mortgage foreclosure consultant law

8/11/2019 Mortgage Foreclosure Consultant Law

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WAIS Document Retrieval

CALI FORNI A CODESCIVIL CODE

SECTI ON 2945- 2945. 11

2945. ( a) The Legi sl atur e f i nds and decl ares t hat homeowners whose

r esi dences ar e i n f orecl osur e ar e subj ect t o f r aud, decept i on,har assment , and unf ai r deal i ng by f or ecl osur e consul t ant s f r om t het i me a Not i ce of Def aul t i s r ecor ded pur suant t o Sect i on 2924 unt i lt he t i me sur pl us f unds f r om any f or ecl osur e sal e ar e di st r i but ed t ot he homeowner or hi s or her successor . For ecl osur e consul t ant sr epr esent t hat t hey can assi st homeowner s who have def aul t ed onobl i gat i ons secur ed by t hei r r esi dences. These f or ecl osur econsul t ant s, however , of t en char ge hi gh f ees, t he payment of whi ch i sof t en secur ed by a deed of t r ust on t he r esi dence to be saved, andper f or m no ser vi ce or essent i al l y a wort hl ess ser vi ce. Homeowner s,r el yi ng on t he f or ecl osur e consul t ant s' pr omi ses of hel p, t ake noother act i on, ar e di ver t ed f r om l awf ul busi nesses whi ch coul d r enderbenef i ci al servi ces, and of t en l ose t hei r homes, somet i mes t o t hef orecl osur e consul t ant s who pur chase homes at a f r act i on of t hei r

val ue bef ore t he sal e. Vul ner abl e homeowner s ar e i ncr easi ngl yr el yi ng on the ser vi ces of f or ecl osur e consul t ant s who advi se t hehomeowner t hat t he f orecl osur e consul t ant can obt ai n t he r emai ni ngf unds f r omt he f orecl osur e sal e i f t he homeowner execut es anassi gnment of t he surpl us, a deed, or a power of at t orney i n f avor oft he f orecl osur e consul t ant . Thi s r esul t s i n t he homeowner payi ng anexor bi t ant f ee f or a servi ce when t he homeowner coul d have obt ai nedt he r emai ni ng f unds f r om t he t r ust ee' s sal e f r om t he t r ust ee di r ect l yf or mi ni mal cost i f t he homeowner had consul t ed l egal counsel or hadsuf f i ci ent t i me t o r ecei ve not i ces f r om t he t r ust ee pur suant t oSect i on 2924j r egardi ng how and where t o make a cl ai m f or excessproceeds.

( b) The Legi sl at ur e f ur t her f i nds and decl ar es t hat f or ecl osur e

consul t ant s have a si gni f i cant i mpact on t he economy of t hi s st at eand on t he wel f ar e of i t s ci t i zens. ( c) The i nt ent and pur poses of t hi s ar t i cl e ar e t he f ol l owi ng:( 1) To r equi r e t hat f orecl osur e consul t ant servi ce agr eement s be

expr essed i n wr i t i ng; t o saf eguar d t he publ i c agai nst decei t andf i nanci al har dshi p; t o per mi t r esci ssi on of f or ecl osur e consul t at i oncont r act s; t o pr ohi bi t r epr esent at i ons t hat t end t o mi sl ead; and t oencour age f ai r deal i ng i n t he r endi t i on of f or ecl osur e ser vi ces.

( 2) The pr ovi si ons of t hi s ar t i cl e shal l be l i ber al l y const r ued t oef f ect uat e thi s i nt ent and t o achi eve t hese pur poses.

2945. 1. The f ol l owi ng def i ni t i ons appl y t o t hi s chapt er :

( a) "Forecl osure consul t ant " means any per son who makes anysol i ci t at i on, r epr esent at i on, or of f er t o any owner t o per f or m f orcompensat i on or who, f or compensat i on, per f or ms any ser vi ce whi ch t heper son i n any manner r epr esent s wi l l i n any manner do any of t hef ol l owi ng:

( 1) St op or post pone t he f or ecl osur e sal e.( 2) Obt ai n any f orbear ance f r omany benef i ci ar y or mort gagee.( 3) Assi st t he owner t o exer ci se t he r i ght of r ei nst at ement

pr ovi ded i n Sect i on 2924c.( 4) Obt ai n any ext ensi on of t he per i od wi t hi n whi ch the owner may

r ei nst at e hi s or her obl i gat i on.

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( 5) Obt ai n any wai ver of an accel erat i on cl ause cont ai ned i n anypromi ssor y note or cont r act secur ed by a deed of t r ust or mor t gage ona r esi dence i n f or ecl osur e or cont ai ned t hat deed of t r ust ormor t gage.

( 6) Assi st t he owner t o obt ai n a l oan or advance of f unds. ( 7) Avoi d or amel i orat e t he i mpai r ment of t he owner ' s cr edi t

r esul t i ng f r om t he r ecor di ng of a not i ce of def aul t or t he conduct ofa f or ecl osur e sal e.

( 8) Save t he owner ' s r esi dence f r omf orecl osur e.( 9) Assi st t he owner i n obt ai ni ng f r om t he benef i ci ar y, mor t gagee,t r ust ee under a power of sal e, or counsel f or t he benef i ci ar y,mort gagee, or t r ust ee, t he r emai ni ng pr oceeds f r omt he f orecl osur esal e of t he owner ' s r esi dence.

( b) A f orecl osur e consul t ant does not i ncl ude any of t hef ol l owi ng:

( 1) A per son l i censed t o pr act i ce l aw i n t hi s st at e when theper son render s servi ce i n t he cour se of hi s or her pr act i ce as anat t orney at l aw.

