Sacramento Convention Center
3:00 p.m. – 5:00 p.m.
Thursday June 9, 2010
Sacramento, 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. SB 206 (Dutton) - REO homebuyer tax credit
SB 206, as introduced, would have, like federal law, 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 whose individual income does not exceed $95,000, and married couples whose combined income does not exceed $170,000. The bill will be effective for one year from the date of its enactment. 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 for tax credit purposes. Efforts are continuing to locate a funding source for this tax credit that does not burden the state's general fund during these tight fiscal times.
Status: Senate Revenue and Taxation Committee
B. SB 1427 (Price) Local property maintenance ordinances
SB 1427 will 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. C.A.R. is working to achieve a consensus with local government on this proposal.
Status: Senate Floor
C. SB 1178 (Corbett) Anti-Deficiency protection
Anti-Deficiency rules protect a borrower from personal liability on a purchase money mortgage which goes into default and eventually foreclosure. Due in part to lower interest rates, many purchase mortgages have been refinanced and have lost their characterization as "purchase money" because of the refinance. Furthermore, most homeowners were not informed by their lender that when they refinanced they lost their legal protections and now may be personally liable for the difference between the value of the foreclosed property and the amount owed to the lender. C.A.R. is sponsoring SB 1178 to extend borrowers’ anti-deficiency protections to cover refinances that refinanced a purchase loan and "cash out" refinances to the extent that homeowners can prove that the money was used to improve the property.
Status: Senate Floor
D. AB 1927 (Knight) CID unit owner right to rent
Over the last few years, C.A.R. members noticed a trend among some homeowner associations to adopt restrictions that limit the ability of unit owners to rent their dwellings in common interest developments (CID’s). In 2008 C.A.R. sponsored AB 2259 (Mullin) to address this issue. The bill passed the legislature, almost unanimously, but was vetoed by the Governor. The Governor’s veto message stated that owners of a unit in a CID agreed when they purchased their unit, to abide by the rules of the HOA and understood that any decision to change those rules would be governed by the HOA voting process. C.A.R. is sponsoring AB 1927 to re-address this right-to-rent issue by addressing the concerns raised by the Governor in his AB 2259 veto message. AB 1927 would require 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. Governance provisions with different written ballot voting requirements in place as of AB 1927’s date of introduction (2-17-2010) would be “grandfathered” by this legislation.
Status: Senate Rules Committee
E. 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. is sponsoring SB 1000 which will enact FHA rules that require lenders to accept a "portable" appraisal, with specified limitations to 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 other material deficiencies.
Status: Held in Senate Banking, Finance and Insurance Committee
F. SB 1123 (Negrete McLeod) DRE "poison pill" reserve protection
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 to create 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 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. is sponsoring SB 1123 to prevent DRE reserve fund transfers ("loans") to other special fund agencies. According to the finance analysis the bill has a potential $2 million price tag, and is opposed by the Department of Finance.
Status: Senate Appropriations Committee
G. AB 1762 (Hayashi) Advance fee definition 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 (e.g. a listing agreement). Even with those amendments, the current statute is confusing. C.A.R. is sponsoring AB 1762 to clarify the current "advance fee" statute (SB 94) in order to make very clear that fee for service contracts do not trigger the advance fee requirements.
Status: Senate Banking, Finance and Insurance Committee
H. AB 1796 (Hall) Appraisal Management Company (AMC) regulatory oversight
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 and subjects AMCs to registration and review by the Office of Real Estate Appraisers (OREA). C.A.R. sponsored AB 1796 to clarify and enhance 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 was held in committee, the chair has committed to an oversight hearing on appraisals and AMC’s, and pending OREA regulations.
Status: Held in Assembly Business and Professions Committee
V. Reports of Policy Committees
A. Housing - Le Francis Arnold
B. Land Use and Environmental - Phyllis Carmichael
C. Taxation and Government Finance - Dennis Badagliacco
D. Transaction and Regulatory - Liz Claus
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
VII. Other
VIII. Adjournment
