AS OF JANUARY 1, 2015 CALIFORNIA REAL ESTATE LICENSEES UPDATE YOUR LOCATION INFORMATION WITHIN 30 DAYS OR SUFFER THE CONSEQUENCES

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1 MORTGAGE e-alert (15-2-3a) Knowledge is power, the more knowledge you have the more powerful you are. (To be certain the e-alert arrives add to your safe addresses) AS OF JANUARY 1, 2015 CALIFORNIA REAL ESTATE LICENSEES UPDATE YOUR LOCATION INFORMATION WITHIN 30 DAYS OR SUFFER THE CONSEQUENCES Every real estate broker and salesperson licensee to provide the commissioner with his or her current office or mailing address, current telephone number, and current electronic mail address that he or she uses to perform any activity that requires a real estate license, and at which the bureau may contact the licensee, and to update that information no later than 30 days after making a change. (ab2540) We will be delighted to represent you before CalBRE if you fail to comply. Remember it is better to ask us a question first rather than to have us cure the problem later. AS OF JANUARY 1, 2015 CALIFORNIA LAW REQUIRES REAL ESTATE LICENSEES TO GIVE THE AGENCY DISCLOSURE IN COMMERCIAL TRANSACTIONS Real property transactions: agents: obligations. Existing law requires listing and selling agents, as defined, to provide the seller and buyer in a residential real property transaction, including a leasehold interest, with a disclosure form, as prescribed, containing general information on real estate agency relationships. Existing law also requires the listing or selling agent to disclose to the buyer and seller whether he or she is acting as the buyer s agent exclusively, the seller s agent exclusively, or as a dual agent representing both the buyer and the seller. This bill extends these disclosure requirements to include transactions involving commercial real property, as defined, including a leasehold interest. (sb1171) Rest assured that if you are a commercial real estate broker that the auditors will look for this disclosure in all transactions since January 1, Page 1 of 8

2 AS OF JANUARY 1, 2015 A REMINDER TO MORTGAGE LOAN ORIGINATOR ORGANIZATIONS THAT CALIFORNIA REVERSE MORTGAGE FINAL AND COMPLETE LOAN APPLICATIONS AND ANY FEES CANNOT BE TAKEN UNTIL SEVEN DAYS AFTER THE CONSUMER AB 1700, Medina. Reverse mortgages: notifications. Existing state and federal law regulate the activities of financial institutions. Existing state law regulates reverse mortgage loans and requires a lender to refer a prospective borrower to a housing counseling agency, as specified, and prohibits a lender from accepting a final and complete application for a reverse mortgage loan or assessing any fees without receiving certification, as specified, that the borrower has received loan counseling. Existing law prohibits a lender from taking a reverse mortgage application before having provided an applicant a specified disclosure notice and written checklist. This bill PROHIBITS A LENDER FROM TAKING A REVERSE MORTGAGE APPLICATION OR ASSESSING ANY FEES UNTIL 7 DAYS FROM THE DATE OF LOAN COUNSELING, AS SPECIFIED. The bill makes specified changes to the disclosure notice. The bill deletes the requirement that the lender provide a written checklist and instead, prohibits a lender from taking a reverse mortgage application unless the applicant has received from the lender a specified reverse mortgage worksheet guide. The bill requires that the reverse mortgage worksheet guide contain certain issues that the borrower is advised to consider and discuss with the counselor. The bill would require the counselor and the prospective borrower to sign the reverse mortgage worksheet guide, as specified. (C.C , ) Are your California Reverse Mortgage Worksheet Guides up to date? Did you wait out the 7 days? I suggest Mortgage Lenders review all Reverses Mortgages taken since January 1, Especially since the auditor will be looking for them. BROKER PAYMENTS OF SALESPERSON COMMISSIONS AND WHERE THE MONEY SHOULD GO A salesperson can instruct the employing broker under whom (s)he is licensed to pay the commission to a third party such as the salespers0n s corporation or LLC or even request that it be paid to a creditor of the salesperson. BUT the W-2/1099 must reflect the payment to the salesperson. The total commission is chargeable to the broker (B&PC 10137) and then the broker pays the salesperson. Payment authorized by the salesperson to another unlicensed entity is acceptable as long as the entity did not perform any licensed activity. The payment is from the broker to the salesperson or to whom the salesperson directs so long as the original payment is tax charged to the salesperson and the entity being paid did not perform licensed activity for the payment. Page 2 of 8

