CRE solicits your input on trasfer fees

The Center for Regulatory Effectiveness Solicits Public Comment on Three Public Policy Issues Associated with the FHFA Proposed Private Transfer Fee Guidance


The Federal Home Finance Authority has proposed guidance which would terminate the use of Private Transfer Fees.  Private Transfer Fees are paid each time a property is sold and are often used for community benefit programs. Private transfer fees have also been used to provide a continual source of income for developers and investors.

The FHFA has received in excess of 2,500 comments. While the FHFA is reviewing these comments  the Center for Regulatory Effectiveness is asking the public and the regulated community to comment on the following public policy issues which emerge from CRE’s review of the public comments submitted to the FHFA:
1.   Should the FHFA issue a rule in lieu of guidance?
2.   Should the FHFA prepare an environmental impact statement on the transfer fee proposal?
3.     Should there be a “carve out” for the public use of transfer fees?Please post your comments at  http://www.thecre.com/tForum/?p=68#respond (Scroll down to the bottom of the page to locate the comments section.)

The Center for Regulatory Effectiveness is a regulatory watchdog founded  by former members of the White House Office of Management and Budget http://thecre.com/ombpapers/OMB_Officials.htm

For additional information , contact
Jim Tozzi at the Center for Regulatory Effectiveness
202.265.2383

____________________________
Josh Van De Riet
Research Assistant
The Center for Regulatory Effectiveness
1601 Connecticut Avenue, NW   Suite 500
Washington, DC 20009(202) 265-2383


A Raspberry to Michael T. Pines & Others

raspberry

The Californian today bestowed a raspberry entitled:

The “Uncommon Law’ award.

A raspberry to attorney Michael T. Pines, who has been advising his clients to break into their foreclosed homes.

Pines claims the actions are justified because lenders committed loan fraud and violated the Truth in Lending Act of 1968. A bankruptcy judge called his ideas frivolous and ordered him to pay $16,.430 in legal fees to the defendants in one case for wasting their time. Other local real estate lawyers are skeptical about his interpretation of the law.

While not every homeowner facing foreclosure is a victim, many are. They really don’t need one more expert giving them questionable advice that may further complicate their lives. They’ve gotten enough of that already.

To the Californian I say – AMEN. Folks, if it sounds too good to be true – you know the rest. And the same goes for those agents and attorneys advising their clients about short sale gimmicks through a series of trusts as well as those advising their clients they enable you to live in their homes indefinitely without paying. Our profession doesn’t need you, the market doesn’t need you and neither do people who have already been victimized once too often.


New laws for 2011 affecting Realtors or your clients

From CAR Government Affairs

The recent end of the 2009-10 legislative session has brought the end of short sale deficiency judgments for first loans, and other new laws affecting REALTORS® and their clients.  To view the full text of the following bills, go to www.leginfo.ca.gov.

No Short Sale Deficiencies: Starting January 1, 2011, a seller’s first trust deed lender cannot obtain a deficiency judgment against the seller after a short sale.  Providing written consent to a short sale shall obligate the first trust deed lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan.  This law applies to first trust deeds secured by one-to-four residential units, but does not limit the lender from seeking damages for fraud or waste by the borrower.  Senate Bill 931.  Governor Schwarzenegger vetoed Senate Bill 1178, our sponsored bill, which would have extended California’s anti-deficiency protection to refinance loans.

Energy Audit in Home Inspection Report:
Beginning January 1, 2011, a home inspection and inspection report may, upon a client’s request, include an audit of the energy efficiency of a home, according to the standards of the Home Energy Rating Systems (HERS).  REALTORS® are also strongly encouraged to give the newly released HERS booklet to residential buyers, because doing so provides a valuable shield from liability.  Delivery of the booklet will be deemed to be adequate to inform the buyer about the statewide HERS program.  Assembly Bill 1809 and California Civil Code section 2079.10.

Restriction on Adverse Possession Claim: Effective January 1, 2011, a claim for adverse possession requires, among other things, certified records of the county tax collector showing that all state, county, or municipal taxes have been timely paid for the five-year period the property has been occupied and claimed.  Existing law merely requires proof that taxes have been paid for the five-year period, not certified proof of timely payments.  Assembly Bill 1684.

