BILL ANALYSIS
AB 1720
Page 1
Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1720 (Galgiani) - As Amended: March 25, 2010
Policy Committee: Banking and
Finance Vote: 11-0
Judiciary 10-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill amends the Buyer's Choice Act to require the seller of
foreclosed residential real property to provide the buyer with a
standard form that acknowledges the buyer's existing right to
choose his or her own title insurer or escrow agent.
FISCAL EFFECT
Minor, likely absorbable, enforcement costs to the Department of
Corporations, Department of Financial Institutions, and
Department of Real Estate.
COMMENTS
1)Background . This bill is a follow-up to the author's AB 957
(Galgiani), Chapter 264/2009. That bill, which created the
Buyer's Choice Act, prohibits a seller of real property
acquired in a foreclosure from requiring the buyer to use a
particular title insurer or escrow agent selected by the
seller. It addressed the concern that lending institutions
were using their institutional leverage to require that buyers
use particular title insurer and escrow agent - even though
the buyer is usually the one who pays for the service. This
practice, the author claimed, often led to the exclusion of
smaller, local businesses from the title insurance and escrow
market.
2)Rationale . According to the author, some banks are using
written notices that do not adequately inform buyers about
their right to make their own choice of title insurers and
AB 1720
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escrow agents. This bill is intended to ensure that buyers
realize benefit of the Buyer's Choice Act by requiring a
seller of real property to provide the buyer with a standard
form that expressly and conspicuously acknowledges the buyer's
rights under the Buyer's Choice Act.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081