California Homeowners Bill of Rights – New Law for 2013.

The new California Homeowner Bill of Rights becomes law today. If you’re not familiar with this measure, it was a bill carried on behalf of California Attorney General Kamala Harris last year that sought to codify some of the measures set forth in the national mortgage settlement deal struck in early 2012. 

Initially opposed by the California Association of Realtors as well as the California Bankers Association and the California Mortgage Bankers Association, the bill was pushed through the legislature by a closed joint committee  of both houses so when the bill eventually reached the floor, it was voted on immediately and passed to the Governor. Total time in committee, floor and signature was measured in hours rather than days, months or years, as is typical for most bills. 

Due to the secretive nature of the committee structure, there was little opportunity for interest groups to provide input and there was great concern that what emerged would be a very flawed effort reflecting an over reaction to purported lender wrongdoing. However, CAR did have an opportunity to work with the committee to effect some modifications to the final version that removed our opposition to the bill. CAR was not supportive of the bill in its final version but adopted a neutral position, although banking groups remained steadfast in their opposition due to to concerns about meritless litigation that the bill opens up for aggreaved homeowners. 

Here’s what the bill does:

  • Stops dual tracking. Once the process has started for either a loan modification or short sale by the lender, the foreclosure process must be stopped. This is in response to cases where the property proceeds along multiple courses at the same time only to have the foreclosure process conclude days ahead of a short sale approval by another arm of the bank. As pointed out, this frequently resulted in the bank taking the property back and ultimately receiving thousands less in the foreclosure sale than they would have in a short sale. Of course we know the banks are covered either way and really don’t care but ultimately this should result in more short sales and fewer foreclosures, which is better for the recovering market.
  • Under the dual tracking provisions, banks must give an applicant a response to their loan modification before they can start the foreclosure process. If a homeowner has not applied for a loan modification, the bank must inform them of their right to do so before starting the foreclosure process.
  • No more robo signing.
  • Banks must provide a single point of contact to borrowers trying for a loan modification or short sale. Homeowners and Realtors are often frustrated by multiple points of contact and the handoff fr5om one agent to  another within a bank frequently resulting in the loss of paperwork sending the process back to square one while the foreclosure process continues apace in another department.
  • Allows the borrower to sue loan servicers if the borrower thinks they have violated any foreclosure laws. This is one of the most worrisome components of the bill in that it may open the door to frivolous lawsuits resulting in increased costs and unnecessary delays in an already costly and time consuming process. 

With nearly 1 million foreclosures recorded in the state since 2007, California remains one of the hardest hit areas of the country. However, foreclosures are down in most areas by 30% or more in the past year and with prices starting to climb across the state, the hope is that fewer and fewer people will be pushed into foreclosure anyway. Some 30% of state homeowners remain underwater in their loans but the combination of improving employment statistics and home price increases has decreased that by more than 5% in the past year.

The Homeowners Bill of Rights may well provide some relief for harried homeowners and produce further delays to the process, but it will do little to change the underlying ability of a homeowner to ultimately afford their home and will, in most cases, only delay the inevitable. If Sacramento and DC don’t screw it up, an improving economy will do more to aid homeowners than the HBR will ever accomplish – and ultimately that’s the best news for everybody. 

Another Bogus Budget

KEVIN’S CORNER

It was another rough month for the families and taxpayers of California, as the legislature completed this year’s budget this week.  I don’t know if there is anyone who is actually happy about the budget, as even the majority party who crafted it in its entirety would certainly rather be growing rather than cutting and eliminating programs.  But there are bad ways to deal with a deficit of this size, and there are worse ways, and make no mistake about it-they have chosen some of the very worst ways to do it.

A few of the worst elements of this budget plan (in no particular order):

  • Once again, the process was done largely in secret behind closed doors.  Hearings were held only on the most general concepts (when they existed at all), and witnesses were unable to say how specific programs might be affected or how much would be spent or cut.  Groups who were affected by the cuts (like local governments) were not allowed to see the final language until it was too late to organize against it, and promises that had been made in negotiations before the budget were absent when the bills were passed on the floor.
  • The budget is based on the assumption that California’s voters will pass an $8 billion tax increase in November, despite the fact that voters have rejected the last 8 taxes to appear on state-wide ballots, including the tobacco tax that just failed in June.  If voters are unwilling to support a relatively small tax that doesn’t affect most of them to cure cancer, are they really likely to pass a massive tax increase that will affect everyone and be spent by our dysfunctional state government?
  • The relatively successful Healthy Families Program that covers medical and dental care for poor children was scrapped, putting them into the state’s Medi-Cal program instead.  Healthy Families is administered by a private group for $50 per client, Medi-Cal is run by state employees for $395 per client.
  • Roughly $16 million was budgeted for administration and collection of the problematic and likely illegal fire tax.  It is likely that no net revenues will ever be recovered from this tax before it is struck down, and we will pay $16 million  for nothing.
  • It is expected that next week the Legislature will approve the $2.7 billion in bond sales that the governor wants for initial construction of the High Speed Rail Program, which will cost the state general fund roughly $180 million annually for 30 years-enough to keep all the State Parks open, fully fund the UCR Medical School, and restore funding to the cities in Riverside County who were victimized in last year’s budget-and still leave tens of millions of dollars to restore other cuts in critical programs or schools.
  • The Governor has targeted massive and unnecessary cuts at education if his tax increase fails as expected  in November.  I supported a budget alternative that would have protected schools and higher education from budget cuts, but it never even received a hearing.  Holding a figurative gun to the head of schools to force voters to pass his tax increase is a cynical move that exposes his true priorities.
  • Pension reform has been cast aside again.  Rather than including the billions in potential savings from legitimate reform in the state budget, votes on the Governor’s plan (a good one, actually) have been rejected, and all discussion of reform has taken place in private.  Rumor has it there may be a vote on some sort of reform next week, but once again, nobody but the legislative leadership and the government union leaders who elected them know what will be in it.
  • Local governments were once again victimized in multiple ways that attack their authority, their flexibility, their budgets, and the safety of their residents.

I am asked regularly what can be done to fix the problems in Sacramento, and there are no easy answers.  With the passage of Proposition 25 two years ago, only a simple majority is required to pass a budget, so the party in charge in Sacramento has free reign and can now make decisions based on whatever priorities they want.  The only way to change what is happening in the Capitol is to change the folks who are running the State Capitol.

Another option is through the initiative system, which allows citizens to go around those who control state government.  There is an initiative which just qualified for the November ballot that does put some restraints on how your government operates, including a requirement that bills be in print and publicly available for 72 hours prior to a vote.  I haven’t had a chance to review all the reforms contained in this measure, and this should not be considered an endorsement of the “Government Performance and Accountability Act”, but it is increasingly clear that the legislature is not willing to reform itself, and change will likely have to be forced upon them.

Because I am leaving the Assembly at the end of the year, this was my last budget fight in Sacramento, and I can guarantee I will not miss it one bit!

Sincerely,

Kevin

CAR OPPOSES AG’s Homeowner Bill of Rights.

California Homeowners Bill of Rights:

A Lesson in Political Expediency & Unintended Consequences.

