Sell My Short Sales

Los Angeles, California

The numbers don’t lie, and if you think that California real estate is better check out the information below, and you determine for your self.
Every one knows of the hardest hit states in the country through the foreclosure crisis has been California.
California Pre Foreclosures have been consistently high in Los Angeles County, which has 3.08 percent of its households in foreclosure; Orange County has 3.42 percent of families in foreclosure, followed by San Diego at 4.26, San Bernardino with 7.31, and Riverside is still first with 9.27 percent of families in foreclosure.

With Los Angeles Pre Foreclosure down, the outlook for the region is positive you would suspect, as the area has seen foreclosure rates decline on average 25 percent from the November 2008 to November 2009;however we have not seen the eye of the storm as of yet.
The cities with the highest numbers of Notice of Default and Notice of Trustee Sales are Los Angeles (1120), San Diego (1067), Riverside (717), and Corona (505).
Jeff Coga, a short sale investor in Southern California pulled local data, and it clearly showed over 20,000 notice of defaults, and over 31,000 trust deed sales set between January- March. This is a frightening number as it could even be higher as the holiday Moratorium is now officially over today 1/04/2010.
Bernie Germani, another short sale investor in Southern California said ” that 2010 will be no different than 2009 as far as the real estate market in California. We are still declining, and I don’t care what the media tells you, We Aren’t On A Recovery Road Yet. The option arms that are going to adjust this year, and next year we will see many many new foreclosures, and these are good credit borrowers. Don’t let the media trick you into believing we have the bottom of the market.”

Written By:
Susan Park

Popularity: 44% [?]

Los Angeles, California:

Bernie Germani, a short sale investor in Southern California said “He personally knows of siutations where the homeowner was notified the foreclosure was postponed until further notice, and Bernie said some of these familes cried with joy that they could stay through the holidays.”

Written By Susan Park

Popularity: 53% [?]

An unfortunate event in this economic crisis is the increase in short sales and foreclosures of homes, and now The all American Dream may need life support.

In most cases, a short sale is a sale by an owner in which the amount owed on the property is greater than the amount the seller will receive from the sale. We Recommend to our clients that they must obtain an agreement from the lender that the proceeds from the sale will satisfy the debt in full in order to convey clear title to the property to the  new buyer. Lenders are sneaky they will try and have you sign a promissory note for the remainder of the balance, but we always tell our clients to say “No” to this.

A foreclosure or a deed in lieu of foreclosure results in the repossession of a property by the lender due to default on the loan on the part of the borrower. We have heard the Government is offering cash for keys, but we have yet to find 1 homeowner who have recieved that alleged cash.

Each of these events can carry significant tax consequences unless the borrower meets specific exclusions.

With either a short sale or a foreclosure, two distinct, potentially taxable events may occur.
These include: (1) income resulting from the forgiveness of the debt is realized by the homeowner.
(2) gain or loss resulting from the sale of the residence to a third party or deemed sale of the residence to the lender in satisfaction of the debt must also be considered.

The Mortgage Debt Foregiveness Act of 2007 and the Emergency Economic Stabilization Act of 2009 provide tax relief for debt forgiven through a short sale, foreclosure or deed in lieu of foreclosure on a principal residence.

In most cases, in order to qualify as a taxpayer’s principal residence, the taxpayer must own and use the property as their primary residence for periods totaling two out of five years before the sale.  Under Internal Revenue Code Section 108, the discharge of qualified debt incurred to buy, construct or substantially improve a principal residence can be excluded from income if the discharge occurs in calendar years 2007 through 2012. The residence must secure the debt. Up to $2 million of forgiven debt is eligible for this exclusion for married couples filing joint tax returns.

If the taxpayer does not meet the Principal Residence Debt Exclusion under the Mortgage Debt Forgiveness Act of 2007 or the Emergency Economic Stabilization Act of 2009 discussed above, they must look to other provisions for possible tax relief.

Recourse versus non-recourse

The first step is to determine if the debt is “recourse” or “non-recourse.” If the debt is recourse, the borrower is personally liable for the debt and the lender is able to pursue the borrower’s other assets in satisfaction of the debt.

If the debt is non-recourse, the lender’s remedy is limited to the property and the borrower is not personally liable for any deficiency. In California, most loans incurred to purchase a home are non-recourse. Mortgages from refinancing a previous mortgage or home equity line of credit are typically recourse.

Cancellation of indebtedness

The second step is to determine if a taxpayer has cancellation of indebtedness (COI) income. When a property subject to non-recourse debt is foreclosed on or is sold subject to a short sale, the property is treated as being sold for the balance of the mortgage. Therefore, there is no COI income.

For property subject to a recourse loan, COI income is the difference between the principal balance of the debt and the fair market value of the property securing the debt.

There are specific exceptions to this, including the Principal Residence Debt Exclusion, which blurs the distinction between recourse and non-recourse debt in determining the type and amount of discharged debt eligible for favorable tax treatment.

Gain or loss on sale

The third step is to determine the gain or loss on the sale of the property.