( 2) A person l i censed under Di vi si on 3 (commenci ng wi t h Sect i on12000) of t he Fi nanci al Code when the per son i s act i ng as a pr orat eras def i ned ther ei n.

( 3) A per son l i censed under Par t 1 ( commenci ng wi t h Sect i on 10000)

of Di vi si on 4 of t he Busi ness and Pr of essi ons Code when t he per sonmakes a di r ect l oan or when t he per son ( A) engages i n act s whoseper f or mance r equi r es l i censur e under t hat par t , ( B) i s ent i t l ed t ocompensat i on f or t he act s per f ormed i n connect i on wi t h the sal e of ar esi dence i n f orecl osur e or wi t h t he ar r angi ng of a l oan secur ed by al i en on a r esi dence i n f orecl osur e, ( C) does not cl ai m, demand,char ge, col l ect , or r ecei ve any compensat i on unt i l t he act s have beenper f ormed or cannot be per f ormed because of an owner ' s f ai l ur e t omake t he di scl osur es set f or t h i n Sect i on 10243 of t he Busi ness andPr of essi ons Code or f ai l ur e t o accept an of f er f r om a pur chaser orl ender r eady, wi l l i ng, and abl e t o pur chase a r esi dence i nf orecl osur e or make a l oan secur ed by a l i en on a r esi dence i nf or ecl osur e on the t er ms pr escr i bed i n a l i st i ng or a l oan agr eement ,

and ( D) does not acqui r e any i nt er est i n a r esi dence i n f or ecl osur edi r ect l y f r om an owner f or whom t he per son agr eed to per f or m t he act sother t han as a t r ust ee or benef i ci ar y under a deed of t r ust gi vent o secur e t he payment of a l oan or t hat compensat i on. For t hepur poses of t hi s par agr aph, a "di r ect l oan" means a l oan of a r ealest ate br oker ' s own f unds secur ed by a deed of t r ust on t he resi dencei n f orecl osur e, whi ch l oan and deed of t r ust t he br oker i n goodf ai t h at t empt s t o assi gn t o a l ender , f or an amount at l eastsuf f i ci ent t o cur e al l of t he def aul t s on obl i gat i ons whi ch ar e t hensubj ect t o a r ecor ded not i ce of def aul t , pr ovi ded t hat , i f af or ecl osur e sal e i s conduct ed wi t h r espect t o t he deed of t r ust , t heper son conduct i ng t he f or ecl osur e sal e has no i nt er est i n t her esi dence i n f orecl osur e or i n t he out come of t he sal e and i s notowned, cont r ol l ed, or managed by the l endi ng br oker ; t he l endi ng

br oker does not acqui r e any i nt er est i n t he r esi dence i n f orecl osur edi r ect l y f r omt he owner other t han as a benef i ci ary under t he deed oft r ust ; and t he l oan i s not made f or t he pur pose or ef f ect ofavoi di ng or evadi ng t he pr ovi si ons of t hi s ar t i cl e.

( 4) A per son l i censed under Chapter 1 ( commenci ng wi t h Sect i on5000) of Di vi si on 3 of t he Busi ness and Prof essi ons Code when t heper son i s act i ng i n any capaci t y f or whi ch t he per son i s l i censedunder t hose pr ovi si ons.

( 5) A per son or hi s or her aut hori zed agent act i ng under t heexpr ess aut hori t y or wr i t t en appr oval of t he Depart ment of Housi ngand Ur ban Devel opment or ot her depar t ment or agency of t he Uni t ed


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St at es or t hi s st at e t o pr ovi de ser vi ces.( 6) A per son who hol ds or i s owed an obl i gat i on secur ed by a l i en

on any resi dence i n f orecl osur e when t he person per f orms servi ces i nconnecti on wi t h t hi s obl i gat i on or l i en.

( 7) Any person l i censed t o make l oans pur suant t o Di vi si on 9( commenci ng wi t h Sect i on 22000) , 10 ( commenci ng wi t h Sect i on 24000) ,or 11 ( commenci ng wi t h Sect i on 26000) of t he Fi nanci al Code, subj ectt o t he aut hori t y of t he Commi ssi oner of Corpor at i ons t o t er mi nat e

t hi s excl usi on, af t er not i ce and hear i ng, f or any per son l i censedpur suant t o any of t hose di vi si ons upon a f i ndi ng that t he l i censeei s f ound t o have engaged i n pr act i ces descr i bed i n subdi vi si on ( a) ofSect i on 2945.

( 8) Any per son or ent i t y doi ng busi ness under any l aw of t hi sst at e, or of t he Uni t ed St at es r el at i ng t o banks, t r ust compani es,savi ngs and l oan associ at i ons, i ndust r i al l oan compani es, pensi ont r ust s, cr edi t uni ons, i nsur ance compani es, or any per son or ent i t yaut hori zed under t he l aws of t hi s st at e t o conduct a t i t l e or escr owbusi ness, or a mor t gagee whi ch i s a Uni t ed States Depar t ment ofHousi ng and Ur ban Devel opment appr oved mor t gagee and any subsi di ar yor af f i l i ate of t he above, and any agent or empl oyee of t he abovewhi l e engaged i n t he busi ness of t hese persons or ent i t i es.

( 9) A per son l i censed as a r esi dent i al mort gage l ender or ser vi cer

pur suant t o Di vi si on 20 ( commenci ng wi t h Sect i on 50000) of t heFi nanci al Code, when act i ng under t he aut hor i t y of t hat l i cense.

( c) Notwi t hst andi ng subdi vi si on ( b) , any per son who pr ovi desser vi ces pur suant t o par agr aph ( 9) of subdi vi si on (a) i s af or ecl osur e consul t ant unl ess he or she i s t he owner ' s at t orney.

( d) "Per son" means any i ndi vi dual , par t ner shi p, cor por at i on,l i mi t ed l i abi l i t y company, associ at i on or ot her gr oup, howeverorgani zed.