California Attorney General Kamala Harris announced in a much heralded press release today that her ‘California Homeowners Bill of Rights’ has ‘taken a key step toward passage’. Here’s the key step – she bypassed every preliminary opportunity for the bill to be discussed, debated or voted on in either the Assembly or the Senate. What she did, or had her minions in the Legislature do for her, was have the bill introduced to a ‘two-house conference committee’ that voted this morning to pass the bill. That means tomorrow or, more probably Monday, the full Senate and Assembly will vote on the bills – SB 900 & AB 278 with no discussion.

You’ve heard me discuss the measures previously as the Nevada Suite of bills, so named for the deleterious results Nevada experienced after passing similar legislation last year. Did I mention the ‘special committee’ was made up of 4 Democrats and 2 Republicans? Now guess what the vote was? That’s called a ‘procedural matter’ in Sacramento. Roughly translated it means ‘bend over’.

Here’s C.A.R.’s take on the issue:

C.A.R. is OPPOSING 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.

Background

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.

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 most well-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.

 

We’re not intimating that everything contained in the bills is bad and we have been supportive of some of the issues. We also have a competing dual-tracking bill in play that we feel is more balanced and less vague. But this is a take-it-or-leave-it kind of bill – you have to eat the whole enchilada and there are no amendments allowed at this point. All the bad will be with us as law along with the few good things it might accomplish. Sound familiar?

This is also what is referred to as a ‘gut & amend’ bill. For 1 1/2 years some bills have been floating around the Legislature knowing full well they weren’t going anywhere. They were being held for just such a vehicle as this to rise from the ashes and require a last minute vote – often with only minutes of notice.

So this bill will pass UNLESS you can convince your Democratic Legislator to vote against it. Otherwise it’s a simple exercise in vote counting (53 – 27) to ascertain that our housing market will take another hit – a victim of increased frivolous lawsuits, further restrictions on foreclosures and tightened lending standards.

So now you know the proverbial ‘other side of the story’ and it’s not pretty. I encourage you to read the bill at  AB 278 and then read the AG’s release below. While the release summarizes a much glossed over purview of the bills, the devil is in the details. So go to work on your Democratic Legislators and let them know how Realtors® feel, and every homeowner and landlord who doesn’t feel like paying the price this bill will cost.

 

 

NEWS RELEASE

June 27, 2012

FOR IMMEDIATE RELEASE
(415) 703-5837

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California Homeowner Bill of Rights Takes Key Step to Passage

SACRAMENTO — Attorney General Kamala D. Harris today announced the passage of two central elements of the California Homeowner Bill of Rights through a special two-house conference committee. The 4 to 1 vote sends the bills to an expected vote next week in both the Assembly and Senate.

The two bills approved by the conference committee are the Foreclosure Reduction Act, which restricts the process of “dual-tracked” foreclosures and the Due Process Rights Act, which guarantees a reliable contact for struggling homeowners to discuss their loan with and which for the first time imposes civil penalties on the practice of fraudulently signing foreclosure documents without verifying their accuracy, a practice commonly known as “robo-signing.” The proposed legislation also includes meaningful enforcement for borrowers whose rights are violated.

The full Homeowner Bill of Rights includes additional provisions to reduce blight, ensure appropriate law enforcement response to mortgage fraud and crime, and protect tenants.  The bills containing these protections are also advancing through the Legislature.

“I am gratified by this vote, which represents one more step toward our goal of achieving a Homeowner Bill of Rights for California,” said Attorney General Harris. “The mortgage and foreclosure crisis in our state demands urgent efforts to help Californians keep their homes. The legislature will now have the opportunity to cast a vote on behalf of California’s struggling homeowners.”

The California Homeowner Bill of Rights was introduced February 29, 2012 at a press conference featuring Assembly Speaker John A. Perez and Senate President pro Tem Darrell Steinberg and bill authors from the Assembly and Senate. The goal of the Homeowner Bill of Rights is to take many of the mortgage reforms extracted from banks in a national mortgage settlement and write them into California law so they could apply to all mortgage-holders in the state.

“The mortgage and foreclosure abuse in California ends here,” said Noreen Evans (D-Santa Rosa), co-chair of the Joint Conference Committee. “This committee has passed historic legislation that codifies the
protections eligible homeowners deserve, while helping to stabilize the foreclosure crisis that has thwarted California’s economic recovery. The Legislature has studied, listened and engaged Californians and
industry to find a solution that is fair and effective to mitigate this crisis. I look forward to the full support of the Legislature and Governor in implementing this package.”

“This bill is the result of a long and difficult process in which we received input from all interested parties; including homeowners and the banks and found that foreclosures benefit no one,” said Assemblymember Mike Eng (D-Alhambra). “We ended such dubious practices as having a bank foreclose while a homeowner is in the process of modifying a loan and cut through confusion by making sure that there is a ‘single point of contact’ with mortgage servicers.  With half a million California homes at risk of foreclosure, this action was urgently needed.”

The California Homeowner Bill of Rights extends Attorney General Harris’ response to the state’s foreclosure and mortgage crisis. Attorney General Harris created a Mortgage Fraud Strike Force in March, 2011 to investigate and prosecute misconduct related to mortgages and foreclosures. In February 2012 Attorney General Harris extracted a commitment from the nation’s five largest banks of an estimated $18 billion for California borrowers.

More details about the California Homeowner Bill of Rights are found on the attached fact sheet.  To learn more about how the bills impact California homeowners, review the slideshow at: www.oag.ca.gov.

# # #

You may view the full account of this posting, including possible attachments, in the News & Alerts section of our website at: http://oag.ca.gov/news/press-releases/california-homeowner-bill-rights-takes-key-step-passage

 

Gov. signs Realtor Bill for short sale relief.

New law gives added protection to short-sale hopefuls On Friday, Gov. Jerry Brown signed Senate Bill 458 (Corbett) into law.  The new law, which contained an urgency clause and became effective upon signing, protects homeowners pursuing short sales by barring first and secondary lien holders from going after sellers for money owed after the short sales close.

Making sense of the story

*     A short sale – a transaction in which the homeowner sells the property for less than is owed on the mortgage – must be approved by the lien holder or lien holders, if there is more than one.

*     Under previous law (SB 931 of 2010), a first mortgage holder could accept an agreed-upon short-sale payment as full payment for the outstanding balance of the loan, but the rule did not apply to junior lien holders. SB 458 extends the protections of SB 931 to junior liens.

*     The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) sponsored the bill and urged lawmakers to pass this much-needed legislation.

*     “The signing of this bill is a victory for California homeowners who have been forced to short sell their home, only to find that the lender will pursue them after the short sale closes and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce.  “SB 458 brings closure and certainty to the short-sale process and ensures that once a lender has agreed to accept a short-sale payment on a property, all lienholders – those in first position and in junior positions – will consider the outstanding balance as paid in full, and the homeowner will not be held responsible for any additional payments on the property.”

Read the full story <http://www2.realtoractioncenter.com/site/R?i=Y7pJy-rwyTJMoTmgvOXhDA..>

Update on Keep Your Home California Program

Update on the ‘Keep Your Home California’ program.