Short sales, foreclosures and deeds in lieu of foreclosure are treated as sales or deemed sales for tax purposes.

The gain or loss is determined by subtracting the net sales price of the property from the owner’s adjusted basis in the property.

The adjusted basis of the property is generally equal to the purchase price plus costs to acquire the property and improvement costs less any depreciation taken.

The selling price is equal to the outstanding principal balance of the loan in the case of non-recourse debt and the price that a third party would pay for the property if the loan is recourse, less any transaction expenses related to the sale.

This article focuses on the income tax aspects of foreclosures and short sales involving principal residences and other personal property.

The above information relates only to federal income taxes under the Internal Revenue Code. SB 1055 in California was intended to make California laws more closely conform to federal legislation and was only effective for 2007 and 2008. This legislation has expired. Conformity legislation has been introduced that would adopt the same rules as provided under federal law through 2010.

But with the current budget situation in California, its enactment may be in jeopardy.

Our local economy has been heavily impacted by the tightening mortgage market and the liberal loan policies of the early to mid 2000s.

If you are involved in any form of debt restructuring or a forced sale of property, you should consult with your tax adviser to gain an understanding of how these settlements will affect your federal and California income tax returns.

It is our expectation that The Mortgage Debt Relief Act of 2007 and the Emergency Economic Stabilization Act of 2008 will provide some tax relief to those individuals having to face these difficult decisions.

We are not tax experts, we are just an Exit Real Estate Group/ short sale investorsin Southern California. Please consult your own CPA or attorney for more clarification that would pertain to your situation.

Popularity: 43% [?]

The Moody’s/REAL Commercial Property Price Index (CPPI) published last week showed a decline of 3.9 percent in real estate values from August to September. Prices in September were 37 percent lower than they were a year ago, and 43 percent below the index’s peak in October 2007.

Commercial property prices have clearly taken a nosedive, but Moody’s says the pace of decline appears to be moderating. From February to May of this year, the Moody’s/REAL CPPI averaged a drop of 4.6 percent, falling more than 7 percent during the months of April and May. But looking at the June to September four-month period, the average decline has retreated to just 3.2 percent.

Still, the agency’s analysts expect commercial property values to fall in the coming months by as much as 12 percent more from the October 2007 peak before experiencing a modest rebound to be followed by a long, gradual recovery.

In a report accompanying the agency’s price index, Nick Levidy, Moody’s managing director, explained that cash flows for properties with short-term lease structures, such as hotels and multifamily, are likely to hit bottom in 2010 or early 2011. The bottom for office, retail, and industrial properties, he says, will take longer to form.

“We believe that valuations will rebound off the bottom and settle in for the longer term at levels 30 percent to 40 percent below the market top as liquidity and investors return to the sector and property cash flows begin to recover,” Levidy said.

According to Levidy, in general, commercial real estate lags the overall economy and is dependent on both business and consumers for demand, but he says specific property types are strongly affected by certain macroeconomic metrics. “Employment growth is fundamental, for example, to the office property market,” Levidy said. “The health of the residential housing market is a key for the multifamily sector and retail properties are greatly dependent on rising consumer confidence.”

Cash flows from properties that back commercial mortgage backed securities (CMBS) will recover slowly over a period of several years, Moody’s said in its report. In addition, refinancing risk on CMBS will grow as maturities near on bonds issued during the 2007 peak of the market.

Popularity: 27% [?]

To All California Realtors/ Investors/ Wholesalers/ whomever:
California Revitalization Group is in need of your short sale listings:

My name is Bernie Germani, I work with a group of CASH BUYERS and were interested in working with you and your team, we would like to purchase at least 5-10 Short Sales each and every month, we can have a CASH offer within 24-48hrs on all properties that fit within our buying criteria.

Have you been trying to do Short Sales, but can’t get them completed?

Do they take too much time?

It’s time you discovered:
California Revitalization Group, Exit Real Estate Group, and Short Sale Wealth Builders!

No fees or costs of any kind to you the Realtor, or your seller in default
Get your FULL listing commission of 5-6% on average
Let us negotiate the short sale discount, saving you many hours of time and increasing your success rate
You, as the Realtor, will retain the listing AND your client
No more long phone calls and frustrations dealing with loss mitigation
Access the progress of your short sales online, 24/7!

In other words….

YOU list and sell the property
YOU make your commission
WE do the short sale negotiations

It’s THAT SIMPLE!

That leaves you time to do what YOU do best:

• Finding Sellers
• Finding Buyers
• Marketing and Listing Properties
• Cash Big Fat Commission Checks!

Popularity: 36% [?]

