BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1950
                                                                  Page  1

          Date of Hearing:   April 17, 2012
          Counsel:                Milena Blake


                         ASSEMBLY COMMITTEE ON PUBLIC SAFETY
                                 Tom Ammiano, Chair

                    AB 1950 (Davis) - As Amended:  April 10, 2012
                       As Proposed to be Amended in Committee
           

          SUMMARY  :   Modifies provisions related to mortgage fraud 
          enforcement.  Specifically,  this bill  :  

          1)Removes the sunset date on prohibitions against unlawful 
            mortgage loan modification or loan forbearance, as specified.  


          2)States that it is unlawful for any person to engage in the 
            business, act in the capacity of, advertise or assume to act 
            as a mortgage loan originator within this state without being 
            so licensed or without having obtained a license endorsement.

          3)Requires an additional fee of $25 paid at the time of 
            recording a notice of default, as specified, which must be 
            transmitted to the Department of Justice, less administrative 
            costs of transmittal.

          4)Creates the State Real Estate Fraud Prosecution Account of the 
            General Fund, which the above fee must be deposited into.  
            This fund is to be used for the purpose of determining, 
            investigating, and prosecuting real estate fraud crimes.  

          5)Extends the statute of limitations for misdemeanor crimes 
            related to mortgage fraud, as specified, from one year to 
            three years after discovery of the offense, or within three 
            years after the completion of the offense, whichever is later. 
             

           EXISTING LAW  :

          1)States that prosecution for a misdemeanor must be commenced 
            within one year of the commission of the offense.  ÝPenal Code 
            Section 802(a).]









                                                                  AB 1950
                                                                  Page  2

          2)States that the prosecution for a felony not punishable by 
            death or life imprisonment, or for the embezzlement of public 
            money, must be commenced within three years, unless the 
            offense carries a sentence of eight years or more.  (Penal 
            Code Section 801.)

          3)States that the prosecution for a felony punishable by 
            imprisonment of eight years or more, but not punishable by 
            death or life imprisonment, or for the embezzlement of public 
            money, must be commenced within six years.  (Penal Code 
            Section 800.)

          4)States that the prosecution for a felony punishable by death, 
            life in prison, or for the embezzlement of public money, may 
            be commenced at any time.  (Penal Code Section 799.)

          5)States that the statute of limitations may be tolled for 
            specified offenses.  (Penal Code Section 803.)

           FISCAL EFFECT  :   Unknown.

           COMMENTS  :   

          1)Author's Statement  : According to the author, "Because of the 
            complicated nature of the mortgage crisis, it is often a while 
            before misconduct is discovered, at which point there is 
            little to no time left in the statute of limitations for the 
            Attorney General to investigate.  Furthermore, due to the 
            inevitable budget cuts, there is a need to insulate the 
            Attorney General's Mortgage Fraud Strike Force."

           2)Statute of Limitations  :  The statute of limitations requires 
            commencement of a prosecution within a certain period of time 
            after the commission of a crime.  A prosecution is initiated 
            by filing an indictment or information, filing a complaint, 
            certifying a case to superior court, or issuing an arrest or 
            bench warrant.  (Penal Code Section 804.)  If prosecution is 
            not commenced within the applicable period of limitation, it 
            is a complete defense to the charge.  The statute of 
            limitations is jurisdictional and may be raised as a defense 
            at any time before or after judgment.  ÝPeople v. Morris, 
            (1988) 46 Cal.3d 1, 13.]  The defense may only be waived under 
            limited circumstances.  ÝCowan v. Superior Court, (1996) 14 
            Cal.4th 367.]









                                                                  AB 1950
                                                                  Page  3

          Criminal statutes of limitations are laws that limit the time 
            during which a prosecution can be commenced.  These statutes 
            have been in operation for over 350 years and are deeply 
            rooted in the American legal system.  There are several 
            rationales underlying statutes of limitations. First, they 
            ensure that prosecutions are based upon reasonably fresh 
            evidence - the idea being that over time memories fade, 
            witnesses die or leave the area, and physical evidence becomes 
            more difficult to obtain, identify or preserve.  In short, the 
            possibility of erroneous conviction is minimized when 
            prosecution is prompt.  Second, statutes of limitations 
            encourage law enforcement officials to investigate suspected 
            criminal activity in a timely fashion.  In addition, it is 
            thought that the statute of limitations may reduce the 
            possibility of blackmail based on threats to disclose 
            information to prosecutors or law enforcement officials.  
            Another rationale is that as time goes by, the likelihood 
            increases that an offender has reformed, making punishment 
            less necessary.  In addition, society's retributive impulse 
            may lessen over time, making punishment less desirable.  
            Finally, there is the thought that statutes of limitations 
            provide an overall sense of security and stability to human 
            affairs.  ÝLauren Kerns, "Incorporating Tolling Provisions 
            into Sex Crimes Statute of Limitations", 13 Temple Policy and 
            Civil Rights Law Review, 325, 327; internal citation omitted.]

           3)Related Legislation  : 

             a)   AB 1763 (Davis), would authorize the Attorney General to 
               convene a special grand jury, as prescribed, for cases 
               involving fraud or theft of public moneys, impairment of 
               the collection of public money, fraud or theft that occurs 
               in more than one county and where all potential charges 
               could not otherwise be brought in a single county, and 
               charges that could reasonably result in a sentencing 
               enhancement for aggravated white collar crime.  AB 1763 is 
               scheduled to be heard in this committee today.  

             b)   SB 1474 (Hancock), would authorize the Attorney General 
               to convene a special grand jury, as prescribed, for cases 
               involving fraud or theft of public moneys, impairment of 
               the collection of public money, fraud or theft that occurs 
               in more than one county and where all potential charges 
               could not otherwise be brought in a single county, and 
               charges that could reasonably result in a sentencing 








                                                                  AB 1950
                                                                  Page  4

               enhancement for aggravated white collar crime.  SB 1474 is 
               scheduled to be heard in Senate Committee on Public Safety 
               today.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Attorney General's Office 
          California Professional Firefighters 
          California Nurses Association
          226 Private individuals

           Opposition 
           
          California Bankers Association
          California Credit Union League
          California Independent Bankers 
          California Land Title Association
          California Mortgage Bankers Association
          Community Financial Services Association
          County Recorders' Association of California
          United Trustees Association
           

          Analysis Prepared by  :    Milena Blake / PUB. S. / (916) 319-3744