News from the Real Estate Corner.....

What CA loan brokers and agents need to know: the ramifications of recent mortgage loan legislation

New loan broker requirements imposed by California’s legislature will profoundly change the business activities of all real estate brokers and agents who arrange RESPA-type consumer loans secured by one-to-four residential units, called mortgage loan originators, and to a very limited extent, mortgage loan brokers arranging business, investment or agricultural loans secured by one-to-four residential units.

On or before January 31, 2010, or 30 days after they begin first acting as a loan broker or agent, real estate brokers and agents arranging loans for any purpose secured by a one-to-four unit residential property must notify the DRE of their loan origination activities. [Calif. Business and Professions Code §10166.07]

Also, on or before December 1, 2010, those real estate brokers and their agents licensed by the California Department of Real Estate (DRE) who originate consumer purpose loans, but not business or investment purpose loans, secured by one-to-four unit residential property will be required to obtain a license endorsement from the DRE. To obtain and maintain this endorsement, they will also need to register with a federal agency, take additional and different continuing education and make annual reports to the DRE. The license endorsement must be renewed every year by December 31. Those who fail to renew will be subject to fines of up to $100 per day, and may have their licenses revoked. [Bus & P C §10166.02]

This “Real Estate Settlement Procedures Act” (RESPA)-type license endorsement is California’s response to the federal government’s newly established supervision of brokers and agents who are “consumer mortgage loan originators”–arrangers of purchase-assist home loans or home equity loans for consumer purposes. All this comes in the wake of disastrous real estate consequences recently brought about by irresponsible lending. Much of the DRE’s oversight will be accomplished in collaboration with the Nationwide Mortgage Licensing System and Registry, here called the Nationwide Registry. This federally-created agency is responsible for monitoring consumer mortgage loan origination activities throughout the United States.

By increasing the education requirements of consumer loan brokers/agents and increasing its own knowledge and oversight of their activities, the government hopes to improve responsibility and accountability among mortgage lenders, and increase its own understanding of what has become an opaque and unregulated business. However, the government’s objective in imposing these registration requirements is to control the loan brokers and mortgage bankers, not the lenders who allowed, and in most cases encouraged, the relaxed lending conditions.

California’s RESPA-related oversight of real estate licensees is managed by the DRE. DRE-licensed brokers and agents who arrange consumer purpose loans secured by one-to-four unit residential property, now called consumer mortgage loan originators, are required to apply for endorsement from the DRE and an ID number from the Nationwide Registry. The national component of the prequalifying exam is currently available to be taken online with the Nationwide Registry.

For the state component, the DRE requires agents and brokers who act as mortgage loan originators to fill out and submit DRE Form RE 866, the Mortgage Loan Activity Notification. This form, available at the DRE’s website, is not an application for endorsement, but rather serves the purpose of notifying the DRE of any loan origination activities. Agents and brokers who fail to fill out this form will be subject to fines and possible license suspension. The DRE has not yet created its application form or set clear prerequisites for license endorsement. These materials should be available in late February, 2010 (look to first tuesday to alert you when this form is available).

Also, applicants to the DRE for the license endorsement will be required to successfully complete a minimum of 20 hours of education, including education on federal and state law related to fraud, fair lending and consumer protection and training in lending standards for nontraditional mortgages as a requisite for receipt of the RESPA loan origination endorsement and registration. [Bus and P C §§10166.06, 10166.09 and 10166.10]

Brokers and agents who apply for an endorsement and have successfully completed the endorsement education will also be required to pass a written exam, prepared and administered by the Nationwide Registry, on ethics, loan origination law and laws related to fraud, consumer protection and fair lending issues. If the licensee fails the registration exam three times, they will be required to wait a minimum of six months before making another attempt. Applicants will also be required to submit to background checks of their criminal history, civil and administrative records, credit history and other information.

Once endorsed by the DRE, the endorsement must be renewed annually. Renewal requirements involve still more education: eight hours of ethics, federal law, and nontraditional mortgage standards to be completed yearly. All qualifying courses must be approved by both the DRE and Nationwide registry. The registered loan broker or agent may not take the same course more than once every two years.

