The new California short sale law
More info this new CA short sale law can be read here
580e.
(a) (1) No deficiency shall be owed or collected, and no deficiency judgment shall be requested or rendered for any deficiency upon a note secured solely by a deed of trust or mortgage for a dwelling of not more than four units, in any case in which the trustor or mortgagor sells the dwelling for a sale price less than the remaining amount of the indebtedness outstanding at the time of sale, in accordance with the written consent of the holder of the deed of trust or mortgage, provided that both of the following have occurred:
(A) Title has been voluntarily transferred to a buyer by grant deed or by other document of conveyance that has been recorded in the county where all or part of the real property is located.
(B) The proceeds of the sale have been tendered to the mortgagee, beneficiary, or the agent of the mortgagee or beneficiary, in accordance with the parties' agreement.
(2) In circumstances not described in paragraph (1), when a note is not secured solely by a deed of trust or mortgage for a dwelling of not more than four units, no judgment shall be rendered for any deficiency upon a note secured by a deed of trust or mortgage for a dwelling of not more than four units, if the trustor or mortgagor sells the dwelling for a sale price less than the remaining amount of the indebtedness outstanding at the time of sale, in accordance with the written consent of the holder of the deed of trust or mortgage.
Following the sale, in accordance with the holder's written consent, the voluntary transfer of title to a buyer by grant deed or by other document of conveyance recorded in the county where all or part of the real property is located, and the tender to the mortgagee, beneficiary, or the agent of the mortgagee or beneficiary of the sale proceeds, as agreed, the rights, remedies, and obligations of any holder, beneficiary, mortgagee, trustor, mortgagor, obligor, obligee, or guarantor of the note, deed of trust, or mortgage, and with respect to any other property that secures the note, shall be treated and determined as if th
Sunday, July 31, 2011
old ccp 580, CA short sale law
(a) No judgment shall be rendered for any deficiency under a
note secured by a first deed of trust or first mortgage for a
dwelling of not more than four 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.
Written consent of the holder of the first deed of trust or first
mortgage to that sale shall obligate that 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.
(b) If the trustor or mortgagor commits either fraud with respect
to the sale of, or waste with respect to, the real property that
secures the first deed of trust or first mortgage, this section shall
not limit the ability of the holder of the first deed of trust or
first mortgage to seek damages and use existing rights and remedies
against the trustor or mortgagor or any third party for fraud or
waste.
(c) This section shall not apply if the trustor or mortgagor is a
corporation or political subdivision of the state.
note secured by a first deed of trust or first mortgage for a
dwelling of not more than four 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.
Written consent of the holder of the first deed of trust or first
mortgage to that sale shall obligate that 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.
(b) If the trustor or mortgagor commits either fraud with respect
to the sale of, or waste with respect to, the real property that
secures the first deed of trust or first mortgage, this section shall
not limit the ability of the holder of the first deed of trust or
first mortgage to seek damages and use existing rights and remedies
against the trustor or mortgagor or any third party for fraud or
waste.
(c) This section shall not apply if the trustor or mortgagor is a
corporation or political subdivision of the state.
Sunday, March 29, 2009
580b and construction loan
Plaintiffs are the owners in fee of certain real property upon which they executed a deed of trust, in favor of defendant Bank of America as beneficiary, to secure payment of a construction loan made by the bank to them for the purpose of financing the erection of a residence on the property. The residence was built and completed with the proceeds of the construction loan, but was demolished as the result of a natural disaster. In this action, thereafter commenced against the bank and the trustee under the deed of trust (defendant Continental Auxiliary Company), plaintiffs sought a declaratory judgment to the effect that Code of Civil Procedure section [37 Cal.App.3d 433] 580b barred the bank from recovering a deficiency judgment in the event of their default and a Judicial foreclosure and sale under the deed of trust. 2
After a nonjury trial, the court found in favor of plaitiffs and entered a declaratory judgment substantially as prayed. Defendants appeal from the declaratory judgment.
Prunty v. Bank of America, 112 Cal.Rptr. 370, 37 Cal.App.3d 430 (Cal.App. 1 Dist., 1974)
After a nonjury trial, the court found in favor of plaitiffs and entered a declaratory judgment substantially as prayed. Defendants appeal from the declaratory judgment.
Prunty v. Bank of America, 112 Cal.Rptr. 370, 37 Cal.App.3d 430 (Cal.App. 1 Dist., 1974)
Set off under California's one action rule
this case may be interesting.
Note that bank of America did take money out of its borrowers account.
However, it looks like that could be a pretty expensive set off in this case.
Our Supreme Court, however, has long since put this issue to rest. McKean v. German-Am. Savings Bank (1897) 118 Cal. 334, 50 P. 656 held a bank setoff against a general deposit account 5 is an "action" within the meaning of section 22 for the purpose of applying the one-form-of-action rule of section 726. (Id., at pp. 340-341, 50 P. 656, accord, Gnarini v. Swiss American Bank (1912) 162 Cal. 181, 184, 121 P. 726; Woodruff v. California Republic Bank (1977) 75 Cal.App.3d 108, 110, 141 Cal.Rptr. 915.) It is now established law that where "the obligation of the depositor is represented by a note secured by a mortgage [or deed of trust], C.C.P. 726 prevents the bank from satisfying it by exercising its setoff; it must exhaust the security. [Citations.]" (2 Witkin, Summary of Cal. Law (8th ed. 1973) Negotiable Instruments, § 129, p. 1387.) "Where a bank has security for the indebtedness of a depositor, the reason for the rule which gives a bank the right to appropriate deposits for the payment of the depositor's matured indebtedness does not apply, and the [152 Cal.App.3d 772] ordinary presumption that it is the depositor's intent to have his indebtedness discharged from his deposit does not exist. The rule is, therefore, that a mortgagee [or beneficiary] bank must first look to the mortgaged [or encumbered] premises as constituting a primary fund out of which the debt secured by the mortgage [or deed of trust] must be paid, and that mortgage [or deed of trust] security must be exhausted before it can apply in reduction or cancellation of the debt any money on deposit with it belonging to the debtor." (9 Cal.Jur.3d, Banks and Other Financial Institutions, § 132, pp. 346-347, fns. omitted.)
Bank of America v. Daily, 152 Cal.App.3d 767, 199 Cal.Rptr. 557 (Cal.App. 4 Dist., 1984)
Note that bank of America did take money out of its borrowers account.
However, it looks like that could be a pretty expensive set off in this case.
Our Supreme Court, however, has long since put this issue to rest. McKean v. German-Am. Savings Bank (1897) 118 Cal. 334, 50 P. 656 held a bank setoff against a general deposit account 5 is an "action" within the meaning of section 22 for the purpose of applying the one-form-of-action rule of section 726. (Id., at pp. 340-341, 50 P. 656, accord, Gnarini v. Swiss American Bank (1912) 162 Cal. 181, 184, 121 P. 726; Woodruff v. California Republic Bank (1977) 75 Cal.App.3d 108, 110, 141 Cal.Rptr. 915.) It is now established law that where "the obligation of the depositor is represented by a note secured by a mortgage [or deed of trust], C.C.P. 726 prevents the bank from satisfying it by exercising its setoff; it must exhaust the security. [Citations.]" (2 Witkin, Summary of Cal. Law (8th ed. 1973) Negotiable Instruments, § 129, p. 1387.) "Where a bank has security for the indebtedness of a depositor, the reason for the rule which gives a bank the right to appropriate deposits for the payment of the depositor's matured indebtedness does not apply, and the [152 Cal.App.3d 772] ordinary presumption that it is the depositor's intent to have his indebtedness discharged from his deposit does not exist. The rule is, therefore, that a mortgagee [or beneficiary] bank must first look to the mortgaged [or encumbered] premises as constituting a primary fund out of which the debt secured by the mortgage [or deed of trust] must be paid, and that mortgage [or deed of trust] security must be exhausted before it can apply in reduction or cancellation of the debt any money on deposit with it belonging to the debtor." (9 Cal.Jur.3d, Banks and Other Financial Institutions, § 132, pp. 346-347, fns. omitted.)
Bank of America v. Daily, 152 Cal.App.3d 767, 199 Cal.Rptr. 557 (Cal.App. 4 Dist., 1984)
Sunday, January 4, 2009
California Foreclosure Consultant law
California Foreclosure Consultant law
People doing loan modifications need to be familiar with this law.
For instance even if you have a retainer agreement approved by the California Department of Real Estate, a non lawyer is not allowed to take money up front from a homeowner after a Notice of Default is filed.
