26 Nov California, Florida, Maryland and New York Legislative Update
The California legislature recently amended its laws governing recording fees, real estate instruments, and the Real Estate Prosecution Trust Fund (the “Fund”). It also amended its laws governing the limitation of interest rates on the liabilities or obligations of service members, mortgage insurance, reverse mortgage counseling, and common interest developments. The Florida legislature recently amended its laws governing the cancellation of mortgages, liens, and judgments. The Maryland legislature recently amended its laws governing mortgage lenders. The New York legislature recently amended its laws governing the licensure to make mortgage loans. All legislation discussed in this memorandum is effective January 1, 2013.
CALIFORNIA SENATE BILL 1342
A $10 (previously $3) fee must be paid at the time of recording of every real estate instrument, paper, or notice required or permitted by law to be recorded within that county, except those expressly exempted from payment of recording fees.
“Real estate instrument” now includes an amended deed of trust, an abstract of judgment, an affidavit, an assignment of rents, an assignment of a lease, a construction trust deed, covenants, conditions, and restrictions, a declaration of homestead, an easement, a lease, a lien, a lot line adjustment, a mechanics lien, a modification for deed of trust, a notice of completion, a quitclaim deed, a subordination agreement, a release, a trustee’s deed upon sale, or any Uniform Commercial Code amendment, assignment, continuation, statement, or termination.
A portion of the funds placed in the Fund may be directly allocated to the county recorder to support county recorder fraud prevention programs. Prior to establishing or increasing fees, the board of supervisors may consider support for county recorder fraud prevention programs. A county must not expend funds held in that county’s Fund until the county’s auditor-controller verifies that the county’s district attorney has submitted an annual report for the county’s most recent full fiscal year.
CALIFORNIA ASSEMBLY BILL 2476
An obligation or liability bearing an interest rate in excess of 6% per year incurred by a service member before that person’s entry into service must not bear an interest rate in excess of 6% per year as follows:
- For an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage, during any part of the period of military service and one year thereafter; or
- For any other obligation or liability, during any part of the period of military service.
CALIFORNIA ASSEMBLY BILL 2303
The following provision has been deleted from the California Insurance Code:
Mortgage insurance includes the guaranteeing of the payment of the principal, interest and other sums agreed to be paid under the terms of any note or bond secured by mortgage, or other sums secured under the terms of any such mortgage, in its entirety, or of any undivided or other partial interest in any such mortgage, or in a group of such mortgages, and the guaranteeing or insuring, directly or indirectly, against loss on them.
CALIFORNIA ASSEMBLY BILL 2010
A lender must not accept a final and complete application for a reverse mortgage loan from a prospective applicant or assess any fees upon a prospective applicant without first receiving certification from the applicant or the applicant’s authorized representative that the applicant has received counseling that was conducted in person, unless the certification specifies that the applicant elected to receive the counseling in a manner other than in person.
CALIFORNIA ASSEMBLY BILL 2273
The transfer, following the sale, of property in a common interest development executed under the power of sale contained in any deed of trust or mortgage, must be recorded within 30 days after the date of sale in the office of the county recorder where the property or a portion of the property is located.
Any failure to comply with the recordation requirement does not affect the validity of a trustee’s sale or a sale in favor of a bona fide purchaser.
FLORIDA SENATE BILL 1050
Within 14 days after receipt of the written request of a borrower, a record title owner of the property, a fiduciary or trustee lawfully acting on behalf of a record title owner, or any other person lawfully authorized to act on behalf of a borrower or record title owner of the property, the holder of a mortgage must deliver or cause the servicer of the mortgage to deliver to the person making the request, at a place designated in the written request, an estoppel letter setting forth the unpaid balance of the loan secured by the mortgage.
If the borrower, or any person lawfully authorized to act on behalf of the borrower, makes the request, the estoppel letter must include an itemization of the principal, interest, and any other charges properly due under or secured by the mortgage and interest on a per-day basis for the unpaid balance.
If a record title owner of the property, or any person lawfully authorized to act on behalf of a borrower or record title owner of the property, makes the request:
- The request must include a copy of the instrument showing title in the property or lawful authorization;
- The estoppel letter may include the itemization of information required above, but must at a minimum include the total unpaid balance due under or secured by the mortgage on a per-day basis; and
- The lender or servicer of the lender acting in accordance with a request in substantial compliance with the above requirements is expressly discharged from any obligation or liability to any person on account of the release of the requested information, other than the obligation to comply with the terms of the estoppel letter.
A mortgage holder may provide the required financial information to a person authorized to request the financial information.
MARYLAND SENATE BILL 302
The Maryland Mortgage Lending Law no longer applies to:
- Any person who makes three or fewer mortgage loans per calendar year and brokers no more than one mortgage loan per calendar year; and
- Subsidiaries and affiliates of any institution incorporated under federal law as a savings association or savings bank that does not maintain its principal office in Maryland, but has a branch that accepts deposits in Maryland.
NEW YORK ASSEMBLY BILL 9123/SENATE BILL 3779
An individual, person, partnership, association, corporation, or other entity may not engage in the business of making (previously five or more) mortgage loans (previously in one calendar year) without first obtaining a license from the Superintendent of Financial Services (the “Superintendent”).
The licensure provisions no longer apply to any individual, person, partnership, association, corporation, or other entity that makes not more than three loans in a calendar year, nor more than five in a two year period, provided that such mortgage loans have not been made that were solicited, processed, placed, or negotiated by a mortgage broker, mortgage banker, or exempt organization.
Mortgage brokers must solicit, process, place, and negotiate mortgage loans with a mortgage banker licensed under the Licensed Mortgage Bankers laws, exempt organization, or according to regulations as promulgated by the New York Banking Board or prescribed by the Superintendent.