To improve public recognition of endorsed loan brokers and agents, these individuals will be required to include their nationwide Registry ID number and their DRE identification number on any advertising intended to be the first point of contact with customers. This includes all purchase agreements for which the endorsed licensee, while acting as the buyer’s loan broker, also acts as a transaction agent – the listing or selling agent. [Bus & P C §10140.6]

To some extent, improvements in the public’s well being are likely to result from all this endorsement, registration, background investigation, net worth requirements and education. In the meantime, however, brokers and agents arranging consumer purpose loans secured by one-to-four residential units will find themselves subject to a variety of new and arduous licensing requirements which are most likely to drive the majority of them out of the market entirely, expecially those that arranged purchase-assist loans for buyers of SFR properties.

In contrast, consider a seller who carries back a note and trust deed on the sale of a one-to-four unit residential property to a buyer who will occupy the property as his principal residence. The sale is an installment sale, and thus no new loan is involved (although an assumption of an existing loan is possible). In this situation, are the listing and selling agents arranging the carryback financing effectively “loan originators”? That is to say, are they required to be endorsed by the DRE and registered with the Nationwide Registry and complete the corresponding education requirements, background checks, etc. in order to arrange this financing and collect their sales fee?

No! RESPA and DRE license endorsements and registration are for consumer purpose loans on one-to-four units and are limited exclusively to loans, not extensions of credit, except for the carryback sale of homes by a builder. State law has always distinguished money loans from extensions of credit on the sale of real estate. [Boerner v. Colwell (1978) 21 CA3d 37]

So which DRE brokers and agents need to undergo this arduous endorsement hurdle, and who is exempt? These requirements do not apply to mortgage loan brokers (MLBs) who solicit, arrange or service investment, agricultural or business loans, regardless of whether those loans are secured by one-to-four residential units, or any loans secured by other than one-to-four unit residential property. These brokers are required to continue to report their activities to the DRE as they have in the past, but they will not need a separate DRE endorsement or federal registration. Also exempt from the endorsement and registration requirement are those service providers affiliated with real estate transactions, such as escrow officers and title companies, who receive and collect information to be used in arranging or processing loans but do not actually arrange or make the loans themselves.

The immediate results of this legislation are not difficult to predict. Institutional lenders have always preferred to lend directly to the homebuyer or homeowner. Direct lending allows them to avoid the expense of paying a loan broker and losing the interest rate spread from par to the note rate they charge. Thus they fulfill their objectives of increasing profits and avoiding competition, another extension of the deregulation of lenders which began with a vengence in 1982. The arduous requirements of endorsement and registration will effectively push all brokers and agents out of the business of placing purchase-assist home loans sought by homebuyers with the most competitive lender.

The mortgage loan broker who was formerly accustomed to acting as an intermediary between the homebuyer and mortgage lender will now be forced to reconsider whether their work is really worth the aggravating endorsement, registration, educational requirements, background checks, increased oversight and compensation disclosures. Some will not be able to meet the creditworthiness scoring standards or the net worth requirements to become endorsed. Lenders, on the other hand, will now be able to limit their loan solicitations to the “transaction agents” – selling agents – who represent homebuyers, although they will not solicit them for the purpose of making loans through those agents or paying a kickback as they did during the 2005-2006 period to get the loan business. Instead, the selling agents will be used for the purpose of bypassing all real estate licensees, dealing directly with the homebuyer once referred.

Save some uncommon cases, consisting probably of a few of the very largest real estate brokerage offices who establish a controlled financial business, we have seen the last days of the omnipresent residential mortgage loan broker. Lenders will now package their own loans, their way, exclusively. The buyer’s selling agent will control which lender now gets the loan, but will not be paid by the lender for making that decision – unless endorsed by the DRE, Registered with the National Registry, and fully compliant.

Source of text: Firsttuesday Newsletter

To get more information you can visit them at www.firsttuesday.us

$5.37

That's what the kid behind the counter at Taco Bell said to me. I dug into my pocket and pulled out some lint and two dimes and something that used to be a Jolly Rancher.



Having already handed the kid a five-spot, I started to head back out to the truck to grab some change when the kid with the Emo hairdo said the harshest thing anyone has ever said to me.



He said, "It's OK Sir. I'll just give you the senior citizen discount."



I turned to see who he was talking to and then heard the sound of change hitting the counter in front of me.