( e) "Ser vi ce" means and i ncl udes, but i s not l i mi t ed t o, any oft he f ol l owi ng:

( 1) Debt , budget , or f i nanci al counsel i ng of any type.( 2) Recei vi ng money f or t he pur pose of di st r i but i ng i t t o

cr edi t ors i n payment or par t i al payment of any obl i gat i on secur ed by

a l i en on a r esi dence i n f orecl osur e. ( 3) Cont act i ng cr edi t or s on behal f of an owner of a resi dence i nf or ecl osur e.

( 4) Ar r angi ng or at t empt i ng t o ar r ange f or an ext ensi on of t heper i od wi t hi n whi ch the owner of a r esi dence i n f orecl osur e may cur ehi s or her def aul t and r ei nst at e hi s or her obl i gat i on pur suant t oSect i on 2924c.

( 5) Ar r angi ng or at t empt i ng t o ar r ange f or any del ay orpostponement of t he t i me of sal e of t he r esi dence i n f orecl osur e.

( 6) Advi si ng t he f i l i ng of any document or assi st i ng i n any manneri n t he pr epar at i on of any document f or f i l i ng wi t h any bankr upt cycour t .

( 7) Gi vi ng any advi ce, expl anat i on or i nst r uct i on t o an owner of ar esi dence i n f orecl osur e whi ch i n any manner r el at es t o the cur e of

a def aul t i n or t he r ei nst at ement of an obl i gat i on secur ed by a l i enon t he r esi dence i n f or ecl osur e, t he f ul l sat i sf acti on of t hatobl i gat i on, or t he post ponement or avoi dance of a sal e of a resi dencei n f orecl osur e pur suant t o a power of sal e cont ai ned i n any deed oft r ust .

( 8) Ar r angi ng or at t empt i ng t o ar r ange f or t he payment by t hebenef i ci ar y, mor t gagee, t r ust ee under a power of sal e, or counsel f ort he benef i ci ar y, mor t gagee, or t r ust ee, of t he remai ni ng pr oceeds t owhi ch t he owner i s ent i t l ed f r om a f or ecl osur e sal e of t he owner ' sr esi dence i n f or ecl osur e. Ar r angi ng or at t empt i ng t o ar r ange f or t hepayment shal l i ncl ude any ar r angement wher e t he owner t r ansf ers or


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assi gns t he r i ght t o the r emai ni ng pr oceeds of a f or ecl osur e sal e t ot he f orecl osur e consul t ant or any per son desi gnat ed by t hef or ecl osur e consul t ant , whet her t hat t r ansf er i s ef f ect ed byagr eement , assi gnment , deed, power of at t orney, or assi gnment ofcl ai m.

( f ) "Resi dence i n f orecl osur e" means a r esi dence i n f or ecl osur e asdef i ned i n Sect i on 1695. 1.

( g) "Owner" means a pr opert y owner as def i ned i n Sect i on 1695. 1.

( h) "Cont r act " means any agr eement , or any t erm t hereof , between af or ecl osur e consul t ant and an owner f or t he rendi t i on of any ser vi ceas def i ned i n subdi vi si on ( e) .

2945. 2. ( a) I n addi t i on t o any ot her r i ght under l aw t o r esci nd acont r act , an owner has t he r i ght t o cancel such a cont r act unt i lmi dni ght of t he t hi r d "busi ness day" as def i ned i n subdi vi si on ( e) ofSect i on 1689. 5 af t er t he day on whi ch the owner si gns a contr actwhi ch compl i es wi t h Sect i on 2945. 3.

( b) Cancel l at i on occur s when t he owner gi ves wr i t t en not i ce ofcancel l at i on t o t he f or ecl osur e consul t ant at t he addr ess speci f i edi n t he cont r act .

( c) Not i ce of cancel l at i on, i f gi ven by mai l , i s ef f ecti ve whendeposi t ed i n the mai l pr oper l y addr essed wi t h post age pr epai d.

( d) Not i ce of cancel l at i on gi ven by t he owner need not t ake t hepar t i cul ar f or m as provi ded wi t h the cont r act and, however expr essed,i s ef f ecti ve i f i t i ndi cat es t he i nt ent i on of t he owner not t o bebound by the cont r act .

2945. 2. ( a) I n addi t i on t o any ot her r i ght under l aw t o r esci nd acont r act , an owner has t he r i ght t o cancel such a cont r act unt i lmi dni ght of t he f i f t h busi ness day, as def i ned i n subdi vi si on ( e) ofSect i on 1689. 5, af t er t he day on whi ch t he owner s i gns a cont r act

t hat compl i es wi t h Sect i on 2945. 3.( b) Cancel l at i on occur s when t he owner gi ves wr i t t en not i ce ofcancel l at i on t o the f or ecl osur e consul t ant by mai l at t he addr essspeci f i ed i n t he cont r act , or by f acsi mi l e or el ect r oni c mai l at t henumber or addr ess i dent i f i ed i n t he cont r act .

( c) Not i ce of cancel l at i on, i f gi ven by mai l , i s ef f ecti ve whendeposi t ed i n t he mai l pr oper l y addr essed wi t h post age pr epai d. I fgi ven by f acsi mi l e or el ectr oni c mai l , not i ce of cancel l at i on i sef f ect i ve when successf ul l y t r ansmi t t ed.

( d) Not i ce of cancel l at i on gi ven by t he owner need not t ake t hepar t i cul ar f or m as provi ded wi t h the cont r act and, however expr essed,i s ef f ecti ve i f i t i ndi cat es t he i nt ent i on of t he owner not t o bebound by the cont r act .

