Bill Text: CA SB153 | 2015-2016 | Regular Session | Introduced

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Bill Title: Mortgage foreclosure consultants.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2016-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB153 Detail]

Download: California-2015-SB153-Introduced.html

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BILL NUMBER: SB 153	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Huff

                        FEBRUARY 2, 2015

   An act to amend Section 2945 of the Civil Code, relating to
mortgage foreclosure consultants.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 153, as introduced, Huff. Mortgage foreclosure consultants.
   Existing law defines mortgage foreclosure consultants and
regulates their activities. Existing law states the intent of the
Legislature to protect homeowners who are in the process of
foreclosure from abuses and fraudulent practices by foreclosure
consultants.
   This bill would make technical, nonsubstantive changes to these
provisions.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 2945 of the Civil Code is amended to read:
   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   writing. 
    (2)    To  safeguard the public
against deceit and financial  hardship; to  
hardship. 
    (3)     To  permit rescission of
foreclosure consultation  contracts; to  
contracts. 
    (4)     To  prohibit representations
that tend to  mislead; and to   mislead. 
    (5)     To  encourage fair dealing in
the rendition of foreclosure services. 
   (2) 
    (d)  The provisions of this article shall be liberally
construed to effectuate this intent and to achieve these purposes.