AB 406- This bill would PROHIBIT BALLOON PAYMENTS from being included in the terms of an adjustable rate loan, as defined, for real property containing one to four residential units secured by a mortgage or deed of trust on real property.
AB 407- This bill prohibits the imposition of prepayment charges on owner occupied dwellings consisting of single-family 1-4 units.
AB 643- This bill would provide that the fiduciary duty owed to a borrower by a broker includes a requirement that the mortgage broker provide a borrower prepurchase counseling that details the advantages and disadvantages of the loan options available to the borrower based upon the borrower’s income and credit rating. This bill also would prohibit a mortgagee, trustee, beneficiary, or authorized agent from filing a notice of default unless the borrower has been provided counseling relating to foreclosure prevention that includes assistance in negotiating an agreement to cure the default.
AB 645- This bill would provide that the fiduciary duty owed to a borrower includes a requirement that the mortgage broker provide information to a borrower regarding the advantages and disadvantages of the loan options available to the borrower based upon the borrower’s income and credit rating. The bill would also provide that the fiduciary duty owed to a borrower includes, if a broker arranges a loan that is less advantageous than a loan for which the borrower is otherwise qualified and the borrower defaults on the loan, sending a letter to any consumer reporting agency indicating that the broker arranged the loan and that the loan was less advantageous than a loan the broker could have arranged for which the borrower was otherwise qualified.
AB 793- This bill would prohibit an insurer, broker, agent, or others engaged in the transaction of insurance, except as provided, from participating in, being associated with, or employing any party that participates in or is associated with, the origination of a reverse mortgage, or referring a client or prospective client to any party that participates in or is associated with the origination of a reverse mortgage.
AB 856- The Personal Income Tax Law conforms to specified provisions of the federal Mortgage Forgiveness Debt Relief Act of 2007, relating to the exclusion of the discharge of qualified principal residence indebtedness, as defined, from a taxpayer’s income if that debt is discharged after Jan. 1, 2007, and before Jan. 1, 2010, as provided. The federal Emergency Economic Stabilization Act of 2008 extended the operation of those provisions to debt that is discharged before Jan. 1, 2013. This bill would provide further conformity to those federal acts, as provided. This bill would take effect immediately as a tax levy.
AB 1321- This bill would require that mortgages and deeds of trust as well as assignments of a mortgage or a deed of trust be recorded within 30 days of the execution of the deed or other document creating a security interest in the real property or within 30 days of execution of the assignment. The bill would further require that either the promissory note or a specified certificate affirming the existence of the promissory note be attached at the time of recordation. This bill would prohibit the mortgagee, trustee, or beneficiary from recording a notice of default until 45 days after it has recorded the mortgage or deed of trust and any assignment of the mortgage and deed of trust.
SB 2- Existing law, until Jan. 1, 2013, prohibits any person who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform residential mortgage loan modifications or forbearance for a fee paid by the borrower, from demanding or receiving any preperformance compensation, requiring collateral to secure final payment, or taking power of attorney from the borrower, and makes a violation of those provisions a misdemeanor. Existing law also requires those persons, when providing services for mortgage loan modifications or forbearance, to provide a 14-point bold type statement to the borrower regarding the borrower’s right to contact his or her lender directly rather than using a third party to arrange for those services, and makes a violation of those provisions a misdemeanor. This bill would extend those provisions until Jan. 1, 2015, and to persons who facilitate or attempt to facilitate mortgage loan modifications or forbearance.
If you are doing short sales, beware: The bill would further extend those prohibitions to persons who for a fee negotiate, attempt to negotiate, arrange, attempt to arrange, facilitate, attempt to facilitate, or otherwise offer to accomplish the sale of a residential dwelling for less than the remaining amount of indebtedness due to a mortgagor, mortgagors, trustor, or trustors at the time of sale. The bill would make conforming changes to the 14-point bold type statement that is required to be provided to a borrower, as specified
SB 4- Existing law requires a lender to file a notice of default in the case of nonjudicial foreclosure prior to enforcing a power of sale as a result of a default on an obligation secured by real property, as specified. Existing law also requires that a notice of sale be given before the power of sale may be exercised. Existing law requires the notice of sale to contain specified information regarding the property and the sale, and to be recorded with the county recorder, as specified.