( a) Ever y cont r act shal l be i n wr i t i ng and shal l f ul l y2945. 3.di scl ose t he exact nat ur e of t he f or ecl osur e consul t ant ' s ser vi cesand the t ot al amount and terms of compensat i on.

( b) The f ol l owi ng not i ce, pr i nt ed i n at l east 14- poi nt bol df acet ype and compl et ed wi t h the name of t he f orecl osur e consul t ant , shal lbe pr i nt ed i mmedi atel y above the st atement r equi r ed by subdi vi si on( c ) :

"NOTI CE REQUI RED BY CALI FORNI A LAW

Operative until July 1, 2009

Operative July 1, 2009



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__________________________________________________

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_____________________________ or anyone wor ki ng( Name)

f or hi m or her CANNOT:( 1) Take any money f r om you or ask you f or money

unt i l __________________________ ______________ has( Name)

compl etel y f i ni shed doi ng ever yt hi ng he or shesai d he or she woul d do; and

( 2) Ask you t o si gn or have you si gn any l i en,deed of t r ust , or deed. "

( c) The cont r act shal l be wr i t t en i n t he same l anguage aspr i nci pal l y used by t he f or ecl osur e consul t ant t o descri be hi s or herservi ces or t o negot i at e t he cont r act ; shal l be dated and si gned byt he owner; and shal l cont ai n i n i mmedi ate pr oxi mi t y to the spacer eserved f or t he owner ' s si gnat ur e a conspi cuous st at ement i n a si zeequal t o at l east 10- poi nt bol df ace t ype, as f ol l ows: "You, t heowner , may cancel t hi s t r ansact i on at any t i me pr i or t o mi dni ght oft he t hi r d busi ness day af t er t he dat e of t hi s t r ansact i on. See t heat t ached not i ce of cancel l at i on f or m f or an expl anat i on of t hi sr i ght . "

( d) The cont r act shal l cont ai n on t he f i r st page, i n a t ype si ze

no smal l er t han t hat general l y used i n the body of t he document , eachof t he f ol l owi ng:

( 1) The name and address of t he f orecl osur e consul t ant t o whi cht he not i ce or cancel l at i on i s t o be mai l ed.

( 2) The dat e t he owner si gned the cont r act .( e) The cont r act shal l be accompani ed by a compl eted f orm i n

dupl i cat e, capt i oned "not i ce of cancel l at i on, " whi ch shal l beat t ached t o t he cont r act , shal l be easi l y det achabl e, and shal lcont ai n i n t ype of at l east 10- poi nt t he f ol l owi ng st at ement wr i t t eni n t he same l anguage as used i n the cont r act :

"NOTI CE OF CANCELLATI ON

( Ent er dat e of t r ansact i on) ( Dat e)

You may cancel t hi s t r ansact i on, wi t hout anypenal t y or obl i gat i on, wi t hi n t hr ee busi ness daysf r omt he above dat e. To cancel t hi s t r ansact i on, mai l or del i ver asi gned and dat ed copy of t hi s cancel l at i on noti ce,or any ot her wr i t t en noti ce, or send a t el egr am t o

( Name of f orecl osur e consul t ant )at

( Addr ess of f or ecl osur e consul t ant ' s pl ace of

busi ness)NOT LATER THAN MI DNI GHT OF ___ __ __ __ ___ __ __ __ __ __ _.

( Dat e)I her eby cancel t hi s t r ansact i on

__________________________________________________.

( Date)________________________________________________"

( Owner ' s si gnat ur e)

( f ) The f or ecl osur e consul t ant shal l pr ovi de the owner wi t h a copy


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of t he cont r act and t he at t ached not i ce of cancel l at i on. ( g) Unt i l t he f or ecl osur e consul t ant has compl i ed wi t h t hi s

sect i on, t he owner may cancel t he cont r act .( h) Af t er t he 65- day per i od f ol l owi ng t he f or ecl osur e sal e, t he

f or ecl osur e consul t ant may ent er i nt o a cont r act t o assi st t he owneri n ar r angi ng, or ar r ange f or t he owner , t he r el ease of f undsr emai ni ng af t er t he f or ecl osur e sal e ( "surpl us f unds") f r om t hebenef i ci ar y, mor t gagee, t r ust ee under a power of sal e, or counsel f or

t he benef i ci ar y, mor t gagee, or t r ust ee. However , pr i or t o ent er i ngi nt o t hat cont r act, t he f or ecl osur e consul t ant shal l do al l of t hef ol l owi ng:

( 1) Prepar e and del i ver t o t he owner a not i ce i n 14- poi nt bol df acet ype and subst ant i al l y i n t he f or m set f or t h bel ow.

( 2) Obtai n a recei pt execut ed by each owner and acknowl edgedbef ore a notar y publ i c, acknowl edgi ng a copy of t he not i ce set f ort hbel ow.

"NOTI CE TO OWNER

( Date of Cont r act ) ( Date si gned by Owner )

( Dat e of For ecl osur e Sal e)

You may be ent i t l ed t o r ecei ve al l or a por t i onof t he sur pl us f unds gener at ed f r om t hef or ecl osur e sal e of your r eal pr oper t y l ocat edat : __________________________, Cal i f or ni a on

_________________________wi t hout payi ng any f eesor costs of any ki nd t o a t hi r d par t y. Youshoul d check di r ect l y wi t h t he t r ust ee orbenef i ci ar y who conduct ed t he f orecl osur e sal eof your pr opert y t o determi ne t he name, addr ess,and t el ephone number of t he par t y t o whom youcan di r ect i nqui r i es r egar di ng f i l i ng a cl ai m

f or sur pl us f unds wi t hout payi ng a f ee t o at hi r d par t y. No per son or ent i t y may requi r e yout o ent er i nt o any agr eement r equi r i ng thepayment of a f ee to that per son or ent i t y i norder t o r ecei ve t he sur pl us f unds f r omt he f orecl osur e sal e t o whi ch you may beent i t l ed dur i ng t he 65 days af t er t he dat e oft he t r ustee' s sal e. "

2945. 3. ( a) Ever y cont r act shal l be i n wr i t i ng and shal l f ul l ydi scl ose t he exact nat ur e of t he f or ecl osur e consul t ant ' s ser vi cesand the t ot al amount and terms of compensat i on.

