Calif. Civil Code §§2944.7, 2944.8 and 2944.10
Added and amended by A.B. 1730
Effective date: January 1, 2015
Any person who, for compensation, negotiates, arranges or offers to perform a loan modification or forbearance on a mortgage secured by a one-to-four unit residence may not:
- claim, demand, charge or collect any compensation until after they have fully performed all services they are contracted for;
- take a wage assignment, lien on real property or other security to secure payment; or
- take any power of attorney from the borrower.
A person who violates these prohibitions is now subject to additional civil penalties of up to $20,000 per violation, to be assessed through a civil action brought by the state or local government.
If the victim is a senior citizen (aged 65 or older) or a disabled person, the violator may be subject to an additional civil penalty of up to $2,500 per violation, to be assessed through a civil action brought by the state or local government. Assessment of this additional penalty depends on whether:
- the violator knew their conduct was directed at a senior citizen or disabled person;
- the violation caused the victim to suffer the loss of their primary residence, retirement property, payments from a pension or retirement plan, employment, source of income or assets essential to the victim’s health; and
- the victim is substantially more vulnerable than other members of the public and suffered significant physical, emotional or economic harm due to age, poor health, impaired understanding or restricted mobility.
A senior citizen or disabled person who has suffered damages may be restored money or property lost as a result of the violation.
The statute of limitations for bringing an action to enforce these provisions is four years from the violation.