All posts in Legislation

Foreclosure Activity Drops Sharply Thanks to New California Law

BY JANN SWANSON
Foreclosure Activity Drops Sharply Thanks to New California Law

Foreclosure activity in much of the nation now appears to be accelerating downward, dropping 7 percent in a single month according to RealtyTrac. Foreclosure filings nationwide – default notices, scheduled auctions, and bank repossessions – numbered 150,864 or one in every 869 U.S. housing units in January compared to 162,511 in December. This was a 28.5 percent decrease from January 2012. Foreclosure starts were down 11 percent from December and 28 percent compared to a year earlier and at the lowest level since June 2006. Bank repossessions or REO dropped 5 percent from the previous month and were down 24 percent from January 2012 to the lowest level since February 2008.

While overall activity was down in most states, the size of the national decline can be traced to California where a new law caused a 39.5 percent decrease in filings from December to January making it the first time since January 2007 that California did not have the largest number of filings in the country. RealtyTrac Vice President Daren Blomquist said the new legislation that became effective on January 1 profoundly altered the U.S. foreclosure landscape. “Dubbed the Homeowners Bill of Rights, this legislation extends many of the principles in the national mortgage settlement – including a prohibition on so-called dual tracking and requiring a single point of contact for borrowers facing foreclosure – to all mortgage servicers operating in California. In addition the new law imposes fines of up to $7,500 per loan for filing of multiple unverified foreclosure documents. As a result, the downward foreclosure trend in California accelerated into hyper speed in January, decisively shifting the balance of power when it comes to the nation’s foreclosure activity.

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2013 Conference of Delegates

Dear Members of the Commercial Law and Bankruptcy Section of the Los Angeles County Bar Association:
Have you ever had occasion to think, “This statute would work better for me and my clients if it said/did  ____ instead”?  This email will describe how you can become involved in effecting changes to California statutory law.

Each year, the Conference of California Bar Associations holds an annual Conference of Delegates in coordination with the State Bar Annual Meeting.   The Conference of Delegates meets to consider and adopt resolutions recommending potential revisions to California statutory law to the California legislature.  The 2013 Conference of Delegates will be held October 11-13, 2013 in coordination with the 2013 State Bar Annual meeting in San Jose.

Each year, the Los Angeles County Bar Association sends a Delegation of LACBA Members to the annual Conference of Delegates.    The 2013 LACBA Delegation will meet during August in advance of the Conference of Delegates to consider and refine resolutions that may be proposed to the Conference of Delegates.  The LACBA Delegation’s August pre-conference meetings are approved for MCLE credit, so participation in the Delegation’s work is an opportunity to be involved with the legislative process, healthy debate, and get MCLE credit.  For more information, visit www.lacba.org/delegation.

In 2012, nine LACBA resolutions were passed by the Conference, and five others were actively negotiated by LACBA to pass in improved amended versions. Four LACBA resolutions from 2008 through 2010 were placed with bill authors, succeeded in the California Legislature and have been chaptered into law, and another three through 2011 are pending.

The Bylaws of the LACBA Delegation provide that each Section may designate a representative as an automatic appointment to the LACBA Delegation.  However, the Bylaws provide further that each such designee must express an interest in serving on the delegation by virtue of having completed an application.   If you wish to serve as a member of the LACBA Delegation to the 2013 Conference of Delegates, please complete, sign and submit the attached application to LACBA in accordance with the instructions on the application form.  If you wish to serve as the Section’s designee, please submit your application and send a copy of the submitted application to me for my receipt on or before March 19, 2013.  The Executive Committee of the Section will select the Section nominee at the Committee’s March 21, 2013, meeting.

Please note that Section designees and all other members of the LACBA Delegation are individually responsible for all expenses incurred as a delegate. LACBA funds may not be used to reimburse volunteers for participation in the Conference of Delegates.

If you are interested in submitting a potential resolution for adoption by the Conference of Delegates, you must send the resolution to Grace Danziger at gdanziger@lacba.org  by January 25, 2013.  See the attached instruction for information on how to format a resolution.