"Only $4.68" he said cheerfully. I stood there stupefied.



I am 62, not even 65 yet?"



A mere child!



Senior citizen?



I took my burrito and walked outside & into the truck wondering what was wrong with Emo.



Was he blind?



As I sat in the truck, my blood began to boil.



Old?



Me?



I'll show him, I thought.



I opened the door and headed back inside.



I strode to the counter, and there he was waiting with a smile.



Before I could say a word, he held up something and jingled it in front of me, like I could be that easily distracted!



What am I now? A toddler?



"Dude! Can't get too far without your car keys, eh?"



I stared with utter disdain at the keys.



I began to rationalize in my mind.



"Leaving keys behind hardly makes a man elderly! It could happen to anyone!"



I turned and headed back to the truck.



I slipped the key into the ignition, but it wouldn't turn..



What now?



I checked my keys and tried another.



Still nothing.



That's when I noticed the purple beads hanging from my rearview mirror..



I had no purple beads hanging from my rearview mirror.



Then, a few other objects came into focus.


The car seat in the back seat.



Happy Meal toys spread all over the floorboard.



A partially eaten doughnut on the dashboard.



Faster than you can say ginkgo biloba, I flew out of the alien vehicle.



Moments later I was speeding out of the parking lot, relieved to finally be leaving this nightmarish stop in my life.



That is when I felt it, deep in the bowels of my stomach: hunger!



My stomach growled and churned, and I reached to grab my burrito, only it was nowhere to be found.



I swung the truck around, gathered my courage, and strode back into the restaurant one final time.



There Emo stood, draped in youth and black nail polish.



All I could think was, "What is the world coming to?"



All I could say was, "Did I leave my food and drink in here?"



At this point I was ready to ask a Boy Scout to help me back to my vehicle, and then go straight home and apply for Social Security benefits.



Emo had no clue. I walked back out to the truck, and suddenly a young lad came up and tugged on my jeans to get my attention. He was holding up a drink and a bag.



His mother explained, "I think you left this in my truck by mistake."



I took the food and drink from the little boy and sheepishly apologized.



She offered these kind words:



"It's OK. My grandfather does stuff like this all the time."



All of this is to explain how I got a ticket doing 85 in a 40.



Yes, I was racing some punk kid in a Toyota Prius.



And no, I told the officer, I'm not too old to be driving this fast..



As I walked in the front door, my wife met me halfway down the hall.



I handed her a bag of cold food and a $300 speeding ticket.



I promptly sat in my rocking chair and covered up my legs with a blanky.



The good news was I had successfully found my way home.

-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-*-



READ BELOW !

Just in case you weren't feeling too old today.



The people who are starting college this fall were born in 1991.



They are too young to remember the space shuttle blowing up.



Their lifetime has always included AIDS.



The CD was introduced two years before they were born.



They have always had an answering machine..



They have always had cable.



Jay Leno has always been on the Tonight Show.

(until recently)



Popcorn has always been micro waved.



They never took a swim and thought about Jaws.



They don't know who Mork was or where he was from.



They never heard: 'Where's the Beef?', 'I'd walk a mile for a Camel ', or 'de plane Boss, de plane'.



McDonald's never came in Styrofoam containers.



They don't have a clue how to use a typewriter.



Pass this on to the other old fogies on your list.



Notice the larger type? That's for those of us who have trouble reading.




P.S. Save the earth. It's the only planet with chocolate.

Try This Nutritious Alternative to Summer Fruits

Alas, the fresh fruits of summer are a distant memory for many right now. But chin up! You might be able to get just as much nutrition with this winter alternative: freeze-dried.

A recent study showed that, ounce for ounce, freeze-dried black raspberries contain even more cancer-fighting anthocyanins than fresh berries do. And freeze-dried fruit can keep for over a year.

Better-for-You Berries
Blackberries, raspberries, blueberries, and cherries are some of the best cancer-fighters around, thanks to their high anthocyanin content. And since they are made up mostly of water, freeze-drying the berries concentrates the nutrition. For example, the black raspberry study showed that you need only a couple of tablespoons of freeze-dried black raspberries to get the anthocyanin content of a cup of fresh berries. Not too shabby. But keep in mind that, berry for berry, some nutrition is lost through freeze-drying. Plus, you'll feel less full with freeze-dried fruit because there's no water content. (Did you know? Some berries are also a good source of resveratrol.)

