BILL NUMBER: SB 94 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 13, 2009
AMENDED IN SENATE MARCH 23, 2009
AMENDED IN SENATE MARCH 9, 2009
INTRODUCED BY Senator Calderon
JANUARY 22, 2009
An act to amend Section 10177 of, and to add Sections 10085.6 and
10147.6 to, the Business and Professions Code, to amend Section
2945.1 of, and to add Sections 2944.6 and 2944.7 to, the Civil Code,
and to amend Sections 22161 and 22301 of, and to add Sections 1243,
14962, and 50002.5 to, the Financial Code, relating to mortgage
loans.
LEGISLATIVE COUNSEL'S DIGEST
SB 94, as amended, Calderon. Mortgage loans.
(1) The Real Estate Law provides for the regulation and licensure
of real estate brokers and real estate salespersons by the Real
Estate Commissioner. The California Finance Lenders Law provides for
the regulation and licensure of finance lenders and brokers by the
Commissioner of Corporations. The California Residential Mortgage
Lending Act provides for the regulation and licensure of residential
mortgage lenders and servicers by the Commissioner of Corporations.
The Banking Law provides for the regulation of state commercial banks
by the Commissioner of Financial Institutions. The California Credit
Union Law provides for the regulation of state credit unions by the
Commissioner of Financial Institutions. A willful violation of
specified provisions of those acts is a crime.
This bill would prohibit any person, including
a real estate licensee from charging, contracting for,
or receiving an advance fee, as defined, for performing services for
borrowers in connection with the modification of the terms of a loan
secured directly or collaterally by a lien on single-family
residential real property , who, for compensation,
solicits customers for, or offers to perform, mortgage loan
modifications or other forms of mortgage loan forbearance from
demanding or receiving any preperformance compensation, as specified,
requiring any security as collateral for final compensation, or
taking a power of attorney from a borrower , and
would make a violation of that prohibition a misdemeanor or
subject to specified fines . By creating a new crime, the bill
would impose a state-mandated local program. The bill would also
prohibit finance lenders and brokers, residential mortgage lenders
and servicers, and state-chartered commercial banks and credit unions
from charging, contracting for, or receiving any interest or charge
for performing services for borrowers in connection with the
modification of the terms of, or the negotiation of another form of
forbearance or forgiveness in connection with, a loan secured
directly or collaterally by a lien on single-family residential real
property.
This bill would also require any person ,
including a real estate licensee, who, for compensation,
solicits customers for, or offers to perform, mortgage loan
modifications or other forms of mortgage loan forbearance to provide
a specified 14-point bold type statement regarding loan modification
fees , and would prohibit those persons from demanding or
receiving any preperformance compensation, as specified, requiring
any security as collateral for final compensation, or taking a power
of attorney from a borrower . The bill would make a
violation of that prohibition a misdemeanor or subject to specified
fines, thereby creating a new crime and imposing a state-mandated
local program. The bill would also provide that a real estate
licensee who fails to comply with specified provisions related to
mortgages, including the loan modification provisions, would be
subject to disciplinary action by the Real Estate Commissioner. The
bill would add to the California Finance Lenders Law a prohibition on
making any false, deceptive, or misleading statement,
representation, or omission in the course of a licensee's lending or
brokering activities.
Because a willful violation of these provisions by
certain licensees may be punished as crimes under their respective
licensing laws, this bill would impose a state-mandated local
program.
(2) Existing law defines a foreclosure consultant as a person who
offers, for compensation, to perform specified services for a
homeowner relating to a foreclosure sale, and imposes regulations
upon foreclosure consultants when servicing a foreclosure sale, as
specified. Existing law excludes specified persons from the
definition of a foreclosure consultant, including a person licensed
under the Real Estate Law when making a direct loan or engaging in
specified acts, and a person licensed to make loans as a finance
lender, subject to the authority of the Commissioner of Corporations
to terminate this exclusion, as specified.
This bill would instead specify that a real estate licensee and a
finance lender are excluded from the definition of a foreclosure
consultant when acting under the authority of that person's license,
and would delete the commissioner's authority to terminate the
finance lender's exclusion. The bill would also delete obsolete
statutory references from those provisions.
