Transactions and Regulatory Committee 8:00 am - 11:30 am Thursday October 4, 2012 Marquis Ballroom Northeast/Northwest Marriot Hotel
Mission Statement The Committee is a Policy committee. Its mission is to develop C.A.R.'s overall policy agenda as it relates to the practice of real estate. It has original jurisdiction to evaluate transactional issues, legislation and regulation in the following issue areas:
Licensure Liability and Risk Management Real Estate Finance Transactional
Each issue area is managed during the Committee's meeting by an Issue Chair, under the direction of a committee Chair and committee Vice-Chair. The Committee has jurisdiction over issues that are potentially real estate related that do not fall into another committee's jurisdiction. The Committee reports to the Legislative or Federal level of government committee(s), as appropriate, and to the Executive Committee and the Board of Directors.
Presiding: Greg Galli, Chair Virginia Butler, Vice Chair
Issues Chairs: Larry Black, Real Estate Finance John Schulte, Risk Management and Liability Clay Sigg, Transactions Michael Tessaro, License and Regulatory
Liaisons: Mel Wilson, Executive Committee Bill Brown, NAR
Staff: Stan Wieg Matt Roberts
I. Introductions and Welcome - Greg Galli, Chair
II. Member Mobilization Update - DeAnn Kerr
III. Action Items A. Sponsoring legislation to limit the use of eminent domain to seize “upside down” mortgage notes*. Should C.A.R. Sponsor legislation or pursue other options? - see also items V (1) and V (2) below.
B. Access to Regulatory Agency/Board/Commission Meeting and Workshop Notices* (License and Regulatory)
State agencies are required to notice a hearing for proposed adoption of 45-Day language in the OAL’s Register; however they are not required to provide a similar notice for informational hearings, workshops, reports, or 15-day comment periods. Should C.A.R. sponsor legislation to increase transparency in the regulation development process?
C. REO to Rental Securitization* (Transactions) Over the last year, hedge funds, investment banks, and other large investors have begun to slowly buy single-family REOs for the purpose of renting out and selling at a later date. In the meantime, the investors want to sell shares in (securitize) the pools of rentals. What position, if any, should C.A.R. take?
D. Expanding Refinancing Opportunities Act* (Real Estate Finance) Federal legislation has been introduced that would allow homeowners who are current on non-governmental mortgages to refinance into FHA mortgages without meeting loan to value tests. To pay for the cost of this program the legislation proposes an increase in the Fannie Mae and Freddie Mac guarantee fee.
E. Renters to Homebuyers Programs* (Real Estate Finance) Federal legislation has been introduced that would allow former homeowners who lost their home in a distressed transaction, and did not do a strategic default, to qualify for FHA mortgages again earlier than the conventional length of time. What position should C.A.R. take (with NAR) on this “accelerated rehabilitation” of returning homebuyers?
F. Other Action Items
IV. Direction Requested A. Pre-Qualification requirements in connection with a short sale; existing lender vs. buyer’s lender.* (Transaction)
Is the practice causing a problem that impairs sales, should C.A.R. Legal be asked for additional background on its legality, should the issue be included in outreach efforts to lenders, should staff prepare briefing materials in anticipation of possible legislation?
B. Government “Bulk Sale” Programs Summary* (Transactions)
Freddie Mac and FHA have recently announced their own form of a “bulk sale” program. These programs are distinctly different from each other, and from the FHFA REO-Initiative Pilot Program for Fannie Mae REOs that C.A.R. has strongly opposed. What position, if any, should C.A.R. take on the programs?
C. Disclosure of On-bill financing. (Risk Management)
What position should C.A.R. take on on-bill financing of cost-effective energy improvements and which includes disclosure of on-bill financing; include standard disclosure supplied on request by the utility that financed the energy upgrade.
D. Sponsoring legislation to protect DRE in-house regulatory and legal staff. (License and Regulatory)
When the Governor’s Reorganization Plan was considered, one concern was that it not endanger the continued use of in-house legal/enforcement staff by DRE. Under existing law the Attorney General voluntarily allows the department to do so, but the rule is not in statute – should it be? Legislation would be required.
