Legislative Update: Foreclosure Consultants to Register With DOJ, Post Bond

Governor Schwarzenegger has signed Assembly Bill 180, enacting increased consumer protections for those utilizing the services of a foreclosure consultant. The new law takes effect July 1, 2009.

AB 180 amends Sections 1632, 2945.2, 2945.3, and 2945.4 of, and adds Section 2945.45 to, the California Civil Code.

Among other things, the new law requires a foreclosure consultant to register with the Department of Justice in accordance with certain requirements, and obtain and maintain a surety bond of $100,000.

"A violation of these provisions would be a crime. By creating a new crime, the bill would impose a state-mandated local program. The bill would permit the Department of Justice to refuse to issue, or to revoke, a foreclosure consultant's registration for any violation of the law regulating foreclosure consultants. The bill would create the Foreclosure Consultant Regulation Fund in the State Treasury for the deposit of fees submitted to the Department of Justice for registration as a foreclosure consultant, and make moneys in that fund available to the department upon appropriation by the Legislature for the costs of administering the registration program."

Will this new law have any more "teeth" than our own Business & Professions Code §§ 6400, et seq.? Why aren't LDA registrations handled on a statewide basis, as with notaries, immigration consultants, and now foreclosure consultants? Every year it's the same rigamarole, trying to register with a County Clerk who is unfamiliar with the process. The procedure is not uniformly applied throughout the state. LDA registration cards aren't even consistent from county to county. Secondary registrations are nothing more than an added expense and waste of, at best, a few hours, while affording no additional consumer protections. Why are we so "different?"