2945.
(a) The Legislature finds and declares that homeowners whose residences are in foreclosure are subject to fraud, deception, harassment, and unfair dealing by foreclosure consultants from the time a Notice of Default is recorded pursuant to Section 2924 until the time surplus funds from any foreclosure sale are distributed to the homeowner or his or her successor. Foreclosure consultants represent that they can assist homeowners who have defaulted on obligations secured by their residences. These foreclosure consultants, however, often charge high fees, the payment of which is often secured by a deed of trust on the residence to be saved, and perform no service or essentially a worthless service. Homeowners, relying on the foreclosure consultants’ promises of help, take no other action, are diverted from lawful businesses which could render beneficial services, and often lose their homes, sometimes to the foreclosure consultants who purchase homes at a fraction of their value before the sale. Vulnerable homeowners are increasingly relying on the services of foreclosure consultants who advise the homeowner that the foreclosure consultant can obtain the remaining funds from the foreclosure sale if the homeowner executes an assignment of the surplus, a deed, or a power of attorney in favor of the foreclosure consultant. This results in the homeowner paying an exorbitant fee for a service when the homeowner could have obtained the remaining funds from the trustee’s sale from the trustee directly for minimal cost if the homeowner had consulted legal counsel or had sufficient time to receive notices from the trustee pursuant to Section 2924j regarding how and where to make a claim for excess proceeds.
(b) The Legislature further finds and declares that foreclosure consultants have a significant impact on the economy of this state and on the welfare of its citizens.
(c) The intent and purposes of this article are the following:
(1) To require that foreclosure consultant service agreements be expressed in writing; to safeguard the public against deceit and financial hardship; to permit rescission of foreclosure consultation contracts; to prohibit representations that tend to mislead; and to encourage fair dealing in the rendition of foreclosure services.
(2) The provisions of this article shall be liberally construed to effectuate this intent and to achieve these purposes.

 

 

