California R.E. Law Changes

While doing home loans in Hemet, California and San Jacinto, California we have discovered that knowledge is imperative. Here are some changes that will affect Van Nuys, CA, Hemet CA, San Jacinto CA and home loans and mortgages in California.

Realtors some of the changes affect you directly.

NEW CALIFORNIA LAWS FOR 2009-10 AFFECTING REALTORS AND LENDERS

The conclusion of the first half of the 2009-10 legislative session has brought many new laws that may affect California REALTORS® and their clients. Not surprisingly in the subprime aftermath, prominently featured among the new laws is stricter regulation of the mortgage lending industry. To view the full text and legislative summary of any of the following new bills, go to www.leginfo.ca.gov.

REO Buyer Can Select Escrow and Title: Effective October 11, 2009, the Buyer's Choice Act prohibits an REO lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company. A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender's escrow or title recommendations. An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller's agent may be subject to license disciplinary action. This law expires on January 1, 2015. Assembly Bill 957.

No Advance Fee Loan Modifications: Starting October 11, 2009, a new law prohibits anyone from claiming any compensation for negotiating or arranging a loan modification until after that person fully performs each and every service as promised. Aimed at combating loan modification scams, this ban applies to upfront fees collected by real estate agents and attorneys. The ban expires on January 1, 2013. Also effective immediately, anyone who negotiates or arranges a loan modification must give the borrower a specified notice that paying a third-party for loan modification services is unnecessary. These new requirements apply to mortgage loans secured by residential property up to four units, with certain exceptions for lenders and loan servicers acting on their own behalf. Violations can be penalized by, among other things, a $10,000 fine plus one-year imprisonment for individuals, or a $50,000 fine for businesses. Real estate brokers with existing Advance Fee Loan Modification Agreements reviewed by the Department of Real Estate (DRE) can no longer, as of October 11, 2009, enter into these agreements or collect advance fees. Agreements entered into and advance fees collected before October 11, 2009 are not affected. For the DRE announcement, go to http://www.dre.ca.gov/pdf_docs/SB94WebAnnouncement(brokers).pdf. Senate Bill 94.

Advance Fee Redefined: Aside from loan modifications discussed above, Senate Bill 94 also broadens the definition of an advance fee which must be specially handled by real estate agents, such as by submitting an advance fee agreement for DRE review and placing funds received into a broker's trust account. Under the new definition that took effect on October 11, 2009, agents cannot separate advance fees or services into components to avoid the advance fee requirements. More specifically, an advance fee is now defined as "a fee, regardless of the form, claimed, demanded, charged, received, or collected by a licensee from a principal before fully completing each and every service the licensee contracted to perform, or represented would be performed." Exceptions include advertisements in newspapers of general circulation, tenant prescreening fees, and tenant security deposits. Senate Bill 94.

Mortgage Loan Originators Regulated: Beginning in December 2010, a real estate licensee acting as mortgage loan originator must obtain a license endorsement, which entails education, written testing, and reporting requirements. A mortgage loan originator is anyone who, for compensation or gain, takes a mortgage loan application or offers or negotiates terms of a mortgage loan for residential property containing one-to-four units. Exemptions include real estate agents who only engage in selling, buying, or leasing activities, unless compensated by a lender or mortgage loan originator. This license endorsement requirement comports with the creation of a Nationwide Mortgage Licensing System and Registry under recent federal law. Finance lenders and residential mortgage lenders under the Department of Corporation must also register in the nationwide system. Additionally, if a real estate broker or the broker's salesperson makes, arranges, or services loans secured by residential property containing one-to-four units, the broker must notify the DRE by January 31, 2010 or within 30 days of commencing such loan activity, whichever is later. Senate Bill 36.

Mortgage Broker Activities Restricted: Commencing January 1, 2010, a mortgage broker will be deemed a fiduciary with a duty to place the borrower's economic interest above his or her own. This fiduciary duty pertains to a mortgage broker who makes loans secured by residential property of one-to-four units. Also starting January 1, 2010, the law will strictly regulate higher-priced mortgage loans as defined, including requiring upfront disclosure if a mortgage broker only arranges higher-priced mortgage loans, restricting prepayment penalties and yield spread premiums, prohibiting negative amortization, and prohibiting mortgage brokers from steering borrowers to higher-cost loans. Assembly Bill 260.