This $2 Billion program, announced a few months ago to great fanfare but little result, has determined it’s time to expand the programs due to it’s thus far limited reach. The program is designed for low and moderate income borrowers who refinanced their home, took out a home equity line of credit (HELOC), or are underwater on their loans and now find themselves in trouble (duh). The program features four separate sections to help these borrowers including one to get caught up on their loan, another to reduce their principle, one to provide relocation and transition assistance and one to subsidize payments to unemployed homeowners.

Administered from a federal grant by the California Housing Finance Agency, the programs director says they started slow by design. Before jumping in with both feet they wanted to guage the response, see what kind of people were applying and why they were not qualifying. The director expects the program ultimately to help 100,000 Californians.

Of course as I noted in an earlier post when the program was announced, the program is voluntary for lenders. Yeah, you read that right. Lenders will voluntarily agree to accept partial back payments or reduced principle for borrowers who took cash out of their homes during the boom times. Low to moderate income buyers, who are in financial trouble. Yeah, the banks haven’t demonstrated much pro-activity in helping anybody at all, let alone low to moderate income folks. I’m sure this will all work out fine. Even the director admits that ‘only some lenders are participating’. Go figure.

Oh well, I guess if we can keep 100,000 low to moderate income people in their homes here while other demographic groups are ignored by HAMP and HAFA and other bail-outs, that’s a good thing, eh?

Redistricting & Open Primaries – it’s a whole new world.

Most of you are aware that we will be undergoing a massive redistricting effort  that will impact our County, our State and our Federal elective districts. Certainly in California we’ve all been aware that in the past decade the political boundaries 1) make no sense and 2) produce landslides for the incumbent party. There are definite Republican Districts and definite Democratic Districts and it’s pretty much a waste of time for the alternate party to even field a candidate in those races. One seat has changed parties during the past 10 years out of over 250 separate races. 1!.

But that’s all about to change. Californians voted last fall to form a commission to draw the new districts – unlike the last time they were drawn when we let the politicians draw their own. The Commissions report is due out by August and our area will be in for some changes because our region has grown faster than most regions of the state. Our County Supervisor boundaries will be redrawn to reflect the growth in Southwest County and, with the potential election of current Assemblyman Kevin Jeffries to a supervisorial seat, our region could see 2 Supervisors representing Southwest County for the first time EVER. That’s good.

At the state level we probably won’t see much change but the district  boundaries will definitely be redrawn to make some sense by keeping contiguous city interests in one sphere. Right now Jeffries has a district that runs in skinny strips hither and yon, crossing over Nestande’s district in places, running into San Diego County – makes no sense. Our Senatorial District may also see some shifts as Emmerson keeps a more contiguous area of Riverside County while Anderson gives up some of the northern portion of his San Diego District that starts in Chula Vista.

Our regions also stands to pick up an additional federal representative as more of the population has shifted inland from coastal areas. With out region currently split between Calvert, Bono-Mack and Issa, we’ll have to see what that means.

Further complicating the political landscape is the new open primary rule, again resulting from the last election. There will no longer be Republican and Democratic primaries, just one big free-fer-all. The top two candidates will run against each other in the fall. The theory is that this will draw more candidates from the middle of the road rather than the ideological edges of party politics. One thing it will do for sure is cost way more money. The rest we’ll just have to see about.

Nationally known prognosticator Charlie Cook has recently published his first blush on what that all means to us. His exhaustive report covers the entire country as well as every district within the state. I’ve included an excerpt here dealing only with our immediate area. Stay tuned. This is going to be an interesting season leading up to next years election.

The Charlie Cool Political Report

California
Redistricting Authority: Commission
Ideal New District Population: 702,905
Current Partisan Breakdown: 34 D, 19 R
2012 Cook Redistricting Forecast: 35 D, 18 R

San Bernardino and Riverside

San Bernardino County has almost enough people for three districts, and commissioners will almost certainly need to draw a Hispanic majority seat anchored by the cities of San Bernardino, Fontana, and Rialto. The question is whether commissioners will try to split Democratic Rep. Joe Baca’s current 43rd CD into two parts, paring his district down to his home base in those three cities, and putting Ontario in a separate Hispanic majority district. There will almost certainly need to be a Republican-leaning district anchored by the fast-growing Victor Valley area to the north, and the fate of Chino to the south is anyone’s guess.

Riverside County grew 42 percent in the last decade and surpassed San Bernardino, adding enough people for slightly over three whole districts. There is very big redistricting upside for Democrats here: Riverside gave President Obama a majority of its vote in 2008, yet all four of its districts are represented by Republicans. The most talked-about scenario calls for commissioners to create a new Hispanic majority district taking in Corona/Norco, Riverside and Moreno Valley. This seat would have a significant Democratic edge and could include the Corona home of GOP Rep. Ken Calvert, whose 44th CD is already 43 percent Hispanic.

In fact, surging Hispanic population and political participation in Riverside County explains why Calvert, who routinely had cruised to reelection since 1992, was nearly caught napping in 2008 when underfunded Democratic teachers’ union organizer Bill Hedrick took 49 percent of the vote. Calvert’s 44th CD needs to lose 141,851 residents, so it’s possible a new GOP-leaning district in southwestern Riverside County will complement a Hispanic majority district to the north. Calvert could run here, but he would almost certainly have to overcome primary competition in a vastly new district; Calvert took only 66 percent in his 2010 primary against a challenger who spent just $17,000.

The fastest growing district in the state was GOP Rep. Mary Bono Mack’s 45th CD based in explosive Palm Springs and Hemet in eastern Riverside County. The 45th needs to shed 211,304 residents. There are rumors Bono Mack may be considering an early exit from Congress to help her husband, Florida GOP Rep. Connie Mack IV, with his prospective Senate bid. If that happens, this district could be highly competitive. But Republicans would be somewhat relieved if the eastern reaches of the 45th CD, such as Moreno Valley, were lopped off into a new Hispanic majority seat, boosting the 45th CD’s GOP performance.

There’s virtually no way commissioners will draw new districts that endanger GOP Reps. Darrell Issa (CA-49) and Duncan Hunter (CA-52) in anything other than primaries, unless they draw much of the deeply conservative territory in northern San Diego County into districts with more urban areas, which would be a stretch. A continued 3-2 GOP edge in this southernmost region of the state still seems like the most likely outcome.

As if boundary fortune telling isn’t already hazardous enough, the state’s new “top two” ballot law has added a whole new layer of complication. In June 2010, voters passed Proposition 14, setting up jungle primaries for all federal and state elections in which the top two vote-getters, regardless of party, will advance to the November general election. Candidates aren’t even required to list their party on the ballot anymore. The first indication of the law’s impact could come in a July 12th special election to replace resigned Democrat Jane Harman in the Torrance-based 36th CD.

In the new “top two” era, two candidates from the same party can and will compete against each other on the general election ballot in some districts. This is highly unlikely to happen in swing seats, with the possible exception of unusual cases like open seat races where a plethora of candidates from each party would divide up the primary ballot. The more likely impact of this law will be to shut third party and independent candidates out of November elections.