This bill would additionally require, beginning April 1, 2012, that the notice of sale, if given pursuant to a deed of trust or mortgage containing a power of sale is secured by real property containing from one to 4 single-family residences, contain language notifying potential bidders of specified risks involved in bidding on property at a trustee’s sale, and a separate notice to the homeowner of that property owner informing the homeowner owner about how to obtain information regarding any postponement of the sale. The bill would require a good faith effort to be made to provide current information regarding sale dates and postponements and that the information be available free of charge. The bill would permit the information to be provided by any means that provides continuous access, as specified.
SB 6- Existing law authorizes the Real Estate Commissioner to temporarily suspend or permanently revoke a real estate license when the licensee has been guilty of generating an inaccurate opinion of the value of residential real property in connection with a certain real estate transaction in order to, among other things, acquire a financial or business advantage that directly results from the inaccurate opinion of value. This bill would delete that provision and would instead prohibit a licensee from providing an opinion of value of real property if his or her compensation is dependent on or affected by that opinion of value or if he or she has any interest in the property or transaction. The bill would also prohibit a licensee who offers or provides these opinions, for compensation or in expectation of compensation, from knowingly or intentionally misrepresenting the value of real property. This bill has additional changes to the Real Estate Appraisal laws as well involving the appraisal management companies.
SB 53- This bill would authorize the Real Estate Commissioner to issue citations to unlicensed persons the commissioner believes to be engaging in activities for which a real estate license is required or to licensees who are in violation of any provision of the Real Estate Law or any rule or order there under. The bill would authorize citations to include an order to correct the violation, to desist and refrain from engaging in a specific business activity, or to suspend all business operations. The bill would authorize citations to include an administrative penalty of up to $2,500. This bill would further authorize the commissioner to apply to the superior court for an order requiring a licensee to appear before the commissioner or to produce evidence under specified circumstances or as pertaining to matters under investigation. The bill would authorize the court to punish as contempt the failure of a licensee to comply with such an order. The bill would also authorize the commissioner to make information public confirming an investigation or proceeding against an unlicensed person or licensee, as specified.
This bill would require a real estate broker who is exempt from the Escrow Law and who engages in escrow activities for five or more transactions in a calendar year or whose escrow activities equal or exceed $1,000,000 in a calendar year to file a specified report with the department within 60 days following the completion of the calendar year. The bill would authorize the commissioner to assess specified penalties upon a real estate broker who fails to provide the report to the department and would authorize the commissioner to suspend or revoke the license of a real estate broker for failure to pay those penalties. There are other changes in this bill but I am only giving the parts I believe are most relevant to most Real Estate Brokers.
SB 412 - Existing law prohibits a deficiency judgment if real property or an estate for years has been sold by the mortgagee or trustee under power of sale in the mortgage or deed of trust. Existing law also prohibits a deficiency judgment under a note secured by a first deed of trust or first mortgage for a dwelling of not more than 4 units in any case in which the trustor or mortgagor sells the dwelling for less than the remaining amount of the indebtedness due at the time of sale with the written consent of the holder of the first deed of trust or first mortgage, and provides that written consent of the holder of the first deed of trust or first mortgage to that sale obligates the holder to accept the sale proceeds as full payment and to fully discharge the remaining amount of the indebtedness on the first deed of trust or first mortgage. This bill would define “note” for these purposes as one made by a natural person, as specified. “Note” means a note made by a natural person or by a trustee of a trust created by a natural person for a loan made primarily for personal, family, or household purposes. “Note” does not include a note made for a loan primarily for agricultural, business, or commercial purposes, including a loan to finance the construction of a residential subdivision.
SB 435- (1) Existing state and federal law regulate the terms and conditions of mortgages and deeds of trust. Upon the failure to satisfy specified terms of these obligations, existing state law requires that a notice of default be sent to a mortgagor or trustor indicating the property securing the loans may be foreclosed upon and that he or she has the right to cure the default and bring the account into good standing. Existing law requires this notice to include a statement indicating the name, address, and telephone number of the beneficiary or mortgagee for the purpose of finding out the amount that is due.