CIVIL CODE
SECTION 2945-2945.11
2945. (a) The Legislature finds and declares that homeowners whose
residences are in foreclosure are subject to fraud, deception,
harassment, and unfair dealing by foreclosure consultants from the
time a Notice of Default is recorded pursuant to Section 2924 until
the time surplus funds from any foreclosure sale are distributed to
the homeowner or his or her successor. Foreclosure consultants
represent that they can assist homeowners who have defaulted on
obligations secured by their residences. These foreclosure
consultants, however, often charge high fees, the payment of which is
often secured by a deed of trust on the residence to be saved, and
perform no service or essentially a worthless service. Homeowners,
relying on the foreclosure consultants' promises of help, take no
other action, are diverted from lawful businesses which could render
beneficial services, and often lose their homes, sometimes to the
foreclosure consultants who purchase homes at a fraction of their
value before the sale. Vulnerable homeowners are increasingly
relying on the services of foreclosure consultants who advise the
homeowner that the foreclosure consultant can obtain the remaining
funds from the foreclosure sale if the homeowner executes an
assignment of the surplus, a deed, or a power of attorney in favor of
the foreclosure consultant. This results in the homeowner paying an
exorbitant fee for a service when the homeowner could have obtained
the remaining funds from the trustee's sale from the trustee directly
for minimal cost if the homeowner had consulted legal counsel or had
sufficient time to receive notices from the trustee pursuant to
Section 2924j regarding how and where to make a claim for excess
proceeds.
(b) The Legislature further finds and declares that foreclosure
consultants have a significant impact on the economy of this state
and on the welfare of its citizens.
(c) The intent and purposes of this article are the following:
(1) To require that foreclosure consultant service agreements be
expressed in writing; to safeguard the public against deceit and
financial hardship; to permit rescission of foreclosure consultation
contracts; to prohibit representations that tend to mislead; and to
encourage fair dealing in the rendition of foreclosure services.
(2) The provisions of this article shall be liberally construed to
effectuate this intent and to achieve these purposes.
2945.1. The following definitions apply to this chapter:
(a) "Foreclosure consultant" means any person who makes any
solicitation, representation, or offer to any owner to perform for
compensation or who, for compensation, performs any service which the
person in any manner represents will in any manner do any of the
following:
(1) Stop or postpone the foreclosure sale.
(2) Obtain any forbearance from any beneficiary or mortgagee.
(3) Assist the owner to exercise the right of reinstatement
provided in Section 2924c.
(4) Obtain any extension of the period within which the owner may
reinstate his or her obligation.
(5) Obtain any waiver of an acceleration clause contained in any
promissory note or contract secured by a deed of trust or mortgage on
a residence in foreclosure or contained that deed of trust or
mortgage.
(6) Assist the owner to obtain a loan or advance of funds.
(7) Avoid or ameliorate the impairment of the owner's credit
resulting from the recording of a notice of default or the conduct of
a foreclosure sale.
(8) Save the owner's residence from foreclosure.
(9) Assist the owner in obtaining from the beneficiary, mortgagee,
trustee under a power of sale, or counsel for the beneficiary,
mortgagee, or trustee, the remaining proceeds from the foreclosure
sale of the owner's residence.
(b) A foreclosure consultant does not include any of the
following:
(1) A person licensed to practice law in this state when the
person renders service in the course of his or her practice as an
attorney at law.
(2) A person licensed under Division 3 (commencing with Section
12000) of the Financial Code when the person is acting as a prorater
as defined therein.
(3) A person licensed under Part 1 (commencing with Section 10000)
of Division 4 of the Business and Professions Code when the person
makes a direct loan or when the person (A) engages in acts whose
performance requires licensure under that part, (B) is entitled to
compensation for the acts performed in connection with the sale of a
residence in foreclosure or with the arranging of a loan secured by a
lien on a residence in foreclosure, (C) does not claim, demand,
charge, collect, or receive any compensation until the acts have been
performed or cannot be performed because of an owner's failure to
make the disclosures set forth in Section 10243 of the Business and
Professions Code or failure to accept an offer from a purchaser or
lender ready, willing, and able to purchase a residence in
foreclosure or make a loan secured by a lien on a residence in
foreclosure on the terms prescribed in a listing or a loan agreement,
and (D) does not acquire any interest in a residence in foreclosure
directly from an owner for whom the person agreed to perform the acts
other than as a trustee or beneficiary under a deed of trust given
to secure the payment of a loan or that compensation. For the
purposes of this paragraph, a "direct loan" means a loan of a real
estate broker's own funds secured by a deed of trust on the residence
in foreclosure, which loan and deed of trust the broker in good
faith attempts to assign to a lender, for an amount at least
sufficient to cure all of the defaults on obligations which are then
subject to a recorded notice of default, provided that, if a
foreclosure sale is conducted with respect to the deed of trust, the
person conducting the foreclosure sale has no interest in the
residence in foreclosure or in the outcome of the sale and is not
owned, controlled, or managed by the lending broker; the lending
broker does not acquire any interest in the residence in foreclosure
directly from the owner other than as a beneficiary under the deed of
trust; and the loan is not made for the purpose or effect of
avoiding or evading the provisions of this article.
(4) A person licensed under Chapter 1 (commencing with Section
5000) of Division 3 of the Business and Professions Code when the
person is acting in any capacity for which the person is licensed
under those provisions.
(5) A person or his or her authorized agent acting under the
express authority or written approval of the Department of Housing
and Urban Development or other department or agency of the United
States or this state to provide services.
(6) A person who holds or is owed an obligation secured by a lien
on any residence in foreclosure when the person performs services in
connection with this obligation or lien.
(7) Any person licensed to make loans pursuant to Division 9
(commencing with Section 22000), 10 (commencing with Section 24000),
or 11 (commencing with Section 26000) of the Financial Code, subject
to the authority of the Commissioner of Corporations to terminate
this exclusion, after notice and hearing, for any person licensed
pursuant to any of those divisions upon a finding that the licensee
is found to have engaged in practices described in subdivision (a) of
Section 2945.
(8) Any person or entity doing business under any law of this
state, or of the United States relating to banks, trust companies,
savings and loan associations, industrial loan companies, pension
trusts, credit unions, insurance companies, or any person or entity
authorized under the laws of this state to conduct a title or escrow
business, or a mortgagee which is a United States Department of
Housing and Urban Development approved mortgagee and any subsidiary
or affiliate of the above, and any agent or employee of the above
while engaged in the business of these persons or entities.
(9) A person licensed as a residential mortgage lender or servicer
pursuant to Division 20 (commencing with Section 50000) of the
Financial Code, when acting under the authority of that license.
(c) Notwithstanding subdivision (b), any person who provides
services pursuant to paragraph (9) of subdivision (a) is a
foreclosure consultant unless he or she is the owner's attorney.
(d) "Person" means any individual, partnership, corporation,
limited liability company, association or other group, however
organized.
(e) "Service" means and includes, but is not limited to, any of
the following:
(1) Debt, budget, or financial counseling of any type.
(2) Receiving money for the purpose of distributing it to
creditors in payment or partial payment of any obligation secured by
a lien on a residence in foreclosure.
(3) Contacting creditors on behalf of an owner of a residence in
foreclosure.
(4) Arranging or attempting to arrange for an extension of the
period within which the owner of a residence in foreclosure may cure
his or her default and reinstate his or her obligation pursuant to
Section 2924c.
(5) Arranging or attempting to arrange for any delay or
postponement of the time of sale of the residence in foreclosure.
(6) Advising the filing of any document or assisting in any manner
in the preparation of any document for filing with any bankruptcy
court.
(7) Giving any advice, explanation or instruction to an owner of a
residence in foreclosure which in any manner relates to the cure of
a default in or the reinstatement of an obligation secured by a lien
on the residence in foreclosure, the full satisfaction of that
obligation, or the postponement or avoidance of a sale of a residence
in foreclosure pursuant to a power of sale contained in any deed of
trust.
(8) Arranging or attempting to arrange for the payment by the
beneficiary, mortgagee, trustee under a power of sale, or counsel for
the beneficiary, mortgagee, or trustee, of the remaining proceeds to
which the owner is entitled from a foreclosure sale of the owner's
residence in foreclosure. Arranging or attempting to arrange for the
payment shall include any arrangement where the owner transfers or
assigns the right to the remaining proceeds of a foreclosure sale to
the foreclosure consultant or any person designated by the
foreclosure consultant, whether that transfer is effected by
agreement, assignment, deed, power of attorney, or assignment of
claim.
(f) "Residence in foreclosure" means a residence in foreclosure as
defined in Section 1695.1.
(g) "Owner" means a property owner as defined in Section 1695.1.
(h) "Contract" means any agreement, or any term thereof, between a
foreclosure consultant and an owner for the rendition of any service
as defined in subdivision (e).
2945.2. (a) In addition to any other right under law to rescind a
contract, an owner has the right to cancel such a contract until
midnight of the third "business day" as defined in subdivision (e) of
Section 1689.5 after the day on which the owner signs a contract
which complies with Section 2945.3.