Over the last few years, relatively unpopular incumbents have eked out November races with less than 50 percent of the vote thanks to minor candidates siphoning opposition votes. Unpopular incumbents won’t be able to depend on this crutch anymore.

California’s brave new world of districts and election laws could seriously endanger 15 or more incumbents. If the commission were to draw districts remotely resembling normal shapes, the incumbents at the most risk in primaries or generals would be those currently sitting in the most gerrymandered districts. Republicans with the most cause for concern are Reps. Dan Lungren (CA-03), Elton Gallegly (CA-24), David Dreier (CA-26), Gary Miller (CA-42), and Ken Calvert (CA-44). The Democrats: Reps. Jerry McNerney (CA-11), Sam Farr (CA-17), Dennis Cardoza (CA-18), Jim Costa (CA-20), Brad Sherman (CA-27), Howard Berman (CA-28), Laura Richardson (CA-37), Grace Napolitano (CA-38), Bob Filner (CA-51), and whoever wins the CA-36 special election in June.

Bottom line: Redistricting may endanger more Democrats in primaries and more Republicans in general elections. Overall, a true incumbent-blind redistricting plan may bequeath Democrats an additional seat or two, given that Republicans currently represent more marginal districts. Eight GOP members sit in districts that voted for President Obama in 2008, while no Democrats sit in districts that voted for GOP presidential nominee John McCain. And if commissioners or judges place an emphasis on maximizing Hispanic voting strength, Hispanic candidates could have new opportunities in as many as five additional districts.

rivco

It’s the Spending, Stupid

By Jon Coupal

“Government is like a baby,” Ronald Reagan was fond of saying. “An alimentary canal with a big appetite at one end and no sense of responsibility at the other.”  If the former California governor were observing Sacramento today, he would probably add that our state government functions more like “triplets,” and has been doing so for more than ten years.

Back at the beginning of the millennium, the California treasury was overflowing due to capital gains tax receipts from what has become known as the “dot.com bubble.”  Almost everyone in the state understood that these tax producing profits were the result of a short-term business cycle, and the excessive flow of tax revenue would not be a permanent condition.  Unfortunately, there were a small group of Californians who did not understand these basic economic principles, including the majority in the state Legislature and Governor Gray Davis.

These officials responded to the increased revenue by spending it all and committing Californians to pay for expensive long-term programs, like radically increased pensions for government workers, that now have state and local governments facing nearly a half-trillion dollars in unfunded liabilities.

This profligate approach to governing was a contributing factor to the successful recall of Davis.  However, governor Schwarzenegger, and the party-hearty lawmakers that continued to dominate the Legislature carried on like there was never a problem.  When the state came up short, they used accounting gimmicks that allowed them to carry on spending as if there were no tomorrow.

Between 2003 and 2007, spending increased by one-third.  Then the housing bubble burst, and these same suspects imposed the largest tax increase in the history of all 50 states.  They had learned their lesson, they said, and pledged to taxpayers they would use the two years of massively higher taxes to buy time to reorganize and reform their spending ways.  Two years later, and in spite of California families having paid about two-thousand dollars in extra taxes, the state is now facing a $26 billion shortfall.  The “spendaholics” have fallen off the wagon, again.

All of this could have been avoided if the malefactors, who clearly lack self-control, had been compelled to work under a hard spending cap.

Because the politicians that control the Legislature and our current governor – the Department of Finance shows that Governor Brown’s budget will grow 31% by 2015 – are still in a state of denial regarding spending, there is an urgent need to take measures to restore a strict spending limit on state government.

This is why Senator Tony Strickland has introduced Senate Constitutional Amendment No. 10, sponsored by the Howard Jarvis Taxpayers Association, that would impose a firm spending cap on lawmakers.  The expenditure limit includes General Fund and special funds, and contains no exemptions for education or local government funding.  It creates a reserve of up to 10% of spending; this reserve can only be tapped to backfill revenue shortfalls in the current budget year and to fund non-fiscally related emergencies.  Funds could only be used by a Declaration of the Governor and two-thirds vote of the Legislature.  Half of the excess revenues beyond the 10% cap would be used to pay off existing debt.

Back when Bill Clinton was running for president, a big sign that read, “It’s the economy, stupid” was placed on his campaign office wall.  In an ideal world every member of the Legislature would be required to post a sign on their office wall that said, “It’s the spending, stupid.”  Sen. Strickland’s SCA 10 is the taxpayers’ way of sending this message.

CAR asks legislature to let the citizens decide.

C.A.R. today sent a letter to Gov. Jerry Brown and members of the California Legislature asking them to place the Governor’s budget framework on the June ballot.  The Governor’s budget framework calls for a $26 billion solution – half in the form of budget cuts and half in the form of revenue from the extension of existing taxes.

C.A.R. has not taken a position in support of tax extensions, but is only in support of putting the tax extensions on the June ballot to let California voters decide.

For more information, contact Christopher Carlisle, C.A.R.’s legislative advocate at (916) 492-5200.

I don’t know if I agree with today’s move by CAR – but they didn’t ask me. However, it appears to be in line with recent polls showing the majority of Californians appear to prefer having a voice in this latest budget skirmish. 61% believe the issue of  Gov. Browns tax & cut budget should be decided by a vote of the people. Even 56% of Republicans believe this should be the case although 61% of Republicans also say they would vote
against the tax measure. A majority of voters also indicate they would not vote for any new or increased taxes – but the survey didn’t drill right down to whether the majority would vote to extend the currently increased taxes for another 5 years.

While I am not in favor of the tax increase that was foisted on us two years ago and is now scheduled to expire, if the few Republicans who have not backed themselves into a corner with the No New Tax pledge can negotiate some meaningful cuts – not just the lame-ass cuts proposed by the Governor, it’s worth bringing to a vote of the people. Without the current taxes being extended, there will be foul nastiness ahead for our state. The few real cuts that have been proposed as well as any future cuts, would be to programs that probably should not be cut. The retirement boondoggle, entitlements and growing employment at the state level will not be impacted. Education, police and parks will be.

Whats worse, if the current tax structure is not extended for another 5 years, in addition to the worthless and superficial cuts that may occur, we would likely face a slew of new taxes disguised as fees, levies and outright thievery from our cities and counties. Many of those taxes would also be aimed at independent contractors, small business owners and other housing related areas. I mean, face it folks, our state is broke and should be declared bankrupt if such a thing were allowed and if we had any politicians with enough balls to do it. Unfortunately it’s not and we don’t.

Further, if the tax extension is placed on a special ballot I believe it would pass. It would be supported by massive spending by the  public employee unions, teachers, nurses, etc, as well as the vast entitlement population who live on the public dole. California has reached a tipping point where we have more takers than  givers, people who rely on the system for their income whether it’s direct payroll, retirement or welfare. When that dynamic exists in a state without the political will to address it, the result will inevitably result in those voters making sure their nest continues to be lined as long as the rest of us can pay for it.

Of even greater concern, and something I believe is another inevitability, taxes will get placed on the ballot with the promise of real and substantial cuts to programs and entitlements. The taxes will get passed but the cuts will not occur. We already saw what happened a few years ago when Arnold worked up the machismo to try to tackle a few state employment issues. He was sued under the table  and no jobs were lost. Even the few cost reductions that might have been realized by the imposition of a few months of furlough days was largely negated by the lawsuits necessary to defend the governors right to impose them.