2945.1.
The following definitions apply to this chapter:
(a) “Foreclosure consultant” means any person who makes any solicitation, representation, or offer to any owner to perform for compensation or who, for compensation, performs any service which the person in any manner represents will in any manner do any of the following:
(1) Stop or postpone the foreclosure sale.
(2) Obtain any forbearance from any beneficiary or mortgagee.
(3) Assist the owner to exercise the right of reinstatement provided in Section 2924c.
(4) Obtain any extension of the period within which the owner may reinstate his or her obligation.
(5) Obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a deed of trust or mortgage on a residence in foreclosure or contained that deed of trust or mortgage.
(6) Assist the owner to obtain a loan or advance of funds.
(7) Avoid or ameliorate the impairment of the owner’s credit resulting from the recording of a notice of default or the conduct of a foreclosure sale.
(8) Save the owner’s residence from foreclosure.
(9) Assist the owner in obtaining from the beneficiary, mortgagee, trustee under a power of sale, or counsel for the beneficiary, mortgagee, or trustee, the remaining proceeds from the foreclosure sale of the owner’s residence.
(b) A foreclosure consultant does not include any of the following:
(1) A person licensed to practice law in this state when the person renders service in the course of his or her practice as an attorney at law.
(2) A person licensed under Division 3 (commencing with Section 12000) of the Financial Code when the person is acting as a prorater as defined therein.
(3) A person licensed under Part 1 (commencing with Section 10000) of Division 4 of the Business and Professions Code when the person makes a direct loan or when the person (A) engages in acts whose performance requires licensure under that part, (B) is entitled to compensation for the acts performed in connection with the sale of a residence in foreclosure or with the arranging of a loan secured by a lien on a residence in foreclosure, (C) does not claim, demand, charge, collect, or receive any compensation until the acts have been performed or cannot be performed because of an owner’s failure to make the disclosures set forth in Section 10243 of the Business and Professions Code or failure to accept an offer from a purchaser or lender ready, willing, and able to purchase a residence in foreclosure or make a loan secured by a lien on a residence in foreclosure on the terms prescribed in a listing or a loan agreement, and (D) does not acquire any interest in a residence in foreclosure directly from an owner for whom the person agreed to perform the acts other than as a trustee or beneficiary under a deed of trust given to secure the payment of a loan or that compensation. For the purposes of this paragraph, a “direct loan” means a loan of a real estate broker’s own funds secured by a deed of trust on the residence in foreclosure, which loan and deed of trust the broker in good faith attempts to assign to a lender, for an amount at least sufficient to cure all of the defaults on obligations which are then subject to a recorded notice of default, provided that, if a foreclosure sale is conducted with respect to the deed of trust, the person conducting the foreclosure sale has no interest in the residence in foreclosure or in the outcome of the sale and is not owned, controlled, or managed by the lending broker; the lending broker does not acquire any interest in the residence in foreclosure directly from the owner other than as a beneficiary under the deed of trust; and the loan is not made for the purpose or effect of avoiding or evading the provisions of this article.
(4) A person licensed under Chapter 1 (commencing with Section 5000) of Division 3 of the Business and Professions Code when the person is acting in any capacity for which the person is licensed under those provisions.
(5) A person or his or her authorized agent acting under the express authority or written approval of the Department of Housing and Urban Development or other department or agency of the United States or this state to provide services.
(6) A person who holds or is owed an obligation secured by a lien on any residence in foreclosure when the person performs services in connection with this obligation or lien.
(7) Any person licensed to make loans pursuant to Division 9 (commencing with Section 22000), 10 (commencing with Section 24000), or 11 (commencing with Section 26000) of the Financial Code, subject to the authority of the Commissioner of Corporations to terminate this exclusion, after notice and hearing, for any person licensed pursuant to any of those divisions upon a finding that the licensee is found to have engaged in practices described in subdivision (a) of Section 2945.
(8) Any person or entity doing business under any law of this state, or of the United States relating to banks, trust companies, savings and loan associations, industrial loan companies, pension trusts, credit unions, insurance companies, or any person or entity authorized under the laws of this state to conduct a title or escrow business, or a mortgagee which is a United States Department of Housing and Urban Development approved mortgagee and any subsidiary or affiliate of the above, and any agent or employee of the above while engaged in the business of these persons or entities.
(9) A person licensed as a residential mortgage lender or servicer pursuant to Division 20 (commencing with Section 50000) of the Financial Code, when acting under the authority of that license.
(c) Notwithstanding subdivision (b), any person who provides services pursuant to paragraph (9) of subdivision (a) is a foreclosure consultant unless he or she is the owner’s attorney.
(d) “Person” means any individual, partnership, corporation, limited liability company, association or other group, however organized.
(e) “Service” means and includes, but is not limited to, any of the following:
(1) Debt, budget, or financial counseling of any type.
(2) Receiving money for the purpose of distributing it to creditors in payment or partial payment of any obligation secured by a lien on a residence in foreclosure.
(3) Contacting creditors on behalf of an owner of a residence in foreclosure.
(4) Arranging or attempting to arrange for an extension of the period within which the owner of a residence in foreclosure may cure his or her default and reinstate his or her obligation pursuant to Section 2924c.
(5) Arranging or attempting to arrange for any delay or postponement of the time of sale of the residence in foreclosure.
(6) Advising the filing of any document or assisting in any manner in the preparation of any document for filing with any bankruptcy court.
(7) Giving any advice, explanation or instruction to an owner of a residence in foreclosure which in any manner relates to the cure of a default in or the reinstatement of an obligation secured by a lien on the residence in foreclosure, the full satisfaction of that obligation, or the postponement or avoidance of a sale of a residence in foreclosure pursuant to a power of sale contained in any deed of trust.
(8) Arranging or attempting to arrange for the payment by the beneficiary, mortgagee, trustee under a power of sale, or counsel for the beneficiary, mortgagee, or trustee, of the remaining proceeds to which the owner is entitled from a foreclosure sale of the owner’s residence in foreclosure. Arranging or attempting to arrange for the payment shall include any arrangement where the owner transfers or assigns the right to the remaining proceeds of a foreclosure sale to the foreclosure consultant or any person designated by the foreclosure consultant, whether that transfer is effected by agreement, assignment, deed, power of attorney, or assignment of claim.
(f) “Residence in foreclosure” means a residence in foreclosure as defined in Section 1695.1.
(g) “Owner” means a property owner as defined in Section 1695.1.
(h) “Contract” means any agreement, or any term thereof, between a foreclosure consultant and an owner for the rendition of any service as defined in subdivision (e).
2945.2.
(a) In addition to any other right under law to rescind a contract, an owner has the right to cancel such a contract until midnight of the third “business day” as defined in subdivision (e) of Section 1689.5 after the day on which the owner signs a contract which complies with Section 2945.3.
(b) Cancellation occurs when the owner gives written notice of cancellation to the foreclosure consultant at the address specified in the contract.
(c) Notice of cancellation, if given by mail, is effective when deposited in the mail properly addressed with postage prepaid.
(d) Notice of cancellation given by the owner need not take the particular form as provided with the contract and, however expressed, is effective if it indicates the intention of the owner not to be bound by the contract.

 

 

2945.3.
(a) Every contract shall be in writing and shall fully disclose the exact nature of the foreclosure consultant’s services and the total amount and terms of compensation.
(b) The following notice, printed in at least 14-point boldface type and completed with the name of the foreclosure consultant, shall be printed immediately above the statement required by subdivision (c):
“NOTICE REQUIRED BY CALIFORNIA LAW
_____________________________ or anyone working
            (Name)
for him or her CANNOT:
   (1) Take any money from you or ask you for money
until ________________________________________ has
                       (Name)
completely finished doing everything he or she
said he or she would do; and
   (2) Ask you to sign or have you sign any lien,
deed of trust, or deed.”
(c) The contract shall be written in the same language as principally used by the foreclosure consultant to describe his or her services or to negotiate the contract; shall be dated and signed by the owner; and shall contain in immediate proximity to the space reserved for the owner’s signature a conspicuous statement in a size equal to at least 10-point boldface type, as follows: “You, the owner, may cancel this transaction at any time prior to midnight of the third business day after the date of this transaction. See the attached notice of cancellation form for an explanation of this right.”
(d) The contract shall contain on the first page, in a type size no smaller than that generally used in the body of the document, each of the following:
(1) The name and address of the foreclosure consultant to which the notice or cancellation is to be mailed.
(2) The date the owner signed the contract.
(e) The contract shall be accompanied by a completed form in duplicate, captioned “notice of cancellation,” which shall be attached to the contract, shall be easily detachable, and shall contain in type of at least 10-point the following statement written in the same language as used in the contract:
“NOTICE OF CANCELLATION
_____________________________________________
  (Enter date of transaction)      (Date)