(b) Cancellation occurs when the owner gives written notice of
cancellation to the foreclosure consultant at the address specified
in the contract.
(c) Notice of cancellation, if given by mail, is effective when
deposited in the mail properly addressed with postage prepaid.
(d) Notice of cancellation given by the owner need not take the
particular form as provided with the contract and, however expressed,
is effective if it indicates the intention of the owner not to be
bound by the contract.
2945.2. (a) In addition to any other right under law to rescind a
contract, an owner has the right to cancel such a contract until
midnight of the fifth business day, as defined in subdivision (e) of
Section 1689.5, after the day on which the owner signs a contract
that complies with Section 2945.3.
(b) Cancellation occurs when the owner gives written notice of
cancellation to the foreclosure consultant by mail at the address
specified in the contract, or by facsimile or electronic mail at the
number or address identified in the contract.
(c) Notice of cancellation, if given by mail, is effective when
deposited in the mail properly addressed with postage prepaid. If
given by facsimile or electronic mail, notice of cancellation is
effective when successfully transmitted.
(d) Notice of cancellation given by the owner need not take the
particular form as provided with the contract and, however expressed,
is effective if it indicates the intention of the owner not to be
bound by the contract.
2945.3. (a) Every contract shall be in writing and shall fully
disclose the exact nature of the foreclosure consultant's services
and the total amount and terms of compensation.
(b) The following notice, printed in at least 14-point boldface
type and completed with the name of the foreclosure consultant, shall
be printed immediately above the statement required by subdivision
(c):
"NOTICE REQUIRED BY CALIFORNIA LAW
_____________________________ or anyone working
(Name)
for him or her CANNOT:
(1) Take any money from you or ask you for money
until ________________________________________ has
(Name)
completely finished doing everything he or she
said he or she would do; and
(2) Ask you to sign or have you sign any lien,
deed of trust, or deed."
(c) The contract shall be written in the same language as
principally used by the foreclosure consultant to describe his or her
services or to negotiate the contract; shall be dated and signed by
the owner; and shall contain in immediate proximity to the space
reserved for the owner's signature a conspicuous statement in a size
equal to at least 10-point boldface type, as follows: "You, the
owner, may cancel this transaction at any time prior to midnight of
the third business day after the date of this transaction. See the
attached notice of cancellation form for an explanation of this
right."
(d) The contract shall contain on the first page, in a type size
no smaller than that generally used in the body of the document, each
of the following:
(1) The name and address of the foreclosure consultant to which
the notice or cancellation is to be mailed.
(2) The date the owner signed the contract.
(e) The contract shall be accompanied by a completed form in
duplicate, captioned "notice of cancellation," which shall be
attached to the contract, shall be easily detachable, and shall
contain in type of at least 10-point the following statement written
in the same language as used in the contract:
"NOTICE OF CANCELLATION
_____________________________________________
(Enter date of transaction) (Date)
You may cancel this transaction, without any
penalty or obligation, within three business days
from the above date.
To cancel this transaction, mail or deliver a
signed and dated copy of this cancellation notice,
or any other written notice, or send a telegram to
__________________________________________________
(Name of foreclosure consultant)
at
__________________________________________________
(Address of foreclosure consultant's place of
business)
NOT LATER THAN MIDNIGHT OF _______________________.
(Date)
I hereby cancel this transaction
__________________________________________________.
(Date)
________________________________________________"
(Owner's signature)
(f) The foreclosure consultant shall provide the owner with a copy
of the contract and the attached notice of cancellation.
(g) Until the foreclosure consultant has complied with this
section, the owner may cancel the contract.
(h) After the 65-day period following the foreclosure sale, the
foreclosure consultant may enter into a contract to assist the owner
in arranging, or arrange for the owner, the release of funds
remaining after the foreclosure sale ("surplus funds") from the
beneficiary, mortgagee, trustee under a power of sale, or counsel for
the beneficiary, mortgagee, or trustee. However, prior to entering
into that contract, the foreclosure consultant shall do all of the
following:
(1) Prepare and deliver to the owner a notice in 14-point boldface
type and substantially in the form set forth below.
(2) Obtain a receipt executed by each owner and acknowledged
before a notary public, acknowledging a copy of the notice set forth
below.
"NOTICE TO OWNER
____________________ ________________________
(Date of Contract) (Date signed by Owner)
____________________________
(Date of Foreclosure Sale)
You may be entitled to receive all or a portion
of the surplus funds generated from the
foreclosure sale of your real property located
at: __________________________, California on
_________________________without paying any fees
or costs of any kind to a third party. You
should check directly with the trustee or
beneficiary who conducted the foreclosure sale
of your property to determine the name, address,
and telephone number of the party to whom you
can direct inquiries regarding filing a claim
for surplus funds without paying a fee to a
third party. No person or entity may require you
to enter into any agreement requiring the
payment of a fee to that person or entity in
order to receive the surplus funds from
the foreclosure sale to which you may be
entitled during the 65 days after the date of
the trustee's sale."
2945.3. (a) Every contract shall be in writing and shall fully
disclose the exact nature of the foreclosure consultant's services
and the total amount and terms of compensation.
(b) The following notice, printed in at least 14-point boldface
type and completed with the name of the foreclosure consultant, shall
be printed immediately above the statement required by subdivision
(d):
" NOTICE REQUIRED BY CALIFORNIA LAW
_____________________________________ or anyone
(Name)
working for him or her CANNOT:
(1) Take any money from you or ask you for
money
until _____________________________________ has
(Name)
completely finished doing everything he or she
said he or she would do; and
(2) Ask you to sign or have you sign any lien,
deed of trust, or deed. "
(c) The contract shall be written in the same language as
principally used by the foreclosure consultant to describe his or her
services or to negotiate the contract. In addition, the foreclosure
consultant shall provide the owner, before the owner signs the
contract, with a copy of a completed contract written in any other
language used in any communication between the foreclosure consultant
and the owner and in any language described in subdivision (b) of
Section 1632 and requested by the owner. If English is the language
principally used by the foreclosure consultant to describe the
foreclosure consultant's services or to negotiate the contract, the
foreclosure consultant shall notify the owner orally and in writing
before the owner signs the contract that the owner has the right to
ask for a completed copy of the contract in a language described in
subdivision (b) of Section 1632.
(d) The contract shall be dated and signed by the owner and shall
contain in immediate proximity to the space reserved for the owner's
signature a conspicuous statement in a size equal to at least
10-point boldface type, as follows: "You, the owner, may cancel this
transaction at any time prior to midnight of the fifth business day
after the date of this transaction. See the attached notice of
cancellation form for an explanation of this right."
(e) The contract shall contain on the first page, in a type size
no smaller than that generally used in the body of the document, each
of the following:
(1) The name, mailing address, electronic mail address, and
facsimile number of the foreclosure consultant to which the notice of
cancellation is to be mailed.
(2) The date the owner signed the contract.
(f) The contract shall be accompanied by a completed form in
duplicate, captioned "notice of cancellation," which shall be
attached to the contract, shall be easily detachable, and shall
contain in type of at least 10-point the following statement written
in the same language as used in the contract:
" NOTICE OF CANCELLATION
___________________________________________
(Enter date of transaction) (Date)
You may cancel this transaction, without any penalty
or
obligation, within five business days from the above
date.
To cancel this transaction, mail or deliver a signed
and dated copy of this cancellation notice, or any
other written notice, or send a telegram,
to __________________________________________________
(Name of foreclosure consultant)
at __________________________________________________
(Address of foreclosure consultant's place of
business)
You may also cancel by sending a facsimile (fax) of
a signed and dated copy of this cancellation notice,
or any other written notice, to the following number:
_____________________________________________________
(Facsimile telephone number of foreclosure
consultant's place of business)
You may also cancel by sending an e-mail canceling
this transaction to the following e-mail address:
_____________________________________________________
(E-mail address of foreclosure consultant's
business)
I hereby cancel this transaction
____________________________________________________.
(Date)
_________________________ "
(Owner's signature)
(g) The foreclosure consultant shall provide the owner with a copy
of the contract and the attached notice of cancellation.
(h) Until the foreclosure consultant has complied with this
section, the owner may cancel the contract.
2945.4. It shall be a violation for a foreclosure consultant to:
(a) Claim, demand, charge, collect, or receive any compensation
until after the foreclosure consultant has fully performed each and
every service the foreclosure consultant contracted to perform or
represented that he or she would perform.
(b) Claim, demand, charge, collect, or receive any fee, interest,
or any other compensation for any reason which exceeds 10 percent per
annum of the amount of any loan which the foreclosure consultant may
make to the owner.
(c) Take any wage assignment, any lien of any type on real or
personal property, or other security to secure the payment of
compensation. That security shall be void and unenforceable.
