Saturday, October 31, 2009

New brochure explaining requirements of San Francisco’s energy and water conservation laws issues

The City of San Francisco has finally issued a revised "informational brochure" to provide buyers with notice of the requirements of San Francisco’s energy and water conservation laws, as amended. Click here for the brochure.

Sunday, October 25, 2009

Governor Signs SB94 Prohibiting Advance Fees for Loan Modifications

No Advance Fee for Loan Modifications:
This new law, which went into effect on October 11, 2009 (and expires January 1, 2013), prohibits any person, including licensed real estate brokers and attorneys who negotiate, attempt to negotiate, arrange, attempt to arrange, or otherwise offer to perform a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation paid by the borrower related to mortgages and deeds of trust secured by residential real property containing one to four dwelling units to do any of the following:
  • Claim, demand, charge, collect, or receive any compensation until after the licensee has fully performed each and every service the licensee contracted to perform or represented that he/she/it would perform.
  • Take any wage assignment, any lien of any type on real or personal property, or any other security to secure the payment of compensation.
  • Take any power of attorney from the borrower for any purpose.

No Dividing Services into Phases to Avoid Advance Fee Law:
The new language in California Business & Professions Code Section 10026 that defines "Advance Fee" has been modified to clarify that services may not be divided into phases to avoid the new law: "Neither an advance fee nor the services to be performed shall be separated or divided into components for the purpose of avoiding the application of this section."

Lenders and Loan Servicers Are Exempt from Advance Fee Law:
This law further provides that these provisions do not apply to actions taken by a person who offers loan modification or other loan forbearance services for a loan owned or serviced by that person, including, but not limited to, collecting principal, interest, or other charges under the terms of a loan, before the loan is modified, including charges to establish a new payment schedule for a non-delinquent loan.

Fees Already Collected Prior to October 11th Not Affected:
Loan modification agreements entered into and advance fees already collected on or before October 11, 2009 are not affected. Any advance fees collected after October 11, 2009 must be fully refunded to the clients. Even if the DRE issued a "no objection" letter, licensees may no longer collect advance fees despite executed loan modification agreement.