Marriot Hotel
3:00 p.m. - 5:00 p.m.
Thursday October 7, 2010
Anaheim, California
Presiding:
Pat "Ziggy" Zicarelli, Chair
Linda Harrison, Vice Chair
Steve White, Vice Chair
Executive Committee Liaisons:
Annette Graw
Kevin Brown
Staff:
Alex Creel
Stan Wieg
I. Welcome and Opening Remarks - Pat "Ziggy" Zicarelli, Chair
II. Review of Reorganized Policy Committee Structure
III. Legislative Overview
A. Member Mobilization Report - DeAnn Kerr
B. Budget and special sessions
C. Other
IV. 2010 Sponsored Legislation
A. On the Governor's desk (must be signed or vetoed by September 30):
1. SB 1178 (Corbett) Anti-deficiency for refinanced purchase money debt – Anti-Deficiency rules protect a borrower from personal liability on a purchase money mortgage which goes into default and eventually judicial foreclosure. Due in part to declining interest rates, many purchase money mortgages have been refinanced and have lost their characterization as "purchase money". Homeowners were not informed by the lender that when they refinanced they lost their legal protections and may be personally liable for the difference between the value of the foreclosed property and the amount of the loan. C.A.R. is sponsoring SB 1178 to extend borrowers’ anti-deficiency protections to refinanced purchase money mortgages. This bill originally extended borrowers’ anti-deficiency protections to cover the refinance of purchase money mortgages that included cash out used to substantially improve the property, but was amended to apply only to the refinance of purchase money mortgage with no cash out. The lending industry is opposed. Status: Enrolled to the Governor
2. SB 1427 (Price) Local vacant property ordinances - C.A.R. is sponsoring SB 1427 to provide an REO owner notice of a violation of an abandoned property ordinance and opportunity to repair before fines for the violation can attach. SB 1427 requires that the cost of nuisance abatement measures taken by cities be limited to what is actual and reasonable. The measure also requires cities to adopt a schedule of these costs so that property owners will know how much it will cost them if they do not make the repairs themselves and it prohibits cities from imposing liens against a property for nuisance abatements costs prior to the adoption of the cost schedule at a public hearing. Status: Enrolled to the Governor
3. AB 1927 (Knight) HOA right to rent - C.A.R. is sponsoring AB 1927 to re-visit the “right-to-rent issue” of 2008 C.A.R. sponsored legislation (AB 2259 - vetoed). As introduced, AB 1927 sought to address the concerns raised by the governor in his veto message by requiring two thirds of the unit owners in a CID to approve, by written ballot, any amendment of the governing documents that would prohibit owners from renting or leasing their unit. Prior to the final vote in the Senate on AB 1927, a meeting with the Governor’s staff resulted in C.A.R. making additional amendments to address additional concerns. C.A.R. removed mention of the two thirds requirement and instead authorized each CID to use its own voting approval standards for amending governing documents, as long as it was by a written ballot vote of the CID’s homeowners. Status: Enrolled to the Governor
B. Previously signed - AB 1762 (Hayashi) Advance fee clarification - In 2009, SB 94 (Calderon) was signed into law to prohibit "cash up front" loan modification contracts. C.A.R. negotiated amendments with the author and DRE to clarify the definition of an advance fee in other sorts of transactions and to ensure licensees’ ability to engage in a fee for service contract. Even with those amendments further clarification was needed. C.A.R. sponsored AB 1762 to clarify the current "advance fee" statute to make clear that “unbundled” fees on “fee for service” contracts do not trigger the advance fee requirements. Status: Signed by the Governor on July 15, 2010 (Chapter 85, Statutes of 2010)
C. Other sponsored bills:
1. SB 206 (Dutton) - $8000 homebuyer tax credit - C.A.R sponsored SB 206 would, like federal law, have created a first-time homebuyer's tax credit equal to 10% of the sale price of a home (not to exceed $8,000) for homes purchased as the principal residence of the taxpayer. Due to the state's fiscal crisis, C.A.R.'s Board of Directors at its June 2009 meeting decided to limit this proposed tax credit to REO properties purchased as a principal residence by homebuyers; SB 206 was amended to utilize a funding source from federal stimulus funds instead of the state general fund. Unfortunately, this source proved to be unavailable. Efforts to locate a funding source for this tax credit that did not burden the state's general fund during these tight fiscal times were not successful. Status: Died in the Senate Revenue and Taxation Committee