This bill would also permit the notice to reference the authorized agent of the beneficiary or mortgagee on the notice described above.
(2) Existing law regulates the sales of property pursuant to a power of sale in a mortgage or deed of trust, including prescribing the times and locations of these sales. Existing law permits these sales to be postponed, as specified, at any time prior to the completion of the sale, for any period of time not to exceed a total of 365 days from the date set forth in the notice of sale, after which time a new notice of sale must be given, as prescribed. This bill would permit these sales to be postponed, as described above, for any period of time not to exceed one year from the date set forth in the notice of sale.
(3) Existing law permits a trustee under a trust deed whose duties are exclusively related to the power of sale contained in the deed to be substituted if certain conditions are met. If the substitution occurs after a notice of default has been recorded but prior to the recording of the notice of sale, existing law requires that the beneficiary or his or her authorized agent give notice of this, as specified.
This bill would condition the requirement that the notice of trustee substitution be sent on the notice of default not having been rescinded.
SB 458- Existing law prohibits a deficiency judgment upon a sale of real property or an estate for years for failure of the purchaser to complete the contract of sale or satisfy the obligation underlying a mortgage or trust deed given to secure payment in specific circumstances, including if the loan was on a dwelling, as specified, and the loan was, in fact, used to pay all or part of the purchase price of the dwelling. This bill would provide that a loan used to pay all or part of the purchase price of real property or an estate for years includes a subsequent loan, mortgage, or deed of trust that refinances or modifies the original loan, but only to the extent that the subsequent loan, mortgage, or deed of trust was acquisition indebtedness, as defined
SB 708 – Debt Settlement Service providers to be regulated and licensed under this bill
SB 729 - Existing state and federal law regulate the terms and conditions of mortgages and deeds of trust secured by real property. Existing state law requires, upon a breach of the obligation of a mortgage or deed of trust secured by real property, that the trustee, mortgagee, or beneficiary record a notice of default in the office of the county recorder where the mortgaged or trust property is situated and mail the notice of default to the mortgagor or trustor, among other acts, prior to exercising a power of sale. Existing state law, until January 1, 2013, prohibits the filing of a notice of default on a mortgage or deed of trust, as specified, secured by owner-occupied real property, as defined, until 30 days after specified parties contact the borrower or 30 days after satisfying due diligence requirements in this regard. This bill would prohibit a mortgagee, trustee, beneficiary, or authorized agent from recording a notice of default unless that party makes reasonable and good faith efforts to evaluate the borrower for all available loss mitigation options to avoid foreclosure. The bill would prohibit a mortgagee, trustee, beneficiary, or authorized agent from recording a notice of default on residential mortgages and deeds of trust, as defined, until various notice requirements and other requirements regarding loan modifications are fulfilled. The bill would include among these requirements informing the borrower of the deadline for applying for a loan modification, which would be prohibited from being earlier than a specified date. The bill would prohibit a mortgagee, trustee, or beneficiary from recording a notice of default on a residential mortgage or deed of trust if a borrower who is eligible for a loan modification submits an application, as specified, unless the mortgagee, trustee, or beneficiary has, in good faith, reviewed the application, rendered a decision on the application, and sent the borrower a denial explanation letter. The bill would provide a process for reviewing a mortgage loan modification application, which would depend, in part, on whether the lender is participating in the federal Making Home Affordable Modification Program. The bill would exempt certain borrowers from these requirements. The bill would require that a borrower who initiates an application for a loan modification according to the procedures of the mortgagee, beneficiary, or authorized agent, and who is denied a loan modification, to receive a denial explanation letter stating the reason or reasons for the denial, as specified. The bill would require a mortgage servicer, as defined, to whom the provisions described above apply, to perform specified actions as part of foreclosing on a residential mortgage or deed of trust, including compiling a record documenting compliance with those provisions, which would be signed, certified, and transmitted to the foreclosure trustee or authorized agent. The bill would require the declaration of compliance to be included or attached to every notice of default recorded, as specified, and a notice of default recorded without the compliance declaration would be void. The bill would prescribe a form for the declaration and would require that the declaration substantially comply with it. The bill would permit an eligible borrower to enjoin a trustee sale if provisions of the bill are not satisfied, and would authorize a borrower to recover damages, attorney’s fees, and costs, as specified, if the property is sold without compliance with the bill’s requirements. The bill would also establish other penalties for certain acts, including for a false declaration of a lost note representing a mortgage or deed of trust. The bill would provide that any person licensed by the State of California who violates the bill’s provisions is deemed to have violated that person’s licensing law. The bill would require certain information to be recorded with a notice of default and to be provided with the notice of default sent to a borrower.
