Thoughts on AB 957

Below is the text of an Email I received today, I have responded to the CAR but not yet received a reply. What do you think California Realtors?

C.A.R. is opposing AB 957 (Galgiani), the so-called “Buyers Choice Act,” which will legally force sellers to use the title and escrow providers chosen by the buyer when selling an REO property. C.A.R. opposes AB 957 because it puts all control in the hands of one side of the transaction.

AB 957 will be voted on in the Assembly Judiciary committee next Tuesday, May 5^th. Your Assembly member is a member of this committee.

Background

Last week the California Assembly Banking and Finance Committee passed AB 957, based in part upon Assemblywoman Galgiani's commitment to "work with" C.A.R. concerns. “The Buyers Choice Act” is now set for its next hearing in the Judiciary Committee. AB 957 is sponsored by the California Escrow Association. The proposed legislation will mandate that the choice of title and escrow services be made by the buyer, not by the bank or other seller of a foreclosed property, on all real estate-owned (REO) transactions.

Talking Points

Two Way Negotiation is Needed. C.A.R. opposes the bill out of concern that it removes the choice of escrow from negotiation, and puts all control in the hands of one side. C.A.R. supports good faith negotiations and fair dealing, and supports full compliance with RESPA.

Beware of other players with other agendas. Please also note that Property ID, a company that frequently has its own agenda in supporting or opposing legislation, is contacting REALTORS® and attempting to gain their support.

Three Amendments are Needed. In the Banking Committee hearing, the author asked C.A.R. to reconsider its opposition in light of a commitment to consider 3 changes in the bill.

• First, a "sunset" on the duration of the bill so that it will be reconsidered as the market recovers.
• Second, Assemblywoman Galgiani also suggested she would be willing to include an enhancement of state regulators’ enforcement of RESPA fair dealing rules; and,
• Finally, language to require that both sides of a transaction negotiate in good faith.

So far, only the RESPA issue has been included, and the bill still mandates that the buyer alone selectstitle and escrow services, a choice that has always been negotiable. C.A.R. LANGUAGE TO INCLUDE FAIR NEGOTIATION HAS BEEN REJECTED.

Okay, so now my question is when in the heck did a bank ever negotiate where the escrow and title will be done? It seems to me that perhaps the CAR is looking at things slightly askew? In an REO my experience is that on those issues all the control is in the hands of the bank, primarily because they make their own rules about sales and contracts. I think the CAR should ask to include a provision that requires the banks to follow the same rules when selling a property that everyone else does!

How about a law regulating the banks ability to completely toss a deal at the last min based on a new offer? How about a provision that eliminates the banks ability to say that the rules dont apply to them? Okay, radical I know but just a thought!