Enforcement of MLO Requirements: Effective January 1, 2011, anyone acting as a mortgage loan originator (MLO) without an MLO license endorsement will be guilty of a crime punishable by six months imprisonment, plus a $20,000 fine.  Furthermore, a broker cannot employ or compensate a real estate licensee for MLO activities unless that licensee has a license endorsement.  This law has also given the Department of Real Estate (DRE) the authority to deny or revoke a MLO license endorsement or take other action.  This law also amends the MLO requirements for finance lenders and residential mortgage lenders under the Department of Corporation.  Senate Bill 1137.

Post-Foreclosure Protection for Tenants: Commencing January 1, 2011, a notice to terminate a residential tenant who remains after a foreclosure sale must generally include a statutory notice of the tenant’s rights.  This requirement, which sunsets on January 1, 2013, applies to an immediate successor-in-interest for one year after a foreclosure sale.  The tenant’s rights must be on a separate cover sheet or, for a 90-day termination, incorporated into the notice to terminate.  Another provision of this bill protects a residential tenant’s credit by generally prohibiting the court clerk from revealing unlawful detainer court records unless the plaintiff prevails at trial.  Senate Bill 1149.

Tenant Protection for Domestic Violence Victims: Starting January 1, 2011, a residential landlord cannot terminate or fail to renew a tenancy based on domestic violence against the tenant or tenant’s household members as specified.  This law applies if the person restrained from contact with the tenant by court order or named in a police report is not also a tenant of the same dwelling unit.  If the protected tenant subsequently allows the person restrained to visit the property, or the landlord reasonably believes the person restrained poses a physical threat to others or to quiet possession by other tenants, the landlord may serve a three-day notice to correct or quit.  To further ensure safe housing for domestic violence victims, this law also requires that, for leases entered into after January 1, 2011, a landlord changes the exterior locks of a protected tenant’s dwelling unit within 24 hours after the tenant provides a written request and supporting court or police documentation as specified.  Senate Bill 782.

Protections Against Real Estate Fraud: Effective January 1, 2011, new laws protecting consumers from real estate fraud include, without limitation, the following: (1) Expanding the foreclosure consultant law to include someone who performs a forensic audit of a residential mortgage loan (Assembly Bill 2325); (2) Requiring any mailed solicitation that offers to provide a copy of an owner’s grant deed or other title records for a fee to include a prominent statutory disclosure that the copy service is not associated with any governmental agency and that the homeowner can obtain such records from the county recorder (Assembly Bill 1373); and (3) Increasing the criminal punishment for renting out a residential dwelling without the owner’s consent from six months imprisonment plus a $1,000 fine, to one year imprisonment, plus a $2,500 fine (Assembly Bill 1800).

Other Laws: Some of the other laws that may interest REALTORS® include, but are not limited to, revisions to the mechanics’ lien law (Senate Bill 189); clarification that the prohibition against discrimination of tenants based on source of income pertains to lawful and verifiable income (Senate Bill 1252); extension of the CalVet Home Loan program to include 2-to-4 residential units (Assembly Bill 2087); and lien enforcement by a municipal utility district for a tenant’s delinquent charges (Senate Bill 1035).


Drive a car – pay a fine. It's headed our way.

If you don’t believe the unregulated California Air Resources Board and local Air Quality Management Districts are out of control, check this out. This is a Central Valley issue but headed south, folks. As a gateway from the Long Beach and Los Angeles harbors to the rest of the country, we could easily end up paying fines, fees and levies for trucks bound for points east that use our highways to get there.

Stepping away from the campaign trail for a moment, we take a look at a landmark decision by Central Valley air-equality enforcers. The Fresno Bee’s Mark Grossi has the story.

“The Valley’s air board voted Thursday to make motorists — not industry — pay a $29 million dirty-air penalty intended for pollution-emitting businesses. The decision, first of its kind in the nation, would add $12 to vehicle registration fees in the Valley beginning next year — if air-quality activists don’t successfully challenge it in court.”

