New California Laws For 2011 Impact Real Estate.

New California Laws For 2011

Real Estate Impact

New California Laws for 2011 to impact real estate, REALTORS®, buyers, sellers and investors:

No Short Sale Deficiencies: a seller’s first trust deed lender cannot obtain a deficiency judgment
against the seller after a short sale.
Providing written consent to a short sale shall obligate the first trust deed
lender to accept the sales proceeds as full payment and discharge of the remaining amount owed on the loan.
This law applies to first trust deeds secured by one-to-four residential units, but does not limit the lender from
seeking damages for fraud or waste by the borrower. Senate Bill 931 effective January 1, 2011

Energy Audit in Home Inspection Report: a home inspection and inspection report may, upon a
client’s request, include an audit of the energy efficiency of a home, according to the standards of the Home
Energy Rating Systems (HERS). REALTORS® are also strongly encouraged to give the newly released HERS
booklet to residential buyers, because doing so provides a valuable shield from liability. Delivery of the booklet
will be deemed to be adequate to inform the buyer about the statewide HERS program. Assembly Bill 1809 and
California Civil Code section 2079.10 effective January 1, 2011

Restriction on Adverse Possession Claim: a claim for adverse possession requires, among other
things, certified records of the county tax collector showing that all state, county, or municipal taxes have been
timely paid for the five-year period the property has been occupied and claimed. Existing law merely requires
proof that taxes have been paid for the five-year period, not certified proof of timely payments. Assembly Bill
1684, effective January 1, 2011,

Loan Originator requirements Enforcement of Mortgage:

Anyone acting as a mortgage loan originator (MLO) without an MLO license endorsement will be guilty of a
crime punishable by six months imprisonment plus a $20,000 fine. And a broker cannot employ or compensate
a real estate licensee for MLO activities unless that licensee has a license endorsement. This law has also given
the Department of Real Estate (DRE) the authority to deny or revoke a MLO license endorsement or take other
action. This amends the MLO requirements for finance lenders and residential mortgage lenders under the
Department of Corporation. Senate Bill 1137, effective January 1,2011

•Protections Against Real Estate Fraud:
new laws protecting consumers from real estate fraud include:
• Expanding the foreclosure consultant law to include someone who performs a forensic audit of a residential
mortgage loan (Assembly Bill 2325);

• Requiring any mailed solicitation that offers to provide a copy of an owner’s grant deed
or other title records
for a fee to include a prominent statutory disclosure that the copy service is not associated with any
governmental agency and that the homeowner can obtain such records from the county recorder (Assembly
Bill 1373); and

• Increasing the criminal punishment for renting out a residential dwelling without the owner’s consent from
six months imprisonment plus a $1,000 fine, to one year imprisonment, plus a $2,500 fine (Assembly Bill
1800). Effective January 1, 2011