California Updates Various Provisions
California Real Estate Advertising Requirements Updated
California has passed Assembly Bill 1650 which amends its real estate licensee advertising requirements to require additional disclosures. Existing law requires that, where a real estate licensee publishes, circulates or distributes in any newspaper or periodical or by mail any matter pertaining to any activity for which a license is required, that the advertisement disclose: that the licensee is performing an act for which a real estate license is required, the licensee’s license identification number, and, in the event the licensee is also a mortgage loan originator, his or her NMLS license number.
Effective January 1, 2018 the licensee is required to disclose on all solicitation materials his or her name, license identification number and unique identifier assigned to that licensee by the Nationwide Mortgage Licensing System and Registry if that licensee is also a mortgage loan originator. In addition, the commissioner may adopt regulations identifying the materials in which this information must be disclosed.
Excluded from this requirement are “for sale,” rent, lease, “open house,” and directional signs that display the broker’s identity pursuant to Section 10159.7 of the Civil Code or display no licensee identification information.
California Amends Provisions Regarding Trustee or Attorney Foreclosure Fees
California has passed Senate Bill 983 which amends provisions regarding foreclosure attorney’s fees that may be charged prior to the mailing of notice of sale pursuant to a power of sale contained in a mortgage or otherwise at any time prior to the decree for foreclosure.
Section 2924c of the California Civil Code has been amended to allow collection of fees based upon the following schedule: If the unpaid principal sum secured is one hundred fifty thousand dollars ($150,000) or less, then the trustee’s or attorney’s fees are authorized to be in a base amount that does not exceed three hundred fifty dollars ($350).
If the unpaid principal sum secured exceeds one hundred fifty thousand dollars ($150,000,) then fees are authorized to be in the base amount of three hundred dollars ($300), plus one-half of 1 percent of the unpaid principal sum secured exceeding fifty thousand dollars ($50,000) up to and including one hundred fifty thousand dollars ($150,000) plus one-quarter of 1 percent of any portion of the unpaid principal sum secured exceeding one hundred fifty thousand dollars ($150,000) up to and including five hundred thousand dollars ($500,000), plus one-eighth of 1 percent of any portion of the unpaid principal sum secured exceeding five hundred thousand dollars ($500,000).
Fees charged based upon the schedule are presumed to be lawful and valid. However, where a court issues a decree of foreclosure, it shall have discretion to award reasonable attorney’s fees and costs as may be allowed by the note, deed of trust or mortgage and subject to Section 580c of the Code of Civil Procedure.
California Enacts Identity Theft Resolution Act
California has amended Sections 1785.16.2 and 1788.18 of the Civil Code to further protect consumers who may be a victim of an identity theft crime. The act requires a debt collector to cease collection activities and to complete a review prior to resuming collection activities where a debtor provides to the debt collector certain items alleging that they are a victim of an identity theft crime as required by Section 1788.18(a) of the Civil Code.
The Act also requires that, within 10 business days of receiving all of the information required by Section 1788.18(a), the debt collector notify any consumer credit agency that the debt collector has reported adverse information to that the account is in dispute. The debt collector is required to complete a review of the information provided by the debtor and any other information available to the debt collector in its file or from the creditor. Within 10 business days of completion of the review the debt collector must send notice of its determination to the debtor. Only when the debt collector makes a good faith determination that the information does not establish that the debtor is not responsible for the debt may the debt collector resume collection activities.
Should the debt collector terminate collection of the debt based upon its review of the information provided, no inference or presumption with respect to the validity of the debt or liability of the debtor shall arise. If the debt collector does terminate collection of the debt, then it must, within 10 days of its determination, instruct consumer credit reporting agencies to delete any adverse information that was provided to it by the debt collector and notify the creditor that collection activities have been terminated.
California Amends Notary Provisions Regarding Identification Acceptance
California has passed Assembly Bill 2566 which amends Section 1185 of the Civil Code with respect to identity documents a notary public may rely on when making the determination that a person making an acknowledgement is the person described. Existing law allows a notary public to reasonably rely on a passport issued by a foreign government and stamped by the United States Citizenship and Immigration Services of the Department of Homeland Security. This provision has been repealed and amended to authorize the acceptance of a valid consular identification document issued by a consulate from the applicant’s country of citizenship or a valid passport from the applicant’s country of citizenship. The requirement that the passport be stamped by the United States Citizenship and Immigration Services of the Department of Homeland Security has been removed.
Adam Faria, JD, is a regulatory compliance consultant with CLA. He is a graduate of Northeastern University and earned his juris doctor at Suffolk University Law School. He is admitted to the bar in Massachusetts and New Hampshire.
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