“The penalty was triggered when the region missed an ozone cleanup deadline this year. Air officials said the penalty would not be fair for businesses, which have spent $40 billion over the past three decades to reduce their pollution by 80%. Most of the Valley’s ozone problem comes from vehicles, officials said.”


Three Wins in Three Weeks, Posted by Vince

NAR has worked exceptionally hard this fall to ensure that the laws and policies in Washington support our members and their businesses.  In the three weeks that Congress was in session between mid-September and October 1st, REALTORS® succeeded on three major pieces of legislation.

First, we urged Congress to pass the “Small Business Jobs and Credit Act of 2010.” It will lend up to $30 billion to community banks to make loans to small businesses as well as provide $12 million in tax relief to small businesses.

Since many of us are small business owners ourselves, we could be eligible for one of these loans and the tax breaks.  Commercial practitioners can also point their clients to these loans to help close a deal.  We all know the commercial sector is in great need of more liquidity and this legislation is a direct answer to that.

Second, Congress unanimously passed a one-year extension for the National Flood Insurance Program.  Since September 2008, Congress had extended the program eight times and let it expire twice.  Getting a one year extension is enormous progress!  And while we’re pleased with it, we will continue our work on this issue by asking Congress for a longer extension and much needed reforms to the program.

Lastly, Congress approved a nine-month extension for the FHA and GSE loan limits.  By pushing for this extension, REALTORS® are standing up for consumers and the U.S. economy.  We want to keep housing affordable for all households right now.  Our economy is still struggling and our industry is in a fragile recovery.  Maintaining the higher loan limits helps keep housing affordable and helps provide stability in the marketplace.

Three weeks.  Three wins.  I’m very proud of our progress.  I want to thank all of the Federal Political Coordinators who visited with their members of Congress to help get these laws passed.

While we’re talking about Washington, I want to remind you that we have less than three weeks until Election Day.  Everything you need to know about the election is posted on the voter portal on the Realtor Action Center.  You can register to vote, see how many REALTORS® are registered in your area and see who NAR is supporting this year.

It’s always a difficult choice, but RPAC supports legislators from both parties who understand and support our business.

I encourage you to do your homework on who’s running in your area and who supports strong real estate policies.   Then get out and vote with the REALTOR® Party on Nov. 2!  Need some more encouragement?  Just listen to your colleagues.

Three weeks from now—if we elect more REALTOR® Champions to Washington—think of the progress we can make in the 52 weeks in 2011.  — Vince Malta, 2010 NAR VP and Liaison to Government Affairs


The list of companies leaving CA continues to expand

California Companies Moving Away or
Shifting Work Out Reaches New Record: 158
(for 2010 alone)

In the three weeks since my last tally, I’ve learned about another 14 companies that have left California completely or re-directed capital to build facilities out of state. The names of the 14 and justifications for listing them appear below. Today’s entry builds upon the Sept. 21 entry 144 Companies Shrink from Calif. This Year – Three Times the Total for All of 2009.

In short:
Total for 9-1/2 months of 2010: 158
Total for all of 2009: 51

Five enterprises represent the type of operations coveted by many California politicians — “green” companies — namely DayStar Technologies, Vetrazzo, SMA America LLC, Enfinity Corp., and Power-One. Those companies have opted for Georgia, Arizona, Colorado and an apparently as-yet-undetermined “overseas location.”

I’ve updated Part III: County-by-County Losses For California Disinvestment Events to reflect these 14 additional entries. In this round, Orange County experienced three disinvestment events; Los Angeles and Sacramento, two; and Alameda, Contra Costa, Fresno, Placer, Santa Barbara, Santa Clara and Ventura counties each suffered one case of “corporate shrinkage.” I’ve also updated Part IV: States, Countries That Gain From California Disinvestment Events.

Nine companies carry the code RELO-OS, which represents an out-of-state or out-of country relocation, while another five are CD-OSG, which means the company directed capital out-of-state for a facility that in the past would have been built in California. I’ve updated Part V: California Disinvestment Events By Category or Type. (I exclude companies building elsewhere to meet growth — see Part II: Examples of Companies Excluded From California Disinvestment Event Listings.)  Also relevant is Part VI: Why California Disinvestment Events Are Greatly Understated.