MORAL
And you thought I was just kidding when I said more legislation was coming. This does not even include the CFPB rules due out in July 2011. Be aware of these and how them may affect you and why you need to be a PAC member of your trade group unless you prefer being out of business.
RIGGING BIDDING AT CALIFORNIA FORECLOSURE SALES GETS YOU A FEDERAL FELONY CONVICTION
FACTS
On March 4, Yama Marifat, a Pleasanton, Calif. real estate investor, pleaded guilty in U.S. District Court in Sacramento to conspiring to rig bids and commit mail fraud at public real estate foreclosure auctions held in San Joaquin County, Calif. The plea was guilty to conspiring with a group of real estate speculators who agreed not to bid against each other at certain public real estate foreclosure auctions in San Joaquin County. The primary purpose of the conspiracy was to suppress and restrain competition and to obtain selected real estate offered at San Joaquin County public foreclosure auctions at non-competitive prices, the department said in court papers.
After the conspirators’ designated bidder bought a property at a public auction, they would hold a second, private auction, at which each participating conspirator would bid the amount above the public auction price he or she was willing to pay. The conspirator who bid the highest amount at the end of the private auction won the property. The difference between the price at the public auction and that at the second auction was the group’s illicit profit, and it was divided among the conspirators in payoffs. According to his plea agreement, Marifat participated in the scheme from in or about April 2009 until in or about October 2009.
To date, five individuals, including Marifat, have pleaded guilty in connection with this investigation. On April 16, 2010, Anthony B. Ghio pleaded guilty to participating in a conspiracy to rig bids at public foreclosure auctions held in San Joaquin County. On June 24, 2010, John R. Vanzetti and Theodore B. Hutz pleaded guilty to participating in the conspiracy. On Feb. 4, Richard W. Northcutt also pleaded guilty to participating in the conspiracy.
Marifat pleaded guilty to bid rigging, a violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. Marifat also pleaded guilty to conspiracy to commit mail fraud, which carries a maximum sentence of 30 years in prison and a $1 million fine. (usattyedca3411)
MORAL
They rigged the bids at the foreclosure sales over about four months is the indication. Now with felony convictions they lose licenses, the right to vote, all the profit, potentially their freedom and if any of them are not citizens they are looking forward to deportation.
CO-OWNER OF FAIR LENDER AUDITS IN SAN DIEGO PLEADS GUILTY IN LOAN MODIFICATION SCHEME
FACTS
Borzou Hamzaviabedi, the co-owner of Fair Lender Audits, recently pleaded guilty in Superior Court to serving as a real estate agent without a license while accepting money upfront for illegal loan modifications. Charging such fees is illegal under state law, and was outlawed by the Federal Trade Commission as of Jan. 31.
Hamzaviabedi, who was sentenced to three years' probation, was ordered to pay a $3,000 fine and $7,750 in restitution to identified victims. He's also banned from taking part in the loan-modification industry unless he becomes properly licensed. Hamzaviabedi must also cooperate in the prosecution of the other co-owner of Fair Lender Audits, Esteban Arjona, for whom charges are pending.
Charges against Hamzaviabedi and Arjona followed a probe into consumer complaints that said the duo took $2,500 to $3,000 from people who wanted to reduce their mortgage payments. None of their clients received new loans. (sdtrib22411)
MORAL
I would say that Hamzaviabedi had a very good attorney to get only three years probation.
THE INFORMATION CONTAINED HEREIN IS NOT LEGAL ADVICE.
AN ATTORNEY SHOULD BE CONSULTED IF YOU DESIRE LEGAL ADVICE