(3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10085.6 is added to the Business and
Professions Code, to read:
10085.6. (a) Notwithstanding any other provision of law, it
shall be unlawful for any licensee to claim, demand, charge,
receive, collect, or contract for an advance fee for performing
services for borrowers in connection with the modification of the
terms of a loan secured directly or collaterally by a lien on
single-family residential real property. shall be
unlawful for any licensee who solicits customers for the purpose of
helping negotiate a mortgage loan modification or other form of
mortgage loan forbearance for a fee or other compensation, or who
otherwise offers to perform these services for a borrower for a fee
or other compensation, to do any of the following:
(1) Claim, demand, charge, collect, or receive any compensation
until after the licensee has fully performed each and every service
the licensee contracted to perform or represented that he, she, or it
would perform.
(2) Take any wage assignment, any lien of any type on real or
personal property, or other security to secure the payment of
compensation.
(3) Take any power of attorney from the borrower for any purpose.
(b) A violation of this section by a natural person who is a
licensee is a public offense punishable by a fine not exceeding
ten thousand dollars ($10,000), by imprisonment in the county jail
for a term not to exceed six months one year
, or by both that fine and imprisonment, or if by a
corporation, the violation is punishable by a fine not exceeding
fifty thousand dollars ($50,000). These penalties are cumulative
to any other remedies or penalties provided by law.
SEC. 2. Section 10147.6 is added to the Business and Professions
Code, to read:
10147.6. (a) Any licensee who solicits customers for the purpose
of helping negotiate a mortgage loan modification or other form of
mortgage loan forbearance for a fee or other form of compensation, or
who otherwise offers to perform these services for a borrower for a
fee or other form of compensation, shall provide the following to the
borrower, as a separate statement, in not less than 14-point bold
type, prior to entering into any fee agreement with the borrower:
IT IS NOT NECESSARY TO PAY A THIRD PARTY TO ARRANGE FOR A LOAN
MODIFICATION OR OTHER FORM OF FORBEARANCE FROM YOUR MORTGAGE LENDER
OR SERVICER. YOU MAY CALL YOUR LENDER DIRECTLY TO ASK FOR A CHANGE IN
YOUR LOAN TERMS. NONPROFIT HOUSING COUNSELING AGENCIES ALSO OFFER
THESE AND OTHER FORMS OF BORROWER ASSISTANCE FREE OF CHARGE. A LIST
OF NONPROFIT HOUSING COUNSELING AGENCIES APPROVED BY THE UNITED
STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) IS AVAILABLE
FROM YOUR LOCAL HUD OFFICE OR BY VISITING WWW.HUD.GOV.
(b) If loan modification or other mortgage loan forbearance
services are offered or negotiated in one of the foreign languages
set forth in Section 1632 of the Civil Code, a translated copy of the
statement in subdivision (a) shall be provided to the borrower in
that foreign language.
(c) A violation of this section by a natural person who is a
licensee is a public offense punishable by a fine not exceeding ten
thousand dollars ($10,000), by imprisonment in the county jail for a
term not to exceed one year, or by both that fine and imprisonment,
or if by a corporation, the violation is punishable by a fine not
exceeding fifty thousand dollars ($50,000). These penalties are
cumulative to any other remedies or penalties provided by law.
SEC. 3. Section 10177 of the Business and Professions Code is
amended to read:
10177. The commissioner may suspend or revoke the license of a
real estate licensee, or may deny the issuance of a license to an
applicant, who has done any of the following, or may suspend or
revoke the license of a corporation, or deny the issuance of a
license to a corporation, if an officer, director, or person owning
or controlling 10 percent or more of the corporation's stock has done
any of the following:
(a) Procured, or attempted to procure, a real estate license or
license renewal, for himself or herself or a salesperson, by fraud,
misrepresentation, or deceit, or by making a material misstatement of
fact in an application for a real estate license, license renewal,
or reinstatement.
(b) Entered a plea of guilty or nolo contendere to, or been found
guilty of, or been convicted of, a felony, or a crime substantially
related to the qualifications, functions, or duties of a real estate
licensee, and the time for appeal has elapsed or the judgment of
conviction has been affirmed on appeal, irrespective of an order
granting probation following that conviction, suspending the
imposition of sentence, or of a subsequent order under Section 1203.4
of the Penal Code allowing that licensee to withdraw his or her plea
of guilty and to enter a plea of not guilty, or dismissing the
accusation or information.
