Pleasanton Real Estate » Finance

Buyers Choice Act finally passed!!

Steve De La Hoya — Tue, 13 Oct 2009 18:54:27 +0000

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.

Senate questions Obama’s financial oversight plan

Steve De La Hoya — Thu, 18 Jun 2009 22:23:32 +0000

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.
___
Associated Press Writer Jeannine Aversa contributed to this report.

Finally Some Good News!!

Steve De La Hoya — Fri, 10 Apr 2009 18:51:08 +0000

Obama pitches refinance plan for homeowners

President Obama on Thursday touted his administration’s efforts to lower mortgage rates in a round-table discussion with Washington, D.C.-area homeowners who have benefited from refinancing into more affordable loans.

NANCY STONE / MCCLATCHY NEWSPAPERS

President Obama meets with Treasury Secretary Timothy Geithner and homeowners on Thursday during a housing-refinance round table at the White House.

WASHINGTON — President Obama on Thursday touted his administration’s efforts to lower mortgage rates in a round-table discussion with Washington, D.C.-area homeowners who have benefited from refinancing into more affordable loans.

Their stories were intended to serve as testimonials for the masses who have not called a mortgage broker, whether they are in danger of foreclosure or simply looking for extra money.

Applications for refis have increased 88 percent since February, according to the Mortgage Bankers Association. And Fannie Mae, a mortgage-financing company, has said its refinancing volume jumped to $77 billion in March, twice the level of the previous month.

“The main message we want to send today is that the programs that have been put in place can help responsible folks who have been making their payments, who are not looking for a handout, but this allows them to make some changes that will leave money in their pockets and leave them more secure in their homes,” Obama said.

Obama said new housing programs would be presented soon, following last month’s plan to provide $275 billion to help distressed homeowners, of which $75 billion would subsidize the mortgage industry to help borrowers avoid foreclosure. But he offered no details Thursday.

The refinancing boom has been fueled by lower mortgage rates. The average rate on 30-year fixed notes was 4.87 percent Thursday, slightly higher than the 4.78 percent last week. Still, it was the lowest level since 1971, which the president used to bolster his two-pronged argument for why refinancing is so important.

First, families will have more money to spend, which will boost the economy. If that happens, home values likely will rise, which will begin rehabilitating the beleaguered housing market that contributed significantly to the economic collapse.

Despite the uptick in refis, the administration’s housing program has yet to have a significant impact, and homeowners with jumbo mortgages still struggle to take advantage of lower rates.

Obama’s focus was intended simply to draw attention to a government Web site that tells people if they are eligible to refinance their mortgages.

“We hope that everybody takes advantage of it. The Web site is makinghomeaffordable.gov — is that right?” Obama said, repeating the address five times in five minutes. “So get on the Web site, find out what’s available.”

BIG BANKS!

Steve De La Hoya — Tue, 07 Apr 2009 23:21:47 +0000

Will the White House and Treasury Let the Big Banks Repay TARP Money? [Larry Kudlow]

Do Pres. Obama and Treasury man Geithner want to control the banks, just as they have taken over GM? Will the government assert political direction of the financial system in place of market forces, or in place of the rule of law as enforced by bankruptcy judges?

These hot topics have been discussed in a recent Politico story, a Wall Street Journal op-ed by my friend Stuart Varney, and an IBD editorial called “Federal Takeover.” Much of the discussion centers on bank paybacks of TARP money. In particular, banks in Louisiana, New York, Indiana, and California (four in all) have offered to pay back $340 million to Uncle Sam. IBD speculates that the Treasury declined to accept these payments.

Melissa Francis and I discussed this today on CNBC, and almost immediately the Treasury Department called one of my producers and e-mailed a quarterly update of all TARP payments made by the Treasury that include capital-repayment details. It turns out that the Treasury has in fact accepted TARP repayment: The Bank of Marin Bancorp in California paid down $28 million, Old National Bancorp in Evansville, Ind., paid back all $100 million, Signature Bank in New York repaid $120 million, and Iberiabank Corp. in Lafayette, La., paid back $90 million.

So we know the Treasury is accepting payment from these smaller regional banks. However, we do not know if the White House or the Treasury will accept repayment of TARP money by the nation’s biggest banks.

In a speech today, Goldman Sachs CEO Lloyd Blankfein once again indicated his desire to quickly pay back TARP. Jamie Dimon of JPMorgan has indicated a similar desire, as has BofA CEO Ken Lewis. But the Politico story implies that Obama does not want the big banks to pay down TARP, and that he is in effect telling the banks, “You haven’t taken your antibiotic over the full period to heal your illness.”

But most of the big bankers are saying they’re regaining profitability. This is especially the case since they can borrow short at near-zero interest rates and lend long at five or six years.

There is a suspicion that the Treasury will use its new bank stress tests to judge whether the big banks should pay back the government capital purchases. But no one knows whether these stress tests are truly standardized; why they are any different from the normal FDIC tests, or for that matter testing by the banks themselves; whether this is going to be a Treasury judgment call; or whether that Treasury judgment call in effect puts a gun to the collective head of the banks in order to force the banks to sell toxic assets through the Public-Private Investment Program.

Many in the government believe that if some banks pay the funds back and others do not, a scarlet-letter stigma will be attached to those who do not. And they believe that might cause a deposit flight, or even capital flight. But it can’t be healthy for the government to determine whether the banks themselves are healthy. And the public is so opposed to the TARP program, you would think paying back TARP in order to retire our over-the-top debt would be a good thing.

Meanwhile, at yesterday’s National Review Institute luncheon here in New York, Sen. Bob Corker told us that he suspected — merely a suspicion — that one or two big-bank CEOs would be removed by the Treasury within 60 days of the conclusion of the stress tests. This is what Treasury secretary Geithner hinted at on the recent Sunday talk shows. And that raises the question of whether a bank CEO-removal would be playing politics: Would it be to even things out after the removal of Rick Wagoner of GM — to placate the unions and their allies like Sen. Carl Levin of Michigan who are charging that the auto industry is getting much tougher treatment than the bank industry?

How to end the political direction of our banks? Let them get out from under TARP as soon as possible. Let them make their own decisions. Let’s end this sordid chapter of unprecedented government intervention in the market economy.