Many, many, many new bills were signed into law by our Governor this month. Following is a quick list. If you would like more information on any bill, go to www.leginfo.ca.gov.

SB 94 – Effective Oct. 11, 2009: No more Advance Fees on Loan Modifications.

AB 957 – Effective Oct. 11, 2009: REO Buyers can select escrow & title.

SB 36 – Effective December, 2010: Licensing Requirements for Mortgage Loan Originators.

AB 260 – Effective Jan. 1, 2010: Tightens restrictions on mortgage brokers so they cannot steer borrowers to riskier, higher-interest loans when they qualify for less-expensive ones.

SB 237 – Effective Jan. 1, 2010: Creates a Registration Program for Appraisal Firms.

SB 239 – Effective Jan. 1, 2010: Fraud on a Mortgage Loan Application will be a Felony.

AB 1160 – Effective July 1, 2010 or 90 days after a form is issued: Requires lenders to provide to borrowers loan documents for mortgages to be written in the same language as that in which the negotiations primarily took place.

AB 329 – Effective Jan. 1, 2010: Requires lenders to give more and clearer information to those interested in reverse mortgages, which let seniors borrow against their homes’ equity.

So many changes, so little time. For example, SB 36 has over 76 pages of single spaced bureaucratic verbiage.

A couple early thoughts or unsolicited opinions from someone who probably shouldn’t be having opinions and according to one reader who said that he couldn’t understand how uninformed I am.

1. No more advance fees for Loan Modifications. Yea, about time. This new law is worded to prohibit advance fees by “any person” so I hope this will be enforced not only on us licensed real estate agents, but also on unlicensed consultants, those licensed by the Commissioner of Corporations, and attorneys. It is effective immediately under emergency legislation rules. This should have been passed years ago.

2. Also, under SB 94, the following statement must be given to loan mod prospects in 14-point type. This should help eliminate some problems:

“It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting www.hud.gov.”

3. REO buyers cannot be forced to use a seller’s escrow and title sources. It will be very interesting to see how this plays out. The Buyer’s Choice Act prohibits an REO lender selling residential property up to four units from directly or indirectly requiring the buyer to purchase escrow services or title insurance from any particular company. A buyer, however, who has received written notice of the right to make an independent selection, may agree to the REO lender’s escrow or title recommendations. An REO lender that violates this law can be held liable for three times the charges the buyer incurred, whereas a violation by the seller’s agent may be subject to license disciplinary action. This law expires on Jan. 1, 2015.

4. SB 260 is said to eliminate negative amortization loans. I really disagree with this. To me negative amortization means that I don’t have to pay a lender the interest owed them until a later time. If I’m having tough financial times, my payments would be lower with a negative amortization loan and I might survive. In good times I have the choice of paying the interest or I can use the lender’s interest for other enterprises. Bad bill. If a lender and I want to make a loan with no payments, we should have that right.

5. Current real estate law states that real estate contracts must be executed in the language that was used during negotiations. AB 1160 will require loan documents to meet the same regulations. I know that many real estate sales are conducted in languages other than English. However, I have yet to see any forms on Win Forms or anywhere else in Spanish, Chinese, Korean, Japanese, German, French, Persian, etc. Maybe, I should start a new business publishing such forms.

6. Fraud on a loan app should be a felony. Does this need a comment?

7. Loan brokers should be under the control of the Department of Real Estate in my opinion. Current law allows a loan originator to work under a Commissioner of Corporations license, and these people do not have to satisfy any pre-license education requirements, pass an exam or complete extensive renewal requirements. Commissioner of Corporation licensing is a travesty.

8. AB 329 states that lenders need to give more information to reverse mortgage prospects. I thought that reverse mortgage applicants must already complete an interview with HUD approved counselors. What does this new reg add? I will have to talk to my son, David, owner of Senior Funding a top reverse mortgage originator (818-999-2265 or www.SeniorFunding.com) , about the effect of the bill.

9. A registration program for appraisal firms might not be unrealistic. So many people have complained to me about HVCC regulations that lead to out-of-the-area firms doing local appraisals. If anyone has any printable responses to the HVCC situation, please send them to me and I will pass them on.