(d) Receive any consideration from any third party in connection
with services rendered to an owner unless that consideration is fully
disclosed to the owner.
(e) Acquire any interest in a residence in foreclosure from an
owner with whom the foreclosure consultant has contracted. Any
interest acquired in violation of this subdivision shall be voidable,
provided that nothing herein shall affect or defeat the title of a
bona fide purchaser or encumbrancer for value and without notice of a
violation of this article. Knowledge that the property was
"residential real property in foreclosure," does not constitute
notice of a violation of this article. This subdivision may not be
deemed to abrogate any duty of inquiry which exists as to rights or
interests of persons in possession of residential real property in
foreclosure.
(f) Take any power of attorney from an owner for any purpose,
except to inspect documents as provided by law.
(g) Induce or attempt to induce any owner to enter into a contract
which does not comply in all respects with Sections 2945.2 and
2945.3.
(h) Enter 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, whether the agreement involves
direct payment, assignment, deed, power of attorney, or assignment
of claim from an owner to the foreclosure consultant or any person
designated by the foreclosure consultant.
2945.4. It shall be a violation for a foreclosure consultant to:
(a) Claim, demand, charge, collect, or receive any compensation
until after the foreclosure consultant has fully performed each and
every service the foreclosure consultant contracted to perform or
represented that he or she would perform.
(b) Claim, demand, charge, collect, or receive any fee, interest,
or any other compensation for any reason which exceeds 10 percent per
annum of the amount of any loan which the foreclosure consultant may
make to the owner.
(c) Take any wage assignment, any lien of any type on real or
personal property, or other security to secure the payment of
compensation. That security shall be void and unenforceable.
(d) Receive any consideration from any third party in connection
with services rendered to an owner unless that consideration is fully
disclosed to the owner.
(e) Acquire any interest in a residence in foreclosure from an
owner with whom the foreclosure consultant has contracted. Any
interest acquired in violation of this subdivision shall be voidable,
provided that nothing herein shall affect or defeat the title of a
bona fide purchaser or encumbrancer for value and without notice of a
violation of this article. Knowledge that the property was
"residential real property in foreclosure," does not constitute
notice of a violation of this article. This subdivision may not be
deemed to abrogate any duty of inquiry which exists as to rights or
interests of persons in possession of residential real property in
foreclosure.
(f) Take any power of attorney from an owner for any purpose.
(g) Induce or attempt to induce any owner to enter into a contract
which does not comply in all respects with Sections 2945.2 and
2945.3.
(h) Enter into an agreement at any time to assist the owner in
arranging, or arrange for the owner, the release of surplus funds
after the trustee's sale is conducted, whether the agreement involves
direct payment, assignment, deed, power of attorney, assignment of
claim from an owner to the foreclosure consultant or any person
designated by the foreclosure consultant, or any other compensation.
2945.45. (a) Except as provided in subdivision (b) of Section
2945.1, a person shall not take any action specified in subdivision
(a) of Section 2945.1 unless the person satisfies the following
requirements:
(1) The person registers with, and is issued and maintains a
certificate of registration from, the Department of Justice in
accordance with the following requirements:
(A) The person shall submit a completed registration form, along
with applicable fees, to the department. The registration form shall
include the name, address, and telephone number of the foreclosure
consultant, all of the names, addresses, telephone numbers, Internet
Web sites, and e-mail addresses used or proposed to be used in
connection with acting as a foreclosure consultant, a statement that
the person has not been convicted of, or pled nolo contendere to, any
crime involving fraud, misrepresentation, dishonesty, or a violation
of this article, a statement that the person has not been liable
under any civil judgment for fraud, misrepresentation, or violations
of this article or of Section 17200 or 17500 of the Business and
Professions Code, and any additional information required by the
department.
(B) The registration form shall be accompanied by a copy of all
print or electronic advertising and other promotional material, and
scripts of all telephonic or broadcast advertising and other
statements used or proposed to be used in connection with acting as a
foreclosure consultant.
(C) The registration form shall be accompanied by a copy of the
bond required pursuant to paragraph (2).
(D) The person shall file an update of any material change in the
information required by subparagraphs (A) and (B) with the
department.
(E) The person shall pay any fee set by the department to defray
reasonable costs incurred in connection with the department's
responsibilities under this article.
(2) The person obtains and maintains in force a surety bond in the
amount of one hundred thousand dollars ($100,000). The bond shall be
executed by a corporate surety admitted to do business in this
state. The bond shall be made in favor of the State of California for
the benefit of homeowners for damages caused by the foreclosure
consultant's violation of this article or any other provision of law.
A copy of the bond shall be filed with the Secretary of State, with
a copy provided to the department pursuant to subparagraph (C) of
paragraph (1).
(b) The Foreclosure Consultant Regulation Fund is hereby created
in the State Treasury for the deposit of fees submitted to the
Department of Justice pursuant to subparagraph (A) of paragraph (1)
of subdivision (a) for registration as a foreclosure consultant.
Moneys in the fund shall be available, upon appropriation by the
Legislature, for the costs of the department incurred in connection
with the administration of the registration program.
(c) The Department of Justice may refuse to issue, or may revoke,
a certificate of registration because of any misstatement in the
registration form, because the foreclosure consultant has been held
liable for the violation of any law described in subparagraph (A) of
paragraph (1) of subdivision (a), because the foreclosure consultant
has failed to maintain the bond required under paragraph (2) of
subdivision (a), or because of any violation of this chapter.
(d) A person who violates subdivision (a) shall be punished, for
each violation, by a fine of not less than one thousand dollars
($1,000) and not more than twenty-five thousand dollars ($25,000), by
imprisonment in the county jail for not more than one year, or by
both that fine and imprisonment. The imposition of a penalty pursuant
to this subdivision shall not be affected by the availability of any
other relief, remedy, or penalty provided by law, and shall not
affect the availability of any such relief, remedy, or penalty.
2945.5. Any waiver by an owner of the provisions of this article
shall be deemed void and unenforceable as contrary to public policy.
Any attempt by a foreclosure consultant to induce an owner to waive
his rights shall be deemed a violation of this article.
2945.6. (a) An owner may bring an action against a foreclosure
consultant for any violation of this chapter. Judgment shall be
entered for actual damages, reasonable attorneys' fees and costs, and
appropriate equitable relief. The court also may, in its
discretion, award exemplary damages and shall award exemplary damages
equivalent to at least three times the compensation received by the
foreclosure consultant in violation of subdivision (a), (b), or (d)
of Section 2945.4, and three times the owner's actual damages for any
violation of subdivision (c), (e), or (g) of Section 2945.4, in
addition to any other award of actual or exemplary damages.
(b) The rights and remedies provided in subdivision (a) are
cumulative to, and not a limitation of, any other rights and remedies
provided by law. Any action brought pursuant to this section shall
be commenced within four years from the date of the alleged
violation.
2945.7. Any person who commits any violation described in Section
2945.4 shall be punished by a fine of not more than ten thousand
dollars ($10,000), by imprisonment in the county jail for not more
than one year, or in the state prison, or by both that fine and
imprisonment for each violation. These penalties are cumulative to
any other remedies or penalties provided by law.
2945.8. If any provision of this article or the application thereof
to any person or circumstance is held to be unconstitutional, the
remainder of the article and the application of such provision to
other persons and circumstances shall not be affected thereby.
2945.9. (a) A foreclosure consultant is liable for all damages
resulting from any statement made or act committed by the foreclosure
consultant's representative in any manner connected with the
foreclosure consultant's (1) performance, offer to perform, or
contract to perform any of the services described in subdivision (a)
of Section 2945.1, (2) receipt of any consideration or property from
or on behalf of an owner, or (3) performance of any act prohibited by
this article.
(b) "Representative" for the purposes of this section means a
person who in any manner solicits, induces, or causes (1) any owner
to contract with a foreclosure consultant, (2) any owner to pay any
consideration or transfer title to the residence in foreclosure to
the foreclosure consultant, or (3) any member of the owner's family
or household to induce or cause any owner to pay any consideration or
transfer title to the residence in foreclosure to the foreclosure
consultant.
2945.10. (a) Any provision in a contract which attempts or purports
to limit the liability of the foreclosure consultant under Section
2945.9 shall be void and shall at the option of the owner render the
contract void. The foreclosure consultant shall be liable to the
owner for all damages proximately caused by that provision. Any
provision in a contract which attempts or purports to require
arbitration of any dispute arising under this chapter shall be void
at the option of the owner only upon grounds as exist for the
revocation of any contract.
(b) This section shall apply to any contract entered into on or
after January 1, 1991.
