Summary of CA SB 94
http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0051-0100/sb_94_bill_20090611_amended_asm_v94.pdf
Short Summary: Prohibits any person offering to assist in mortgage loan modification from demanding or receiving any pre-completion compensation or from taking a power of attorney from a borrower.
· Prohibits any person (including a real estate licensee) who:
o Negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform residential mortgage loan modifications or other forms of mortgage loan forbearance
o For a fee or other compensation paid by a borrower
o From:
§ Demanding or receiving any compensation until every service is fully performed,
§ Requiring any security as collateral for final compensation, or
§ Taking a power of attorney from a borrower.
o Requires such a person to provide a specified 14-point bold type statement regarding loan modification fees to the borrower
o Violations:
§ Punishable by a fine of up to 10,000 and/or up to one year in county jail for an individual, or $50,000 for a corporation
§ Additionally violation may subject a real estate licensee to disciplinary action by the Real Estate Commissioner
§ Additionally violation may subject an attorney to disciplinary action
o New exceptions to this section:
§ Any nonprofit, community-based organization, or an employee of such an organization, that has been approved by federal HUD to provide counseling services when those services are provided at no cost to the borrower and are in connection with the modification of the terms of a residential property loan.
§ Excludes a real estate licensee and a finance lender from the definition of a foreclosure consultant when acting under the authority of that person’s license
o This
prohibition expires
o This act is EFFECTIVE on passage.