 

 

   You may cancel this transaction, without any
penalty or obligation, within three business days
from the above date.
   To cancel this transaction, mail or deliver a
signed and dated copy of this cancellation notice,
or any other written notice, or send a telegram to
__________________________________________________
        (Name of foreclosure consultant)
at
__________________________________________________
   (Address of foreclosure consultant’s place of
                    business)
NOT LATER THAN MIDNIGHT OF _______________________.
                                    (Date)
  I hereby cancel this transaction
__________________________________________________.

 

 

                                   (Date)
________________________________________________”
   (Owner’s signature)
(f) The foreclosure consultant shall provide the owner with a copy of the contract and the attached notice of cancellation.
(g) Until the foreclosure consultant has complied with this section, the owner may cancel the contract.
(h) After the 65-day period following the foreclosure sale, the foreclosure consultant may enter into a contract to assist the owner in arranging, or arrange for the owner, the release of funds remaining after the foreclosure sale (”surplus funds”) from the beneficiary, mortgagee, trustee under a power of sale, or counsel for the beneficiary, mortgagee, or trustee. However, prior to entering into that contract, the foreclosure consultant shall do all of the following:
(1) Prepare and deliver to the owner a notice in 14-point boldface type and substantially in the form set forth below.
(2) Obtain a receipt executed by each owner and acknowledged before a notary public, acknowledging a copy of the notice set forth below.
               “NOTICE TO OWNER
____________________  ________________________
  (Date of Contract)    (Date signed by Owner)
____________________________
  (Date of Foreclosure Sale)

 

 

You may be entitled to receive all or a portion
of the surplus funds generated from the
foreclosure sale of your real property located
at: __________________________, California on
_________________________without paying any fees
or costs of any kind to a third party. You
should check directly with the trustee or
beneficiary who conducted the foreclosure sale
of your property to determine the name, address,
and telephone number of the party to whom you
can direct inquiries regarding filing a claim
for surplus funds without paying a fee to a
third party. No person or entity may require you
to enter into any agreement requiring the
payment of a fee to that person or entity in
order to receive the surplus funds from
the foreclosure sale to which you may be
entitled during the 65 days after the date of
the trustee’s sale.”

 

 

2945.4.
It shall be a violation for a foreclosure consultant to:
(a) Claim, demand, charge, collect, or receive any compensation until after the foreclosure consultant has fully performed each and every service the foreclosure consultant contracted to perform or represented that he or she would perform.
(b) Claim, demand, charge, collect, or receive any fee, interest, or any other compensation for any reason which exceeds 10 percent per annum of the amount of any loan which the foreclosure consultant may make to the owner.
(c) Take any wage assignment, any lien of any type on real or personal property, or other security to secure the payment of compensation. That security shall be void and unenforceable.
(d) Receive any consideration from any third party in connection with services rendered to an owner unless that consideration is fully disclosed to the owner.
(e) Acquire any interest in a residence in foreclosure from an owner with whom the foreclosure consultant has contracted. Any interest acquired in violation of this subdivision shall be voidable, provided that nothing herein shall affect or defeat the title of a bona fide purchaser or encumbrancer for value and without notice of a violation of this article. Knowledge that the property was “residential real property in foreclosure,” does not constitute notice of a violation of this article. This subdivision may not be deemed to abrogate any duty of inquiry which exists as to rights or interests of persons in possession of residential real property in foreclosure.
(f) Take any power of attorney from an owner for any purpose, except to inspect documents as provided by law.
(g) Induce or attempt to induce any owner to enter into a contract which does not comply in all respects with Sections 2945.2 and 2945.3.
(h) Enter into an agreement to assist the owner in arranging, or arrange for the owner, the release of surplus funds prior to 65 days after the trustee’s sale is conducted, whether the agreement involves direct payment, assignment, deed, power of attorney, or assignment of claim from an owner to the foreclosure consultant or any person designated by the foreclosure consultant.

 

 

2945.5.
Any waiver by an owner of the provisions of this article shall be deemed void and unenforceable as contrary to public policy. Any attempt by a foreclosure consultant to induce an owner to waive his rights shall be deemed a violation of this article.

 

 

2945.6.
(a) An owner may bring an action against a foreclosure consultant for any violation of this chapter. Judgment shall be entered for actual damages, reasonable attorneys’ fees and costs, and appropriate equitable relief. The court also may, in its discretion, award exemplary damages and shall award exemplary damages equivalent to at least three times the compensation received by the foreclosure consultant in violation of subdivision (a), (b), or (d) of Section 2945.4, and three times the owner’s actual damages for any violation of subdivision (c), (e), or (g) of Section 2945.4, in addition to any other award of actual or exemplary damages.
(b) The rights and remedies provided in subdivision (a) are cumulative to, and not a limitation of, any other rights and remedies provided by law. Any action brought pursuant to this section shall be commenced within four years from the date of the alleged violation.