Brian Holman
Section Chair

Click Here for additional information.

First Revamped Bankruptcy Forms Out for Public Comment

The Judicial Conference Committee on Rules of Practice and Procedure is asking for comment on the first proposed modernization of bankruptcy forms in two decades. The revised forms, published for comment, are all used by individual debtors and include the fee waiver and installment fee forms, income and expense forms, and the means test forms, replacing previous forms. The comments, submitted by the public, will be reviewed in coming months and will be used to fine-tune the forms.

There were over 1.2 million non-business bankruptcies filed in federal courts in the 12-month period ending September 30, 2012, where the debts were predominantly personal or consumer in nature.

Read the full article here.

California Assembly Bill 929: Increasing Certain Exemptions Available to Bankruptcy Debtors under C.C.P. Sections 703 and 704

Dear California NACBA member:

In case you had not heard, California Assembly Bill 929, took effect on January 1, 2013, increasing certain exemptions available to bankruptcy debtors under CCP Sections 703 and 704.  This legislation was introduced by Assembly Member Bob Wieckowski, who is also a long-time NACBA member.  We have learned that Rep. Wieckowski has been named the Chairman of the Assembly Judiciary Committee in the legislative session which began on December 1, 2012, and NACBA looks forward to working closely with him in this session to address further revisions needed to CCP 703 and 704.

Here are some highlights of California Assembly Bill 929:
. Increases the dollar amount of the exemptions for various categories under CCP 703.140(b)
. For the personal injury exemption under CCP 703.140(b)(11) (D), eliminates the exclusion for pain, suffering and actual pecuniary loss
. Expands the motor vehicle exemption under CCP 703.140 (b)(2) to one or more vehicles
. Increases the maximum income threshhold for persons 55+ years of age to be eligible for the $175,000 homestead exemption under CCP 704.
. Beginning April 1, 2013, and every 3 years thereafter, requires the Judicial Council to submit to the Legislature the amount by which the homestead exemptions may be adjusted based on the change in the annual California Consumer Price Index

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Homeowner Bill of Rights

Hello, Happy Holidays

Please see the link below; it is a link to ConsumersUnion, and contains what I think is an excellent summary of the law about to take effect.  I assume the lenders have prepared & are preparing new forms for this, such as foreclosure notices & denial of loan modification applications. I also assume this is going to have an impact on the bankruptcy filings; it will likely slow them down for a month or so. And, for oppositions to motions for relief from the stay, if I were a debtor’s attorney I would include a copy of the loan mod. application (although getting a copy may be much easier said than done).

For creditors, as the attorney for the lender I would ask for copies of all letters denying any & all loan mod applications so to be prepared for the debtor who says he or she never received it. You just know that is going to be part of an opposition to the motion for relief from the stay.
http://www.consumersunion.org/pdf/CA_Homeowner_Bill_of_Rights_Summary.pdf

David Brian Lally, Esq.
Law Office of David B. Lally
8001 Irvine Center Drive, Suite 1090
Irvine, CA 92618

National Forms Subcommittee Proposing a National Chp. 13 Plan

To my fellow Ch13 Brethern!

Please take note that there is a National Forms Subcommittee, called the “Working Group” headed by retired Judge Eugene Wedoff (retired Bankruptcy Judge from Chicago & one of the 3 authors of the Means Test) that is proposing the creation of a NATIONAL CHAPTER 13 PLAN. It is an effort to make the plan easier to understand and to combine Motions to Value & Motions to Avoid Liens through the plan in one document. Please review the draft as it will significantly affect our practice — both for creditors and debtors.

Our Judge Saltzman has been requested to participate in this endeavor and will be attending a meeting in mid-January. It would behoove you to provide comments in this endeavor.