Our New State Budget – Yippeee! No wait…

Who is Rosy Projections?

By Jon Coupal

Rosy Projections is a powerful player in state government, but when I asked around the Capitol for directions to her office, no one could help me. And I couldn’t find a listing for Ms. Projections in any of the political directories in Sacramento, either.

Still we know Rosy exists, because her fingerprints are all over the state budget.

Let’s see, the budget agreement includes the expectation that the federal government — out of the goodness of its heart — will chip in $5.3 billion dollars to shore up Californians’ profligate spending. Certainly that is proof of Rosy’s influence. And then there are the estimates of future revenue that would only be believed by someone who had just put their life savings into Florida swampland. Surely Rosy had a hand in this, too.

Another player in the budget process is the famous — but never photographed — S. Pecial Deals. Mr. Deals, like his cousin Rosy, always seems to surface at budget time. His “tour de farce” was, of course, the arrangement in 2009 whereby Abel Maldonado demanded that an “open primary” system be placed on the ballot in exchange for his vote on the budget. This payment had nothing to do with the budget and everything to do with advancing his own political career. Mr. Deals is still smiling over that one.

This year, Mr. Deals wasn’t quite so prominent, but he was still around. On display were special carve-outs for a couple of redevelopment agencies — one so it could help finance a major league sports arena — and an ethanol firm (which simply can’t seem to make a profit without government help). But, quite frankly, everyone was so relieved to finally get a budget that these relatively minor instances of soft corruption could be ignored.

Despite the influence of Rosy Projections and S. Pecial Deals, for taxpayers, this was a better budget than we’ve seen in the past. It is certainly better than the budget deal of 2009 which gave us a $12 billion tax increase and would have given us another $16 billion in higher taxes but for the rejection of Prop 1A in May of 2009.

The contention that there are no tax increases in this budget is, at best, a half truth. There is, in fact, a delay in a tax break for certain businesses having to do with “net operating losses.” Technically, this is a tax increase for purposes of Prop 13 and thus requires a two-thirds vote. However, from the perspective of ordinary Californians (the people usually ignored in Sacramento) there were no broad-based tax increases.

For that, we are thankful to both the fiscal conservatives in the Legislature who refused to budge and to a re-energized player on the California political scene, I.M. Angry Taxpayer. Mr. & Mrs. Taxpayer were very prominent 30 years ago when, bypassing the Legislature and the budget process altogether, they passed Proposition 13. The political establishment had assumed that Mr. & Mrs. Angry Taxpayer had retired. But, as noted above, they came out of retirement in May of 2009 to send a huge signal to the political elites with the 2 to 1 trashing of Prop 1A.

I.M. Angry Taxpayer is now rejuvenated — having attended several Tea Party events — and learning that there are millions more like him. He and his compatriots are a big reason why the Governor and Legislature knew that tax increases were a non-starter for the budget just enacted.

Make no mistake; this is still a bad, out-of-balance budget full of accounting gimmicks. But, amazingly, fiscal conservatives find themselves in agreement with the Los Angeles Times when it said “the state budget plan is far from perfect, but it’s doubtful that a better deal could have been produced under the circumstances.”

If that’s not damning with faint praise, nothing is.

Jon Coupal is president of the Howard Jarvis Taxpayers Association -– California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This column can be found on the HJTA website by clicking here.


More housing delays from Brown – thanks Jerry

Pandering for a few more votes, Jerry Brown is calling for a halt to foreclosures in California. Super. Let’s let more people stay in their homes indefinitely without making payments and stall off the inevitable for a few more months. That’s what our market needs. Thanks Clueless. What a tool.

Brown Calls on Banks to Halt Foreclosures In California

SAN FRANCISCO – Following his office’s negotiations with the state’s top loan servicers and today’s announcement by Bank of America that it is temporarily halting foreclosures nationwide, Attorney General Edmund G. Brown Jr. today called on the state’s other lenders to halt foreclosing on California homes until the banks can demonstrate that they are complying with state law.

“All lenders should halt foreclosures until they clear up this mess and ensure that the process is fair and complies with California law,” Brown said. “Bank of America has taken an important step, and the other major lenders should follow its lead.”