Appraisal Industry Oversight: The Office of Real Estate Appraisers (OREA) will have regulatory oversight of appraisal management companies, which gained prominence after Fannie Mae and Freddie Mac adopted the Home Valuation Code of Conduct (HVCC). Starting January 1, 2010, the OREA must implement a registration system for appraisal management companies, including fingerprinting and background checks for persons with operational authority as defined. On a separate note, this law clarifies what conduct constitutes improperly influencing the appraisal process by anyone with an interest in a real estate transaction. Such prohibited conduct includes withholding or threatening to withhold an appraisal fee, withholding or threatening to withhold future appraisal business, and promising future business, promotions, or compensation. Senate Bill 237.

Mortgage Fraud Becomes a State Crime: As of January 1, 2010, anyone who deliberately makes any misrepresentation or omission during the mortgage lending process with the intent of influencing that process will be guilty of mortgage fraud under California law. A violation of this law is a crime punishable by one-year imprisonment. Under existing federal law, loan fraud against a federally-insured lender is a crime punishable by a $1 million fine, plus one-year imprisonment (18 U.S.C. section 1014). Senate Bill 239.

Increase in Homestead Exemptions: Coming into effect on January 1, 2010, the homestead exemption protecting a homeowner's equity from judgment creditors has been increased by $25,000 across the board to $75,000 for individuals, $100,000 for married couples or family units as specified, and $175,000 for persons over 65 years, disabled, or over 55 years with limited income as specified. Assembly Bill 1046.

60-Day Notice to Terminate Tenants Extended: Existing law generally requiring a 60-day notice to terminate a month-to-month residential tenant, which was originally slated to sunset on January 1, 2010, has been extended indefinitely. A 30-day notice to terminate is sufficient if the tenant has lived in the property for less than one year, or if the landlord has sold the property and certain requirements are met as specified in our standard-form Notice of Termination of Tenancy (C.A.R. Form NTT). The 60-day notice requirement does not apply to fixed-term leases, such as a one-year lease. Other laws address tenants in properties foreclosed upon. Senate Bill 290.
Other Significant Laws: Other new laws that may interest REALTORS® include, without limitation, the following:

Landlord Utilities: Requires certain utility companies to notify residential tenants of landlord's past due accounts and upcoming shutoffs, and allows tenants to begin service in their own names and deduct payment from rent (Senate Bill 120).

Mobilehome Parks: Prohibits management from requiring a homeowner to use a specific broker or dealer when replacing a mobilehome or manufactured home on a space in a mobilehome park (Senate Bill 804).

Swimming Pools: Requires anti-entrapment devices for owners of apartment buildings, condominium complexes, and others, including the filing of compliance statements (Assembly Bill 1020).

Mechanic's Liens: Provides new procedures, including service of a Notice of Mechanic's Lien to the owner and mandatory recording of a lis pendens when enforcing a mechanic's lien (Assembly Bill 457).

Low Water-Using Plants: Renders unenforceable any HOA provision prohibiting landscaping with water-efficient plants in common interest developments (Assembly Bill 1061).

Reverse Mortgages: Provides new disclosure and other requirements under the Reverse Mortgage Elder Protection Act (Assembly Bill 329).

Disposal of Records: Shields from liability businesses that dispose of abandoned records containing personal information by shredding or erasing, and gives a legal presumption that a tenant owns records remaining on the premises after tenancy termination (Assembly Bill 1094).

Plumbing Fixtures: Provides new disclosure and other requirements for water-conserving plumbing fixtures effective on or after January 1, 2014 (Senate Bill 407).

Thanks Arnold

I have been involved in home loans in Van Nuys, The San Fernando Valley and most recently Hemet and San Jacinto for 20 years. I have seen up and down markets and I never fail to end up scratching my head when it comes to political action within the industry. Why is it that law makers find it neccessary to change the laws after the fact. California has always had stringent licensing guidelines and now we get a new set. We also now penalize our borrowers by no longer allowing them access to every loan program that might be available. Quite frankly I believe that the path to a recovery is more lending not less. Arnold came in as a Republican but has been a turncoat almost from the beggining. I have attached a link to the bills that he signed in to law today.

I wonder how much of our cash was used to debate a program that no longer exists. We are no longer allowed to offer Negative Amortization Loans in California. It's funny but I have not seen one available in quite sometime. I don't think they will be coming back very soon but one never knows. The reality is that the market place eliminated the program. Now if the market happens to find a way to bring it back we are out. Of course we can spend some more money to rescind the law then. We will also be spending money on testing mortgage originators (licensing is a good thing that we already do well) and then hiring a new enforcement crowd. Oh well, I guess that is what we get for being responsible for the current financial condition. Oh, wait a minute maybe it was not us maybe it was the multi-billion dollar companies that we bailed out even though they were responsible for selling the CDOs



http://www.latimes.com/business/la-fi-mortgage13-2009oct13,0,6365006.story

4.5 mortgage rates

Ok so I've recieved some phone calls about the fed and rates. My clients that are at 6 and above are ready to refinance and seem very in to what they see on TV. This is what I've explained to them lately.