(c) Knowingly authorized, directed, connived at, or aided in the
publication, advertisement, distribution, or circulation of a
material false statement or representation concerning his or her
designation or certification of special education, credential, trade
organization membership, or business, or concerning a business
opportunity or a land or subdivision, as defined in Chapter 1
(commencing with Section 11000) of Part 2, offered for sale.
(d) Willfully disregarded or violated the Real Estate Law (Part 1
(commencing with Section 10000)) or Chapter 1 (commencing with
Section 11000) of Part 2 or the rules and regulations of the
commissioner for the administration and enforcement of the Real
Estate Law and Chapter 1 (commencing with Section 11000) of Part 2.
(e) Willfully used the term "realtor" or a trade name or insignia
of membership in a real estate organization of which the licensee is
not a member.
(f) Acted or conducted himself or herself in a manner that would
have warranted the denial of his or her application for a real estate
license, or has either had a license denied or had a license issued
by another agency of this state, another state, or the federal
government revoked or suspended for acts that, if done by a real
estate licensee, would be grounds for the suspension or revocation of
a California real estate license, if the action of denial,
revocation, or suspension by the other agency or entity was taken
only after giving the licensee or applicant fair notice of the
charges, an opportunity for a hearing, and other due process
protections comparable to the Administrative Procedure Act (Chapter
3.5 (commencing with Section 11340), Chapter 4 (commencing with
Section 11370), and Chapter 5 (commencing with Section 11500) of Part
1 of Division 3 of Title 2 of the Government Code), and only upon an
express finding of a violation of law by the agency or entity.
(g) Demonstrated negligence or incompetence in performing an act
for which he or she is required to hold a license.
(h) As a broker licensee, failed to exercise reasonable
supervision over the activities of his or her salespersons, or, as
the officer designated by a corporate broker licensee, failed to
exercise reasonable supervision and control of the activities of the
corporation for which a real estate license is required.
(i) Has used his or her employment by a governmental agency in a
capacity giving access to records, other than public records, in a
manner that violates the confidential nature of the records.
(j) Engaged in any other conduct, whether of the same or a
different character than specified in this section, which constitutes
fraud or dishonest dealing.
(k) Violated any of the terms, conditions, restrictions, and
limitations contained in an order granting a restricted license.
(l) (1) Solicited or induced the sale, lease, or listing for sale
or lease of residential property on the ground, wholly or in part, of
loss of value, increase in crime, or decline of the quality of the
schools due to the present or prospective entry into the neighborhood
of a person or persons having a characteristic listed in subdivision
(a) or (d) of Section 12955 of the Government Code, as those
characteristics are defined in Sections 12926 and 12926.1,
subdivision (m) and paragraph (1) of subdivision (p) of Section
12955, and Section 12955.2 of the Government Code.
(2) Notwithstanding paragraph (1), with respect to familial
status, paragraph (1) shall not be construed to apply to housing for
older persons, as defined in Section 12955.9 of the Government Code.
With respect to familial status, nothing in paragraph (1) shall be
construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and
799.5 of the Civil Code, relating to housing for senior citizens.
Subdivision (d) of Section 51 and Section 1360 of the Civil Code and
subdivisions (n), (o), and (p) of Section 12955 of the Government
Code shall apply to paragraph (1).
(m) Violated the Franchise Investment Law (Division 5 (commencing
with Section 31000) of Title 4 of the Corporations Code) or
regulations of the Commissioner of Corporations pertaining thereto.
(n) Violated the Corporate Securities Law of 1968 (Division 1
(commencing with Section 25000) of Title 4 of the Corporations Code)
or the regulations of the Commissioner of Corporations pertaining
thereto.
(o) Failed to disclose to the buyer of real property, in a
transaction in which the licensee is an agent for the buyer, the
nature and extent of a licensee's direct or indirect ownership
interest in that real property. The direct or indirect ownership
interest in the property by a person related to the licensee by blood
or marriage, by an entity in which the licensee has an ownership
interest, or by any other person with whom the licensee has a special
relationship shall be disclosed to the buyer.
(p) Violated Article 6 (commencing with Section 10237).
(q) Violated or failed to comply with Chapter 2 (commencing with
Section 2920) of Title 14 of Part 4 of Division 3 of the Civil Code,
related to mortgages.
