Fannie Mae and Freddie Mac will suspend foreclosure evictions from December 19, 2009 through January 3, 2010. To help struggling families over the holidays, both owner-occupants and tenants living in properties foreclosed upon by Fannie Mae will not be evicted. Freddie Mac’s suspension of evictions will be limited to properties up to four units.
In a similar move, Citigroup Inc. will suspend foreclosure sales and evictions for 30 days through January 17, 2010 for loans it owns. Citigroup’s foreclosure moratorium, however, does not extend to loans it services on behalf of other investors. Given these developments, other lenders may follow suit, so check with the lender if appropriate.

Pending home sales have risen for nine months in a row, a first for the series of the index since its inception in 2001, according to the latest survey. The Pending Home Sales Index increased 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The rise from a year ago is the biggest annual increase ever recorded for the index, which is at the highest level since March 2006 when it was 115.2. Lawrence Yun, NAR chief economist, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.”

On December 11, 2009, the U.S. House of Representatives passed the “Wall Street Reform and Consumer Protection Act of 2009,” H.R. 4173. This sweeping legislation—a combination of several bills, including a modified version of the Consumer Financial Protection Agency Act, formerly HR 3126—includes broad new regulation of derivatives, executive compensation, systemic risk, investor rights, mortgages, credit-rating agencies, hedge funds and private equity, insurance, and consumer financial protection.

Title IV of the Act (sections 4001 – 4901) provides for the creation of a Consumer Financial Protection Agency (section 4101 – 4703), a new, independent federal agency to oversee virtually every aspect of consumer financial services, including mortgages, credit cards, debit cards, car loans, gift cards, credit reporting agencies, debt collectors, and financial advisers. Certain merchants, such as auto dealers and pawnbrokers, would be exempted.

Consumer financial protection functions would be transferred (section 4601) to the new Consumer Financial Protection Agency from the Federal Reserve Board of Governors, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, and the Secretary of Housing and Urban Development. Among other powers, the Consumer Financial Protection Agency would be responsible for enforcing laws governing consumer credit.

The Act also provides for the creation of a Consumer Financial Protection Oversight Board (section 4103), to ensure consistent consumer financial protection regulations, and a Consumer Advisory Board (section 4106) to advise and consult with the CFPA regarding consumer laws and industry practices.

Significantly, the Act calls for changes to current laws and regulations regarding preemption of state law (sections 4401 – 4410) and pre-dispute arbitration provisions (section 4208).

Separately, the U.S. Senate is working on its own version of consumer financial protection legislation.

For more information about this topic, contact Dan O’Rielly, Vice-Chair for Communications, at O’Rielly & Roche LLP, djo@oriellyroche.com, or Committee Chair Arnold S. Rosenberg at arosenberg@tjsl.edu.

For more information about the Agribusiness Committee, please see the committee’s Web site: www.calbar.org/buslaw/consumer.

These periodic e-mails are being sent to you because you expressed interest in receiving news and information from the Consumer Financial Services Committee of the State Bar of California’s Business Law Section. If you no longer wish to receive these communications or you have a new e-mail address — or if you have a friend or colleague who would like to add his or her e-mail address to our distributions list, please contact Susan Orloff, Section Coordinator of the Business Law Section.

The California Secretary of State’s office has posted a notice on its website advising that letters are being sent to California corporations and LLCs directing them to submit $495 and a completed form to a private company named Business Filings Division in order to dissolve their entity. The letter/form does not meet the requirements of the California Corporations Code, and a corporation cannot delegate the obligation to have the Certificate of Election to Wind Up and Dissolve and the Certificate of Dissolution signed and verified by the shareholders, members, officers or directors of the corporation. Organizations that receive one of these fraudulent solicitation letters can mail a written complaint along with the entire solicitation (including the solicitation letter, the outer and return envelopes, and all related documents) to the California Attorney General’s office, Public Inquiry Unit, P.O. Box 944255, Sacramento, California 94244-2250. A complaint form, can also be completed online and printed to mail, which is available on the California Attorney General’s website at www.ag.ca.gov/consumers/general.php.

Four years after the collapse of the U.S. housing bubble, flipping homes is back in fashion.

To read the full story, please click here:

http://online.wsj.com/article/SB126022588878780861.html?mod=WSJ_hpp_MIDDLETopStories

Foreclosures declined 8 percent in November compared with October, but were still up 18 percent from November 2008.

This was the fourth-straight month that U.S. foreclosures have declined since hitting an all-time high in July, according to online foreclosure marketer RealtyTrac.

Default notices, an indicator of coming foreclosures, also were down 8 percent from October, but up 22 percent from November 2008. Bank repossessions were flat from the previous month and down 2 percent from November 2008.

States with the highest foreclosure rates are:
Nevada
Florida
California
Arizona
Idaho
Michigan
Illinois
Utah
Maryland
New Jersey

As the end of the 2009 tax year approaches, the Internal Revenue Service (IRS) has issued a tax guide featuring new tax-saving opportunities, including information on:
• The making work pay credit for most workers;
• American opportunity credit for parents and college students;
• Energy credits for homeowners going green;
• First-time home buyer tax credits,
• Sales or excise tax deduction for new car buyers; and
• The expanded child tax credit and earned income tax credit for low- and moderate-income workers.

For more information go to: http://www.irs.gov/publications/p17/index.html

National Association of Realtors Pending Home Sales Index (PHSI) rose 3.7 percent to 114.1 in October from 110 in September, and is 31.8 percent higher than October 2008’s 86.6 index reading. Pending home sales have risen nine consecutive months. The rise from a year ago is the largest annual increase ever recorded for the index, which is at its highest level since March 2006. However, in the West, which includes California, the index declined 11.2 percent to 127.7 but is 21.9 percent higher than October 2008.

The U.S. Dept. of the Treasury last week announced the Home Affordable Foreclosure Alternatives Program (HAFA), which provides financial incentives to servicers, borrowers, and investors for a closed short sale or a deed-in-lieu (DIL).
The HAFA program simplifies and encourages short sale and DIL options by:
• Allowing pre-approved short sale terms before a property is listed;
• Preventing servicers from attempting to reduce real estate commissions established in the listing agreement as a condition for short sale approval; and
• Releasing borrowers from future liability for the debt.
Borrowers not eligible for the Home Affordable Mortgage Program must be considered for HAFA within 30 calendar days of the date the borrower does not qualify for a HAMP Trial Period Plan; does not successfully complete a HAMP Trial Period Plan; is delinquent on a HAMP modification by missing at least two consecutive payments; or requests a short sale or DIL.