So we’ll get our existing higher taxes extended another five years, the $12 Billion in cuts will not materialize, there will be a call for more ‘fees’ on services and any other way to wring the last few bucks out of the business class and the paying populace and next year we’ll be right back here trying to figure out why we’re another $25 Billion in the crapper.

Ahhh California.

On the upside, it is almost 80 today and the sun is shining beautifully. Had a great lunch with my Congressional Rep on an outdoor patio and it’s almost time to pour a cold one. What? Me worry?

War Games – Gov. Browns Budget Vote Scheduled today.

War games

Mar 16, 2011
Tensions in the Capitol increased dramatically as the first floor votes loomed on a budget crafted by Gov. Jerry Brown and majority Democrats. But as the negotiations intensified, the voice of the people — a cliche, but a nice cliche — was heard: Most Californians want a chance to vote on the budget, a new poll shows.

From the Chronicle’s Wyatt Buchanan: “A strong majority of California voters want a special election and support Gov. Jerry Brown’s plan to shrink the state budget deficit by extending temporary tax increases for five more years, according to a survey by UC Berkeley and the Field Poll. Most California voters, however, would not support paying new or higher taxes to help close the state’s $26.6 billion deficit.”

“The poll showed 61 percent of all voters surveyed said they were in favor of calling a special election, and 56 percent of Republican voters surveyed said they wanted that, too. However, most of the Republicans – 61 percent – said they would vote against the tax proposal.”

More from the poll: About nine out of 10 lawmakers are either conservative or liberal, but only about half of Californians fall into those cagtegories, notes the Bee’s Dan Walters.

“That’s another way of saying that the state’s moderate Democrats, centrist Republicans and independent voters – half of the electorate – have only scant representation in the Capitol.”

“The stark contrast between the political dynamics inside the Capitol and the reality outside its impervious granite walls is one of the major impediments to timely and effective political decision-making. Those inside the building engage in ideological gamesmanship. Those outside just want politicians to do their jobs, even if that requires compromise.”

The eternal push by some Republicans to rewrite the state’s principal environmental law, the California Environmental Quality Act, is gaining new momentum as five Republicans are demanding CEQA changes — the same Republicans whose votes Brown is courting for the state budget.  The LA Times’ Shane Goldmacher and Evan Halper have the story.

“Sweeping changes in the California Environmental Quality Act would stand little chance of approval through the normal legislative process, which Democrats — environmentalists’ usual allies — control. But the governor’s budget cannot pass without some Republican votes, and GOP lawmakers see an opportunity to win long-sought concessions.”

“Environmentalists expressed outrage at the Republicans’ bid. Bill Magavern, director of Sierra Club California, said that what the legislators want amounts to a “wholesale gutting” of the law.”

Redevelopment Agencies are wrong places to cut

I’ve been writing about this since Gov. Brown stated his intent to do away with local redevelopment agencies and distribute the money from local agencies to hi8s statewide projects. Sure there are some cities around the state that either aren’t using the funds or are misusing the funds but many are not and they have done a world of good. Look at downtown Temecula. Look at the Gaslamp in San Diego. Without redevelopment, the Gaslamp would still be the slum it was not that long ago.

An article appeared in today’s Californian that adds the housing element to the mix. Redevlopment has provided over 91,000 affordable housing units since 1995. For every 100 units created, 125 local jobs are created and 32 permanent jobs. Some in Sacramento just don’t get it – they are actively trying to kill what’s left of the housing industry not understanding that housing speeds an economic recovery, housing is a jobs engine which our state desperately needs.

Click here to view the forum post: Wrong places to cut.

Don’t Kill California’s Recovery

Posted by Former California Congressman George Runner in the Fresno Bee. Why can’t people understand this most simple concept?

Don’t kill California’s recovery

Posted at 12:00 AM on Tuesday, Feb. 15, 2011

By George Runner
With jobless numbers still at record highs, it wouldn’t be right to declare California’s economic downturn over anytime soon. Even so, glimmers of hope are beginning to emerge that the Golden State is inching its way toward economic recovery.

Let’s hope the politicians don’t mess it up.

In his recent State of the State address, Gov. Jerry Brown said “we will not create the jobs we need unless we get our financial house in order.”

Unfortunately the governor’s proposals to put California’s financial house in order are starting to look more like a wrecking ball than a rescue plan.

His budget proposes billions of dollars in taxes on the private sector — the very folks he wants to create more jobs.

It may seem like a distant memory, but merely two years ago, a different governor and Legislature tried taxing their way out of a similar budget mess. Since then California has lost more than half a million jobs and our state’s unemployment rate has grown by 20%.

We clearly don’t need an empirical study to tell us that tax hikes don’t create jobs.

Even so, Gov. Brown is proposing to extend these very same tax increases for five more years. If approved, Californians will pay $45 billion more in income taxes, sales taxes, and vehicle taxes.

On top of this, the governor is proposing to eliminate a number of tax incentives that currently encourage businesses to create and retain jobs in our state.

Under his proposals, private sector employers, including many small businesses, would pay more than $2 billion in retroactive taxes this year and increased taxes for years to come.

The governor calls his budget solution a “balanced approach” since it includes both tax increases and cuts. But in reality, his approach is anything but balanced.

A balanced approach would recognize that the private sector has been devastated by the economic downturn-more so in California than other states. In the past three years, more than one million private sector workers have lost their jobs.

During that same time period, guess how much state employment shrunk?

It didn’t.

According to the latest Employment Development Department numbers, state employment actually grew by 1,200 jobs. We now have 489,000 state workers-nearly half a million-whose wages and benefits are paid by a private sector that is a million workers smaller.

And now the governor is asking the private sector to step up and pay even more to protect those state workers’ paychecks.

Does that seem balanced to you?

To be clear, I’m not saying I want state workers to lose their jobs. I wouldn’t wish that on anyone. My point is simply that private sector workers provide the tax dollars that allow state government to pay its bills, including the paychecks of state workers.

California currently has the second highest unemployment rate in the nation. Our elected leaders could have responded aggressively months-even years-ago to protect California jobs and improve our state’s dismal business climate, but they didn’t. It’s only fair that government shares the pain.

California’s real problem is jobs, not revenues. When jobs are plentiful, government always has plenty of revenues. When jobs are scarce, as they are now, government revenues dry up.

Solve the jobs problem, and you’ll solve California’s budget problem — not to mention a few other problems as well.

George Runner represents more than 9 million Californians on the state Board of Equalization. For more information, visit www.boe.ca.gov/Runner< h6

Read more: http://www.fresnobee.com/2011/02/14/2272658/george-runner-dont-kill-californias.html#ixzz1EG8IYuQP

Court Bars Further Implementation of AB32

As we were wrapping up our Board of Directors meetings last week, the Superior Court of California in San Francisco barred further implementation of AB 32 pending CEQA compliance.  In Association of Irritated Residents, et al. v. California Air Resources Board, et al., the Superior Court issued a “tentative statement of decision” (Tentative Decision) that prevents the California Air Resources Board (CARB) from implementing a state-wide Green House Gas reduction regulatory program under AB 32 until the agency complies with the requirements of the California Environmental Quality Act (CEQA).

