BILL NUMBER: SB 633 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 27, 2009
AMENDED IN SENATE APRIL 13, 2009
INTRODUCED BY Senator Wright
FEBRUARY 27, 2009
An act to amend Section 11423 of the Business and
Professions Code, relating to real estate appraisers.
An act to amend Section 2954 of the Civil Code, re lating
to mortgages.
LEGISLATIVE COUNSEL'S DIGEST
SB 633, as amended, Wright. Real estate appraisers.
Mortgages: impound accounts.
Existing law prohibits requiring an impound, trust, or other type
of account for payment of property taxes, insurance premiums, or
other purposes relating to the property as a condition of a real
property sale contract or a loan secured by a deed of trust or
mortgage on real property containing only a single-family,
owner-occupied dwelling, except as specified.
This bill would include among those exceptions sales where a loan
is made in compliance with the requirements for higher-priced
mortgage loans established in Regulation Z, as defined, whether or
not the loan is a higher-priced mortgage loan, and where a loan is
refinanced or modified in connection with a lender's homeownership
preservation program or a lender's participation in such a program
sponsored by a federal, state, or local government authority or a
nonprofit organization.
Existing law, the Real Estate Appraisers' Licensing and
Certification Law, provides for the licensure and regulation of real
estate appraisers and vests the duties of enforcing and administering
that law in the Office of Real Estate Appraisers. Existing law
requires a lender in a loan transaction secured by real property to
provide notice, as specified, to a loan applicant that, upon request,
the applicant is entitled to receive a copy of the appraisal report,
provided he or she has paid for the appraisal. Existing law requires
that an applicant's written request for a copy of an appraisal be
received by the lender no later than 90 days after the lender has
provided notice of the action taken on the application, or the
application has been withdrawn. Existing law also requires the lender
to mail or deliver a copy of an appraisal within 15 days after
receiving a written request from the applicant or within 15 days
after receiving the appraisal, whichever occurs later.
This bill would delete these requirements, and instead require
that the lender mail or deliver a copy of the appraisal report to the
loan applicant within 15 days of receiving the appraisal, provided
the applicant has paid for the appraisal.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2954 of the Civil
Code is amended to read:
2954. (a) (1) No impound, trust ,
or other type of account for payment of taxes on the property,
insurance premiums or other purposes relating to the property shall
be required as a condition of a real property sale contract or a loan
secured by a deed of trust or mortgage on real property containing
only a single-family, owner-occupied dwelling, except: (1) where
required by a state or federal regulatory authority; or (2) where a
loan is made, guaranteed, or insured by a state or federal
governmental lending or insuring agency; or (3) upon a failure of the
purchaser or borrower to pay two consecutive tax installments on the
property prior to the delinquency date for such payments; or (4)
where the original principal amount of such a loan is (i) 90 percent
or more of the sale price, if the property involved is sold, or is
(ii) 90 percent or more of the appraised value of the property
securing the loan; or (5) whenever the combined principal amount of
all loans secured by the real property exceeds 80 percent of the
appraised value of the property securing the loans ; or (6)
where a loan is made in compliance with the requirements for
higher-priced mortgage loans established in Regulation Z, whether or
not the loan is a higher-priced mortgage loan; or (7) where a loan is
refinanced or modified in connection with a lender's homeownership
preservation pr ogram or a lender's participation in such
a program sponsored by a federal, state, or local government
authority or a nonprofit organization . Nothing contained in
this section shall preclude establishment of such an account on terms
mutually agreeable to the parties to the loan, if, prior to the
execution of the loan or sale agreement, the seller or lender has
furnished to the purchaser or borrower a statement in writing, which
may be set forth in the loan application, to the effect that the
establishment of such an account shall not be required as a condition
to the execution of the loan or sale agreement, and further, stating
whether or not interest will be paid on the funds in such an
account.
An impound, trust, or other type of account for the payment of
taxes, insurance premiums or other purposes relating to property
established in violation of this subdivision is voidable, at the
option of the purchaser or borrower, at any time, but shall not
otherwise affect the validity of the loan or sale.
