BILL NUMBER: AB 1072	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 18, 2013

INTRODUCED BY   Assembly Member Wagner

                        FEBRUARY 22, 2013

   An act to amend Section 2944.7 of the Civil Code, relating to
mortgages.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1072, as amended, Wagner. Mortgage loan modification.
   Existing law, applicable to residential mortgages, prohibits a
person who negotiates, arranges, or otherwise offers to perform a
mortgage loan modification or other form of mortgage loan forbearance
for a fee or other compensation from, among other things, demanding
or receiving any compensation until every service that the person
contracted to perform or represented that he or she would perform is
accomplished. Existing law makes a violation of these provisions by a
natural person a misdemeanor punishable by a specified fine or
imprisonment, or both.
   This bill would authorize a violation of these provisions to be
punished as a felony with imprisonment  in county jail
 , as specified. By changing the definition of a crime, the
bill would impose a state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 2944.7 of the Civil Code is amended to read:
   2944.7.  (a) Notwithstanding any other provision of law, it shall
be unlawful for any person who negotiates, attempts to negotiate,
arranges, attempts to arrange, or otherwise offers to perform a
mortgage loan modification or other form of mortgage loan forbearance
for a fee or other compensation paid by the borrower, to do any of
the following:
   (1) Claim, demand, charge, collect, or receive any compensation
until after the person has fully performed each and every service the
person contracted to perform or represented that he or she would
perform.
   (2) Take any wage assignment, any lien of any type on real or
personal property, or other security to secure the payment of
compensation.
   (3) Take any power of attorney from the borrower for any purpose.
   (b) A violation of this section by a natural person is a
punishable by a fine not exceeding ten thousand dollars ($10,000), by
imprisonment in the county jail for a term not to exceed one year or
imprisonment  in county jail  pursuant to
subdivision (h) of Section 1170 of the Penal Code, or by both that
fine and imprisonment, or if by a business entity, the violation is
punishable by a fine not exceeding fifty thousand dollars ($50,000).
These penalties are cumulative to any other remedies or penalties
provided by law.
   (c) Nothing in this section precludes a person, or an agent acting
on that person's behalf, who offers loan modification or other loan
forbearance services for a loan owned or serviced by that person,
from doing any of the following:
   (1) Collecting principal, interest, or other charges under the
terms of a loan, before the loan is modified, including charges to
establish a new payment schedule for a nondelinquent loan, after the
borrower reduces the unpaid principal balance of that loan for the
express purpose of lowering the monthly payment due under the terms
of the loan.
   (2) Collecting principal, interest, or other charges under the
terms of a loan, after the loan is modified.
   (3) Accepting payment from a federal agency in connection with the
federal Making Home Affordable Plan or other federal plan intended
to help borrowers refinance or modify their loans or otherwise avoid
foreclosures.
   (d) This section shall apply only to mortgages and deeds of trust
secured by residential real property containing four or fewer
dwelling units.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.