( b) The f ol l owi ng not i ce, pr i nt ed i n at l east 14- poi nt bol df acet ype and compl et ed wi t h the name of t he f orecl osur e consul t ant , shal lbe pr i nt ed i mmedi atel y above the st atement r equi r ed by subdi vi si on( d) :

" NOTI CE REQUI RED BY CALI FORNI A LAW

_____________________________________ or anyone( Name)

worki ng f or hi m or her CANNOT:



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( 1) Take any money f r om you or ask you f ormoneyunt i l __________________________ ___________ has

( Name)compl etel y f i ni shed doi ng ever yt hi ng he or shesai d he or she woul d do; and

( 2) Ask you t o si gn or have you si gn any l i en,deed of t r ust , or deed. "

( c) The cont r act shal l be wr i t t en i n t he same l anguage aspr i nci pal l y used by t he f or ecl osur e consul t ant t o descri be hi s or herser vi ces or t o negot i at e t he cont r act . I n addi t i on, t he f or ecl osur econsul t ant shal l pr ovi de t he owner , bef ore t he owner si gns t hecont r act , wi t h a copy of a compl et ed cont r act wr i t t en i n any ot herl anguage used i n any communi cat i on bet ween t he f or ecl osure consul t antand t he owner and i n any l anguage descr i bed i n subdi vi si on ( b) ofSect i on 1632 and r equest ed by t he owner . I f Engl i sh i s t he l anguagepr i nci pal l y used by t he f or ecl osur e consul t ant t o descri be thef or ecl osur e consul t ant ' s ser vi ces or t o negot i at e t he cont r act , t hef or ecl osur e consul t ant shal l not i f y t he owner or al l y and i n wr i t i ngbef ore t he owner si gns t he cont r act t hat t he owner has t he r i ght t oask f or a compl eted copy of t he cont r act i n a l anguage descr i bed i n

subdi vi si on ( b) of Sect i on 1632.( d) The cont r act shal l be dated and si gned by t he owner and shal l

cont ai n i n i mmedi at e pr oxi mi t y t o t he space reserved f or t he owner ' ssi gnat ur e a conspi cuous st at ement i n a si ze equal t o at l east10- poi nt bol df ace t ype, as f ol l ows: "You, t he owner , may cancel t hi st r ansact i on at any t i me pr i or t o mi dni ght of t he f i f t h busi ness dayaf t er t he dat e of t hi s t r ansact i on. See t he at t ached not i ce ofcancel l at i on f or m f or an expl anat i on of t hi s ri ght . "

( e) The cont r act shal l cont ai n on t he f i r st page, i n a t ype si zeno smal l er t han t hat general l y used i n the body of t he document , eachof t he f ol l owi ng:

( 1) The name, mai l i ng addr ess, el ect r oni c mai l addr ess, andf acsi mi l e number of t he f or ecl osur e consul t ant t o whi ch t he noti ce of

cancel l at i on i s t o be mai l ed.( 2) The dat e t he owner si gned the cont r act .( f ) The cont r act shal l be accompani ed by a compl et ed f orm i n

dupl i cat e, capt i oned "not i ce of cancel l at i on, " whi ch shal l beat t ached t o t he cont r act , shal l be easi l y det achabl e, and shal lcont ai n i n t ype of at l east 10- poi nt t he f ol l owi ng st at ement wr i t t eni n t he same l anguage as used i n the cont r act :

" NOTI CE OF CANCELLATI ON

( Ent er dat e of t r ansact i on) ( Dat e)

You may cancel t hi s t r ansact i on, wi t hout any penal t yorobl i gat i on, wi t hi n f i ve busi ness days f r om t he abovedat e.

To cancel t hi s t r ansact i on, mai l or del i ver a si gnedand dat ed copy of t hi s cancel l at i on not i ce, or anyother wr i t t en not i ce, or send a t el egr am,to __________________________________________________ ( Name of f orecl osur e consul t ant )at __________________________________________________ ( Addr ess of f or ecl osur e consul t ant ' s pl ace of


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_____________________________________________________

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busi ness)You may al so cancel by sendi ng a f acsi mi l e ( f ax) ofa si gned and dated copy of t hi s cancel l at i on not i ce,or any ot her wr i t t en noti ce, t o the f ol l owi ng number :

( Facsi mi l e tel ephone number of f orecl osur econsul t ant ' s pl ace of busi ness)

You may al so cancel by sendi ng an e- mai l cancel i ng

t hi s t r ansact i on t o t he f ol l owi ng e- mai l addr ess:

( E- mai l addr ess of f or ecl osur e consul t ant ' sbusi ness)

I her eby cancel t hi s t r ansact i on____________________________________________________.

( Date) _______________________ __ " ( Owner ' s si gnat ur e)

( g) The f orecl osur e consul t ant shal l pr ovi de t he owner wi t h a copyof t he cont r act and t he at t ached not i ce of cancel l at i on.

( h) Unt i l t he f or ecl osur e consul t ant has compl i ed wi t h t hi s

sect i on, t he owner may cancel t he cont r act .

2945. 4. I t shal l be a vi ol at i on f or a f or ecl osur e consul t ant t o: ( a) Cl ai m, demand, char ge, col l ect , or r ecei ve any compensat i on

unt i l af t er t he f or ecl osur e consul t ant has f ul l y per f or med each andever y ser vi ce t he f orecl osur e consul t ant cont r act ed t o per f orm orr epr esent ed t hat he or she woul d per f or m.