California law prohibits lenders from recording notices of default on mortgages made between January 1, 2003 and December 31, 2007, unless, subject to limited exceptions, the lender contacts or tries diligently to contact the borrower to determine eligibility for a loan modification. A notice of default must include a declaration of compliance with California law.

In the past few weeks, Brown’s office has been in discussions with Bank of America, Ally Financial, JP Morgan Chase, Wells Fargo and OneWest to ascertain whether they are complying with California law. Brown’s office has called on those banks to show they are complying with state law before continuing with foreclosures.

JP Morgan Chase, the nation’s third largest loan servicer, Ally Financial and One West have admitted that employees approved and signed foreclosure documents without first fully reviewing the borrowers’ loan files. As a result, those borrowers lost their homes based on affidavits the bank never confirmed were accurate.

Ally Financial and JP Morgan have suspended foreclosures in 23 other states that, unlike California, require a court order for foreclosures.

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Attorney General Announces Charges Against Two Con Artists Who Took Money From Struggling East Bay Homeowners

FREMONT — Attorney General Edmund G. Brown Jr. announced charges today against two “callous con artists” who took thousands of dollars from dozens of struggling Northern California homeowners for foreclosure services never delivered.

“The housing crisis has been devastating for many Californians, and their pain has been sharpened by callous con artists like these,” Brown said. “Their arraignment today serves as a warning to people trying to save their homes from foreclosure that there are fraudulent operators out there who will take their money but do nothing to help.”

Angeline Lisa Lizarrago, 68, of Fremont and Michael Douglas Young, 67, of Los Gatos were scheduled to be arraigned today in Department 502 of the Hayward Hall of Justice on a 23 count complaint for felony fraud and theft they committed at their business, Avemos Financial Group, of Fremont.

If convicted, Lizarrago could face more than 15 years in prison. Young, a licensed real estate broker, faces up to 12 years.

The case was investigated and prosecuted jointly by the Attorney General and the Alameda County District Attorney.

From June 2008 to October 2009, Lizarrago and Young targeted Spanish-speaking homeowners as well as Southeast Asian immigrants, all desperate to save their homes.

People stood in line for hours to get into Avemos’s waiting room, which was decorated with shrines to the Virgin Mary. Clients seeking help typically paid $1,500 initially. Lizarrago, the owner of Avenos, and Young, Avemos’s general manager, promised they would take steps to stop banks from immediately foreclosing on their homes and renegotiate clients’ loans to reflect their homes’ current market value. Lizarrago and Young guaranteed a refund if they were unsuccessful. Many lost their homes in foreclosure and did not receive a refund.

Lizarrago also took advantage of the foreclosure crisis in another way. She told an 89-year-old man and his wife, who wanted to move away from Stockton, that she owned 51 properties, many of which had been foreclosed upon, and she could find them a home in Fremont. She asked for an up-front fee, which she promised to return with interest once the purchase was made. In a series of payments, the couple gave Lizarrago $25,000. She never found them a home, nor returned their money.

The criminal charges against Lizarrago and Young are based on 11 cases of fraud and theft, and prosecutors believe there are 50 more victims who haven’t been identified yet. Anyone with information about the Avemos Financial Group or the defendants should call the Alameda County District Attorney’s Office at 1-877-288-2882.

Lizarrago was moved to Alameda County jail from Chowchilla State Prison, where she was serving a two-year sentence for a prior real estate scam. Young was arrested September 30.

The California Department of Real Estate and the Fremont Police Department assisted in the investigation.

The Attorney General has fought to stop scammers and con artists from taking advantage of people during the housing crisis. He has sought court orders to shut down more than 30 fraudulent foreclosure-relief companies and has brought criminal charges and obtained lengthy prison sentences for dozens of other deceptive loan-modification consultants. For more information on the Attorney General’s action against loan-modification fraud visit: http://ag.ca.gov/loanmod


Brown Files $60 Million Lawsuit Against Fraudulent Forensic Audit Loan Modification Scam

SACRAMENTO — Attorney General Edmund G. Brown Jr. today filed a $60 million lawsuit against a pair of Sacramento companies that lured desperate homeowners with a deceptive marketing scheme that promised to obtain mortgage modifications through the use of computer-generated “forensic loan audits.”