Article taken from Real Age Newletter

YOU GOTTA LOVE THIS!!!

Shown below, is an actual letter that was sent to a bank by
an 86 year old woman. Yes, that's right, she was 86!!
The bank manager thought it amusing enough to have it
published in the New York Times.

Dear Sir:

I am writing to thank you for bouncing my check with which

I endeavored to pay my plumber last month.

By my calculations, three nanoseconds must have elapsed between

his presenting the check and the arrival in my account of the

funds needed to honor it.

I refer, of course, to the automatic monthly deposit of my

entire pension, an arrangement which, I admit, has been in

place for only eight years. You are to be commended for seizing

that brief window of opportunity, and also for debiting my account

$30 by way of penalty for the inconvenience caused to your bank.

My thankfulness springs from the manner in which this incident has

caused me to rethink my errant financial ways.

I noticed that whereas I personally answer your telephone calls

and letters, --- when I try to contact you, I am confronted by the

impersonal, overcharging, pre-recorded, faceless entity which your

bank has become.

From now on, I, like you, choose only to deal with a flesh -and-blood

person.

My mortgage and loan repayments will therefore and hereafter,

no longer be automatic, but will arrive at your bank, by check,

addressed personally and confidentially to an employee at your bank

whom you must nominate.

Be aware that it is an offense under the Postal Act for any other

person to open such an envelope. Please find attached an Application

Contract which I require your chosen employee to complete. I am

sorry it runs to eight pages, but in order that I know a s much about

him or her as your bank knows about me, there is no alternative.

Please note that all copies of his or her medical history must be

countersigned by a Notary Public, and the mandatory details of

his/her financial situation (income, debts, assets and liabilities)

must be accompanied by documented proof.

In due course, at MY convenience, I will issue your employee with a

PIN number which he/she must quote in dealings with me.

I regret that it cannot be shorter than 28 digits but, again, I have

modeled it on the number of button presses required of me, to

access my account balance on your phone bank service. As they say,

imitation is the sincerest form of flattery.

Let me level the playing field even further.

When you call me, press buttons as follows:

IMMEDIATELY AFTER DIALING, PRESS THE STAR (*) BUTTON FOR

ENGLISH:

#1. To make an appointment to see me.

#2. To query a missing payment.

#3. To transfer the call to my living room in case I am there.

#4. To transfer the call to my bedroom in case I am sleeping.

#5. To transfer the call to my toilet in case I am attending to nature.

#6. To transfer the call to my mobile phone if I am not at home.

#7. To leave a message on my computer, a password to access my

computer is required.. Password will be communicated to you at a later

date, and only to that Authorized Contact mentioned earlier.

#8. To return to the main menu and again listen to options 1 through 7.

#9. To make a general complaint or inquiry. The contact will then be put

on hold, pending the attention of my automated answering service.

#10. This is a second reminder to press* for English.

While this may, on occasion, involve a lengthy wait, uplifting

music will play for the duration of the call.

Regrettably, but again following your example, I must also levy an

establishment fee to cover the setting up of this new arrangement.

May I wish you a happy, if ever so slightly less prosperous New Year?

Your Humble Client

(Remember: This was written by an 86 year old woman)

YA JUST GOTTA LOVE ' US SENIORS'!!!!!

And remember: Don't make old ladies mad.

They don't like being old in the first place,

so it doesn't take much to set them off.

THIS IS COOL

This is cool. Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it dseno't mtaetr waht oerdr the ltteres in a wrod are, the olny iproamtnt tihng is taht the frsit and lsat ltteer be in the rghit pclae. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. If you can raed tihs, p...sot it to yuor wlal. Olny 55% of plepoe can.

Health Discovery: Curry, Black Pepper May Help Prevent Breast Cancer

Add one more reason for women to spice up their diet: New research shows that compounds in turmeric and black pepper stop the growth of stem cells that often trigger breast cancer.