2945.11. (a) Any representative, as defined in subdivision (b) of
Section 2945.9, deemed to be the agent or employee or both the agent
and the employee of the foreclosure consultant shall be required to
provide both of the following:
(1) Written proof to the owner that the representative has a valid
current California Real Estate Sales License and that the
representative is bonded by an admitted surety insurer in an amount
equal to at least twice the fair market value of the real property
that is the subject of the contract.
(2) A statement in writing, under penalty of perjury, that the
representative has a valid current California Real Estate Sales
License, that the representative is bonded by an admitted surety
insurer in an amount equal to at least twice the value of the real
property that is the subject of the contract and has complied with
paragraph (1). The written statement required by this paragraph
shall be provided to all parties to the contract prior to the
transfer of any interest in the real property that is the subject of
the contract.
(b) The failure to comply with subdivision (a) shall, at the
option of the owner, render the contract void and the foreclosure
consultant shall be liable to the owner for all damages proximately
caused by the failure to comply.
People doing loan modifications need to be familiar with this law.
For instance even if you have a retainer agreement approved by the California Department of Real Estate, a non lawyer is not allowed to take money up front from a homeowner after a Notice of Default is filed.
CIVIL CODE
SECTION 2945-2945.11
2945. (a) The Legislature finds and declares that homeowners whose
residences are in foreclosure are subject to fraud, deception,
harassment, and unfair dealing by foreclosure consultants from the
time a Notice of Default is recorded pursuant to Section 2924 until
the time surplus funds from any foreclosure sale are distributed to
the homeowner or his or her successor. Foreclosure consultants
represent that they can assist homeowners who have defaulted on
obligations secured by their residences. These foreclosure
consultants, however, often charge high fees, the payment of which is
often secured by a deed of trust on the residence to be saved, and
perform no service or essentially a worthless service. Homeowners,
relying on the foreclosure consultants' promises of help, take no
other action, are diverted from lawful businesses which could render
beneficial services, and often lose their homes, sometimes to the
foreclosure consultants who purchase homes at a fraction of their
value before the sale. Vulnerable homeowners are increasingly
relying on the services of foreclosure consultants who advise the
homeowner that the foreclosure consultant can obtain the remaining
funds from the foreclosure sale if the homeowner executes an
assignment of the surplus, a deed, or a power of attorney in favor of
the foreclosure consultant. This results in the homeowner paying an
exorbitant fee for a service when the homeowner could have obtained
the remaining funds from the trustee's sale from the trustee directly
for minimal cost if the homeowner had consulted legal counsel or had
sufficient time to receive notices from the trustee pursuant to
Section 2924j regarding how and where to make a claim for excess
proceeds.
(b) The Legislature further finds and declares that foreclosure
consultants have a significant impact on the economy of this state
and on the welfare of its citizens.
(c) The intent and purposes of this article are the following:
(1) To require that foreclosure consultant service agreements be
expressed in writing; to safeguard the public against deceit and
financial hardship; to permit rescission of foreclosure consultation
contracts; to prohibit representations that tend to mislead; and to
encourage fair dealing in the rendition of foreclosure services.
(2) The provisions of this article shall be liberally construed to
effectuate this intent and to achieve these purposes.
2945.1. The following definitions apply to this chapter:
(a) "Foreclosure consultant" means any person who makes any
solicitation, representation, or offer to any owner to perform for
compensation or who, for compensation, performs any service which the
person in any manner represents will in any manner do any of the
following:
(1) Stop or postpone the foreclosure sale.
(2) Obtain any forbearance from any beneficiary or mortgagee.
(3) Assist the owner to exercise the right of reinstatement
provided in Section 2924c.
(4) Obtain any extension of the period within which the owner may
reinstate his or her obligation.
(5) Obtain any waiver of an acceleration clause contained in any
promissory note or contract secured by a deed of trust or mortgage on
a residence in foreclosure or contained that deed of trust or
mortgage.
(6) Assist the owner to obtain a loan or advance of funds.
(7) Avoid or ameliorate the impairment of the owner's credit
resulting from the recording of a notice of default or the conduct of
a foreclosure sale.
(8) Save the owner's residence from foreclosure.
(9) Assist the owner in obtaining from the beneficiary, mortgagee,
trustee under a power of sale, or counsel for the beneficiary,
mortgagee, or trustee, the remaining proceeds from the foreclosure
sale of the owner's residence.
(b) A foreclosure consultant does not include any of the
following:
(1) A person licensed to practice law in this state when the
person renders service in the course of his or her practice as an
attorney at law.
(2) A person licensed under Division 3 (commencing with Section
12000) of the Financial Code when the person is acting as a prorater
as defined therein.
(3) A person licensed under Part 1 (commencing with Section 10000)
of Division 4 of the Business and Professions Code when the person
makes a direct loan or when the person (A) engages in acts whose
performance requires licensure under that part, (B) is entitled to
compensation for the acts performed in connection with the sale of a
residence in foreclosure or with the arranging of a loan secured by a
lien on a residence in foreclosure, (C) does not claim, demand,
charge, collect, or receive any compensation until the acts have been
performed or cannot be performed because of an owner's failure to
make the disclosures set forth in Section 10243 of the Business and
Professions Code or failure to accept an offer from a purchaser or
lender ready, willing, and able to purchase a residence in
foreclosure or make a loan secured by a lien on a residence in
foreclosure on the terms prescribed in a listing or a loan agreement,
and (D) does not acquire any interest in a residence in foreclosure
directly from an owner for whom the person agreed to perform the acts
other than as a trustee or beneficiary under a deed of trust given
to secure the payment of a loan or that compensation. For the
purposes of this paragraph, a "direct loan" means a loan of a real
estate broker's own funds secured by a deed of trust on the residence
in foreclosure, which loan and deed of trust the broker in good
faith attempts to assign to a lender, for an amount at least
sufficient to cure all of the defaults on obligations which are then
subject to a recorded notice of default, provided that, if a
foreclosure sale is conducted with respect to the deed of trust, the
person conducting the foreclosure sale has no interest in the
residence in foreclosure or in the outcome of the sale and is not
owned, controlled, or managed by the lending broker; the lending
broker does not acquire any interest in the residence in foreclosure
directly from the owner other than as a beneficiary under the deed of
trust; and the loan is not made for the purpose or effect of
avoiding or evading the provisions of this article.
(4) A person licensed under Chapter 1 (commencing with Section
5000) of Division 3 of the Business and Professions Code when the
person is acting in any capacity for which the person is licensed
under those provisions.
(5) A person or his or her authorized agent acting under the
express authority or written approval of the Department of Housing
and Urban Development or other department or agency of the United
States or this state to provide services.
(6) A person who holds or is owed an obligation secured by a lien
on any residence in foreclosure when the person performs services in
connection with this obligation or lien.
(7) Any person licensed to make loans pursuant to Division 9
(commencing with Section 22000), 10 (commencing with Section 24000),
or 11 (commencing with Section 26000) of the Financial Code, subject
to the authority of the Commissioner of Corporations to terminate
this exclusion, after notice and hearing, for any person licensed
pursuant to any of those divisions upon a finding that the licensee
is found to have engaged in practices described in subdivision (a) of
Section 2945.
(8) Any person or entity doing business under any law of this
state, or of the United States relating to banks, trust companies,
savings and loan associations, industrial loan companies, pension
trusts, credit unions, insurance companies, or any person or entity
authorized under the laws of this state to conduct a title or escrow
business, or a mortgagee which is a United States Department of
Housing and Urban Development approved mortgagee and any subsidiary
or affiliate of the above, and any agent or employee of the above
while engaged in the business of these persons or entities.
(9) A person licensed as a residential mortgage lender or servicer
pursuant to Division 20 (commencing with Section 50000) of the
Financial Code, when acting under the authority of that license.
(c) Notwithstanding subdivision (b), any person who provides
services pursuant to paragraph (9) of subdivision (a) is a
foreclosure consultant unless he or she is the owner's attorney.
(d) "Person" means any individual, partnership, corporation,
limited liability company, association or other group, however
organized.
(e) "Service" means and includes, but is not limited to, any of
the following:
(1) Debt, budget, or financial counseling of any type.
(2) Receiving money for the purpose of distributing it to
creditors in payment or partial payment of any obligation secured by
a lien on a residence in foreclosure.
(3) Contacting creditors on behalf of an owner of a residence in
foreclosure.
(4) Arranging or attempting to arrange for an extension of the
period within which the owner of a residence in foreclosure may cure
his or her default and reinstate his or her obligation pursuant to
Section 2924c.
(5) Arranging or attempting to arrange for any delay or
postponement of the time of sale of the residence in foreclosure.
(6) Advising the filing of any document or assisting in any manner
in the preparation of any document for filing with any bankruptcy
court.
(7) Giving any advice, explanation or instruction to an owner of a
residence in foreclosure which in any manner relates to the cure of
a default in or the reinstatement of an obligation secured by a lien
on the residence in foreclosure, the full satisfaction of that
obligation, or the postponement or avoidance of a sale of a residence
in foreclosure pursuant to a power of sale contained in any deed of
trust.
