For release:
Thursday, Sept. 25, 2008

CALIFORNIA ASSOCIATION OF REALTORS^® praises Governor Schwarzenegger for veto of AB 1830

LOS ANGELES (Sept. 25) – The CALIFORNIA ASSOCIATION OF REALTORS^® (C.A.R) today praised California Governor Arnold Schwarzenegger for his foresight in vetoing AB 1830, legislation that would have imposed limitations on some -- but not all -- mortgage loan originators.

“Governor Schwarzenegger exhibited true leadership today in his veto of AB 1830, especially in light of the unprecedented challenges facing the U.S. financial system,” C.A.R. President William E. Brown. “AB 1830 is a feel good measure that would have unequally burdened different sectors of the mortgage industry, but would not have addressed lender misconduct that inspired the legislation in the first place. AB 1830 also would have failed to effectively deal with ongoing challenges in the mortgage market.

“C.A.R. historically has supported longstanding California policy that each side involved in litigation must bear its own attorney costs; and that if a contract attempts to impose attorney fees, then the rule applies to both sides,” he said.

“AB 1830 would have created a new right of enforcement by private parties that includes the one-sided ability for successful plaintiffs to collect attorney fees.

“While AB 1830 imposed new restrictions on mortgage brokers originating loans, it failed to apply to competing loans by conventional lenders,” Brown said. “AB 1830 would not have applied equally to lenders like Countrywide or Ameriquest when making a loan through their own in-house loan officers.

“Governor Schwarzenegger recognized that the same rules should apply to all loan officers regardless of whether they are independent licensees or in-house employees of lenders,” he said.

“AB 1830 also would have prejudiced California loans and restricted credit liquidity just as more legitimate, qualified, borrowers are attempting to finance or refinance their transactions in an environment of increasingly stricter underwriting and declining property values,” Brown said. “It also would have attempted to duplicate some protections of existing law.”

C.A.R. also praised Governor Schwarzenegger for his signature on SB 1737, Machado, which will empower California regulators, rather than litigators, to comprehensively enforce the law in the critical area of mortgage fraud.

“We don’t need more laws -- we need more enforcement,” Brown said.

Leading the way...^® in real estate news and information for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with nearly 175,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

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