KEITH

THE LAW OFFICES OF KEITH ALAN HIGGINBOTHAM

Possible “Drastic” Overhaul of Student Loan Collections

I’ll see it when I believe it – makes too much sense.  As posted by Prof. Nathalie Martin on Credit Slips:

A new bill is pending in Congress that

would require employers to withhold payments from wages in the same way they do taxes, capping payments at 15 percent of borrowers’ income after basic living expenses.  The bill follows growing concern about the burden of $1 trillion in outstanding student loans, which now exceed credit- card debt. Under the new system, the government would no longer need to hire thugs to collect, and I personally have found these student loan debt collectors to be quite formidable indeed.  Never mind that the debt collectors fees can add up to 25 percent to borrowers’ loan balances, leaving defaulted former students even deeper in the hole.  This new process would streamline the confusing process of getting on a reduced payment plan if a borrower is un or under-employed, but would still provide for repayment of the student debt.

Bloomberg article is here.

Proposed New Rules and Forms

The 458 page report of the Advisory Committee on Bankruptcy Rules can be accessed here.  A proposed new Chapter 13 plan form can be found at page 186.  The proposed new forms begin at page 215.  I understand that these forms are getting pretty close.  The proposed new rules will be “published” in August 2013.  According to a press release:

These are going to be the most important changes to Chapter 13 practice and procedure since the enactment of BAPCPA.  PLEASE take time to read the Draft Form and Working Group comments below.  Send your suggestions and comments to: Troy McKenzie at troy.mckenzie@nyu.edu and/or Hon. Eugene Wedoff at eugene_wedoff@ilnb.uscourts.gov.

Governor Brown — signed three significant foreclosure bills into law

Governor Brown signed three significant foreclosure bills into law:

AB 2610 (Skinner) – Extends the federal 90-day notice protection to all tenants in foreclosed properties, not just bona fide tenants. The bill also enacts the PTFA’s lease protections into state law but places the burden of proof on who qualifies for lease protections on the landlord. The newly enacted law also reforms the eviction process to better ensure that foreclosed tenants can assert their rights in post-foreclosure eviction actions.

SB 1191 (Simitian) – Requires landlords in 1-4 unit properties to disclose a notice of default (foreclosure) to prospective renters. Disclosure must be made in the six most frequently used languages in California. If the landlord fails to make the necessary disclosure, the tenant may ether (1) void the lease and recover all pre-paid rent plus additional damages or (2) elect to remain in the home and deduct one month’s rent from future rent obligations.

AB 1599 (Feuer) – Requires foreclosure notices (notice of default and notice of trustee sale) to include summaries in the six most frequently used languages in California listed in Civil Code 1632. This law will take effect on April 1, 2013 or 90 days after the Department of Consumer Affairs issues the translations, whichever is later.

The text of the bills is linked above.  The tenant bills will take effect on January 1, 2013.

Best,

Magdalena Reyes Bordeaux
Senior Staff Attorney
Public Counsel
mbordeaux@publiccounsel.org

New California Law Signed by Jerry Brown re Levies on Banks

Governor Brown Signs AB 2364 into Law, Centralizing the Location for Service of Levies, Attachments and Garnishments on Financial Institutions

The Consumer Financial Services Committee is pleased to report that an Affirmative Legislative Proposal on service of levies and other process on financial institutions that was sponsored by the CFSC has now become law.  This will require large banks, and permit smaller banks, to designate a central location where judgment creditors must serve levies, attachments and garnishments on deposit accounts and safe deposit boxes. The advantage for plaintiffs such as tort victims suing underinsured or uninsured motorists, as well as debt collectors, is that they no longer will have to serve the correct branch of the bank holding the account, a requirement that was a vestige of the pre-computer era.  Identifying the right branch bank for service of levies, attachments and garnishments has necessitated the costly use of orders of examination of the debtor and other procedures, and enforcement of money judgments could be frustrated by the judgment debtor moving money around.  The advantage of the legislation for financial institutions lies in both the efficiency of centralizing this function and the reduced risk of errors by branch bank staff.   The Department of Financial Institutions is required to create a procedure for banks to designate their central locations for service, and to establish a website where judgment creditors can obtain this information.

The law goes into effect January 1, 2013.

For the text of the Bill, click here: http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_2351-2400/ab_2364_bill_20120911_enrolled.pdf

Jonathan Leventhal, esq.