Senate Bill 94 - California

[Will Barnard]

Are any of you short sale investors aware of Senate Bill 94 which was placed into action October 12, 2009? If not, you need to read up on it right now. While it only affect us in CA, other states are soon to follow, although other states may do it better as usual.

Basically, the bill was designed to reduce/eliminate all the loan mod fraudsters out there. The problem has been taht a large majority of loan mod companies (95%+ in my book) are frauds and scams, looking only to take money from unsuspecting homeowners. In fact, many of the loan mod crooks are the very same mortgage broker crooks who sold ridiculous loans to people and now that they are out of the loan biz, they got into another biz to take maoney from people.
Unfortunatley, the infinite wisdom of our state officials made the bill so broad, that it encoumpasses not only loan mod people, but EVERYONE, including us investors.
It is my hope that the wording is edited or ammended so that it is more specific, but until that time, and according to the bill, anybody performing a short sale in CA without having a RE sales license, DRE # or being an attorney, you could be committing a crime, and not a small one, but a felony that carries with it 10 years jail time!

Read up and post your comments here.

[Edward Alvarez]

Hey Will, great topic... not to many short sale investors in CA, apperantly. I personally think it took long enough to implement Bill 94. It really boils down to taking up-front fee's. I'm a strong believer of producing results before anyone gets paid anything. I personally have a couple short sales in my pipeline and I don't see how it would affect me. 1st off I use an option agreement and second I actually pay the seller an option fee, so I'm not in anyway taking any up-front fees whatsoever. Another piece of advice, use complete transperancy between all parties involved... Your thoughts?

By the way if your doing short sale investing in CA. Read up on CA laws 1695, 2945 and Bill 94... Theirs also a great bulletin post by Freddie Mac on flipping distress property including REO and short sales. Flipping is legit as long as you do it the right way! Get Educated folks...

p.s. one last thing to be on the safe side of things keep your profit margins below 15% if not 10% is best...

Ed