( b) Cl ai m, demand, char ge, col l ect , or r ecei ve any f ee, i nt er est ,or any ot her compensat i on f or any r eason whi ch exceeds 10 per cent perannum of t he amount of any l oan whi ch t he f orecl osur e consul t ant maymake t o t he owner .

( c) Take any wage assi gnment , any l i en of any t ype on real orpersonal pr oper t y, or other secur i t y t o secur e t he payment ofcompensat i on. That secur i t y shal l be voi d and unenf orceabl e.

( d) Recei ve any consi der at i on f r om any thi r d par t y i n connect i onwi t h ser vi ces r ender ed t o an owner unl ess t hat consi der at i on i s f ul l ydi scl osed t o t he owner .

( e) Acqui r e any i nt er est i n a r esi dence i n f or ecl osur e f r om anowner wi t h whomt he f orecl osur e consul t ant has cont r act ed. Anyi nt er est acqui r ed i n vi ol at i on of t hi s subdi vi si on shal l be voi dabl e,pr ovi ded t hat not hi ng her ei n shal l af f ect or def eat t he t i t l e of abona f i de pur chaser or encumbr ancer f or val ue and wi t hout not i ce of avi ol at i on of t hi s ar t i cl e. Knowl edge t hat t he pr oper t y was"r esi dent i al r eal pr oper t y i n f or ecl osur e, " does not const i t ut enot i ce of a vi ol at i on of t hi s ar t i cl e. Thi s subdi vi si on may not be

deemed to abr ogate any dut y of i nqui r y whi ch exi st s as t o r i ght s ori nt er est s of per sons i n possessi on of r esi dent i al r eal pr oper t y i nf or ecl osur e.

( f ) Take any power of at t orney f r oman owner f or any pur pose,except t o i nspect document s as pr ovi ded by l aw.

( g) I nduce or at t empt t o i nduce any owner t o ent er i nt o a cont r actwhi ch does not compl y i n al l r espect s wi t h Sect i ons 2945. 2 and2945. 3.

( h) Ent er i nt o an agr eement t o assi st t he owner i n arr angi ng, orar r ange f or t he owner , t he r el ease of sur pl us f unds pr i or t o 65 daysaf t er t he t r ust ee' s sal e i s conduct ed, whet her t he agr eement i nvol ves



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di r ect payment , assi gnment , deed, power of at t orney, or assi gnmentof cl ai m f r om an owner t o t he f orecl osur e consul t ant or any per sondesi gnat ed by t he f orecl osur e consul t ant .

2945. 4. I t shal l be a vi ol at i on f or a f or ecl osur e consul t ant t o: ( a) Cl ai m, demand, char ge, col l ect , or r ecei ve any compensat i on

unt i l af t er t he f or ecl osur e consul t ant has f ul l y per f ormed each andever y ser vi ce t he f orecl osur e consul t ant cont r act ed t o per f or m orr epr esent ed t hat he or she woul d per f orm.

( b) Cl ai m, demand, char ge, col l ect , or r ecei ve any f ee, i nt er est ,or any ot her compensat i on f or any r eason whi ch exceeds 10 per cent perannum of t he amount of any l oan whi ch t he f orecl osur e consul t ant maymake t o t he owner .

( c) Take any wage assi gnment , any l i en of any t ype on real orper sonal pr oper t y, or other secur i t y t o secur e t he payment ofcompensat i on. That secur i t y shal l be voi d and unenf orceabl e.

( d) Recei ve any consi der at i on f r om any thi r d par t y i n connect i onwi t h ser vi ces r ender ed t o an owner unl ess t hat consi der at i on i s f ul l ydi scl osed to t he owner .

( e) Acqui r e any i nt er est i n a r esi dence i n f or ecl osur e f r om an

owner wi t h whomt he f orecl osur e consul t ant has cont r act ed. Anyi nt er est acqui r ed i n vi ol at i on of t hi s subdi vi si on shal l be voi dabl e,pr ovi ded t hat not hi ng her ei n shal l af f ect or def eat t he t i t l e of abona f i de pur chaser or encumbr ancer f or val ue and wi t hout not i ce of avi ol at i on of t hi s ar t i cl e. Knowl edge t hat t he pr oper t y was"r esi dent i al r eal pr oper t y i n f or ecl osur e, " does not const i t ut enot i ce of a vi ol at i on of t hi s ar t i cl e. Thi s subdi vi si on may not bedeemed to abr ogate any dut y of i nqui r y whi ch exi st s as t o r i ght s ori nt er est s of per sons i n possessi on of r esi dent i al r eal pr oper t y i nf or ecl osur e.

( f ) Take any power of at t orney f r oman owner f or any pur pose.( g) I nduce or at t empt t o i nduce any owner t o ent er i nt o a cont r act

whi ch does not compl y i n al l r espect s wi t h Sect i ons 2945. 2 and

2945. 3.( h) Ent er i nt o an agr eement at any t i me to assi st t he owner i nar r angi ng, or ar r ange f or t he owner , t he rel ease of sur pl us f undsaf t er t he t r ust ee' s sal e i s conduct ed, whet her t he agr eement i nvol vesdi r ect payment , assi gnment , deed, power of at t orney, assi gnment ofcl ai m f r om an owner t o the f or ecl osur e consul t ant or any per sondesi gnat ed by t he f orecl osur e consul t ant , or any ot her compensat i on.