The Fed does not matter when it comes to mortgage rates. What matters is who is buying the coupons and right now it's you and I. Simply put the whole mortgage market has come down to 3 players. Fannie, Freddie and FHA. The first two are currently owned by us.

We basically are there without the help of the fed. I can quote 4.875 today at a cost to the borrower. Most of my clients are familiar with pricing because I go to great lengths to make sure they understand how much I make for assisting them with the process of getting a Mortgage Loan. I always find it rewarding for them to understand why they should pay the point and get that rate down. Of course when appropriate I will guide them the other way.

One of the things that occured when the fed funds rate was low, was the borrowing of money by certain companies that lent that money out at much higher rates based on high risk. We called that sub-prime lending. I don't see it coming back soon. Right now credit is tight and Fannie and Freddie are not helping by charging a premium for lower fico scores. Hopefully they will loosen up a bit and we can go back to helping those that are not postal workers or public school teachers to get a loan.

The Ultimate Solution

Happy Thanksgiving from Sylmar, Van Nuys, The San Fernando Valley and the State of California. We are still lending, home loans, loan modifications, mortgages in Sylmar, Van Nuys, The San Fernando Valley and the State of California.

Well this has been an interesting year to say the least. I have been watching the Government reaction to the credit squeeze and I just can't understand why we just keep giving big bucks to the corporate structure. It seems like the correct action to take but I wonder if they might go a different way.

I mention this because I've spent most of the last few months realigning myself to work hard for REO business. I understand the business and I am exclusively working with Realtors that sell and list REOs. The grapevine says that we are about to have a big slowdown. Basically the banks are not foreclosing due to the fact that FNMA and FMAC have decided on a moratorium until January 9, 2009. It takes about 3 weeks or so from a bank getting a property to the property getting on to the market. With no new activity we can expect a cleaning of the pipeline and then we hold.

So, what might help? I hate the idea but we really need the economy to get out from under the housing collapse. I believe that all can be healed if housing prices will stabilize and increase. Just this year I have worked in an area where the average month depreciation is around 3%. That's monthly not annually. I think the Gov. should stop bailing out the guys that bought the secondary market paper. I think if the tax payers are paying for it that we should go direct to the source. Bail out the individual homeowner.

Guess what, we made mistakes. Some people got loans they should not have. Some of it was created by the brokers, some by the lenders, much by the greedy homeowner who bit off more that they can chew. Whatever the reason, it no longer matters. The theory is simple. Line up all borrowers and modify all the loans. Many people suggest that there would be no incentive for those that are paying to pay. Well there is not now. I know several people that have made a conscious choice to not pay so that they can get a modification. What if we modify all the notes to current value and set a base rate? It hurts but only once and the dollar loss is spread across all instead of the tax payers giving it to the bank and trying to regulate what they do with it.

In the end I believe that the market would be stabalized. Some will still not make it. That's ok. We can use the traditional foreclosure method and keep moving. Thousands will get relief and we can say that the bottom is here. So far we have spent over a Trillion in bail out and as far as I know none have really gotten relief. The new rules are hard to qualify for even if the bank is willing to modify. Lets just take it right to the people. It's radical and I firmly believe it's coming.

Get Green

Even while doing loans in Sylmar and Van Nuys and working for First Time homebuyers in California, we try to be green.

There is an ongoing need to conserve energy and reduce waste. Many people are starting to make greener choices, do whats best for the environment and lessen their impact on the earth. The common phrase is Go Green and there are both very simple and inexpensive steps we can all take that will add up in a big way.

While doing loans from Sylmar CA to Van Nuys and all the San Fernando Valley in the City of Los Angeles, Bring your own reusable shopping bags to the grocery store. Plastic and paper bags both use a lot of energy to produce and end up as litter. Stash some canvas bags in your car.


Ditch the Plastic Bottles and replace with a reusable water bottle and place your current bottles in a recycle bin. Billions of plastic water bottles end up in our landfills every year. Most of us already have filtered water available on our fridge, a water-filter pitcher such as Brita or an in-sink filter. If we all use what weve already paid for, that would be a big win for the environment.


Change your light bulbs to Compact Fluorescent Light bulbs or CFLs. They last up to 10 times longer than regular light bulbs and although they may be more expensive they will help reduce your energy bills. Remember to turn off lights in rooms that are not in use.


Buy a package of recycled napkins. If every household purchased one package of 100 percent recycled napkins, we would save 1 million trees. Even more trees would be saved if you bought recycled paper towels and tissues.


