FACTS
The Federal Trade Commission is further extending its deferral of enforcement of the Identity Theft Red Flags Rule through Dec. 31, 2010, while Congress continues to consider legislation that would impact the scope of entities covered by the rule.
The rule was promulgated pursuant to the Fair and Accurate Credit Transactions Act, in which Congress directed the Commission and other agencies to develop regulations requiring creditors and financial institutions to address the risk of identity theft. The resulting Red Flags Rule requires all such entities that have covered accounts to develop and implement written identity theft prevention programs. The identity theft prevention programs must be designed to help identify, detect, and respond to patterns, practices, or specific activities--known as "red flags"--that could indicate identity theft.
Creditors under the ECOA include professionals, merchants, or service providers that regularly provide a product or service for which the consumer pays after delivery. The final Red Flags Rule became effective on Jan. 1, 2008, with full compliance for all covered entities originally required by Nov. 1, 2008. The Commission has issued several Enforcement Policies delaying the enforcement of the Rule. Most recently, the FTC announced in October 2009 that at the request of certain members of Congress, it was delaying enforcement of the Rule until June 1, 2010. (ftacprsrel52810)
MORAL
If you have ours, good, use it. If you do not have one, you now have until Dec. 31, 2010 to get one or create one for yourself.
HUD IS AGAIN CONSIDERING ADOPTING A RULE RESTRICTING THE REQUIRED USE OF AFFILIATED BUSINESSES
FACTS
The Department of Housing and Urban Development is again addressing both incentivized affiliate referrals and penalties that could adversely affect not only individual borrowers, but also competition in the provision of settlement services. In advance of proposing a new rule on this subject, HUD is publishing this ANPR to request information on the practices to be addressed by this rulemaking.
HUD requests information from all interested members of the public, including individual consumers, consumer advocacy organizations, housing counseling agencies, the real estate and mortgage industry, and federal, state, and local consumer protection and enforcement agencies. HUD requests information that includes empirical data, studies, and analyses regarding affiliated business arrangement practices. HUD would like to know if economic incentives to use affiliated lenders facilitated inflated appraisals or lowered underwriting standards in the lending market. (75fr31334-5/10/10)
MORAL
If you as a lender or broker do not want "tie-ins" between the builder and the broker or lender, then you should comment.
CALIFORNIA STATE CRIMINAL CONVICTIONS CAN BE EXPUNGED
FACTS
In California, anyone convicted of a crime but did not serve any prison time and has remained out of trouble can expunge his or her record. Studies suggest that one in ten Californians has a criminal conviction. (That is one heck of a statistic! Think about it. 10% of the California population has a criminal conviction! Count 10 people at random and it may be that one of that 10 has a criminal conviction.)
In California, section 432.7 of the Labor Code, states "No employer...shall ask an applicant for employment to disclose...information concerning an arrest or detention that did not result in conviction, or information concerning a referral to, and participation in, any...diversion program, nor shall any employer seek from any source whatsoever, or utilize, as a factor in determining any condition of employment including hiring, promotion, termination...any record of arrest or detention that did not result in conviction. Nothing in this section shall prevent an employer from asking an employee or applicant for employment about an arrest for which the employee or applicant is out on bail or on his or her own recognizance pending trial."
If you were convicted of a misdemeanor or a felony and were not sentenced to state prison or under the authority of the Department of Corrections and Rehabilitation you can petition for a dismissal. This means you were given county jail time, probation, a fine, or a combination of those three. If you are petitioning for a dismissal, the court upon proper motion, may withdraw your guilty or nolo contendere (no contest) plea, or verdict of guilty if you went to trial, and enter a not guilty plea. Then the court will set aside and dismiss the conviction. From that point forward, you are considered no longer convicted of the offense. Your record will be changed to show a dismissal rather than a conviction. (Calif. Pen. C. §§1203.1203.3)
MORAL
There are exceptions even if the convictions is dismissed or expunged. For example, government employment, licenses such as Department of Real Estate broker or sales licenses, and government clearances. You should read the code and the job application under the arrests and convictions section to see what the requirements are. However, private employers cannot ask about the expungments or dismissals once granted Check with your attorney.
PAIR DRAW 12 YEARS IN STATE PRISON FOR MORTGAGE FRAUD
FACTS
On June 2, 2010, Ruben Hernandez of Downey, Calif., was sentenced to 12 years in state prison for a multi-million dollar mortgage fraud. He was accused in a series of house purchases using fake social security numbers and fake ban statements and defrauded banks of about $4 million. His co-defendant Joel Rodriguez, owner of Coast to Coast Mortgage was found guilty of six counts of filing a false application and five counts of grand theft and sentenced to 12 years, 8 months in prison. Both men were sentenced by Judge Lance Ito. Coast to Coast is still active according to the Department of Real Estate licensing website. Mr. Rodriguez is also the designated officer of SABINAJOELLE ENTERPRISES INCORPORATED WITH A DBA OF GOLDEN REALTY NETWORK. The Secretary of State website notes SABINAJOELLE ENTERPRISES is suspended and yet it is listed as an active real estate licensee with two sales people. (lataa2-6-3-10)
