AB 957 (Galgiani), the “Buyer’s Choice Act” was originally introduced to make sure that buyers of REOs could have their choice of title and escrow providers, by including federal RESPA rules in state law. C.A.R. supported AB 957. However, recent amendments to the bill would have weakened REALTOR® liability protection. This liability protection is already included in state law. With those amendments C.A.R. changed its position to OPPOSE. In the past few days, many REALTORS® received a “Red Alert” type communication asking them to contact their legislators in support of AB 957. This red alert was NOT sent by C.A.R. It was sent by representatives of a company that sells substitute disclosure reports. This company was actively pursuing amendments that would have made REALTORS® vulnerable to lawsuits. Yesterday in the Senate Judiciary committee the offending language was removed from the bill. C.A.R. now SUPPORTS AB 957.

3% Withholding Proposal Update

C.A.R. is OPPOSING a proposal to force those making payments to independent contractors to withhold 3%. This provision was included in a budget gap proposal approved by the Budget Conference committee in the California legislature. C.A.R. opposes this FORCED OVER WITHHOLDING because it unfairly singles out independent contractors to shoulder the burden of the state’s budget troubles and because it fails to address systematic problems in California’s budgeting process. A vote was taken Wednesday on one of the many bills comprising the budget package, but it failed. It remains unclear whether the Legislature will vote on the remaining bills, given that Gov. Schwarzenegger has vowed to veto them. Look for a possible Red Alert to oppose including the withholding proposal in future versions of the state budget.

What to Watch for Next Week

Document Recording Tax Bill to Be Heard In Senate Committee

C.A.R. is OPPOSING AB 827 (Yamada) which is scheduled to be heard by the Senate Local Government Committee next week. AB 827 would allow counties to impose an additional per page recording “fee” of up to $3 per document for the archiving of historical documents. This “fee” is really a tax because the charge doesn’t directly pay for the RECORDING of documents as required by state law. All local taxes must be approved by the voters. C.A.R. is opposing AB 827 because it attempts to circumvent the voters’ right to approve local taxes.

In Washington

HVCC Update

On May 1, 2009, the Home Valuation Code of Conduct (HVCC) went into effect for all appraisals on Fannie Mae and Freddie Mac loans. The HVCC are guidelines by which appraisals for these loans must be done. Both C.A.R. and NAR had expressed opposition to Fannie Mae, Freddie Mac, their regulator the Federal Housing Finance Agency (FHFA) and Congress about the HVCC when first proposed over a year ago. In spite of this and other industry opposition Fannie and Freddie chose to go ahead with the HVCC. As a result of the HVCC, our members have reported that appraisal costs have increased for consumers, appraisers as far away as 40 miles have been used to do appraisals, inaccurate appraisals have led to the ordering of multiple appraisals at an additional cost to the consumer, and appraisals have taken three to five business days longer to order and to receive the final appraisal.

C.A.R. is working NAR to place a moratorium on the HVCC. We are reaching out to Fannie Mae, Freddie Mac, the Federal Housing Finance Agency, and Congress to explain the negative impact the HVCC has had on California real estate transactions.