2945. 45. ( a) Except as pr ovi ded i n subdi vi si on ( b) of Sect i on2945. 1, a per son shal l not t ake any act i on speci f i ed i n subdi vi si on( a) of Secti on 2945. 1 unl ess t he per son sat i sf i es t he f ol l owi ng

r equi r ement s:( 1) The per son r egi st er s wi t h, and i s i ssued and mai nt ai ns a

cer t i f i cat e of r egi st r at i on f r om, t he Depar t ment of J ust i ce i naccor dance wi t h t he f ol l owi ng r equi r ement s:

( A) The per son shal l submi t a compl et ed r egi st r at i on f orm, al ongwi t h appl i cabl e f ees, t o t he depar t ment . The r egi st r at i on f or m shal li ncl ude t he name, address, and tel ephone number of t he f orecl osur econsul t ant , al l of t he names, addr esses, t el ephone number s, I nt er netWeb si t es, and e- mai l addresses used or proposed t o be used i nconnect i on wi t h act i ng as a f or ecl osur e consul t ant , a st at ement t hatt he person has not been convi ct ed of , or pl ed nol o cont endere t o, any



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cr i me i nvol vi ng f r aud, mi sr epr esent at i on, di shonest y, or a vi ol at i onof t hi s ar t i cl e, a st at ement t hat t he per son has not been l i abl eunder any civil j udgment f or f r aud, mi sr epr esent at i on, or vi ol at i onsof t hi s ar t i cl e or of Sect i on 17200 or 17500 of t he Busi ness andPr of essi ons Code, and any addi t i onal i nf or mat i on requi r ed by t hedepar t ment .

( B) The regi st r at i on f or m shal l be accompani ed by a copy of al lpr i nt or el ect r oni c adver t i si ng and other pr omot i onal mat er i al , and

scri pt s of al l t el ephoni c or br oadcast adver t i si ng and ot herst atement s used or proposed to be used i n connect i on wi t h act i ng as af or ecl osur e consul t ant .

( C) The r egi st r at i on f orm shal l be accompani ed by a copy of t hebond r equi r ed pur suant t o paragr aph ( 2) .

( D) The per son shal l f i l e an updat e of any mat er i al change i n t hei nf ormat i on r equi r ed by subpar agr aphs ( A) and (B) wi t h thedepar t ment .

( E) The person shal l pay any f ee set by t he depart ment t o def r ayr easonabl e cost s i ncur r ed i n connect i on wi t h t he depar t ment ' sr esponsi bi l i t i es under t hi s ar t i c l e.

( 2) The per son obt ai ns and mai nt ai ns i n f orce a sur et y bond i n theamount of one hundr ed t housand dol l ar s ( $100, 000) . The bond shal l beexecut ed by a corpor at e sur ety admi t t ed to do busi ness i n thi s

st at e. The bond shal l be made i n f avor of t he St at e of Cal i f or ni a f ort he benef i t of homeowner s f or damages caused by t he f or ecl osureconsul t ant ' s vi ol at i on of t hi s ar t i cl e or any ot her pr ovi si on of l aw.A copy of t he bond shal l be f i l ed wi t h t he Secr et ar y of St at e, wi t ha copy provi ded t o t he depar t ment pur suant t o subpar agr aph ( C) ofpar agr aph ( 1) .

( b) The Forecl osur e Consul t ant Regul at i on Fund i s her eby cr eat edi n t he St at e Tr easur y f or t he deposi t of f ees submi t t ed t o theDepar t ment of J ust i ce pur suant t o subpar agr aph (A) of par agr aph (1)of subdi vi si on ( a) f or r egi st r at i on as a f or ecl osur e consul t ant .Moneys i n t he f und shal l be avai l abl e, upon appr opr i at i on by t heLegi sl at ur e, f or t he cost s of t he depar t ment i ncur r ed i n connect i onwi t h t he admi ni st r at i on of t he r egi st r at i on pr ogr am.

( c) The Depar t ment of J ust i ce may r ef use t o i ssue, or may r evoke,a cer t i f i cat e of r egi st r at i on because of any mi sst at ement i n t her egi st r at i on f orm, because t he f orecl osur e consul t ant has been hel dl i abl e f or t he vi ol at i on of any l aw descr i bed i n subpar agr aph ( A) ofpar agr aph ( 1) of subdi vi si on ( a) , because t he f or ecl osur e consul t anthas f ai l ed t o mai nt ai n t he bond requi r ed under par agr aph (2) ofsubdi vi si on ( a) , or because of any vi ol at i on of t hi s chapt er .

( d) A per son who vi ol at es subdi vi si on ( a) shal l be puni shed, f oreach vi ol at i on, by a f i ne of not l ess t han one t housand dol l ar s( $1, 000) and not more t han t went y- f i ve t housand dol l ar s ( $25, 000) , byi mpr i sonment i n the count y j ai l f or not more t han one year , or byboth that f i ne and i mpr i sonment . The i mposi t i on of a penal t y pur suantt o t hi s subdi vi si on shal l not be af f ect ed by t he avai l abi l i t y of anyother r el i ef , r emedy, or penal t y pr ovi ded by l aw, and shal l not

af f ect t he avai l abi l i t y of any such r el i ef , r emedy, or penal t y.

2945. 5. Any wai ver by an owner of t he pr ovi si ons of t hi s ar t i cl eshal l be deemed voi d and unenf orceabl e as cont r ar y t o publ i c pol i cy.Any at t empt by a f orecl osur e consul t ant t o i nduce an owner t o wai vehi s r i ght s shal l be deemed a vi ol at i on of t hi s ar t i cl e.