 

 

2945.7.
Any person who commits any violation described in Section 2945.4 shall be punished by a fine of not more than ten thousand dollars ($10,000), by imprisonment in the county jail for not more than one year, or in the state prison, or by both that fine and imprisonment for each violation. These penalties are cumulative to any other remedies or penalties provided by law.

 

 

2945.8.
If any provision of this article or the application thereof to any person or circumstance is held to be unconstitutional, the remainder of the article and the application of such provision to other persons and circumstances shall not be affected thereby.

 

 

2945.9.
(a) A foreclosure consultant is liable for all damages resulting from any statement made or act committed by the foreclosure consultant’s representative in any manner connected with the foreclosure consultant’s (1) performance, offer to perform, or contract to perform any of the services described in subdivision (a) of Section 2945.1, (2) receipt of any consideration or property from or on behalf of an owner, or (3) performance of any act prohibited by this article.
(b) “Representative” for the purposes of this section means a person who in any manner solicits, induces, or causes (1) any owner to contract with a foreclosure consultant, (2) any owner to pay any consideration or transfer title to the residence in foreclosure to the foreclosure consultant, or (3) any member of the owner’s family or household to induce or cause any owner to pay any consideration or transfer title to the residence in foreclosure to the foreclosure consultant.

 

 

2945.10.
(a) Any provision in a contract which attempts or purports to limit the liability of the foreclosure consultant under Section 2945.9 shall be void and shall at the option of the owner render the contract void. The foreclosure consultant shall be liable to the owner for all damages proximately caused by that provision. Any provision in a contract which attempts or purports to require arbitration of any dispute arising under this chapter shall be void at the option of the owner only upon grounds as exist for the revocation of any contract.
(b) This section shall apply to any contract entered into on or after January 1, 1991.

 

 

2945.11.
(a) Any representative, as defined in subdivision (b) of Section 2945.9, deemed to be the agent or employee or both the agent and the employee of the foreclosure consultant shall be required to provide both of the following:
(1) Written proof to the owner that the representative has a valid current California Real Estate Sales License and that the representative is bonded by an admitted surety insurer in an amount equal to at least twice the fair market value of the real property that is the subject of the contract.
(2) A statement in writing, under penalty of perjury, that the representative has a valid current California Real Estate Sales License, that the representative is bonded by an admitted surety insurer in an amount equal to at least twice the value of the real property that is the subject of the contract and has complied with paragraph (1). The written statement required by this paragraph shall be provided to all parties to the contract prior to the transfer of any interest in the real property that is the subject of the contract.
(b) The failure to comply with subdivision (a) shall, at the option of the owner, render the contract void and the foreclosure consultant shall be liable to the owner for all damages proximately caused by the failure to comply.

Popularity: 37% [?]

CIVIL CODE – SECTION 1695-1695.17

1695.
(1) To provide each homeowner with information necessary to make an informed and intelligent decision regarding the sale of his or her home to an equity purchaser; to require that the sales agreement be expressed in writing;  to safeguard the public against deceit and financial hardship; to insure, foster, and encourage fair dealing in the sale and purchase of homes in foreclosure; to prohibit representations that tend to mislead; to prohibit or restrict unfair contract terms; to afford homeowners a reasonable and meaningful opportunity to rescind sales to equity purchasers; and to preserve and protect home  equities for the homeowners of this state.
(2) This chapter shall be liberally construed to effectuate this intent and to achieve these purposes.

1695.1.  The following definitions apply to this chapter:
(a) “Equity purchaser” means any person who acquires title to any residence in foreclosure, except a person who acquires such title as follows:
(1) For the purpose of using such property as a personal residence.
(2) By a deed in lieu of foreclosure of any voluntary lien or encumbrance of record.
(3) By a deed from a trustee acting under the power of sale contained in a deed of trust or mortgage at a foreclosure sale conducted pursuant to Article 1 (commencing with Section 2920) of Chapter 2 of Title 14 of Part 4 of Division 3.
(4) At any sale of property authorized by statute.
(5) By order or judgment of any court.
(6) From a spouse, blood relative, or blood relative of a spouse.
(b) “Residence in foreclosure” and “residential real property in foreclosure” means residential real property consisting of one- to four-family dwelling units, one of which the owner occupies as his or her principal place of residence, and against which there is an outstanding notice of default, recorded pursuant to Article 1 (commencing with Section 2920) of Chapter 2 of Title 14 of Part 4 of Division 3.
(c) “Equity seller” means any seller of a residence in foreclosure.
(d) “Business day” means any calendar day except Sunday, or the following business holidays:  New Year’s Day, Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans’ Day, Thanksgiving Day, and Christmas Day.
(e) “Contract” means any offer or any contract, agreement, or arrangement, or any term thereof, between an equity purchaser and equity seller incident to the sale of a residence in foreclosure.
(f) “Property owner” means the record title owner of the residential real property in foreclosure at the time the notice of default was recorded.