2. SB 1123 (Negrete McLeod) DRE reserves "poison pill” - During the 1990’s the Governor and Legislature raided DRE reserve funds to help balance the budget’s general fund during budget crises. In response, C.A.R. sponsored legislation creates a two part “poison pill” that would roll back licensee fees to 1982 levels if DRE funds were again raided and/or borrowed by the general fund or if DRE reserves are allowed to grow to exceed 18 months. As a part of the 2009 budget bill, the legislature loaned $500,000 from the DRE operating reserve to the Department of Justice to start up a new foreclosure consultant registration program. This loan did not trigger the so-called “poison pill” statute and roll back license fees because the recipient was a special fund agency and not the state’s general fund. C.A.R. sponsored SB 1123 prevents DRE reserve fund transfers (“loans”) to other special fund agencies. According to the finance analysis the bill has a $2 million price tag, dooming its passage in session. Status: Died in the Senate Appropriations Committee
3. AB 1796 (Hall) AMCs in OREA - Appraisal Management Companies (AMCs) have grown enormously over the last few years, driven primarily by the Home Valuation Code of Conduct adopted by Fannie Mae and Freddie Mac. In 2009, C.A.R. supported SB 237 (Calderon), which was signed into law. It subjects AMCs to registration and review by the Office of Real Estate Appraisers (OREA). C.A.R. sponsored AB 1796 clarifies and enhances OREAs oversight of Appraisal Management Companies, specifically in connection with conflicts of interest, “out of area” appraisers, timeliness and accuracy of work product, and to ensure compliance with other requirements of law applicable to licensed appraisers. While this bill did not become law, the chair of the Assembly Business and Professions Committee, at C.A.R.’s request, committed to an interim hearing on appraisals and AMC’s in the fall. Status: Died in the Assembly Business, Professions and Consumer Protection Committee
4. SB 1000 (Correa) Portable appraisals - Current law permits, but does not require, lenders to utilize current appraisals ordered by a different lender. C.A.R. sponsored SB 1000 will enact FHA rules that require lenders to accept a "portable" appraisal, with specified limitations, for all transactions at the request of the borrower. Put simply, if an appraisal is ordered and prepared for one lender on a particular property, the second lender would be required to accept that appraisal to support a mortgage even though the lender did not order that appraisal, provided that the appraisal is in compliance with the Uniform Standards of Professional Appraisal Practices and does not contain any material deficiencies. While this bill did not become law, the chair of the Assembly Business and Professions Committee, at C.A.R.’s request, committed to an interim hearing on appraisals and AMC’s. Status: Died in the Senate Banking, Finance and Insurance Committee
V. Reports of Policy Committees
A. Taxation and Government Finance - Dennis Badagliacco
B. Transaction and Regulatory - Liz Claus
C. Housing - Le Francis Arnold
D. Land Use and Environmental - Phyllis Carmichael
VI. Ballot Propositions*
Legislative committee will bring a motion that will consolidate all recommended ballot proposition positions into a single motion which will be reported to the Board of Directors.
A. November 2, 2010, General Election Ballot - PROPOSITION 27: Financial Accountability in Redistricting Act (FAIR Act). Initiative Constitutional Amendment. Proposition 27 returns the responsibility to create new boundaries for the Senate, Assembly and BOE districts to the State Legislature.
B. February 7, 2012, Primary Election Ballot - PROPOSITION NUMBER PENDING: Legislative Term Limits Reform Act of 2010. Initiative Constitutional Amendment. This proposition would reduce the total number of years that a legislator could serve in the California State Legislature from fourteen to twelve years, allowing legislators to serve their entire twelve years in the Assembly, Senate or a combination of the two.
VII. Other
VIII. Adjournment
