Welcome to the Legal Section of C.A.R. Online, where REALTORS® legal needs are met with the latest information and legal updates. Look below for the latest legal news during the last two weeks. You'll see Regulatory News, new Legal Q&As, new Realegals®, and What's Hot announcements.
If you missed a news announcement, look under 2008-2009 Archive News in the left-hand column.
The campaign will engage local housing counseling agencies, community organizations, elected officials and other trusted advisors in the target markets to build public awareness of Making Home Affordable, educate at-risk borrowers about options available, prepare borrowers to work more efficiently with their servicers and drive them to take action.
The FTC filed an amended complaint adding several new defendants in the action currently pending against Federal Loan Modification Law Center, LLP, and six related defendants. The original complaint, filed on April 3, 2009, charged the defendants with misrepresenting that in exchange for a large up-front fee, they will obtain a mortgage loan modification or stop foreclosure in all or virtually all cases, and by misrepresenting that they are affiliated with or endorsed by the U.S. government.
The FTC sued the defendants in October 2008 as part of “Operation Clean Sweep,” a crackdown on credit repair operations. The defendants represented that they could remove negative but accurate information from consumers’ credit reports, including bankruptcies and late fees. According to the FTC, the defendants charged consumers up to $59.95 initially, then $59.95 per month, to send letters to credit reporting agencies disputing information on the consumers’ credit reports. Contrary to the defendants’ representations to consumers, those dispute letters failed to remove accurate negative information from the consumers’ credit reports.
A Los Angeles man was taken into federal custody on charges that he has been defrauding homeowners by falsely promising them that he could prevent foreclosures and evictions from their property.
Loan modification scams are worrisome and widespread. July 2008, the DRE had fewer than 10 complaints involving loan modification companies; today the department has 750 pending investigations. In addition, since last October the DRE has filed over 200 Desist and Refrain Orders and Accusations involving loan modification scams and the list of offenders continues to grow. A list of the companies and persons the Department has filed an action against can be viewed at http://www.dre.ca.gov/cons_drs.asp.
The Franchise Tax Board (FTB) announced today that the $100 million allocated by the state in new home tax credits will soon be gone. As of June 17, 2009, the FTB had received more than 9,800 applications claiming nearly $95 million. Because some of these applications are duplicates, revisions, or invalid, FTB plans to accept 12,000 applications. This will ensure enough valid applications will be available to allocate the full $100 million credit. However, FTB will only issue approved credit certificates until the $100 million is exhausted.
This tax credit is available
for qualified buyers who on or after March 1, 2009, and before March 1,
2010, purchase a qualified principal residence that has never been
occupied. The buyer must reside in the new home for a minimum of two years
immediately following the purchase date.
At the request of the Federal Trade Commission, a federal court has halted a bogus mortgage foreclosure prevention operation that misrepresented both the “loss mitigation” services it offered and the earnings potential of the business opportunity it sold. The FTC seeks to end this deceptive scheme and make the defendants give up their ill-gotten gains.
It was a big week in February for the California REALTOR® who keeps watch over legislative change. On Tuesday, February 17, 2009, a $787 billion economic stimulus package became law, including several important housing stimulus provisions. The next day, President Barack Obama announced a $275 billion Homeowner Affordability and Stability Plan for restructuring and refinancing mortgage loans for at-risk homeowners. By Friday, February 20, 2009, California passed a state budget which also included new laws to stimulate housing.
The scale of the lawmakers’ efforts in these three laws is massive. Both the federal and California government have enacted unprecedented measures aimed at stimulating the housing market and protecting homeowners from foreclosure.


