Gov. Schwarzenegger Does the Right Thing: Signs SB 94 and Vetoes AB 764
Governor Schwarzenegger signed Senate Bill 94, and vetoed Assembly Bill 764. Here’s the Governor’s message to the California Assembly on why he chose to veto the bill:
To the Members of the California State Assembly:
I am returning Assembly Bill 764 without my signature.
Although I support the prohibition of individuals charging advance fees for mortgage loan modifications, I do not agree with the provision of this bill that will only allow fees to be collected if a modification is successful.
This could adversely affect legitimate businesses that provide loan modification services. As such, I am signing SB 94 that accomplishes this prohibition against advance fees without unnecessarily harming legitimate companies.
For these reasons, I am unable to sign this bill.
Well… Congratulations to Governor Schwarzenegger! Frankly, you had us worried there for a few hours, as your threat to not sign any of the bills might have left us with AB 764, as it was the last to be passed by the legislature and therefore would have become law had you signed neither bill.
But that didn’t happen, so congratulations for seeing the issue clearly and establishing California as a state that recognizes that there ARE legitimate firms helping homeowners remain in their homes and that these firms play an important role in helping not only the homeowners in their struggle against the lenders and servicers, but the state and national economy as well.
For law firms it’s great news because we’ve developed several SB 94 compliant practice methodologies that are certainly financially viable. Â And for firms licensed by the Department of Real Estate, there are also ways in which to practice under SB 94 without losing one’s shirt.
SB 94, which was proposed by State Senator Ron S. Calderon who chairs the Senate Banking Committee, and drafted under the committee leadership of Eileen Newhall, I think will turn out to be a very good thing for all involved. Â For homeowners, it will ensure that they’ll get what they paid for, and for law firms and others, it will add some financial discipline and make for a better client relationship. Â Structure and transparency is always a good thing.
I have to say that I was not originally in favor of SB 94’s provisions on advance fees, as I saw the language and what I thought to be the original intent as being harmful to homeowners as I saw it as an attempt to deprive homeowners of professional representation. Â But as the process went forward and reading the final bill, I have to say that I now believe that I was wrong… SB 94 should be a very positive thing.
Does it need some clarification from the courts as it pertains to law firms? Â Yes, but that will come. Â And does the California State Bar need to come to terms with the fact that there are hundreds of attorneys practicing in California that offer homeowners legitimate and oftentimes critical support when attempting to save their homes? Â Again, the answer is yes.
But I, along with the 70 attorneys that make up the Commission on Homeowner Representation, are hopeful that this is a step in the right direction, and I salute Governor Schwarzenegger for signing it and for making the statement he made.
The Commission on Homeowner Representation
Because Homeowners Need Help