, 2009 a homeowner can cancel a contract with a foreclosure consultant within 5 days after signing the contract, and to do so by mail, e-mail, or facsimile. A contract with a foreclosure consultant must be written in the language principally used by the foreclosure consultant to describe his or her services or to negotiate the contract, and in specified circumstances the foreclosure consultant must to provide the owner, before the owner signs the contract, with one or more copies of a completed contract written in specified languages. A foreclosure consultant is prohibited from taking any power of attorney from an owner for any purpose.

As of January 1, 2008 a foreclosure consultant must register with the Department of Justice in accordance with certain requirements, and to obtain and maintain a surety bond of $100,000. Failure to do so is a crime.

MORAL

If you are going to be a foreclosure consultant after July 1, 2009 you better have the surety bond and register with the Attorney General.

ASSEMBLY BILL 2454 IS CHAPTERED-CALIFORNIA REAL ESTATE RECOVERY ACCOUNT BILL INCREASES RECOVERY TO $50,000 PER INCIDENT FOR MAXIMUM OF $250,000 PER BROKER

FACTS

Effective January 1, 2009 AB 2454 is now chaptered and amends California Business and Professions Code Section 10474 the Real Estate Recovery account.

The Real Estate Recovery Account for applications for payment filed on or after January 1, 2009 is $50,000 for any one transaction and $250,000 for any one licensee.

MORAL

As a real estate broker watch your “p’s” and “q’s” and your real estate salespersons. It is now economically worthwhile for an attorney to sue you and to chase you into bankruptcy court to keep a judgment nondischargeable. This can cost you your license until you repay the DRE Recovery Account “with interest.”

ASSEMBLY BILL 69 IS CHAPTERED-CALIFORNIA FINANCE LENDERS AND RESIDENTIAL MORTGAGE LENDING ACT LENDERS MAY NOW BE FILING FURTHER REPORTS WITH THE DEPARTMENT OF CORPORATIONS

FACTS

Effective January 1, 2009, AB 69 is chaptered and adds two code sections that allows the Corporations Commissioner to require licensees to provide reports concerning their residential mortgage loan servicing activities, including, but not limited to, information similar to that collected in connection with the Mortgage Servicers Survey, first published by the Department of Corporations in December 2007. The commissioner is additionally authorized to seek and accept information provided on a voluntary basis by residential mortgage loan servicers not subject to the commissioner's jurisdiction. (FinC§§ 22159.5, 50307.1)

MORAL

More overhead, more costs, more losses or less profit if you are lucky.

CALIFORNIA SENATE BILL 133 CHAPTERED TO FORCE ALL TITLE REPRESENTATIVES TO BE REGISTERED AND TO PREVENT ANY OFFSETTING PAYMENTS FOR PLACEMENT OF TITLE INSURANCE

FACTS

Effective January 1, 2009 California Senate Bill 133 has been chaptered amending Section 12404 and adding Article 8 (commencing with Section 12418) to the Insurance Code affecting Title Insurance representative.

It prohibits any person from being employed as a title marketing representative unless he or she holds a valid certificate of registration as a title marketing representative issued by the Insurance Commissioner for a 3-year period. Violation of these provisions is a misdemeanor.

Section 12404 also provides more prohibitions against remunerations for placement of title insurance or in the hopes you will place it with a particular title company.

A “title marketing representative” is defined and provides this does not include a person whose primary duties directly involve the creation, production, or issuance of the title policy or the performance of escrow services. If a person markets title insurance without a valid certificate the commissioner may issue a cease and desist order prohibiting that person from further marketing. Title companies are required to notify the commissioner when a title marketing representative is terminated or employed.

The Department of Insurance may revoke, suspend, restrict, or decline to issue a certificate of registration if it determines, after a hearing, that the title marketing representative has committed specified acts.

Referral fees are in violation of insurance law.

MORAL

Anything a title company does to offset expenses of any function that can produce business is arguably a violation. Goodbye to Title Company sponsorships

CALIFORNIA SENATE BILL 1461 IS CHAPTERED AND YOU NEED YOUR REAL ESTATE LICENSE NUMBER ON BUSINESS CARDS AND REAL ESTATE PURCHASE CONTRACTS

FACTS

Effective July 1, 2009 Senate Bill 1461amends California Business and Professions Code Section 10140.6 requiring the license number of all real estate sales people on solicitation materials intended to be the first point of contact with consumers" including business cards, stationery, advertising fliers, and other materials designed to solicit the creation of a professional relationship between the licensee and a consumer, and excludes an advertisement in print or electronic media and "for sale" signs. However, purchase agreements must have the license number.

MORAL

If you have our DRE self audit manual, update it now in the license checking area to add the above. Otherwise in an audit you can be violated by DRE. This means salesperson business cards must have the salesperson’s license number among other things. We



by thorlaw October 12, 2008 12:00 AM

CA was already pretty restrictive.

by Just a broker October 12, 2008 12:00 AM

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