AB 32, the state’s landmark 2006 climate change statute, required CARB to develop a regulatory program to reduce state-wide GHG emissions to 1990 levels by 2020.  In response to this mandate, the Board of CARB already approved a first set of comprehensive regulations in December 2010; the regulations were based on an earlier “Scoping Plan” developed by the CARB staff.   The Tentative Decision partially grants a petition for a writ of mandate brought by a coalition of environmental justice organizations (Petitioners) that alleged that CARB’s Scoping Plan violated both AB 32 and CEQA. “Environmental Justice” is the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.

Although the Superior Court denied all claims related to AB 32, the court found that CARB: 1) failed to adequately discuss and analyze the impacts of alternatives in its proposed Scoping Plan as required by its CEQA implementing regulations; and 2) improperly approved the Scoping Plan prior to completing the environmental review required by CEQA.  In upholding the Petitioners’ challenge on these two CEQA issues, the Superior Court issued a Peremptory Writ of Mandate and enjoined CARB from further implementation of the Scoping Plan until it complies with all CEQA requirements. Parties to the case have 15 days from the issuance of the Tentative Decision to file objections before the Superior Court issues a final decision in the case.

While this is good news for some, the order to stop the implementation of AB 32 has little effect on the housing sector and will not affect other Green House Gas reducing mandates already in place such as SB 375: the anti-sprawl law which requires regional governments to reduce Green House Gas emissions via land use and transportation planning, and AB 758: which will require energy efficient retrofits in California’s existing homes and commercial properties. The stay will, however, affect the development of regulations concerning Cap-and-Trade, Low Carbon Fuel Standards, Renewable Energy, Landfills, Vehicles, Industrial Emissions, etc.

C.A.R. took a neutral position on AB 32 when it passed through the legislature in 2006.  At the time, C.A.R. did not find tailpipe emissions reductions and cap-and-trade policies to be of direct and immediate concern to REALTORS®.  Subsequent to the passage of AB 32, C.A.R. has monitored AB 32 implementation planning and policy development meetings. C.A.R. remains neutral on the goal of GHG reduction yet continues to urge CARB and other state agencies to consider the real cost of doing business and to take a realistic approach to the implementation of their rules and policies.

Sen. Joel Andersen introduces emergency legislation to protect taxpayers from State-issued IOUs

SACRAMENTO – On the heels of State Treasurer Bill Lockyer’s warning that the state may soon issue IOUs, Senator Joel Anderson (R-El Cajon) introduced emergency legislation to help businesses stay afloat in such an event. “IOUs could be a death knell for already struggling California businesses,” State Senator Joel Anderson stated. “This emergency legislation could be their lifeline.”
Senate Bill 120, if passed and signed into law, would force state agencies and departments to accept the state’s IOUs as payments for bills owed to the state. The State of California is facing a whopping $25.4 billion budget deficit. As reported by the Los Angeles Times, Treasurer Lockyer stated that California is facing another immediate cash crisis and could issue IOU notes in April or May.
In 2009, the state issued billions of dollars of IOUs when it ran out of money. That same year, Anderson introduced a similar proposal to protect businesses when IOUs were issued in place of actual payments. Over 3,000 letters of support flooded Anderson’s office from businesses, citizens, and elected officials – including one from State Controller John Chiang. Chiang stated in his letter, “When a person receives an IOU from the State, the State should accept the IOU for payment obligations owed to the State.” The bill sailed through both houses of the Legislature and had over 70 bi-partisan co-authors.
Governor Schwarzenegger vetoed the measure. Senator Anderson reintroduced this bill to help California businesses out of the untenable position of having to pay their own bills while the State of California is unable to pay its obligations.
Senator Joel Anderson represents the 36th Senate District, which includes portions of San Diego and Riverside County, including Fallbrook and the Inland Empire.

Christmas Calm Before The Storm

It’s the holiday season and my wife reminds me that my personal newsletter to you should be cheerful and positive.  So I will not mention the near $26 billion deficit that years of legislative inaction, overspending, over-regulating and just plain bad management has heaped on all of us – Republicans, Democrats, Independents and those who won’t even vote because they are so darn mad.  After all – It’s Christmas, so let’s at least have a few weeks of good times and good will before reality comes crashing down in the State Capitol.

Okay… That’s enough good time.  Let’s talk Christmas turkey.

We have a new Governor who is going to be sworn into office in early January. Okay, he’s not really new.  Really, in California, he would be more properly titled as “recycled”.  So in the holiday spirit – let’s wish him well.  Let’s cheer him on when he holds our feet to the fire and says that we have to cut up the credit cards and live within our means.  Let’s raise a toast to him when he says that California needs to be a place where businesses can flourish, be profitable and hire more employees. Let’s say “Thank You Governor” when he tells regulators and bureaucrats that they work for the people of this state – not the other way around. Those are nothing but a Christmas Wish you say?  You bet. A wish, a prayer, a goal, and a hope.  All of the above, because I’m not giving up during my last two years.

I briefly met with our new Governor last week. He was candid, unscripted and had no staff in the room to whisper in his ear.  He was direct and listened to our concerns and our hopes.  In short, we are in for some really tough times with regards to our state finances. While I did not support him at the ballot box, I am, in fact, hopeful that he will turn out to be the right man at the right time. California needs a very strong-willed and focused Chief Executive Officer to help us climb out of our financial abyss. Anything less will be a disservice to every Californian who wants a state they can be proud of.

And speaking of proud, please remember that we have thousands of Californians in uniform serving in hostile foreign environments.  These men and women will not be home for the holidays. They will not be home for a big family dinner, nor to open any gifts with family. Let’s keep them in our prayers and thoughts.

Merry Christmas and Happy Holidays to all.

Respectfully,

Kevin Jeffries

When fireplaces are outlawed only outlaws will have fireplaces.

The South Coast Air Quality Management District (SCAQMD) has recently launched the latest salvo aimed at curbing individual freedoms and property right. This initiative, dubbed ‘Check Before You Burn’, is geared toward forcing people to refrain from using their wood burning fireplaces or other wood burning heaters in an effort to ‘improve wintertime air quality’.

Under this new program, the AQMD will issue no-burn advisories through the end of February for specific areas where ‘fine particulates are forecast to reach unhealthy levels’. For 2011 the no-burn prohibition is voluntary but starting in 2012 there will be a series of escalating fines from $50 to $500 or more if you light up during one of their advisory periods. They expect to see about 15 of these periods from November through February.

The AQMD claims that Southern California is home to about 1.4 million fireplaces or wood burning stoves. They claim that these spew 6 tons of soot into the air every day – 4 times the amount emitted by all the power plants in the southland. Really? But their spokes hole says people can avoid the problem just by switching to natural gas fireplaces.