1695.2.  Every contract shall be written in letters of a size equal to 10-point bold type, in the same language principally used by the equity purchaser and equity seller to negotiate the sale of the residence in foreclosure and shall be fully completed and signed and dated by the equity seller and equity purchaser prior to the execution of any instrument of conveyance of the residence in foreclosure.

1695.3.   Every contract shall contain the entire agreement of the parties and shall include the following terms:
(a) The name, business address, and the telephone number of the equity purchaser.
(b) The address of the residence in foreclosure.
(c) The total consideration to be given by the equity purchaser in connection with or incident to the sale.
(d) A complete description of the terms of payment or other consideration including, but not limited to, any services of any nature which the equity purchaser represents he will perform for the equity seller before or after the sale.
(e) The time at which possession is to be transferred to the equity purchaser.
(f) The terms of any rental agreement.
(g) A notice of cancellation as provided in subdivision (b) of Section 1695.5.
(h) The following notice in at least 14-point boldface type, if the contract is printed or in capital letters if the contract is typed, and completed with the name of the equity purchaser, immediately above the statement required by Section

1695.5
(a):  “NOTICE REQUIRED BY CALIFORNIA LAW
Until your right to cancel this contract has ended, (Name) or anyone working for __________(Name) CANNOT ask you to sign or have you sign any deed or any other document.”

The contract required by this section shall survive delivery of any instrument of conveyance of the residence in foreclosure, and shall have no effect on persons other than the parties to the contract.

1695.4. 
(a) In addition to any other right of rescission, the equity seller has the right to cancel any contract with an equity purchaser until midnight of the fifth business day following the day on which the equity seller signs a contract that complies with this chapter or until 8 a.m. on the day scheduled for the sale of the p pursuant to a power of sale conferred in a deed of trust, whichever occurs first.
(b) Cancellation occurs when the equity seller personally delivers written notice of cancellation to the address specified in the contract or sends a telegram indicating cancellation to that address.
(c) A notice of cancellation given by the equity seller need not take the particular form as provided with the contract and, however expressed, is effective if it indicates the intention of the equity seller not to be bound by the contract.

1695.5. 
(a) The contract shall contain in immediate proximity to the space reserved for the equity seller’s signature a conspicuous statement in a size equal to at least 12-point bold type, if the contract is printed or in capital letters if the contract is typed, as follows:

“You may cancel this contract for the sale of your house without any penalty or obligation at any time before
____________________________________________________________.
.                      (Date and time of day)

See the attached notice of cancellation form for an explanation of this right.” The equity purchaser shall accurately enter the date and time of day on which the rescission right ends.
(b) The contract shall be accompanied by a completed form in duplicate, captioned “notice of cancellation” in a size equal to 12-point bold type, if the contract is printed or in capital letters if the contract is typed, followed by a space in which the equity purchaser shall enter the date on which the equity seller executes any contract.  This form shall be attached to the contract, shall be easily detachable, and shall contain in type of at least 10-point, if the contract is printed or in capital letters if the contract is typed, the following statement written in the same language as used in the contract:  “NOTICE OF CANCELLATION________________________________________.
                                             (Enter date contract signed)

You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before_______________________________
                           (Enter date and time of day)
To cancel this transaction, personally deliver a signed and dated copy of this cancellation notice, or send a telegram to___________________________
                                            (Name of purchaser)
at ___________________________________________________________
                  (Street address of purchaser’s place of business)

NOT LATER THAN _______________________________.
                                            (Enter date and time of day)
I hereby cancel this transaction _______________________________.
                                                                            (Date)
                        ___________________________________”
                                              (Seller’s signature)
(c) The equity purchaser shall provide the equity seller with a copy of the contract and the attached notice of cancellation.
(d) Until the equity purchaser has complied with this section, the equity seller may cancel the contract.

1695.6. 
(a) The contract as required by Sections 1695.2, 1695.3, and 1695.5, shall be provided and completed in conformity with those sections by the equity purchaser.
(b) Until the time within which the equity seller may cancel the transaction has fully elapsed, the equity purchaser shall not do any of the following:
(1) Accept from any equity seller an execution of, or induce any equity seller to execute, any instrument of conveyance of any interest in the residence in foreclosure.
(2) Record with the county recorder any document, including, but not limited to, any instrument of conveyance, signed by the equity seller.
(3) Transfer or encumber or purport to transfer or encumber any interest in the residence in foreclosure to any third party, provided no grant of any interest or encumbrance shall be defeated or affected as against a bona fide purchaser or encumbrancer for value and without notice of a violation of this chapter, and knowledge on the part of any such person or entity that the property was “residential real property in foreclosure” shall not constitute notice of a violation of this chapter.  This section shall not be deemed to abrogate any duty of inquiry which exists as to rights or interests of persons in possession of the residential real property in foreclosure.
(4) Pay the equity seller any consideration.
(c) Within 10 days following receipt of a notice of cancellation given in accordance with Sections 1695.4 and 1695.5, the equity purchaser shall return without condition any original contract and any other documents signed by the equity seller.
(d) An equity purchaser shall make no untrue or misleading statements regarding the value of the residence in foreclosure, the amount of proceeds the equity seller will receive after a foreclosure sale, any contract term, the equity seller’s rights or obligations incident to or arising out of the sale transaction, the nature of any document which the equity purchaser induces the equity seller to sign, or any other untrue or misleading statement concerning the sale of the residence in foreclosure to the equity purchaser.

