TheHOME EQUITY SALES CONTRACTS ACT" (Civil Code Section 1695 )i

Hello

Anyone know about this and where I can get it?
The "HOME EQUITY SALES CONTRACTS ACT" (Civil Code Section 1695 )
Does this apply to shortselling?

Thanks
Niceguy

Comments(13)

  • TheShortSalePro16th August, 2004

    http://caselaw.lp.findlaw.com/cacodes/civ/1695-1695.17.html

    Is this applicable to preforeclosure short sales? Presumed equity or lack thereof notwithstanding, I would think so because it involves the sale of a property in foreclosure...

  • Niceguy116th August, 2004

    OK Thanks

  • TheShortSalePro17th August, 2004

    Well, after reading it, what do you think?
    You've been gathering opinions and information for a while... do you think it applies?
    [addsig]

  • Niceguy117th August, 2004

    OK Here's what I found

    Equity purchaser means "any person who aquires title to any residence in foreclosure"

    It seems that a shortseller would apply becuase that is what they are doing.
    The wording throws me because shortsellers aren't "equity purchasers"

    But yes I think it applies.

    It also says the 'representative" "deemed to be the agent or employee" has to have a real estate license.

    Not clear on this Do I have to have one or just my backer?

  • arytkatz18th August, 2004

    Not a lawyer by any means, but after reading the code, here's what I think.

    The RE license part seems to be to prevent someone from entering into these purchase agreements for someone other than yourself. I believe this applies to most RE transactions: if you are not a party in the transaction, then you can be construed to be acting as an agent or representative for another party and would be bascially practicing real estate without a license.

    If you ARE a party, i.e., you're the one buying the property, then you don't need a license, anymore than you'd need one to buy a FSBO listed house.

    Regarding the question of whether this applies to short-sellers, I think it does, but not to their detriment.

    The code is a protection against scam artists grabbing Grandma's house, using false claims of dire consequences and not outlining the entire transaction up front. It also makes unlawful the practice of attaching liens to property when the seller decides to cancel a contract and sets out clear warning language that must be in any contract and clear cancellation procedures that must be followed, otherwise such sales can and will be overturned.

    Should this be a discouragement for doing short sales? IMHO, not at all, as long as you are not promising more than what you can actually do and your contracts meet the code's requirements.

    It's clear that some unscrupulous types have told seller's that they will "get the bank off their back" but not explain exactly what they are planning to do or how it will affect the seller.

    If you're doing business as Short Sale Pro does it, you should have no problem (I'm assuming you're not posting from prison, SSP grin.

    BTW: do you add any additional Seller Acknowledgement documents to your buy package that outlines in black and white what's going on so the seller can't claim they didn't know what was happening?

    I believe that if you're ethical and absolutely crystal clear (in writing) what exactly is occuring in a transaction, this Act should not hinder you at all.

    Andy

  • Niceguy118th August, 2004

    MaybeI am posting from Prison Ha LOL

    <BTW: do you add any additional Seller Acknowledgement documents to your buy package that outlines in black and white what's going on so the seller can't claim they didn't know what was happening?>

    I am way to new new to consider that aspect of short sales yet but I will know more later
    Niceguy

  • arytkatz18th August, 2004

    NG:
    You look great in that striped suit...lol.

    Actually I was asking Short Sale Pro if he used anything like that Acknowledgement document.

    SSP?

    Andy

  • Lufos18th August, 2004

    Remember Guys this is a California document it was designed to keep the Hungry Wolf from Grandmothers Door. What it has created is a general withdrawal of the larger Goniff's from this practice. Of course as it must what has hapened is that the highly dedicated, George O'Conner for example create enough paper to fill a well documented PhD. The english is better, they cover everything. They call it papering the deal and believe me it is extensive. I asked George did he really need all of this paper and he said yes. It makes the cheaper attornies who might take the case, pause. It is well written stuff.

    Of course dear George just dropped out of the game the other night I mean for real. He had a pretty massive heart attack in one of our better bars and hardly had time to say goodby and give me the finger. I will be handling his affairs and thats a pretty good description of masses of properties, most of them very small. He had a small mind, liked to stay at certain economic levels. Sort of a money snob.

    When I divested and made my kids very happy I almost lost his his friendship and I did lose his respect. Ah well, now its my turn to make his kids very happy. He was estranged from most of them. Insisted that every body do things his way.

    When he hears my little speech boy oh boy he will probably jump right out of the casket. You know how the Chinese load up the casket with funny money? I am tempted to load his with funny Grant Deeds and Trust Deeds etc. etc.

    Ah well, he should have spent more time with his kids.

    Cheers Reflectively Lucius

  • Niceguy118th August, 2004

    If you aren't doing all this for your kids or
    for some altruistic endevour in this life what ever that may be then all this wheeling and dealing seems meaningless, but that's another subject.

    Lucius you said
    "George O'Conner for example created enough paper to fill a well documented PhD. The english is better, they cover everything."

    Please explain

    NIceguy

  • Niceguy118th August, 2004

    SSpro and all you other's out there who I've been talking with

    Here is where I stand: My buddy is of the mind that the deed is signed over right up front( he has not done this )but this is what is training tells him.

    I am of another mind thanks to you guys.
    I would prefer to follow the california civil code and discuss the homeowners options give him or her time to decide and then follow the civil code (wait five days then let them sign over the deed)

    This is a golden opportunity for me.
    I don't want to lose it
    How do I discuss this with my buddy?

    If we find we cannot reach an aggreement how can I still pursue this
    I do not have the funds and expertise.

  • AllCash4Homes18th August, 2004

    you can buy cd with forms and a book for buying foreclosures in ca at www.firsttuesdayonline.com

  • wannabe2121st August, 2004

    Niceguy1,

    I sent you a PM. Remember that the "right of rescission" is either 5-days (longer if the 1st or 5th day falls on a weekend or holiday) or 8:00AM the morning of the scheduled auction, whichever comes first.

    I asked you this in my PM, but where did your buddy get his "training"? I'd like to know who's teaching to get the deed right away for CA.

    You asked about extra forms. Yes, you can use a CYA document (something like Joe Kaiser's "Best Damn Document... Period"wink as a ratification of the equity purchase agreement. Have it signed after the 5-day period when you get the deed. If you're taking over subject to the existing loan and you'll just be bringing the loan current, have the seller sign an Affidavit of Deed a couple days after you get the deed (and use a different notary). This should keep you from having to track the seller down later should a title company make a stink when you sell.

  • wannabe2121st August, 2004

    Niceguy1,

    I'm having second thoughts about what I posted in order to clarify things a little bit...this is going to get a bit sticky.

    A loan can be in default and yet not be in foreclosure. If you have a seller who's loan is in default, but a Notice of Default has not been recorded, then you are not bound by CC 1695 because the owner is not in (pre)foreclosure. So, it is possible in these circumstances to do a short sale and not have to wait the requisite 5-days. Once the NOD is recorded, however, everything changes.

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