But how about if you live in an area not served by natural gas? Say you live in the Temecula Valley Wine Country or up in the De Luz avocado groves, or the Meadowview area of Temecula? These areas are not all served by natural gas. Many rely on wood burning appliances to not just take the edge off a nippy winter eve, but to stay warm affordably. Electric heat isn’t cheap and many older residents or those on a fixed income will have to make tough choices.

Some of these homes have installed propane (bottled) gas to power certain appliances. But according to one resident I spoke to, their heating bill if they rely on propane alone can run to over $500/month during the winter. Simply burning a half cord of wood for $225 during the winter keeps the chill away and keeps their propane bill to under $200/month.

The AQMD knows this is a problem and have issued exemptions for areas over 3,000 feet elevation because they ‘recognize some mountain residents heat their homes that way’. How about recognizing that some residents below 3,000 do the same?

Is this a life changing event? Not for me. I’ve got four fireplaces in my house and they all burn gas. Goody goody for me. Will it severely impact a lot of people throughout our rural areas that can ill afford it? Probably not significantly if the no-burn events are held to no more than 15 random nights during the 4 month period. Maybe cost folks a few hundred extra bucks for heat, or a few hundred more for fines. Too bad for them.

But here’s my forecast – and I’ve been through this before so I’m not just whistling Dixie out my kazoo. Within 5 years, all wood burning devices will be banned. (When fireplaces are outlawed, only outlaws will have fireplaces).

Year one (2011) will be voluntary compliance with the no-burn. Year two (2012) the ban is no longer voluntary.

Year 3 (2013) will be more of the same – probably with a few more no-burn advisory days thrown in for good measure, or the particulate standards will be reduced to comply with some arbitrary ruling by the geniuses at the California Air Resources Board (CARB).

By year 4 (2014), based on the same specious studies that give us 6 tons of soot a day from fireplaces (did I mention that’s 4 times more than ALL the power plants in Southern California?), they will declare the project a resounding success but predicated on Californians need to be the leader in greenwashing reality, they will see the need to implement an outright ban on all woodburning devices. This will be voluntary in 2014 and there will be a call for increased state spending both to appoint a ‘smoke czar patrol’ to monitor the the state’s chimneys as well as to pay for people to switch to some alternate form of heat technology. By 2015 you’ll be subject to criminal prosecution if your chimney so much as farts during the winter.

Don’t believe me? I could direct you to several cities around the state and the country where that exact scenario has come to pass already. Meanwhile China continues to open a new coal-fired power plant every day. Arizona coal-fired plants will continue to provide electricity to Southern California. Our air will not be appreciably cleaner. But another of your simple pleasures, what you used to consider a right, will have been erased.

Aw, who cares? I’m heading for my little cabin in the woods. There’s plenty of down timber to cut up and not a neighbor around for miles to tattle if I stoke my fireplace. You can come drive by sometime if you get nostalgic for a whiff of pine smoke on a crisp winter morning.

Meanwhile if you want to learn if there’s a ‘no-burn’ advisory out tonight, here’s all you have to do:

• Check AQMD’s Check Before You Burn map at www.aqmd.gov to see if a voluntary no-burn advisory has been issued for their area. Residents may also zoom into a particular neighborhood on the map by entering an address or zip code;
• Sign up to receive electronic e-mail notices when a no-burn advisory is issued for their area. Visit www.airalerts.org to sign up; or
• Call AQMD’s 24-hour Check Before You Burn toll-free information line at (866) 966-3293.

New laws for 2011 affecting Realtors or your clients

From CAR Government Affairs

The recent end of the 2009-10 legislative session has brought the end of short sale deficiency judgments for first loans, and other new laws affecting REALTORS® and their clients.  To view the full text of the following bills, go to www.leginfo.ca.gov.

No Short Sale Deficiencies: Starting January 1, 2011, 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.  Governor Schwarzenegger vetoed Senate Bill 1178, our sponsored bill, which would have extended California’s anti-deficiency protection to refinance loans.

Energy Audit in Home Inspection Report:
Beginning January 1, 2011, 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.

Restriction on Adverse Possession Claim: Effective January 1, 2011, 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.

Enforcement of MLO Requirements: Effective January 1, 2011, 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.  Furthermore, 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 law also amends the MLO requirements for finance lenders and residential mortgage lenders under the Department of Corporation.  Senate Bill 1137.

Post-Foreclosure Protection for Tenants: Commencing January 1, 2011, a notice to terminate a residential tenant who remains after a foreclosure sale must generally include a statutory notice of the tenant’s rights.  This requirement, which sunsets on January 1, 2013, applies to an immediate successor-in-interest for one year after a foreclosure sale.  The tenant’s rights must be on a separate cover sheet or, for a 90-day termination, incorporated into the notice to terminate.  Another provision of this bill protects a residential tenant’s credit by generally prohibiting the court clerk from revealing unlawful detainer court records unless the plaintiff prevails at trial.  Senate Bill 1149.

Tenant Protection for Domestic Violence Victims: Starting January 1, 2011, a residential landlord cannot terminate or fail to renew a tenancy based on domestic violence against the tenant or tenant’s household members as specified.  This law applies if the person restrained from contact with the tenant by court order or named in a police report is not also a tenant of the same dwelling unit.  If the protected tenant subsequently allows the person restrained to visit the property, or the landlord reasonably believes the person restrained poses a physical threat to others or to quiet possession by other tenants, the landlord may serve a three-day notice to correct or quit.  To further ensure safe housing for domestic violence victims, this law also requires that, for leases entered into after January 1, 2011, a landlord changes the exterior locks of a protected tenant’s dwelling unit within 24 hours after the tenant provides a written request and supporting court or police documentation as specified.  Senate Bill 782.

Protections Against Real Estate Fraud: Effective January 1, 2011, new laws protecting consumers from real estate fraud include, without limitation, the following: (1) Expanding the foreclosure consultant law to include someone who performs a forensic audit of a residential mortgage loan (Assembly Bill 2325); (2) 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 (3) 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).

Other Laws: Some of the other laws that may interest REALTORS® include, but are not limited to, revisions to the mechanics’ lien law (Senate Bill 189); clarification that the prohibition against discrimination of tenants based on source of income pertains to lawful and verifiable income (Senate Bill 1252); extension of the CalVet Home Loan program to include 2-to-4 residential units (Assembly Bill 2087); and lien enforcement by a municipal utility district for a tenant’s delinquent charges (Senate Bill 1035).

Am I asking for too much? by Kevin Jeffries

Strange things happen when the clock strikes midnight…

You all may recall that a little over a week ago word had spread that finally a State Budget Deal had been reached by the “Big 5” in Sacramento. 100 days overdue but the baby was finally arriving!

The Speakers Office issued the official Email summoning all Assembly members to report to the State Capitol for Floor Session on Thursday October 7th.  This was good news.  The sticking points had apparently been ironed out. We could meet with our budget team, walk through the agreed upon details in all 28 ( /-) of the budget bills and get this budget done! (and then immediately start worrying about the next budget).

However, a funny thing happened on the way to the Capitol.  Seemed that not all of the details had been thoroughly worked out by the time we arrived to start discussing the details in advance of our floor debate and votes. In fact well over half of the 20 budget bills had not even been printed yet for review by our budget team – much less all of the Legislators who were now expected to vote on them.