1695.7.  An equity seller may bring an action for the recovery of damages or other equitable relief against an equity purchaser for a violation of any subdivision of Section 1695.6 or Section 1695.13. The equity seller shall recover actual damages plus reasonable attorneys’ fees and costs.  In addition, the court may award exemplary damages or equitable relief, or both, if the court deems necessary.

1695.8. Any equity purchaser who violates any subdivision of Section 1695.6 or who engages in any practice which would operate as a fraud or deceit upon an equity seller shall, upon conviction, be punished by a fine of not more than twenty-five thousand dollars ($25,000), by imprisonment in the county jail for not more than one year, or in the state prison, or by both that fine and imprisonment for each violation.

1695.9.  The provisions of this chapter are not exclusive and are in addition to any other requirements, rights, remedies, and penalties provided by law.

1695.10.  Any waiver of the provisions of this chapter shall be void and unenforceable as contrary to the public policy.

1695.11.  If any provision of this chapter, or if any application thereof to any person or circumstance is held unconstitutional, the remainder of this chapter and the application of its provisions to other persons and circumstances shall not be affected thereby.

1695.13.  It is unlawful for any person to initiate, enter into, negotiate, or consummate any transaction involving residential real property in foreclosure, as defined in Section 1695.1, if such person, by the terms of such transaction, takes unconscionable advantage of the property owner in foreclosure.

1695.14.
(a) In any transaction involving residential real property in foreclosure, as defined in Section 1695.1, which is in violation of Section 1695.13 is voidable and the transaction may be rescinded by the property owner within two years of the date of the recordation of the conveyance of the residential real property in foreclosure.
(b) Such rescission shall be effected by giving written notice as provided in Section 1691 to the equity purchaser and his successor in interest, if the successor is not a bona fide purchaser or encumbrancer for value as set forth in subdivision (c), and by recording such notice with the county recorder of the county in which the property is located, within two years of the date of the recordation of the conveyance to the equity purchaser.  The notice of rescission shall contain the names of the property owner and the name of the equity purchaser in addition to any successor in interest holding record title to the real property and shall particularly describe such real property.  The equity purchaser and his successor in interest if the successor is not a bona fide purchaser or encumbrancer for value as set forth in subdivision (c), shall have 20 days after the delivery of the notice in which to reconvey title to the property free and clear of encumbrances created subsequent to the rescinded transaction.  Upon failure to reconvey title within such time, the rescinding party may bring an action to enforce the rescission and for cancellation of the deed.
(c) The provisions of this section shall not affect the interest of a bona fide purchaser or encumbrancer for value if such purchase or encumbrance occurred prior to the recordation of the notice of rescission pursuant to subdivision (b).   Knowledge that the property was residential real property in foreclosure shall not impair the status of such persons or entities as bona fide purchasers or encumbrancers for value.  This subdivision shall not be deemed to abrogate any duty of inquiry which exists as to rights or interests of persons in possession of the residential real property in foreclosure.
(d) In any action brought to enforce a rescission pursuant to this section, the prevailing party shall be entitled to costs and reasonable attorneys fees.
(e) The remedies provided by this section shall be in addition to any other remedies provided by law.

1695.15. 
(a) An equity purchaser is liable for all damages resulting from any statement made or act committed by the equity purchaser’s representative in any manner connected with the equity purchaser’s acquisition of a residence in foreclosure, receipt of any consideration or property from or on behalf of the equity seller, or the performance of any act prohibited by this chapter.
(b) “Representative” for the purposes of this section means a person who in any manner solicits, induces, or causes any property owner to transfer title or solicits any member of the property owner’ s family or household to induce or cause any property owner to transfer title to the residence in foreclosure to the equity purchaser.

1695.16. 
(a) Any provision of a contract which attempts or purports to limit the liability of the equity purchaser under Section 1695.15 shall be void and shall at the option of the equity seller render the equity purchase contract void.  The equity purchaser shall be liable to the equity seller for all damages proximately caused by that provision.  Any provision in a contract which attempts or purports to require arbitration of any dispute arising under this chapter shall be void at the option of the equity seller only upon grounds as exist for the revocation of any contract.
(b) This section shall apply to any contract entered into on or after January 1, 1991.

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