If a real estate broker that is a corporation has not done any of
the foregoing acts, either directly or through its employees, agents,
officers, directors, or persons owning or controlling 10 percent or
more of the corporation's stock, the commissioner may not deny the
issuance of a real estate license to, or suspend or revoke the real
estate license of, the corporation, provided that any offending
officer, director, or stockholder, who has done any of the foregoing
acts individually and not on behalf of the corporation, has been
completely disassociated from any affiliation or ownership in the
corporation.
SEC. 4. Section 2944.6 is added to the Civil Code, to read:
2944.6. (a) Notwithstanding any other provision of law, any
person who solicits customers for the purpose of helping negotiate a
mortgage loan modification or other form of mortgage loan forbearance
for a fee or other compensation, or who otherwise offers to perform
these services for a borrower for a fee or other compensation, shall
provide the following to the borrower, as a separate statement, in
not less than 14-point bold type, prior to entering into any fee
agreement with the borrower:
IT IS NOT NECESSARY TO PAY A THIRD PARTY TO ARRANGE FOR A LOAN
MODIFICATION OR OTHER FORM OF FORBEARANCE FROM YOUR MORTGAGE LENDER
OR SERVICER. YOU MAY CALL YOUR LENDER DIRECTLY TO ASK FOR A CHANGE IN
YOUR LOAN TERMS. NONPROFIT HOUSING COUNSELING AGENCIES ALSO OFFER
THESE AND OTHER FORMS OF BORROWER ASSISTANCE FREE OF CHARGE. A LIST
OF NONPROFIT HOUSING COUNSELING AGENCIES APPROVED BY THE UNITED
STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) IS AVAILABLE
FROM YOUR LOCAL HUD OFFICE OR BY VISITING WWW.HUD.GOV.
(b) If loan modification or other mortgage loan forbearance
services are offered or negotiated in one of the foreign languages
set forth in Section 1632, a translated copy of the statement in
subdivision (a) shall be provided to the borrower in that foreign
language.
(c) A violation of this section by a natural person is a public
offense punishable by a fine not exceeding ten thousand dollars
($10,000), by imprisonment in the county jail for a term not to
exceed one year, or by both that fine and imprisonment, or if by a
corporation, the violation is punishable by a fine not exceeding
fifty thousand dollars ($50,000). These penalties are cumulative to
any other remedies or penalties provided by law.
SEC. 5. Section 2944.7 is added to the Civil Code, to read:
2944.7. (a) Notwithstanding any other
provision of law, it shall be unlawful for any person who solicits
customers for the purpose of helping negotiate a mortgage loan
modification or other form of mortgage loan forbearance for a fee or
other compensation, or who otherwise offers to perform these services
for a borrower for a fee or other compensation, to do any of the
following:
(a)
(1) Claim, demand, charge, collect, or receive any
compensation until after the person has fully performed each and
every service the person contracted to perform or represented that he
or she would perform.
(b)
(2) Take any wage assignment, any lien of any type on
real or personal property, or other security to secure the payment of
compensation.
(c)
(3) Take any power of attorney from the borrower for
any purpose.
(b) A violation of this section by a natural person is a public
offense punishable by a fine not exceeding ten thousand dollars
($10,000), by imprisonment in the county jail for a term not to
exceed one year, or by both that fine and imprisonment, or if by a
corporation, the violation is punishable by a fine not exceeding
fifty thousand dollars ($50,000). These penalties are cumulative to
any other remedies or penalties provided by law.
SEC. 6. Section 2945.1 of the Civil Code is amended to read:
2945.1. The following definitions apply to this chapter:
(a) "Foreclosure consultant" means any person who makes any
solicitation, representation, or offer to any owner to perform for
compensation or who, for compensation, performs any service which the
person in any manner represents will in any manner do any of the
following:
(1) Stop or postpone the foreclosure sale.
(2) Obtain any forbearance from any beneficiary or mortgagee.
(3) Assist the owner to exercise the right of reinstatement
provided in Section 2924c.
(4) Obtain any extension of the period within which the owner may
reinstate his or her obligation.
(5) Obtain any waiver of an acceleration clause contained in any
promissory note or contract secured by a deed of trust or mortgage on
a residence in foreclosure or contained that deed of trust or
mortgage.
(6) Assist the owner to obtain a loan or advance of funds.
(7) Avoid or ameliorate the impairment of the owner's credit
resulting from the recording of a notice of default or the conduct of
a foreclosure sale.