When I walked out to my desk on the Assembly floor, I honestly had no idea just how bad the day was going to be with regards to respecting and advancing Good Government practices.  It was truly a (Not-So) Good-Government disaster in the making.

Within short order we were being asked to vote on budget bills that were now either piling up on our desk – or did not exist as yet.  I wasted little time in expressing my frustration when the floor discussions began.

Several websites reported selections from my floor speech:

I can’t tell you what’s in this budget,” said Assemblymember Kevin Jeffries, who said he has had very little opportunity to review the budget bill which spans three volumes.  “This is not an example of open and transparent government,” reported the Public Policy research firm Kersten Communications.

The Orange County Register also qouted a portion of my comments: “We talk about open and transparent government, and yet we haven’t had 30 minutes, an hour, to digest all of this – a multi-billion (dollar) decision.

As the evening progressed, we (Republicans, Democrats and one Independent) actually found ourselves being asked to vote on some bills that were not in print, had not been seen by the public or media, and were only hastily posted on our computer screens as “mock-ups” (drafts) to read and vote at the same time. Many of the votes were occurring between midnight and the sun rising the next morning – conveniently when the taxpaying public was asleep and most of the media had gone home.  Just imagine the public and media outcry if your local city council or county supervisors conducted their budget meeting and votes in this manner!  Several times I was ready to walk off the floor and return to my office to question my sanity.  I guess that’s why we were literally “locked” in the Assembly Chamber and could not leave.

This kind of behavior is why I introduced ACA 8 and ACA 31 this past session, and will reintroduce the reforms again on the first day we are back in session in December.  ACA 8 would have required that all legislation be in print at least 24 hours before a vote could be taken on the bill, and ACA 31 would have prohibited midnight sessions, requiring that all votes occur between 9am and 9pm when the public and their watchdogs can actually see what is happening.  Neither bill even got a hearing in Sacramento, but I will not stop fighting this battle.

I know that I’m sent to Sacramento to make the best decisions I can on your behalf. I take that responsibility very seriously. However the lack of timely details, the rush of last minute amendments, the reports of new deals being cut (including removing one of the state’s largest government employee unions from his pension reforms that were still going to impact public safety personnel), and on occasion the complete failure to provide us with any written details of some bills did cause me to either Oppose or Abstain on numerous budget bills (my wife says that I get a little stubborn on occasion – I of course disagree). To be sure, I did support about a dozen bills that I felt would either help fix some of our on-going budget problems or help in some small way with our economy.

With millions of Californians still out of work, and hundreds of small and large businesses still leaving the State at a record pace – I remain unwavering in my opinion that not enough is being done to turn our state around and get our state government and its crushing regulatory bureaucracy under control.

A dysfunctional Legislature that is NOT united in stopping the flight of good paying private sector jobs to other states, and seems unwilling to take on the powerful bureaucracy – will simply continue to chase its own tail with half-baked budget solutions and ineffective reforms.

We need to stop the midnight votes. We need to drill down into every state agency and every state program and question the effectiveness and purpose of every hard-earned taxpayer dollar that is spent. We need to start listening to the suggestions of successful business owners about what it will take to keep and create jobs in California. We need to put a leash on our bureaucrats and our regulators. We need our teachers to be free of Sacramento mandates and union directives. We need to move more government services out of Sacramento and back to local government. In short – what we really need is for our government to be truly accountable to the people and to put some good ol’ fashioned common sense back in our State Capitol.

Am I asking for too much?

Respectfully,

Kevin Jeffries

New anti-deficiency law for short sellers hits the state 1/1/11

A ray of good news for homeowners in California. Lame-Duck Arnie actually signed a bill that provides some relief for short-sellers.

Existing law prohibits a deficiency judgment by the holder of a first trust deed on a property that has sold through foreclosure. SB931 extends that protection to short-sellers of a property as well. If the holder of a first trust deed or mortgage gives written consent to a short sale, that lender is obligated to accept the sale proceeds and discharge the remaining amount owed (the deficiency). Prior to this law, lenders could pursue a homeowner even after approving a short sale for the balance of the deficiency. It still allows the holder to pursue the seller in the event they determine there was fraud or waste by the borrower and it does not apply to holders of second or subsequent notes.

The California Association of Realtors was optimistic that the Gov. would also sign our sponsored bill SB1178 that would have extended anti-deficiency protection to owners who had refi-ed their homes only to the extent that the subsequent loan was used to pay debt or costs incurred in the purchase of the home. In other words, if you refi-ed only to get a better interest rate but took no  money out, your original anti-deficiency protections would still accrue.

We all know that during the boom years, banks were quick to offer refi-s but slow to disclose that you were giving up a valuable protection by taking them up on the offer. You sacrificed your anti-deficiency protection when you refi-ed. Arnie sided with the banking lobby and declared that SB1178 would interfere with the contract between the bank and the borrower. No matter that there was no disclosure or explanation of the ramifications. CAR will be looking to again sponsor this bill in the upcoming legislative session in hopes that a new Governor will have a better grasp of the issues.

Governor Schwarzenegger holds the distinction of vetoing more real estate friendly and CA sponsored bills than any previous governor of our state. But he talked such a good line when he came to talk with us – we thought he really meant all his accolades about real estate making him the man he is today. Oh well, he turned out to be much less of a man than we all hoped. Some people light up a room when they enter, others when they leave. Don’t let the door hit ya in the bum on the way out.

The list of companies leaving CA continues to expand

California Companies Moving Away or
Shifting Work Out Reaches New Record: 158
(for 2010 alone)

In the three weeks since my last tally, I’ve learned about another 14 companies that have left California completely or re-directed capital to build facilities out of state. The names of the 14 and justifications for listing them appear below. Today’s entry builds upon the Sept. 21 entry 144 Companies Shrink from Calif. This Year – Three Times the Total for All of 2009.

In short:
Total for 9-1/2 months of 2010: 158
Total for all of 2009: 51

Five enterprises represent the type of operations coveted by many California politicians — “green” companies — namely DayStar Technologies, Vetrazzo, SMA America LLC, Enfinity Corp., and Power-One. Those companies have opted for Georgia, Arizona, Colorado and an apparently as-yet-undetermined “overseas location.”

I’ve updated Part III: County-by-County Losses For California Disinvestment Events to reflect these 14 additional entries. In this round, Orange County experienced three disinvestment events; Los Angeles and Sacramento, two; and Alameda, Contra Costa, Fresno, Placer, Santa Barbara, Santa Clara and Ventura counties each suffered one case of “corporate shrinkage.” I’ve also updated Part IV: States, Countries That Gain From California Disinvestment Events.

Nine companies carry the code RELO-OS, which represents an out-of-state or out-of country relocation, while another five are CD-OSG, which means the company directed capital out-of-state for a facility that in the past would have been built in California. I’ve updated Part V: California Disinvestment Events By Category or Type. (I exclude companies building elsewhere to meet growth — see Part II: Examples of Companies Excluded From California Disinvestment Event Listings.)  Also relevant is Part VI: Why California Disinvestment Events Are Greatly Understated.