Welcome back! The Winter 2022 edition of the California Department of Real Estate (DRE’s) Real Estate Bulletin focuses on changing education requirements, licensing fraud and new laws.

Read on for firsttuesday’s digest of this quarter’s most pertinent DRE updates for real estate professionals.

Commissioner’s update

DRE Commissioner Doug McCauley opens the Real Estate Bulletin with an important update on real estate education requirements. Senate Bill (SB) 263, which goes into effect in 2023, adds two hours implicit bias training to pre-licensing and continuing education requirements in California.

The new education requirements aim to counter implicit bias in the real estate industry to fully realize the spirit of existing fair housing laws. Because of the complex and covert nature of implicit bias, SB 263 requires schools include an interactive element so that students may explore and react to the many ways bias creeps into transactions.

In a webinar for course providers on March 17, 2022, DRE representatives offered little guidance beyond the text of the new law — encouraging schools to “be creative” and “Google it” when crafting their Implicit Bias materials. On a hot mic at the end of the event, a DRE representative could be heard saying “so… nobody died,” perhaps revealing a state of overwhelm about the new requirements even at the highest levels.

For real estate professionals looking to keep their licenses current, compliance means ensuring any implicit bias training they take truly gamifies the experience — a technique long used to improve engagement in higher education.

Editor’s note — firsttuesday is hard at work producing its own Implicit Bias training. Our course materials take to heart SB 263’s requirements by gamifying the learning experience with video, animation, interactive storytelling, and programming — all created by firsttuesday’s legal research and IT teams.

Education scandal

This Real Estate Bulletin issue also marks the closing of the DRE’s largest enforcement action in its 100+ year history.

In December 2021, the DRE withdrew the qualification of Danny Yen, owner and sponsor of Real Estate Educational Services (REES), an approved CE provider operating out of Carlsbad, California.

This comes after an official investigation during which the DRE discovered that Yen sold a fraudulent course that did not properly educate and prepare real estate licensees for engaging with members of the public.

In investigating the egregious allegations against Yen, the DRE uncovered a massive real estate licensing scam. Among other violations, investigators found that REES:

  • failed to administer a final exam to course students [DRE Regulations §3007.3];
  • issued course completion certificates to DRE licensees for real estate CE courses which falsely stated the licensees completed a final exam when none was actually provided to them [DRE Regs. §3006(d); DRE Regs. §3007.3]; and
  • created courses for students that significantly deviated from the materials he submitted for approval to the DRE, without reporting as much to the DRE for consideration and approval. [DRE Regs. §3007.2]

In addition, the Department of Financial Protection and Innovation (DFPI) has also launched its own disciplinary action against Yen and REES. Click below to read firsttuesday’s full coverage of the REES scandal, including the details of the DFPI’s ongoing action against Yen.

Related article:

DRE Hot Seat: Danny Yen, owner of Real Estate Educational Services (REES), reprimanded by DRE and DFPI for conducting massive education fraud scheme

Editor’s note — just as in real estate transactions, continuing education requires licensees do their due diligence about their course providers. With over 40 years of experience serving California’s agents and brokers, firsttuesday is a long-trusted name in real estate education. Visit firsttuesday.us to learn about our DRE-approved real estate courses.

New real estate laws

To help licensees stay on top of the real estate industry’s latest legislation, the DRE published a list of new real estate laws that take effect in 2022.

This list highlights new legislation that agents and brokers are likely encounter in their practice this year, including:

  • Assembly Bill (AB) 948, which requires the Bureau of Real Estate Appraisers (BREA) to include a check box within their existing complaint form, asking the complainant whether they believe the appraisal is below market value;
  • SB 263, which alters real estate education requirements to include Implicit Bias training; and
  • AB 838, which requires cities and counties to inspect a property when they receive a complaint about lead hazards or substandard living conditions, and follow up with violations and remedies.

To keep abreast of changes affecting California’s real estate professionals as they happen, bookmark the firsttuesday New Laws feed.

Unlicensed activity

In addition to its monumental crackdown of Danny Yen and REES, the DRE celebrates another enforcement win — this time against an unlicensed MLO.

On November 4, 2021, Amy A. Agtarap was sentenced to over 3 years in Monterey County jail after a jury found her guilty of grand theft and forgery, among other counts. A multi-agency investigation found Amy unlawfully solicited loan modification services from consumers struggling to stay current on their mortgages.

While Amy will be ordered to pay restitution to her victims, many of them have already lost their homes because of her unlicensed activity. As part of its commitment to consumer safety, the DRE takes allegations of unlicensed activity very seriously, and asks readers to report such activity via their Enforcement Online Complaint System.

To keep your practice compliant, brush up on firsttuesday’s Unlicensed Activity articles and learn what the DRE deems appropriate conduct without a license.

Mortgage relief

The California Mortgage Relief Program started accepting applications in January 2021 to help homeowners catch up on housing payments missed due to pandemic hardship.

The program covers past due mortgage payments in a one-time payment of up to $80,000 per household. Qualified homeowners can apply for free, and the aid does not need to be repaid.

To qualify for the program, applicants need to:

  • own a single family residence, condominium or permanently affixed mobilehome as a primary residence;
  • fall at or below 100% of their county’s Area Median Income (AMI calculator);
  • have experienced pandemic-related financial hardship after January 21, 2020; and
  • meet at least one of the following criteria:
    • receive public assistance
    • be severely housing burdened; or
    • have no alternative mortgage options though their mortgage service provider.

In addition to the California Mortgage Relief Program, real estate professionals are encouraged to direct their clients struggling with pandemic-related financial hardship to HousingIsKey, which offers helpful answers to frequently asked questions about mortgage relief options.

That’s a wrap on the Winter 2022 Real Estate Bulletin! As always, download the full DRE Bulletin on the DRE website.

Sign up for the firsttuesday Newsletter to catch the upcoming Spring 2022 Bulletin digest in the coming weeks.