Bill Text: CA AB1730 | 2013-2014 | Regular Session | Chaptered
Bill Title: Mortgage loan modification.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2014-09-19 - Chaptered by Secretary of State - Chapter 457, Statutes of 2014. [AB1730 Detail]
Download: California-2013-AB1730-Chaptered.html
BILL NUMBER: AB 1730 CHAPTERED
BILL TEXT
CHAPTER 457
FILED WITH SECRETARY OF STATE SEPTEMBER 19, 2014
APPROVED BY GOVERNOR SEPTEMBER 19, 2014
PASSED THE SENATE AUGUST 21, 2014
PASSED THE ASSEMBLY AUGUST 22, 2014
AMENDED IN SENATE AUGUST 19, 2014
AMENDED IN SENATE JUNE 5, 2014
AMENDED IN ASSEMBLY APRIL 23, 2014
INTRODUCED BY Assembly Member Wagner
FEBRUARY 14, 2014
An act to amend Section 2944.7 of, and to add Sections 2944.8 and
2944.10 to, the Civil Code, relating to mortgages.
LEGISLATIVE COUNSEL'S DIGEST
AB 1730, Wagner. Mortgage loan modification.
Existing law, applicable to residential mortgages, prohibits a
person who negotiates, arranges, or otherwise offers to perform a
mortgage loan modification or other form of mortgage loan forbearance
for a fee or other compensation from, among other things, demanding
or receiving any compensation until every service that the person
contracted to perform or represented that he or she would perform is
accomplished. Existing law makes a violation of these provisions by a
natural person a misdemeanor punishable by a specified fine or
imprisonment, or both.
This bill would require the assessment of civil penalties for a
violation of these provisions and would authorize designated state
and local government officials to commence civil actions to recover
those penalties.
This bill would, in addition to the civil penalties described
above, authorize further civil penalties for unlawful mortgage
modifications perpetrated against a senior citizen or disabled
person, as defined, and provide criteria for the assessment of these
additional penalties. The bill would authorize a court to order the
offender to pay restitution to the senior citizen or disabled person,
as specified.
This bill would impose a 4-year statute of limitations for actions
brought pursuant to these provisions.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2944.7 of the Civil Code is amended to read:
2944.7. (a) Notwithstanding any other law, it shall be unlawful
for any person who negotiates, attempts to negotiate, arranges,
attempts to arrange, or otherwise offers to perform a mortgage loan
modification or other form of mortgage loan forbearance for a fee or
other compensation paid by the borrower, to do any of the following:
(1) Claim, demand, charge, collect, or receive any compensation
until after the person has fully performed each and every service the
person contracted to perform or represented that he or she would
perform.
(2) Take any wage assignment, any lien of any type on real or
personal property, or other security to secure the payment of
compensation.
(3) Take any power of attorney from the borrower for any purpose.
(b) A violation of this section by a natural person is punishable
by a fine not exceeding ten thousand dollars ($10,000), by
imprisonment in the county jail for a term not to exceed one year, or
by both that fine and imprisonment, or if by a business entity, the
violation is punishable by a fine not exceeding fifty thousand
dollars ($50,000). These penalties are cumulative to any other
remedies or penalties provided by law.
(c) In addition to the penalties and remedies provided by Chapter
5 (commencing with Section 17200) of Part 2 of Division 7 of the
Business and Professions Code, a person who violates this section
shall be liable for a civil penalty not to exceed twenty thousand
dollars ($20,000) for each violation, which shall be assessed and
recovered in a civil action brought in the name of the people of the
State of California by the Attorney General, by any district
attorney, by any county counsel authorized by agreement with the
district attorney in actions involving a violation of a county
ordinance, by any city attorney of a city having a population in
excess of 750,000, by any city attorney of any city and county, or,
with the consent of the district attorney, by a city prosecutor in
any city having a full-time city prosecutor, in any court of
competent jurisdiction pursuant to Chapter 5 (commencing with Section
17200) of Part 2 of Division 7 of the Business and Professions Code.
(d) Nothing in this section precludes a person, or an agent acting
on that person's behalf, who offers loan modification or other loan
forbearance services for a loan owned or serviced by that person,
from doing any of the following:
(1) Collecting principal, interest, or other charges under the
terms of a loan, before the loan is modified, including charges to
establish a new payment schedule for a nondelinquent loan, after the
borrower reduces the unpaid principal balance of that loan for the
express purpose of lowering the monthly payment due under the terms
of the loan.
(2) Collecting principal, interest, or other charges under the
terms of a loan, after the loan is modified.
(3) Accepting payment from a federal agency in connection with the
federal Making Home Affordable Plan or other federal plan intended
to help borrowers refinance or modify their loans or otherwise avoid
foreclosures.
(e) This section shall apply only to mortgages and deeds of trust
secured by residential real property containing four or fewer
dwelling units.
SEC. 2. Section 2944.8 is added to the Civil Code, to read:
2944.8. (a) In addition to any liability for a civil penalty
pursuant to Section 2944.7, if a person violates Section 2944.7 with
respect to a victim who is a senior citizen or a disabled person, the
violator may be liable for a civil penalty not to exceed two
thousand five hundred dollars ($2,500) for each violation, which may
be assessed and recovered in a civil action.
(b) As used in this section, the following terms have the
following meanings:
(1) "Disabled person" means a person who has a physical or mental
disability, as defined in Sections 12926 and 12926.1 of the
Government Code.
(2) "Senior citizen" means a person who is 65 years of age or
older.
(c) In determining whether to impose a civil penalty pursuant to
subdivision (a) and the amount thereof, the court shall consider, in
addition to any other appropriate factors, the extent to which one or
more of the following factors are present:
(1) Whether the defendant knew or should have known that his or
her conduct was directed to one or more senior citizens or disabled
persons.
(2) Whether the defendant's conduct caused one or more senior
citizens or disabled persons to suffer any of the following: loss or
encumbrance of a primary residence, principal employment, or source
of income, substantial loss of property set aside for retirement, or
for personal or family care and maintenance, or substantial loss of
payments received under a pension or retirement plan or a government
benefits program, or assets essential to the health or welfare of the
senior citizen or disabled person.
(3) Whether one or more senior citizens or disabled persons are
substantially more vulnerable than other members of the public to the
defendant's conduct because of age, poor health or infirmity,
impaired understanding, restricted mobility, or disability, and
actually suffered substantial physical, emotional, or economic damage
resulting from the defendant's conduct.
(d) A court of competent jurisdiction hearing an action pursuant
to this section may make orders and judgments as necessary to restore
to a senior citizen or disabled person money or property, real or
personal, that may have been acquired by means of a violation of
Section 2944.7.
SEC. 3. Section 2944.10 is added to the Civil Code, to read:
2944.10. Any action to enforce any cause of action pursuant to
Section 2944.7 or 2944.8 shall be commenced within four years after
the cause of action accrued. No cause of action barred under existing
law on the effective date of this section shall be revived by its
enactment.