(2) For the purposes of this subdivision, "Regulation Z" means any
rule, regulation, or interpretation promulgated by the Board of
Governors of the Federal Reserve System and any interpretation or
approval issued by an official or employee duly authorized by the
board to issue interpretations or approvals dealing with,
respectively, consumer leasing or consumer lending, pursuant to the
Federal Truth in Lending Act, as amended (15 U.S.C. Sec. 1601 et
seq.).
(b) Every mortgagee of real property, beneficiary under a deed of
trust on real property or vendor on a real property sale contract
upon the written request of the mortgagor, trustor or vendee shall
furnish to the mortgagor, trustor or vendee for each calendar year
within 60 days after the end of such year an itemized accounting of
moneys received for interest and principal repayment and received and
held in or disbursed from an impound or trust account, if any, for
payment of taxes on the property, insurance premiums or other
purposes relating to the property subject to the mortgage, deed of
trust or real property sale contract. The mortgagor, trustor or
vendee shall be entitled to receive one such accounting for each
calendar year without charge and shall be entitled to additional
similar accountings for one or more months upon written request and
on payment in advance of fees as follows:
(1) Fifty cents ($0.50) per statement when requested in advance on
a monthly basis for one or more years.
(2) One dollar ($1) per statement when requested for only one
month.
(3) Five dollars ($5) if requested for a single cumulative
statement giving all the information described above back to the last
statement rendered.
If the mortgagee, beneficiary or vendor transmits to the
mortgagor, trustor or vendee a monthly statement or passbook showing
moneys received for interest and principal repayment and received and
held in and disbursed from an impound or trust account, if any, the
mortgagee, beneficiary or vendor shall be deemed to have complied
with this section.
No increase in the monthly rate of payment of a mortgagor, trustor
or vendee on a real property sale contract for impound or trust
accounts shall be effective until after the mortgagee, beneficiary or
vendor has furnished the mortgagor, trustor or vendee with an
itemized accounting of the moneys presently held by it in the
accounts, and a statement of the new monthly rate of payment, and an
explanation of the factors necessitating the increase.
The provisions of this section shall be in addition to the
obligations of the parties as stated by Section 2943 of this code.
Every person who willfully or repeatedly violates this subdivision
shall be subject to punishment by a fine of not less than fifty
dollars ($50) nor more than two hundred dollars ($200).
(c) As used in this section, "single-family, owner-occupied
dwelling" means a dwelling which will be owned and occupied by a
signatory to the mortgage or deed of trust secured by such dwelling
within 90 days of the execution of such mortgage or deed of trust.
SECTION 1. Section 11423 of the Business and
Professions Code is amended to read:
11423. (a) For purposes of this section:
(1) "Applicant" means a person who has made a written request for
an extension of credit which is proposed to be secured by real
property. The term does not include a guarantor, surety, or other
person who will not be directly liable on the loan.
(2) "Appraisal" shall have the same meaning as set forth in
subdivision (b) of Section 11302.
(3) "Residential real property" means real property located in the
State of California containing only a one-to-four family residence.
(b) A lender in a loan transaction secured by real property shall
mail or deliver a copy of an appraisal to a loan applicant within 15
days of receiving the appraisal, provided the applicant has paid for
the appraisal.
(c) Nothing in this section is intended to effect a change in
current law in any manner with respect to reliance on an appraisal by
anyone other than the lender who released the appraisal.
(d) This section does not apply to appraisals obtained by lenders
on property owned by the lender, nor to appraisals obtained by the
lender in anticipation of modifying any existing loan agreement if
the lender has not charged for the appraisal.
(e) In the case of loans secured by residential real property,
compliance with Regulation B (12 C.F.R. Part 202 et seq.) of the
Federal Reserve Board is deemed to be compliance with the provisions
of this section and Section 10241.3.
(f) This section is in addition to any right of access to
appraisals that exists under any other provision of state or federal
law.