(8) Save the owner's residence from foreclosure.
(9) Assist the owner in obtaining from the beneficiary, mortgagee,
trustee under a power of sale, or counsel for the beneficiary,
mortgagee, or trustee, the remaining proceeds from the foreclosure
sale of the owner's residence.
(b) A foreclosure consultant does not include any of the
following:
(1) A person licensed to practice law in this state when the
person renders service in the course of his or her practice as an
attorney at law.
(2) A person licensed under Division 3 (commencing with Section
12000) of the Financial Code when the person is acting as a prorater
as defined therein.
(3) A person licensed under Part 1 (commencing with Section 10000)
of Division 4 of the Business and Professions Code when the person
is acting under the authority of that license, as described in
Section 10131 or 10131.1 of the Business and Professions Code.
(4) A person licensed under Chapter 1 (commencing with Section
5000) of Division 3 of the Business and Professions Code when the
person is acting in any capacity for which the person is licensed
under those provisions.
(5) A person or his or her authorized agent acting under the
express authority or written approval of the Department of Housing
and Urban Development or other department or agency of the United
States or this state to provide services.
(6) A person who holds or is owed an obligation secured by a lien
on any residence in foreclosure when the person performs services in
connection with this obligation or lien.
(7) Any person licensed to make loans pursuant to Division 9
(commencing with Section 22000) of the Financial Code when the person
is acting under the authority of that license.
(8) Any person or entity doing business under any law of this
state, or of the United States relating to banks, trust companies,
savings and loan associations, industrial loan companies, pension
trusts, credit unions, insurance companies, or any person or entity
authorized under the laws of this state to conduct a title or escrow
business, or a mortgagee which is a United States Department of
Housing and Urban Development approved mortgagee and any subsidiary
or affiliate of the above, and any agent or employee of the above
while engaged in the business of these persons or entities.
(9) A person licensed as a residential mortgage lender or servicer
pursuant to Division 20 (commencing with Section 50000) of the
Financial Code, when acting under the authority of that license.
(c) Notwithstanding subdivision (b), any person who provides
services pursuant to paragraph (9) of subdivision (a) is a
foreclosure consultant unless he or she is the owner's attorney.
(d) "Person" means any individual, partnership, corporation,
limited liability company, association or other group, however
organized.
(e) "Service" means and includes, but is not limited to, any of
the following:
(1) Debt, budget, or financial counseling of any type.
(2) Receiving money for the purpose of distributing it to
creditors in payment or partial payment of any obligation secured by
a lien on a residence in foreclosure.
(3) Contacting creditors on behalf of an owner of a residence in
foreclosure.
(4) Arranging or attempting to arrange for an extension of the
period within which the owner of a residence in foreclosure may cure
his or her default and reinstate his or her obligation pursuant to
Section 2924c.
(5) Arranging or attempting to arrange for any delay or
postponement of the time of sale of the residence in foreclosure.
(6) Advising the filing of any document or assisting in any manner
in the preparation of any document for filing with any bankruptcy
court.
(7) Giving any advice, explanation or instruction to an owner of a
residence in foreclosure which in any manner relates to the cure of
a default in or the reinstatement of an obligation secured by a lien
on the residence in foreclosure, the full satisfaction of that
obligation, or the postponement or avoidance of a sale of a residence
in foreclosure pursuant to a power of sale contained in any deed of
trust.
(8) Arranging or attempting to arrange for the payment by the
beneficiary, mortgagee, trustee under a power of sale, or counsel for
the beneficiary, mortgagee, or trustee, of the remaining proceeds to
which the owner is entitled from a foreclosure sale of the owner's
residence in foreclosure. Arranging or attempting to arrange for the
payment shall include any arrangement where the owner transfers or
assigns the right to the remaining proceeds of a foreclosure sale to
the foreclosure consultant or any person designated by the
foreclosure consultant, whether that transfer is effected by
agreement, assignment, deed, power of attorney, or assignment of
claim.
(f) "Residence in foreclosure" means a residence in foreclosure as
defined in Section 1695.1.
(g) "Owner" means a property owner as defined in Section 1695.1.
(h) "Contract" means any agreement, or any term thereof, between a
foreclosure consultant and an owner for the rendition of any service
as defined in subdivision (e).
