Realty World – Town and Country

Excerpt from CLTA News:
Governor Signs Buyer’s Choice Act into Law
Measure to take Effect Immediately as Urgency Statute
The Governor signed AB 957 (Galgiani), also known as the Buyer’s Choice Act, over the weekend amidst a spate of political gamesmanship that put its passage into question. While the bill had almost no opposition in the Legislature before its signing, it nevertheless faced an uncertain future as one of hundreds of bills that could have been vetoed by a Governor unhappy with the progress of talks over water legislation.
The bill, which takes effect immediately as an urgency statute, prohibits a seller who acquired title to residential real property at a foreclosure sale from requiring a buyer to purchase title insurance, or escrow services from a company chosen by the seller as a condition of receiving offers or selling the residential real property. A transaction subject to the act would not be invalidated solely because of the failure of any person to comply with any provision of the Act. The measure is effective only until January 1, 2015, unless extended by the Legislature.
For commonly asked questions surrounding AB 957, please see the CLTA’s Buyer’s Choice Act FAQ.
Buyer’s Choice Act
Frequently Asked Questions
Q. What is the Buyer’s Choice Act?
A. The Buyers’ Choice Act is a new law that prohibits a seller who acquired property as a foreclosure sale from requiring a buyer to purchase title and escrow services from a company chosen by the seller as a condition to receiving offers or selling the property. It was enacted by Assembly Bill 957 (Galgiani).
Q. Who is a seller under the Buyer’s Choice Act?
A. A seller is defined as a mortgagee or beneficiary under a deed of trust who acquired title to the property at a foreclosure sale, including a trustee, agent, officer or other employee of any mortgagee or beneficiary.
Q. When does the Buyer’s Choice Act become law?
A. On October 12, 2009. The law is an urgency measure and became effective when it was signed by the Governor on October 12, 2009.
Q. Can a buyer agree to accept the recommendations of the seller as to which title or escrow provider to use?
A. Yes, provided that a written notice of the right to make an independent selection of those services is first given by the seller to the buyer.
Q. Does the new law apply to all real estate transactions?
A. No. The law only applies to residential property improved by four or fewer dwelling units.
Q. What settlement services are covered by the law?
A. The law covers title insurance and escrow services.
Q. Are there penalties for violating the Act?
A. Yes. A seller who violates the new law is liable to the buyer for three times all charges made for the title insurance or escrow service. In addition, a seller who violates the law is also considered to have violated their licensing law.
Q. If a person violates the law can the sale be set aside?
A. No. A transaction cannot be invalidated solely because of the failure to comply with the law.
Q. What is the reason the Legislature passed the Buyer’s Choice Act?
A. The Legislative findings and declarations state that the recent troubled real estate market has resulted in a concentration of the majority of homes available for resale within the hand of foreclosing lenders and has dramatically changed the market dynamics affecting ordinary home buyers. The act declares that the potential for unfairness occasioned by the resale of large numbers of foreclosed home requires that protections against abused be made effective immediately.
Q. Does the Act continue indefinitely?
A. The Act is only effective until January 1, 2015 unless it is extended by the Legislature.

Play Video CNBC – Grading Regulation Revamp
AP – Senate Banking Committee Chairman Christopher Dodd, D-Conn., left, speaks on Capitol Hill in Washington, …
By ANNE FLAHERTY and JIM KUHNHENN, Associated Press Writer Anne Flaherty And Jim Kuhnhenn, Associated Press Writer – 27 mins ago
WASHINGTON – President Barack Obama’s plan to increase oversight of banks and other financial institutions ran into skepticism Thursday on Capitol Hill where senators sharply questioned whether it was enough to prevent another economic meltdown. The lack of a ringing endorsement suggests the proposal was headed for a rewrite by a Congress sensitive to voter frustration with the government’s handling of the economy.
“They’re very angry, and they are worried. And they are wondering who’s looking out for them,” Sen. Christopher Dodd, chairman of the Senate Banking Committee, said of his constituents.
In testimony before the panel, Treasury Secretary Timothy Geithner defended the proposal as the nation’s best shot.
“It will be very hard, perhaps impossible, for any authority, any individual to anticipate and pre-empt all potential sources of future risk,” Geithner said.
Lawmakers mostly agreed that change was needed to streamline federal regulation and fill in oversight gaps believed to have contributed to the housing and credit crisis. Several Democrats also lauded the proposed creation of a new consumer-protection agency that would police the market for deceptive business practices in such financial products as credit cards and mortgages.
But members on both sides of the aisle questioned whether the administration was putting too much faith in the Federal Reserve.
Under Obama’s plan, the Fed would oversee institutions deemed so big or influential in the market that their failure could seriously damage the economy.
A council of federal regulators, including the Fed, would help monitor the market for risk. But the Fed would ultimately be accountable for ensuring companies don’t make overly risky bets.
Several lawmakers have suggested tasking the council of regulators with the job and criticized the Fed for its role in the recent crisis.
“The reality is they (the Fed) had the knowledge and authority to address the mortgage problem long before it became a crisis, and they didn’t act,” said Sen. Robert Menendez, D-N.J.
Other lawmakers questioned whether the Fed could become an effective super-regulator while retaining its role as the nation’s central bank and setting monetary policy.
“I do not believe that we can reasonably expect the Fed or any other agency to effectively play so many roles,” said Sen. Richard Shelby of Alabama, the top Republican on the Senate panel.
Geithner said the Fed was the best option because it was the only institution with the capacity and expertise to monitor the “too big to fail” firms. Giving the power to the council of regulators could delay action in a crisis, he added.
“You cannot convene a committee to put out a fire,” he said.
Geithner also noted that the plan would strip the Fed of its role in overseeing consumer protections in setting up an agency focused solely on the mission.
However, it is likely that the Fed will mount a defense to keep its consumer oversight duties. Fed officials believe their oversight of mortgages, credit cards and other products fits well with their duties to regulate banks, and that they have the right mix of experts — economists and lawyers — already on hand to do the job.
At the White House, Obama spokesman Robert Gibbs said the administration would watch what Congress does with the proposal, but added, “the president feels enormously comfortable with his proposal.”
Commenting on criticism from the financial sector aimed at the consumer protection agency and other aspects of the plan, Gibbs said: “The president intends to fight for each and every one of those.”
Other details of the plan were also scrutinized. Democratic Sens. Charles Schumer of New York and Jon Tester of Montana pressed Geithner on why the administration did not seek greater consolidation of regulatory agencies.
“A multiplicity of regulators tends to produce less oversight overall,” Schumer said.
Geithner conceded the regulatory system is not ideal. But, he said, it would have been a politically difficult task.
“We did not want to put you in a position of having to spend a lot of time on changes that may be desirable, that may leave us with a neater system, maybe a more efficient system, but were not central to the cause of the problem,” he said.
Democratic leaders have committed to pushing through reform legislation by the end of the year.
The ambitious timetable — Dodd is simultaneously trying to shepherd an overhaul of the nation’s health care system — has some members worried about missteps. Others lawmakers say Congress has no choice but to act quickly so as to prevent another crisis.
“If we mess this up, the unintended consequences for not only our economic recovery but the overall long-term financial stability for the world is really at stake,” said Sen. Mark Warner, D-Va.
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Associated Press Writer Jeannine Aversa contributed to this report.