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2945. 6. ( a) An owner may br i ng an act i on agai nst a f orecl osur econsul t ant f or any vi ol at i on of t hi s chapt er . J udgment shal l beent er ed f or act ual damages, r easonabl e at t orneys' f ees and cost s, andappr opr i at e equi t abl e r el i ef . The cour t al so may, i n i t sdi scr et i on, awar d exempl ary damages and shal l awar d exempl ar y damagesequi val ent t o at l east t hr ee t i mes t he compensat i on r ecei ved by t hef or ecl osur e consul t ant i n vi ol at i on of subdi vi s i on ( a) , ( b) , or ( d)

of Sect i on 2945. 4, and thr ee t i mes t he owner ' s act ual damages f or anyvi ol at i on of subdi vi s i on ( c), ( e) , or ( g) of Secti on 2945. 4, i naddi t i on t o any ot her award of act ual or exempl ary damages.

( b) The ri ght s and remedi es provi ded i n subdi vi si on (a) ar ecumul at i ve t o, and not a l i mi t at i on of , any ot her r i ght s and remedi espr ovi ded by l aw. Any act i on br ought pur suant t o t hi s sect i on shal lbe commenced wi t hi n f our years f r omt he dat e of t he al l egedvi ol at i on.

2945. 7. Any person who commi t s any vi ol at i on descr i bed i n Sect i on2945. 4 shal l be puni shed by a f i ne of not more than t en t housanddol l ar s ( $10, 000) , by i mpr i sonment i n the count y j ai l f or not mor et han one year , or i n t he st at e pr i son, or by bot h t hat f i ne and

i mpr i sonment f or each vi ol at i on. These penal t i es ar e cumul at i ve t oany ot her r emedi es or penal t i es pr ovi ded by l aw.

2945. 8. I f any pr ovi si on of t hi s ar t i c l e or t he appl i cat i on t her eoft o any per son or ci r cumst ance i s hel d to be unconst i t ut i onal , t her emai nder of t he ar t i cl e and t he appl i cat i on of such pr ovi si on t oother per sons and ci r cumst ances shal l not be af f ect ed ther eby.

2945. 9. ( a) A f or ecl osur e consul t ant i s l i abl e f or al l damagesr esul t i ng f r om any st atement made or act commi t t ed by the f orecl osur econsul t ant ' s r epr esent at i ve i n any manner connect ed wi t h thef or ecl osur e consul t ant ' s ( 1) per f or mance, of f er t o per f or m, orcont r act t o per f or m any of t he ser vi ces descri bed i n subdi vi si on ( a)of Sect i on 2945. 1, ( 2) r ecei pt of any consi der at i on or pr oper t y f r omor on behal f of an owner , or ( 3) per f ormance of any act pr ohi bi t ed bythi s ar t i cl e.

( b) "Repr esent at i ve" f or t he pur poses of t hi s sect i on means aperson who i n any manner sol i ci t s, i nduces, or causes ( 1) any ownert o cont r act wi t h a f orecl osur e consul t ant , ( 2) any owner t o pay anyconsi der at i on or t r ansf er t i t l e t o t he r esi dence i n f or ecl osur e t ot he f orecl osur e consul t ant , or ( 3) any member of t he owner ' s f ami l yor househol d to i nduce or cause any owner t o pay any consi der at i on or

t r ansf er t i t l e t o t he r esi dence i n f or ecl osur e t o t he f or ecl osur econsul t ant .

2945. 10. ( a) Any pr ovi si on i n a cont r act whi ch at t empt s or pur por t st o l i mi t t he l i abi l i t y of t he f or ecl osur e consul t ant under Secti on2945. 9 shal l be voi d and shal l at t he opt i on of t he owner r ender t hecont r act voi d. The f or ecl osur e consul t ant shal l be l i abl e t o t heowner f or al l damages pr oxi matel y caused by t hat provi si on. Anypr ovi si on i n a cont r act whi ch at t empt s or pur por t s t o requi r e


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WAIS Document Retrieval

ar bi t r at i on of any di sput e ar i si ng under t hi s chapt er shal l be voi dat t he opt i on of t he owner onl y upon gr ounds as exi st f or t her evocat i on of any cont r act .

( b) Thi s sect i on shal l appl y to any cont r act ent er ed i nt o on oraf t er J anuar y 1, 1991.

2945. 11. ( a) Any r epr esent at i ve, as def i ned i n subdi vi si on ( b) ofSect i on 2945. 9, deemed t o be the agent or empl oyee or bot h t he agentand t he empl oyee of t he f orecl osur e consul t ant shal l be r equi r ed t opr ovi de bot h of t he f ol l owi ng:

( 1) Wr i t t en pr oof t o t he owner t hat t he repr esent at i ve has a val i dcur r ent Cal i f or ni a Real Est at e Sal es Li cense and t hat t her epr esent at i ve i s bonded by an admi t t ed surety i nsurer i n an amountequal t o at l east t wi ce t he f ai r mar ket val ue of t he r eal pr oper t yt hat i s t he subj ect of t he cont r act .

( 2) A st at ement i n wr i t i ng, under penal t y of per j ur y, t hat t her epr esent at i ve has a val i d cur r ent Cal i f or ni a Real Est at e Sal esLi cense, t hat t he repr esent at i ve i s bonded by an admi t t ed suret yi nsur er i n an amount equal t o at l east t wi ce t he val ue of t he realpr oper t y t hat i s t he subj ect of t he cont r act and has compl i ed wi t h

par agr aph ( 1) . The wr i t t en st at ement r equi r ed by t hi s par agr aphshal l be pr ovi ded t o al l par t i es t o t he cont r act pr i or t o t het r ansf er of any i nt er est i n t he r eal pr oper t y t hat i s t he subj ect oft he cont r act .

( b) The f ai l ur e t o compl y wi t h subdi vi si on ( a) shal l , at t heopt i on of t he owner , r ender t he cont r act voi d and t he f orecl osur econsul t ant shal l be l i abl e t o t he owner f or al l damages proxi mat el ycaused by t he f ai l ur e t o compl y.

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