(8) Arranging or attempting to arrange for the payment by the
beneficiary, mortgagee, trustee under a power of sale, or counsel for
the beneficiary, mortgagee, or trustee, of the remaining proceeds to
which the owner is entitled from a foreclosure sale of the owner's
residence in foreclosure. Arranging or attempting to arrange for the
payment shall include any arrangement where the owner transfers or
assigns the right to the remaining proceeds of a foreclosure sale to
the foreclosure consultant or any person designated by the
foreclosure consultant, whether that transfer is effected by
agreement, assignment, deed, power of attorney, or assignment of
claim.
(f) "Residence in foreclosure" means a residence in foreclosure as
defined in Section 1695.1.
(g) "Owner" means a property owner as defined in Section 1695.1.
(h) "Contract" means any agreement, or any term thereof, between a
foreclosure consultant and an owner for the rendition of any service
as defined in subdivision (e).
2945.2. (a) In addition to any other right under law to rescind a
contract, an owner has the right to cancel such a contract until
midnight of the third "business day" as defined in subdivision (e) of
Section 1689.5 after the day on which the owner signs a contract
which complies with Section 2945.3.
(b) Cancellation occurs when the owner gives written notice of
cancellation to the foreclosure consultant at the address specified
in the contract.
(c) Notice of cancellation, if given by mail, is effective when
deposited in the mail properly addressed with postage prepaid.
(d) Notice of cancellation given by the owner need not take the
particular form as provided with the contract and, however expressed,
is effective if it indicates the intention of the owner not to be
bound by the contract.
2945.2. (a) In addition to any other right under law to rescind a
contract, an owner has the right to cancel such a contract until
midnight of the fifth business day, as defined in subdivision (e) of
Section 1689.5, after the day on which the owner signs a contract
that complies with Section 2945.3.
(b) Cancellation occurs when the owner gives written notice of
cancellation to the foreclosure consultant by mail at the address
specified in the contract, or by facsimile or electronic mail at the
number or address identified in the contract.
(c) Notice of cancellation, if given by mail, is effective when
deposited in the mail properly addressed with postage prepaid. If
given by facsimile or electronic mail, notice of cancellation is
effective when successfully transmitted.
(d) Notice of cancellation given by the owner need not take the
particular form as provided with the contract and, however expressed,
is effective if it indicates the intention of the owner not to be
bound by the contract.
2945.3. (a) Every contract shall be in writing and shall fully
disclose the exact nature of the foreclosure consultant's services
and the total amount and terms of compensation.
(b) The following notice, printed in at least 14-point boldface
type and completed with the name of the foreclosure consultant, shall
be printed immediately above the statement required by subdivision
(c):
"NOTICE REQUIRED BY CALIFORNIA LAW
_____________________________ or anyone working
(Name)
for him or her CANNOT:
(1) Take any money from you or ask you for money
until ________________________________________ has
(Name)
completely finished doing everything he or she
said he or she would do; and
(2) Ask you to sign or have you sign any lien,
deed of trust, or deed."
(c) The contract shall be written in the same language as
principally used by the foreclosure consultant to describe his or her
services or to negotiate the contract; shall be dated and signed by
the owner; and shall contain in immediate proximity to the space
reserved for the owner's signature a conspicuous statement in a size
equal to at least 10-point boldface type, as follows: "You, the
owner, may cancel this transaction at any time prior to midnight of
the third business day after the date of this transaction. See the
attached notice of cancellation form for an explanation of this
right."
(d) The contract shall contain on the first page, in a type size
no smaller than that generally used in the body of the document, each
of the following:
(1) The name and address of the foreclosure consultant to which
the notice or cancellation is to be mailed.
(2) The date the owner signed the contract.
(e) The contract shall be accompanied by a completed form in
duplicate, captioned "notice of cancellation," which shall be
attached to the contract, shall be easily detachable, and shall
contain in type of at least 10-point the following statement written
in the same language as used in the contract:
"NOTICE OF CANCELLATION
_____________________________________________
(Enter date of transaction) (Date)
You may cancel this transaction, without any
penalty or obligation, within three business days
from the above date.
To cancel this transaction, mail or deliver a
signed and dated copy of this cancellation notice,
or any other written notice, or send a telegram to
__________________________________________________
(Name of foreclosure consultant)
at
__________________________________________________
(Address of foreclosure consultant's place of
business)
NOT LATER THAN MIDNIGHT OF _______________________.
(Date)
I hereby cancel this transaction
__________________________________________________.
(Date)
________________________________________________"
(Owner's signature)
(f) The foreclosure consultant shall provide the owner with a copy
of the contract and the attached notice of cancellation.
(g) Until the foreclosure consultant has complied with this
section, the owner may cancel the contract.
(h) After the 65-day period following the foreclosure sale, the
foreclosure consultant may enter into a contract to assist the owner
in arranging, or arrange for the owner, the release of funds
remaining after the foreclosure sale ("surplus funds") from the
beneficiary, mortgagee, trustee under a power of sale, or counsel for
the beneficiary, mortgagee, or trustee. However, prior to entering
into that contract, the foreclosure consultant shall do all of the
following:
(1) Prepare and deliver to the owner a notice in 14-point boldface
type and substantially in the form set forth below.
(2) Obtain a receipt executed by each owner and acknowledged
before a notary public, acknowledging a copy of the notice set forth
below.
"NOTICE TO OWNER
____________________ ________________________
(Date of Contract) (Date signed by Owner)
____________________________
(Date of Foreclosure Sale)
You may be entitled to receive all or a portion
of the surplus funds generated from the
foreclosure sale of your real property located
at: __________________________, California on
_________________________without paying any fees
or costs of any kind to a third party. You
should check directly with the trustee or
beneficiary who conducted the foreclosure sale
of your property to determine the name, address,
and telephone number of the party to whom you
can direct inquiries regarding filing a claim
for surplus funds without paying a fee to a
third party. No person or entity may require you
to enter into any agreement requiring the
payment of a fee to that person or entity in
order to receive the surplus funds from
the foreclosure sale to which you may be
entitled during the 65 days after the date of
the trustee's sale."
2945.3. (a) Every contract shall be in writing and shall fully
disclose the exact nature of the foreclosure consultant's services
and the total amount and terms of compensation.
(b) The following notice, printed in at least 14-point boldface
type and completed with the name of the foreclosure consultant, shall
be printed immediately above the statement required by subdivision
(d):
" NOTICE REQUIRED BY CALIFORNIA LAW
_____________________________________ or anyone
(Name)
working for him or her CANNOT:
(1) Take any money from you or ask you for
money
until _____________________________________ has
(Name)
completely finished doing everything he or she
said he or she would do; and
(2) Ask you to sign or have you sign any lien,
deed of trust, or deed. "
(c) The contract shall be written in the same language as
principally used by the foreclosure consultant to describe his or her
services or to negotiate the contract. In addition, the foreclosure
consultant shall provide the owner, before the owner signs the
contract, with a copy of a completed contract written in any other
language used in any communication between the foreclosure consultant
and the owner and in any language described in subdivision (b) of
Section 1632 and requested by the owner. If English is the language
principally used by the foreclosure consultant to describe the
foreclosure consultant's services or to negotiate the contract, the
foreclosure consultant shall notify the owner orally and in writing
before the owner signs the contract that the owner has the right to
ask for a completed copy of the contract in a language described in
subdivision (b) of Section 1632.
(d) The contract shall be dated and signed by the owner and shall
contain in immediate proximity to the space reserved for the owner's
signature a conspicuous statement in a size equal to at least
10-point boldface type, as follows: "You, the owner, may cancel this
transaction at any time prior to midnight of the fifth business day
after the date of this transaction. See the attached notice of
cancellation form for an explanation of this right."
(e) The contract shall contain on the first page, in a type size
no smaller than that generally used in the body of the document, each
of the following:
(1) The name, mailing address, electronic mail address, and
facsimile number of the foreclosure consultant to which the notice of
cancellation is to be mailed.
(2) The date the owner signed the contract.
(f) The contract shall be accompanied by a completed form in
duplicate, captioned "notice of cancellation," which shall be
attached to the contract, shall be easily detachable, and shall
contain in type of at least 10-point the following statement written
in the same language as used in the contract:
" NOTICE OF CANCELLATION
___________________________________________
(Enter date of transaction) (Date)
You may cancel this transaction, without any penalty
or
obligation, within five business days from the above
date.