SEC. 7. Section 1243 is added to the Financial Code, to read:
1243. (a) No bank shall directly or indirectly charge, contract
for, or receive any interest or charge of any nature for performing
services for a borrower in connection with either of the following:
(1) The actual or attempted modification of the terms of a loan
secured directly or collaterally by a lien on single-family
residential real property.
(2) The actual or attempted negotiation of another form of
forbearance or forgiveness in connection with a loan secured directly
or collaterally by a lien on single-family residential real
property.
(b) Nothing in this section precludes a bank from doing either of
the following:
(1) Collecting interest or other charges pursuant to the terms of
a loan that has been modified.
(2) Accepting payment from a federal agency in connection with the
federal Homeowner Affordability and Stability Plan or other federal
plan intended to help reduce foreclosures.
SEC. 8. Section 14962 is added to the Financial Code, to read:
14962. (a) No credit union shall directly or indirectly charge,
contract for, or receive any interest or charge of any nature for
performing services for a borrower in connection with either of the
following:
(1) The actual or attempted modification of the terms of a loan
secured directly or collaterally by a lien on single-family
residential real property.
(2) The actual or attempted negotiation of another form of
forbearance or forgiveness in connection with a loan secured directly
or collaterally by a lien on single-family residential real
property.
(b) Nothing in this section precludes a credit union from doing
either of the following:
(1) Collecting interest or other charges pursuant to the terms of
a loan that has been modified.
(2) Accepting payment from a federal agency in connection with the
federal Homeowner Affordability and Stability Plan or other federal
plan intended to help reduce foreclosures.
SEC. 9. Section 22161 of the Financial Code is amended to read:
22161. (a) No person shall make a false, deceptive, or misleading
statement, representation, or omission in the course of his or her
lending or brokering activities.
(b) No person shall advertise, print, display, publish,
distribute, or broadcast, or cause or permit to be advertised,
printed, displayed, published, distributed, or broadcast in any
manner, any statement or representation with regard to the business
subject to the provisions of this division, including the rates,
terms, or conditions for making or negotiating loans, that is false,
misleading, or deceptive, or that omits material information that is
necessary to make the statements not false, misleading, or deceptive,
or in the case of a licensee, that refers to the supervision of the
business by the state or any department or official of the state.
SEC. 10. Section 22301 of the Financial Code is amended to read:
22301. (a) No licensee shall directly or indirectly charge,
contract for, or receive any interest or charge of any nature with
respect to a loan of five thousand dollars ($5,000) or more unless
the loan is made.
(b) Notwithstanding subdivision (a), whenever a loan of five
thousand dollars ($5,000) or more is not consummated because of the
borrower's failure to disclose outstanding liens or other information
essential to making the loan or solely because of the borrower's
failure to complete the loan in accordance with the loan application,
a licensee may charge, contract for, and receive an amount equal to
the actual expenses incurred by the licensee in connection with the
preparation for the loan.
(c) No licensee shall directly or indirectly charge, contract for,
or receive any interest or charge of any nature for performing
services for a borrower in connection with either of the following:
(1) The actual or attempted modification of the terms of a loan
secured directly or collaterally by a lien on single-family
residential real property.
(2) The actual or attempted negotiation of another form of
forbearance or forgiveness in connection with a loan secured directly
or collaterally by a lien on single-family residential real
property.
(d) Nothing in this section precludes a licensee from doing either
of the following:
(1) Collecting interest or other charges pursuant to the terms of
a loan that has been modified.
(2) Accepting payment from a federal agency in connection with the
federal Homeowner Affordability and Stability Plan or other federal
plan intended to help reduce foreclosures.
SEC. 11. Section 50002.5 is added to the Financial Code, to read:
50002.5. (a) No licensee shall directly or indirectly charge,
contract for, or receive any interest or charge of any nature for
performing services for a borrower in connection with either of the
following:
(1) The actual or attempted modification of the terms of a loan
secured directly or collaterally by a lien on single-family
residential real property.
(2) The actual or attempted negotiation of another form of
forbearance or forgiveness in connection with a loan secured directly
or collaterally by a lien on single-family residential real
property.
(b) Nothing in this section precludes a licensee from doing either
of the following:
(1) Collecting interest or other charges pursuant to the terms of
a loan that has been modified.
(2) Accepting payment from a federal agency in connection with the
federal Homeowner Affordability and Stability Plan or other federal
plan intended to help reduce foreclosures.
SEC. 12. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.