Stem cells play a role in many types of cancer, believed to mutate and fuel tumors. But researchers say limiting stem cell growth in the breast is crucial, especially in middle and older age. Although stem cells help maintain proper function in many organs—largely by replacing other cells that naturally die off—“in the breast, normal cells don’t turn over as much, and stem cells are necessary only during puberty to form breast tissue and during lactation,” explains Madhuri Kakarala, M.D., of the University of Michigan.

Her study, published online in Breast Cancer Research and Treatment in November, found that when a compound of the two spices was applied to breast cell cultures, it decreased the number of stem cells without affecting normal cells.

Past studies have shown cancer-preventing properties in turmeric, which gives curry its yellow-orange color. But Kakarala’s study finds that piperine, which is in black pepper, enhances turmeric’s power.

Supplements with these spices are available, but they only enter your system properly when eaten as part of your natural diet, Kakarala says.

“As a preventive measure against cancer, eat these spices regularly—in amounts to enhance but not overpower the flavor of food,” advises Bharat B. Aggarwal of M.D. Anderson Cancer Center. He calls Kakarala’s study “impressive and exciting,” noting that in India and other countries where curry is frequently consumed, rates of several types of cancer—including breast cancer—are about 10 times lower than in the United States. “But as women move from India to here, we see an increase in their rates of breast, colon and other cancers because they adopt a Western diet.”

By: Sid Kirchheimer | Source: AARP Bulletin Today

Mike Russ Financial Training Centers
1-800-724-5661

WE HAVE CREATED A NEW CLASS for those seeking more information on

Auto & Homeowners Insurance 6 Day Boot Camp!

ONLY TAKE THIS COURSE IF YOU ARE SERIOUS ABOUT BECOMING A TOP AGENT!

Auto & Homeowners Boot Camp

How can you sell something if you don't understand how it works?

By taking this course you will learn the in's and outs of writing personal lines business! This course will enable you to bypass a huge learning curve for people that are either new in the insurance business, or are leaving the captive agent arena and becoming an independent agent. Learn how to cross sell and explain coverages so your clients will ask for higher limits on their policies! Overcome the fear of being asked questions you don't know the answer to(i.e. When does it pay? What are the exclusions?)


This intense SIX-DAY COURSE will cover

• Understanding Coverages
• Underwriting guidelines
  
• Claims
• Overcoming Objections
• Role Play
• The Close
  

Course price: $999

Times: 9am - 5pm

San Diego: January 4th thru 9th

March 1st thru 6th

Anaheim: February 22nd thru 27th

April 19th thru 24th

Location Addresses:

San Diego: 8322 Clairemont Mesa Blvd., Suite 103, San Diego, CA 92111

Anaheim: 631 S. Brookhurst St., Suite 211, Anaheim, CA 92804

If you are interested in joining the class please call and ask
for Jeanette

The Day After Christmas

Well here we are another season has come and gone and the new year quickly coming upon us. I hope that this will be a better year for most of us than last year was with all the economy being the way it was. We can only hope for the best. Yesterday was a very special Christmas for me since I truly met my Christmas Angel in the form of a dear friend. I hope that I will be able to pass along the kindness that she showed me to others who's lives I may touch in the coming year. Just a thought for the new year don't forget how precious your friends and family are.

December Happenings...

December has been quite a busy month for me and might I say a very fun one too. Now that Christmas is only a few days away things are going to slow down a little for me. To start the month off I went to Disneyland with my sister and brother-in-law and we had a wonderful two days there even though the weather wasn't perfect. It just made things seem a little more magical. Then after that weekend we were invited to have a Christmas get together at my sister's house and it was so much fun to watch the grand-kiddies and great nephew Diego dance with glee as all the gifts were exchanged. He is so cute and so polite his mom has done a good job with him. It seemed like even the youngest were filled with glee and excitement to. It's always so nice to spend holidays with the family.
As the holidays are almost over but I still have some more get togethers to go to and my youngest son is going to take me out to dinner on Christmas Eve. I have to say this has been the very best holiday season I have had in years. Even our office party was the tops thanks to great planning.
Merry Christmas to all my friends may you have a happy and prosperous new year.

Isla's First Christmas 2009

It's hard to believe that our little Isla is 10 1/2 months old and about to experience her first Christmas. She enjoys unwrapping the little trinkets that St. Nick leaves outside her bedroom door if she has been a good girl the day before.