To cancel this transaction, mail or deliver a signed
and dated copy of this cancellation notice, or any
other written notice, or send a telegram,
to __________________________________________________
(Name of foreclosure consultant)
at __________________________________________________
(Address of foreclosure consultant's place of
business)
You may also cancel by sending a facsimile (fax) of
a signed and dated copy of this cancellation notice,
or any other written notice, to the following number:
_____________________________________________________
(Facsimile telephone number of foreclosure
consultant's place of business)
You may also cancel by sending an e-mail canceling
this transaction to the following e-mail address:
_____________________________________________________
(E-mail address of foreclosure consultant's
business)
I hereby cancel this transaction
____________________________________________________.
(Date)
_________________________ "
(Owner's signature)
(g) The foreclosure consultant shall provide the owner with a copy
of the contract and the attached notice of cancellation.
(h) Until the foreclosure consultant has complied with this
section, the owner may cancel the contract.
2945.4. It shall be a violation for a foreclosure consultant to:
(a) Claim, demand, charge, collect, or receive any compensation
until after the foreclosure consultant has fully performed each and
every service the foreclosure consultant contracted to perform or
represented that he or she would perform.
(b) Claim, demand, charge, collect, or receive any fee, interest,
or any other compensation for any reason which exceeds 10 percent per
annum of the amount of any loan which the foreclosure consultant may
make to the owner.
(c) Take any wage assignment, any lien of any type on real or
personal property, or other security to secure the payment of
compensation. That security shall be void and unenforceable.
(d) Receive any consideration from any third party in connection
with services rendered to an owner unless that consideration is fully
disclosed to the owner.
(e) Acquire any interest in a residence in foreclosure from an
owner with whom the foreclosure consultant has contracted. Any
interest acquired in violation of this subdivision shall be voidable,
provided that nothing herein shall affect or defeat the title of a
bona fide purchaser or encumbrancer for value and without notice of a
violation of this article. Knowledge that the property was
"residential real property in foreclosure," does not constitute
notice of a violation of this article. This subdivision may not be
deemed to abrogate any duty of inquiry which exists as to rights or
interests of persons in possession of residential real property in
foreclosure.
(f) Take any power of attorney from an owner for any purpose,
except to inspect documents as provided by law.
(g) Induce or attempt to induce any owner to enter into a contract
which does not comply in all respects with Sections 2945.2 and
2945.3.
(h) Enter 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, whether the agreement involves
direct payment, assignment, deed, power of attorney, or assignment
of claim from an owner to the foreclosure consultant or any person
designated by the foreclosure consultant.
2945.4. It shall be a violation for a foreclosure consultant to:
(a) Claim, demand, charge, collect, or receive any compensation
until after the foreclosure consultant has fully performed each and
every service the foreclosure consultant contracted to perform or
represented that he or she would perform.
(b) Claim, demand, charge, collect, or receive any fee, interest,
or any other compensation for any reason which exceeds 10 percent per
annum of the amount of any loan which the foreclosure consultant may
make to the owner.
(c) Take any wage assignment, any lien of any type on real or
personal property, or other security to secure the payment of
compensation. That security shall be void and unenforceable.
(d) Receive any consideration from any third party in connection
with services rendered to an owner unless that consideration is fully
disclosed to the owner.
(e) Acquire any interest in a residence in foreclosure from an
owner with whom the foreclosure consultant has contracted. Any
interest acquired in violation of this subdivision shall be voidable,
provided that nothing herein shall affect or defeat the title of a
bona fide purchaser or encumbrancer for value and without notice of a
violation of this article. Knowledge that the property was
"residential real property in foreclosure," does not constitute
notice of a violation of this article. This subdivision may not be
deemed to abrogate any duty of inquiry which exists as to rights or
interests of persons in possession of residential real property in
foreclosure.
(f) Take any power of attorney from an owner for any purpose.
(g) Induce or attempt to induce any owner to enter into a contract
which does not comply in all respects with Sections 2945.2 and
2945.3.
(h) Enter into an agreement at any time to assist the owner in
arranging, or arrange for the owner, the release of surplus funds
after the trustee's sale is conducted, whether the agreement involves
direct payment, assignment, deed, power of attorney, assignment of
claim from an owner to the foreclosure consultant or any person
designated by the foreclosure consultant, or any other compensation.
2945.45. (a) Except as provided in subdivision (b) of Section
2945.1, a person shall not take any action specified in subdivision
(a) of Section 2945.1 unless the person satisfies the following
requirements:
(1) The person registers with, and is issued and maintains a
certificate of registration from, the Department of Justice in
accordance with the following requirements:
(A) The person shall submit a completed registration form, along
with applicable fees, to the department. The registration form shall
include the name, address, and telephone number of the foreclosure
consultant, all of the names, addresses, telephone numbers, Internet
Web sites, and e-mail addresses used or proposed to be used in
connection with acting as a foreclosure consultant, a statement that
the person has not been convicted of, or pled nolo contendere to, any
crime involving fraud, misrepresentation, dishonesty, or a violation
of this article, a statement that the person has not been liable
under any civil judgment for fraud, misrepresentation, or violations
of this article or of Section 17200 or 17500 of the Business and
Professions Code, and any additional information required by the
department.
(B) The registration form shall be accompanied by a copy of all
print or electronic advertising and other promotional material, and
scripts of all telephonic or broadcast advertising and other
statements used or proposed to be used in connection with acting as a
foreclosure consultant.
(C) The registration form shall be accompanied by a copy of the
bond required pursuant to paragraph (2).
(D) The person shall file an update of any material change in the
information required by subparagraphs (A) and (B) with the
department.
(E) The person shall pay any fee set by the department to defray
reasonable costs incurred in connection with the department's
responsibilities under this article.
(2) The person obtains and maintains in force a surety bond in the
amount of one hundred thousand dollars ($100,000). The bond shall be
executed by a corporate surety admitted to do business in this
state. The bond shall be made in favor of the State of California for
the benefit of homeowners for damages caused by the foreclosure
consultant's violation of this article or any other provision of law.
A copy of the bond shall be filed with the Secretary of State, with
a copy provided to the department pursuant to subparagraph (C) of
paragraph (1).
(b) The Foreclosure Consultant Regulation Fund is hereby created
in the State Treasury for the deposit of fees submitted to the
Department of Justice pursuant to subparagraph (A) of paragraph (1)
of subdivision (a) for registration as a foreclosure consultant.
Moneys in the fund shall be available, upon appropriation by the
Legislature, for the costs of the department incurred in connection
with the administration of the registration program.
(c) The Department of Justice may refuse to issue, or may revoke,
a certificate of registration because of any misstatement in the
registration form, because the foreclosure consultant has been held
liable for the violation of any law described in subparagraph (A) of
paragraph (1) of subdivision (a), because the foreclosure consultant
has failed to maintain the bond required under paragraph (2) of
subdivision (a), or because of any violation of this chapter.
(d) A person who violates subdivision (a) shall be punished, for
each violation, by a fine of not less than one thousand dollars
($1,000) and not more than twenty-five thousand dollars ($25,000), by
imprisonment in the county jail for not more than one year, or by
both that fine and imprisonment. The imposition of a penalty pursuant
to this subdivision shall not be affected by the availability of any
other relief, remedy, or penalty provided by law, and shall not
affect the availability of any such relief, remedy, or penalty.
2945.5. Any waiver by an owner of the provisions of this article
shall be deemed void and unenforceable as contrary to public policy.
Any attempt by a foreclosure consultant to induce an owner to waive
his rights shall be deemed a violation of this article.
2945.6. (a) An owner may bring an action against a foreclosure
consultant for any violation of this chapter. Judgment shall be
entered for actual damages, reasonable attorneys' fees and costs, and
appropriate equitable relief. The court also may, in its
discretion, award exemplary damages and shall award exemplary damages
equivalent to at least three times the compensation received by the
foreclosure consultant in violation of subdivision (a), (b), or (d)
of Section 2945.4, and three times the owner's actual damages for any
violation of subdivision (c), (e), or (g) of Section 2945.4, in
addition to any other award of actual or exemplary damages.
(b) The rights and remedies provided in subdivision (a) are
cumulative to, and not a limitation of, any other rights and remedies
provided by law. Any action brought pursuant to this section shall
be commenced within four years from the date of the alleged
violation.
2945.7. Any person who commits any violation described in Section
2945.4 shall be punished by a fine of not more than ten thousand
dollars ($10,000), by imprisonment in the county jail for not more
than one year, or in the state prison, or by both that fine and
imprisonment for each violation. These penalties are cumulative to
any other remedies or penalties provided by law.
2945.8. If any provision of this article or the application thereof
to any person or circumstance is held to be unconstitutional, the
remainder of the article and the application of such provision to
other persons and circumstances shall not be affected thereby.
2945.9. (a) A foreclosure consultant is liable for all damages
resulting from any statement made or act committed by the foreclosure
consultant's representative in any manner connected with the
foreclosure consultant's (1) performance, offer to perform, or
contract to perform any of the services described in subdivision (a)
of Section 2945.1, (2) receipt of any consideration or property from
or on behalf of an owner, or (3) performance of any act prohibited by
this article.