E. DRE proposed regulations and internal task force; DRE seeking C.A.R. participation. (License and Regulatory)
1. Regulation of “team” names. 2. Regulation of misleading fictitious business license names. 3. DRE task force on legislation defining “place of business” and records in a virtual world.
F. Reg. Z proposed disclosure rule update. (Real Estate Finance) Update on California Land Title Assn. comment letter.
G. Other Issues
V. Actions Taken / Updates A. Eminent Domain extension of policy to oppose eminent domain in non-performing notes. Recommended by Distressed Property Task Force and Committee leadership; accepted by C.A.R. leadership.
B. Eminent Domain comment letter to FHFA* Copy of letter included in materials; FHFA reaction to comments not yet known.
C. Special Report: Distressed Property Task Force - Sharon Bowler, Chair
D. Special Report: Ethics and Professionalism Task Force - Jim Hamilton, Chair
E. Other Issues / Updates
VI. Informational Items A. C.A.R. Sponsored legislation - 2012**
AB 1590 (Campos) Assessment Appeals Board - defeated by cost estimates assigned by local government.
AB 1711 (Galgiani) Burdensome energy conservation retrofit - Goal achieved when energy commission backed away from threatened regulations.
AB 1718 (Hill) Degree Broker license - Closes loophole in experience requirement for broker license. Signed by Governor, effective 2013.
AB 1745 (Torres) Dual Track limitation - Goal of bill accomplished by enactment of similar language in Attorney General's foreclosure procedure bills.
AB 2225 (Perea) Debt forgiveness tax liability sunset extension - The bill moved through the legislature but did not go to final enactment because Congress has not yet passed the sunset extension to which California will conform.
** Please see included expanded description of the bills in the Legislative Program bill report at
B. Department of Real Estate (License and Regulatory)
C. National Mortgage Settlement; Report of the Oversight Monitor (Real Estate Finance) https://www.mortgageoversight.com/wp-content/uploads/2012/03/Progress-Report-Release_FOR-POSTING.pdf
D. Bills of Others 1. SB 1220, Desaulnier, Document recording fee for Affordable Housing. 2. Governor’s Agency Reorganization Plan. 3. AB 935, Blumenfield, $20,000 foreclosure tax. 4. Homeowners’ Bill of Rights, sponsored by Attorney General Kamala Harris - SB 900/AB 278; foreclosure process. Dual Track; “Nevada Approach” - AB 2610/ SB 1473; Tenants’ Bill of Rights (in REO properties) - SB 1471/ AB 2425; foreclosure process. These bills were included in the SB 900/AB 278 conference report described above. - AB 1474, Davis, Transfer fees for multi-county grand jury jurisdiction on real estate fraud. C.A.R. obtained clarifying amendments in the bill as described in SB 1220, above, and was otherwise neutral on the bill. 5. AB 1511, Bradford, Disclosure of proximity of pipeline proximity. 6. AB 2517 (Eng) Wage Liens - laborer liens on property with super priority and no notice. 7. SB 1069 (Corbett) Deficiency Judgments - A “new loans only” prospective version of C.A.R.'s SB 1178. 8. AB 2257 (Achadjian) Landfill “Move to the Nuisance” Immunity 9. AB 2299 (Feuer) Public Safety Officer Title Records 10. AB 1838 (Calderon) CID Fees for required Documents - Clarification of C.A.R's AB 771 of 2011. 11. SB 1156 (Steinberg) Sustainable Communities Investment Authority - allows local governments with remaining redevelopment funds to create a Sustainable Community Redevelopment Authority (authority) to replace redevelopment agencies. 12. SB 1191 (Simitian) Landlord Disclosure to Prospective Tenants of pending foreclosure. 13. SB 1394 (Lowenthal) Carbon Monoxide Devices & Smoke Detectors - extends date on rentals to 2016. 14. AB 2231 (Fuentes) Sidewalk repairs 15. AB 1506 (Jeffries) Fire Prevention Fees Repeal. 16. AB 1963 (Huber) Service Sales Tax - Turned into a study of the issue. 17. Other bills as information is available
VII. Other Business
Note: “*” indicates that an item is accompanied by an Issues Briefing Paper included in the committee materials.