Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®.
C.A.R. Opposing Conference Report that STALLS
Please Ask All Your Colleagues to Call their Senators NOW!
As a Legislative Liaison, we are asking that you urge all your colleagues to respond to this Red Alert right away! Please forward this to everyone in your office!
C.A.R. is OPPOSING a conference report, AB 278, containing anti-foreclosure legislation sponsored by the state Attorney General. C.A.R. opposes provisions in this measure which will allow anyone to stop the foreclosure process by filing a lawsuit, merited or not. C.A.R. agrees that careful and balanced reforms to the foreclosure process are necessary. However, C.A.R. opposes this conference report because it will further delay the housing recovery by inviting bad-faith lawsuits and defaults, and making it difficult for even well qualified borrowers to obtain financing. Financing is already very difficult to get. This conference report will only make a difficult situation worse.
Initially the Attorney General had sponsored a package of bills; the so-called the “Homeowners Bill of Rights.” For procedural reasons, the majority of these bills have been under consideration by a Conference Committee made up of six legislators. REALTORS® had the opportunity to educate these legislators about C.A.R.’s concerns as part of Legislative Day and since then C.A.R. lobbyists have been working directly with the conferees and legislative staff to make them aware of the unintended consequences of some of these proposals. The Conference Committee has now issued its final report and it must be passed by both Houses of the legislature. These votes may occur as early as Monday, July 2nd.
PLEASE URGE EVERYONE IN YOUR OFFICE TO LOOK FOR AN EMAIL TITLED, “Red Alert: Stop Bill to Stall Housing Market.”
ASK THEM TO FOLLOW THE INSTRUCTIONS IN THE EMAIL TO MAKE THE CALL. OR THEY CAN CALL 1-800-969-3310 AND ENTER THEIR NRDS ID TO BE CONNECTED!
Please note: if some of your agents live in a state Senate district represented by a Republican they will not have an email and will not be asked to contact their legislator.
The Attorney General has sponsored a package of bills to place into California law an expanded version of the national settlement between major banks and state attorneys general. The contents of some of these bills have been under consideration by a Conference Committee comprised of six members who have just approved a conference report on a party-line vote. Some provisions will have the unintended effect of drying up mortgage loans for anyone but the most well-qualified borrowers, and increasing the costs of all mortgages.
One provision allows any borrower, no matter what the circumstances, to file a lawsuit. This will encourage opportunistic lawyers to pursue frivolous lawsuits, bringing unnecessary and unjustifiable delays to an already difficult and time consuming process. The language is so vaguely written that the borrower doesn’t even have to show that they have been harmed to file suit and be awarded damages. One-sided attorneys’ fees may still be awarded only to plaintiffs based on the very broad definition of a “prevailing party” in the report. And, of course, if lenders don’t have the remedy of foreclosure to ensure they can recover their security in appropriate situations, they will be less likely to lend, credit will be less available and the housing market recovery will limp along even more slowly.
“less likely to lend” I don’t see why. Lending is based on the current ability of borrowers to pay, not (as it was) the rare possibility of foreclosure.
CAR, Got any proof of this assertion?
C.A.R. is OPPOSED to the conference report because:
The housing market recovery is still fragile. About half of all sales are of distressed properties. By restricting a lender’s ability to foreclose and exposing them to unnecessary liability, this report will dry up inventory, and it will further discourage lending other than to the most highly qualified borrowers. Additionally, these bills will artificially slow down the foreclosure process, keeping properties off the market that are legitimately in foreclosure. Finally, by removing the threat of foreclosure, the bill erodes the incentive for short sales as well.
The bill invites bad-faith defaults and lawsuits. By broadly defining under what circumstances a lawsuit can be filed, even those legitimately in foreclosure can “game” the system. Additionally, the bill creates an incentive for plaintiffs’ attorneys to file frivolous lawsuits even if no harm has been done to the borrower. The courts are already overwhelmed. This bill, by inviting frivolous lawsuits puts an additional strain on the already underfunded courts.
Lending is already tight. Even the best qualified borrowers are finding it difficult to obtain financing. By stopping legitimate foreclosures, banks will be forced to further tighten lending standards at the expense of homebuyers.
For More Information
Please contact DeAnn Kerr at firstname.lastname@example.org
Keeping people in their homes is bad? Especially after the bankers awful behavior. Why?
Shrinking inventory is bad? Doesn’t that mean that prices will rise. Enabling people to sell their home because less of them are under water? Is that not good?
I’d like to see the assertions provide some modicum of proof of the effects stated above. An example of cause & effect.
I don’t remember CAR being on the forefront of decrying the housing bubble, to protect us from the Banks and the crash. Their attitude, as I remember it, was “Buy now or you will never be able to buy a home” which further inflated the bubble.
CAR, the institution who believe Dual Agency (A Realtor can represent both buyer and seller in a transaction) is not an outright conflict of interest, and actively lobby to keep the practice.
People if you live in California, why don’t you ask the delightful DeAnn about these assertions. Her email is above. This email clearly states that CAR wants widespread coverage, and they are looking forward to you emails.