Buy food that is grown locally. It has been determined most of our food travels an average of 1,500 miles before it ends up on our tables. Local food is fresher and tastes better than food shipped long distances. Buying local food keeps your dollars circulating in your community. A good place to start is looking for a Farmers Market in your area.


Give your car a tune up. Speeding, fast accelerations, and hard braking waste gas. Maintaining your car saves it. Tune up your car according to your owners-manual schedule and raise your cars fuel efficiency anywhere from 4 to 40 percent. Maintaining the correct tire pressure not only increases gasoline mileage, but also helps the car handle and ride better. Correct tire pressure also increases the life of the tire. All tires have the correct tire pressure imprinted on the tire.


While doing loans from Sylmar CA to Van Nuys and all the San Fernando Valley in the City of Los Angeles, Think first, and learn a new way of living that helps sustain the worlds environment. By changing our daily habits we can all Go Green with ease.

Fraud And Identity Theft Are Big Business

While doing loans in Sylmar and Van Nuys and California we attempt to educate where we can. Here are my thoughts regarding ongoing identity theft in Sylmar and Van Nuys.

Fraud in Sylmar, Van Nuys and California is increasing at an alarming rate and new ways to separate you from your money are being invented every day. Identity theft is big business. Millions of Americans have been the victim of some form of identity theft. You are the first line of defense in keeping your personal information secure. There are steps you can take to minimize the chances that your personal information will fall into the wrong hands:

Buy a shredder. They are inexpensive and shred items with your personal information. That includes charge receipts, bank statements, expired credit cards, credit offers, etc. Identify thieves have been known to comb through trash looking for just such information. We shred everything while doing loans in Sylmar, Van Nuys and California.

Do not carry your Social Security card, birth certificate or passport with you.

Don't give your credit card or bank account number over the phone, through the mail, or over the Internet unless you confirm you are dealing with an actual representative of a legitimate business.

Get the receipts from your credit card transactions and check your credit card statements for unfamiliar transactions.

Shield the keypad when entering your PIN.


With the expansion of the Internet, your personal information is more accessible than ever and the number of "phishing" scams sent out to consumers is continuing to increase. Phishing lures unsuspecting Internet users to a fraudulent website by using authentic-looking emails in an attempt to steal passwords, financial and/or personal information. Check to see that the business is legitimate and you can conduct transactions on a secure website. You can identify a secure website by the address. It should begin with the https; the s means the site is secure. Be extra careful about what you reveal about yourself when you are online. You never know who is watching. Identity thieves could be cruising these sites for clues to piece together just what they need to steal your identity. If identity theft should happen to you, do the following immediately:

Cancel all credit/debit/ATM cards.

File a police report in the jurisdiction in which your identification was stolen.

Place a fraud alert by calling the three credit reporting bureaus so that you will be contacted before any new credit is authorized. The three bureaus are; Equifax, (800) 797-7033 , Experian, (800) 583-4080 and TransUnion, (800) 916-8800 .

For further information regarding any type of fraud you can visit the Fraud Center website at www.fraud.org.

Keep your personal information private. Taking steps will help protect you and keep fraud and identity theft an unlikely possibility.

Will Republicans and Democrats ever be on the same page?

Last week the House passed legislation that aims to refinance troubled mortgages and increase demand among first-time homebuyers. The President has threatened a veto, and the position of the Senate is unclear. http://www.house.gov/apps/list/press/financialsvcs_dem/press050808.shtml But, regardless, at some point federal intervention still appears likely. The policy differences aren't as large as rhetoric implies, and enactment of some type of legislation could slightly help the decline in home prices by reducing the number of foreclosures and increasing demand among first-time homebuyers - at a cost to taxpayers.

There is no agreement on the bill yet as several Republicans view the plans as a bailout for lenders, speculators and irresponsible homeowners. The program involves giving struggling homeowners a new mortgage backed by the FHA. The Democrats believe that it would cost much less compared to the potential government exposure with the Fed's guarantee in the Bear Stearns case, and as mentioned above the president may veto it. On top of Congressional differences, lies the threat of a White House veto of the bill, asking the question, "Why should the taxpayer, through the program, provide a guarantee of principal if lenders agree to reduce the principal of a borrower's current mortgage?" This is a volunteer program by which a mortgage company would be required to write-down the value of a delinquent loan by 15% of the home's current appraised value for borrowers who are 60 days late on their mortgage payments. The bill specifically excludes investors and those that lied about their income on the loan application. The bill also proposes an overhaul of Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks as well as bringing the FHA into the 21st century.

Stay tuned as soon as I know more...you"ll know more!