“These defendants dangled the term ‘forensic loan audit’ as a sure-fire remedy for the mortgage problems of homeowners in distress,” Brown said. “In fact, it was no remedy at all, and hundreds of desperate California homeowners took the bait and lost their money — and sometimes their homes.”

Brown filed the $60 million lawsuit against US Loan Auditors, My US Legal Services, and five individuals, including two attorneys, who operate a fraudulent mortgage audit scheme that preys on desperate homeowners anxious to save their homes. The suit demands civil penalties, restitution for victims, and permanent injunctions to keep the companies and other defendants from fraudulently marketing forensic loan audits and legal services of little value.

The companies, based in Rancho Cordova, work together to market and sell “forensic loan audits” to homeowners, who pay thousands of dollars in up-front fees for a dubious computer-generated review of their mortgages. The audits purport to show violations of law by lenders, which sales agents cite to convince homeowners they have a strong legal case. Sales agents use these findings to encourage homeowners to stop making their mortgage payments and instead pay additional fees to bring “predatory lending” lawsuits against their lenders.

Both companies deceive homeowners by assuring them that filing these lawsuits will give them “legal leverage” to obtain a loan modification and prevent lenders from foreclosing or collecting monthly mortgage payments. Homeowners who filed these lawsuits have lost thousands of dollars and placed themselves in greater danger of losing their homes.

My US Legal Services bilks clients for months, filing cookie-cutter complaints with little or no merit, billing unjustified monthly fees, and then dodging clients’ phone calls or stringing them along with false assurances that a settlement is in progress.

Hundreds of California homeowners, many of them facing possible loss of their homes, have been duped into paying thousands of dollars to the two companies — one homeowner paid more than $55,000 — but received little or no relief.

Meanwhile, the litigation mill run by My US Legal Services has littered courts with hundreds of lawsuits that have scant chance of success. Two federal judges have expressed concern about the legitimacy of these lawsuits and have several times sanctioned attorneys involved.

In addition to the companies, Brown is suing the three owners: attorney and real estate broker James Sandison, Jeffrey Pulvino, and Shane Barker, as well as two California attorneys, Sharon L. Lapin and Jonathan G. Stein.

The State Bar filed disciplinary charges yesterday against Sandison for alleged misappropriation of clients’ funds and aiding the unauthorized practice of law.

The Attorney General’s investigation, assisted by the State Bar and the Department of Real Estate, located victims throughout California cities hit hard by the foreclosure crisis: Corning, Fresno, Hayward, Irvine, Manteca, Richmond, Sacramento, Salinas, Sanger, Santa Ana, Stockton, Tracy, Vacaville and West Sacramento.

In February, Brown, along with the Bar and the Department of Real Estate, issued an alert ( http://ag.ca.gov/newsalerts/release.php?id=1862&) warning consumers to be wary of forensic loan audits that require homeowners to pay up-front fees. There is no evidence or statistical data to support claims that forensic loan audits of a lenders’ mortgage practices – even if performed by a licensed mortgage professional or a lawyer — help homeowners obtain loan modifications or any other foreclosure relief.

Brown has led the fight against fraudulent mortgage rescue and loan modification companies. He has obtained court orders to shut down several companies and has brought criminal charges against deceptive loan modification consultants. For more information on Brown’s actions against loan-modification fraud, see: http://ag.ca.gov/loanmod.

If you are a homeowner who has been scammed, you can file a complaint online with the Attorney General’s office at: www.ag.ca.gov/consumers/general.php. You can learn more about avoiding scams and obtain a complaint form by visiting the Department of Real Estate’s website at: www.dre.ca.gov.

If you have a complaint against Sandison, Lapin, Stein or any other lawyer involved in a loan modification or foreclosure relief service, contact the State Bar Complaint Hotline at 1-800-843-9053. Complaint forms and an explanation of the attorney discipline system are available online at: www.calbar.ca.gov.

Attached are a copy of the complaint and a sample of the fraudulent advertising mailers sent by the companies.

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