(b) "Representative" for the purposes of this section means a
person who in any manner solicits, induces, or causes (1) any owner
to contract with a foreclosure consultant, (2) any owner to pay any
consideration or transfer title to the residence in foreclosure to
the foreclosure consultant, or (3) any member of the owner's family
or household to induce or cause any owner to pay any consideration or
transfer title to the residence in foreclosure to the foreclosure
consultant.
2945.10. (a) Any provision in a contract which attempts or purports
to limit the liability of the foreclosure consultant under Section
2945.9 shall be void and shall at the option of the owner render the
contract void. The foreclosure consultant shall be liable to the
owner for all damages proximately caused by that provision. Any
provision in a contract which attempts or purports to require
arbitration of any dispute arising under this chapter shall be void
at the option of the owner only upon grounds as exist for the
revocation of any contract.
(b) This section shall apply to any contract entered into on or
after January 1, 1991.
2945.11. (a) Any representative, as defined in subdivision (b) of
Section 2945.9, deemed to be the agent or employee or both the agent
and the employee of the foreclosure consultant shall be required to
provide both of the following:
(1) Written proof to the owner that the representative has a valid
current California Real Estate Sales License and that the
representative is bonded by an admitted surety insurer in an amount
equal to at least twice the fair market value of the real property
that is the subject of the contract.
(2) A statement in writing, under penalty of perjury, that the
representative has a valid current California Real Estate Sales
License, that the representative is bonded by an admitted surety
insurer in an amount equal to at least twice the value of the real
property that is the subject of the contract and has complied with
paragraph (1). The written statement required by this paragraph
shall be provided to all parties to the contract prior to the
transfer of any interest in the real property that is the subject of
the contract.
(b) The failure to comply with subdivision (a) shall, at the
option of the owner, render the contract void and the foreclosure
consultant shall be liable to the owner for all damages proximately
caused by the failure to comply.
Wednesday, December 31, 2008
John Bilotta - Administrative Offset Decision - HUD
John Bilotta - Administrative Offset Decision - HUD: "DECISION and ORDER
Petitioner was notified by Due Process Notice that the Secretary of the U.S. Department of Housing and Urban Development (HUD) intended to seek administrative offset of any Federal payments due to Petitioner or to seek administrative wage garnishment of Petitioner's pay in satisfaction of a delinquent and legally enforceable debt allegedly owed to HUD. Administrative offset is authorized by 31 U.S.C. § 3720A; administrative wage garnishment is authorized by 31 U.S.C. § 3720D. The claimed debt has resulted from a defaulted loan that was insured against non-payment by the Secretary pursuant to Title I of the National Housing Act. 12 U.S.C. § 1703.
Petitioner has made a timely request for a hearing concerning the existence, amount or enforceability of the debt allegedly owed to HUD. The Administrative Judges of this Board have been designated to conduct a hearing to determine whether the debt allegedly owed to HUD is legally enforceable pursuant to 24 C.F.R. § 20.4(b). As a result of Petitioner's request, referral of the debt for offset or issuance of a wage withholding order was temporarily stayed by the Board.
Discussion
31 U.S.C. § 3720A and 31 U.S.C. § 3720D provide Federal agencies with remedies for the collection of debts owed to the United States Government. The burden of proof is on"
Petitioner was notified by Due Process Notice that the Secretary of the U.S. Department of Housing and Urban Development (HUD) intended to seek administrative offset of any Federal payments due to Petitioner or to seek administrative wage garnishment of Petitioner's pay in satisfaction of a delinquent and legally enforceable debt allegedly owed to HUD. Administrative offset is authorized by 31 U.S.C. § 3720A; administrative wage garnishment is authorized by 31 U.S.C. § 3720D. The claimed debt has resulted from a defaulted loan that was insured against non-payment by the Secretary pursuant to Title I of the National Housing Act. 12 U.S.C. § 1703.
Petitioner has made a timely request for a hearing concerning the existence, amount or enforceability of the debt allegedly owed to HUD. The Administrative Judges of this Board have been designated to conduct a hearing to determine whether the debt allegedly owed to HUD is legally enforceable pursuant to 24 C.F.R. § 20.4(b). As a result of Petitioner's request, referral of the debt for offset or issuance of a wage withholding order was temporarily stayed by the Board.
Discussion
31 U.S.C. § 3720A and 31 U.S.C. § 3720D provide Federal agencies with remedies for the collection of debts owed to the United States Government. The burden of proof is on"
Thursday, December 11, 2008
group homes of 6 or fewer equals residential use under California law
California Health And Safety Code Section 1267.8 - California Attorney Resources - California Laws
California Health And Safety Code Section 1267.8
Legal Research Home > California Lawyer > Health and Safety Code > California Health And Safety Code Section 1267.8
(a) An intermediate care facility/developmentally disabled
habilitative or an intermediate care facility/developmentally
disabled --nursing or a congregate living health facility shall meet
the same fire safety standards adopted by the State Fire Marshal
pursuant to Sections 13113, 13113.5, 13143, and 13143.6 that apply to
community care facilities, as defined in Section 1502, of similar
size and with residents of similar age and ambulatory status. No
other state or local regulations relating to fire safety shall apply
to these facilities and the requirements specified in this section
shall be uniformly enforced by state and local fire authorities.
(b) An intermediate care facility/developmentally disabled
habilitative or an intermediate care facility/developmentally
disabled--nursing or a congregate living health facility shall meet
the same seismic safety requirements applied to community care
facilities of similar size with residents of similar age and
ambulatory status. No additional requirements relating to seismic
safety shall apply to such facilities.
(c) Whether or not unrelated persons are living together, an
intermediate care facility/developmentally disabled habilitative
which serves six or fewer persons or an intermediate care
facility/developmentally disabled--nursing which serves six or fewer
persons or a congregate living health facility shall be considered a
residential use of property for the purposes of this article. In
addition, the residents and operators of the facility shall be
considered a family for the purposes of any law or zoning ordinance
which is related to the residential use of property pursuant to this
article.
For the purposes of all local ordinances, an intermediate care
facility/developmentally disabled habilitative which serves six or
fewer persons or an intermediate care facility/developmentally
disabled--nursing which serves six or fewer persons or a congregate
living health facility shall not be included within the definition of
a boarding house, rooming house, institution or home for the care of
minors, the aged, or the mentally infirm, foster care home, guest
home, rest home, sanitarium, mental hygiene home, or other similar
term which implies that the intermediate care
facility/developmentally disabled habilitative or intermediate care
facility/developmentally disabled--nursing or a congregate living
health facility is a business run for profit or differs in any other
way from a single-family residence.
This section does not forbid any city, county, or other local
public entity from placing restrictions on building heights, setback,
lot dimensions, or placement of signs of an intermediate care
facility/developmentally disabled habilitative which serves six or
fewer persons or an intermediate care facility/developmentally
disabled--nursing which serves six or fewer persons or a congregate
living health facility as long as such restrictions are identical to
those applied to other single-family residences.
This section does not forbid the application to an intermediate
care facility/developmentally disabled habilitative or an
intermediate care facility/developmentally disabled--nursing or a
congregate living health facility of any local ordinance which deals
with health and safety, building standards, environmental impact
standards, or any other matter within the jurisdiction of a local
public entity, as long as that ordinance does not distinguish
intermediate care facility/developmentally disabled habilitative
which serves six or fewer persons or an intermediate care
facility/developmenta lly disabled--nursing or a congregate living
health facility from other single-family dwellings and that the
ordinance does not distinguish residents of the intermediate care
facility/developmentally disabled habilitative or intermediate care
facility/developmentally disabled--nursing which serves six or fewer
persons or a congregate living health facility from persons who
reside in other single-family dwellings.
No conditional use permit, zoning variance, or other zoning
clearance shall be required of an intermediate care
facility/developmentally disabled habilitative which serves six or
fewer persons or an intermediate care facility/developmentally
disabled--nursing which serves six or fewer persons or a congregate
living health facility which is not required of a single-family
residence in the same zone.
Use of a single-family dwelling for purposes of an intermediate
care facility/developmentally disabled habilitative serving six or
fewer persons or an intermediate care facility/developmentally
disabled--nursing which serves six or fewer persons or a congregate
living health facility shall not constitute a change of occupancy for
purposes of Part 1.5 (commencing with Section 17910) of Division 13
or local building codes. However, nothing in this section supersedes
Section 13143 to the extent these provisions are applicable to
intermediate care facility/developmentally disabled habilitative
providing care for six or fewer residents or an intermediate care
facility/developmentally disabled--nursing serving six or fewer
persons or a congregate living health facility.
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