3 I have had this discussion with many over the years and always the same subject. The answer has never changed. (See REB Spring 2012,p.1) BUT do remember, you now have CFPB enforcement and RESPA enforcement. So before sending money to a third party entity that did not perform the licensed services, check with your attorney. You may find the fact scenario you have does not comply with interpretations of and RESPA. Then you risk personal license exposure. TWO PLEAD GUILTY FOR TAKING ADVANCE FEES FOR LOAN MODIFICATIONS IN SACRAMENTO, CALIFORNIA On February 5, 2015 two people MARTIN WAYNE FLANDERS, 50, FORMERLY OF ROSEVILLE, AND LIGIA SANDOVAL SPAFFORD, 48, OF ROSEVILLE, pleaded guilty in federal court in Sacramento to charges of mail fraud related to a scheme that targeted Spanish-speaking homeowners facing mortgage problems. Flanders has been in custody since his arrest in Oct (over 2 years. Reason: Probably did not have the money to make bail). Sandoval is not in custody. Flanders charged clients advance fees for loan modifications, mortgage loan audits, credit repair, debt relief, bankruptcy filings and other services from 2008 through Sandoval marketed Flanders' services on Spanish-language radio and television. Flanders and Sandoval pleaded guilty to making false statements to investors about the success of their programs or about refunds. They also used sham bankruptcies to stall foreclosures. At least 30 people paid for services and did not receive them. Total losses to victims are at least $120,000, and some homeowners lost homes to foreclosure. (sacbusjl2615) There is a larger focus now on those that collected advance fees. So those that did for loan modifications, foreclosure help, are being investigated from at least The federal government has ten years from the date of the incident to file criminal charges. Questions? Reply to this e alert or call us. FORTUNA, CALIFORNIA WOMAN INDICTED FOR FALSE HARD MONEY LOANS On January 30, 2015 a federal indictment CHARGING DELORES REEVES with three counts of mail fraud and two counts of aggravated identity theft was unsealed in federal court. Page 3 of 8

4 Reeves, 59, was indicted by a federal grand jury on January 27, According to the Indictment, REEVES OPERATED ISERVE RESIDENTIAL LENDING, LLC. Through this business and in her personal capacity, Reeves acted as a broker for hard money real estate loans, where she would purportedly match borrowers who needed cash loans with lenders who wanted to invest in loans secured by real estate. The Indictment alleges that Reeves defrauded one of her lenders by falsely soliciting three loans that Reeves represented would go to three borrowers and would be secured by real property owned by those borrowers. According to the Indictment, those borrowers knew nothing of the loans, and Reeves used their personal information without their consent to create fraudulent loan documents that she sent to the lender to make the transaction appear legitimate. After the lender paid Reeves the money for the loans, Reeves fraudulently retained the money for herself. Reeves was arrested and made her initial appearances in federal court today in Eureka before the Honorable Nandor J. Vadas, U.S. Magistrate Judge, where she was released on bond. Bail was set at $50,000. Reeves was next scheduled to appear before the Honorable Joseph C. Spero, U.S. Magistrate Judge, at 9:30 a.m. on February 4, 2015, for identification of counsel. The maximum statutory penalty for each count of mail fraud, in violation of Title 18, United States Code, Sections 1341, is 20 years imprisonment and a fine of $250,000 or twice the gross gain or loss from the offense, plus restitution. The statutory penalty for each count of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A, is a MANDATORY MINIMUM OF TWO YEARS IMPRISONMENT, and a fine of $250,000 or twice the gross gain or loss from the offense. (usattyndca13015) Remember, she is innocent until proven guilty in a court of law. BUT with the mandatory two years for aggravated identity theft, I certainly trust she gets excellent criminal counsel. ANOTHER LOAN MODIFICATION ADVANCE FEE COMPLAINT AGAINST UTAH DANIELSON LAW GROUP AND OTHERS WHO STIPULATE TO $28 MILLION JUDGMENT FOR COLLECTING ADVANCE FEES ON LOAN MODIFICATION CASE FILED IN NEVADA U.S. DISTRICT COURT On February 5, 2014 a group of Utah-based defendants claiming to be legal experts in loan modifications settled Federal Trade Commission charges that they broke the law by conning consumers into paying hefty fees for worthless mortgage relief services. The FIVE PROPOSED ORDERS SETTLING THE FTC S CHARGES BAN THE DEFENDANTS, LED BY PHILIP J. DANIELSON AND HIS COMPANY, DANIELSON LAW GROUP, from offering mortgage assistance relief services and from participating in the debt relief industry. Page 4 of 8

5 The FTC filed its complaint in July 2014, as part of a multi-agency federal and state law enforcement sweep targeting operations that fraudulently pitched loan modifications to consumers. At the FTC s request, a U.S. district court temporarily halted the operation, which promised legal help to consumers to avoid foreclosure or get relief from unaffordable mortgages but then did little or nothing to help. The court order froze the defendants corporate and personal assets pending litigation of the case. According to the Federal Trade Commission, the defendants lured consumers into paying $500 to $3,900 by falsely promising that attorneys would negotiate loan modifications that would substantially reduce the consumers mortgage payments. The defendants touted a success rate that exceeded 90 percent purportedly based on their legal expertise and a pre-qualification process that identified clients that they knew they could help. The complaint also alleged that the defendants used the name Danielson Law Group and other attorney or law firm names to look like they had lawyers all over the country, even though many consumers never met or spoke to an attorney. The FTC charged the defendants with violating the FTC Act and the Mortgage Assistance Relief Services (MARS) Rule, now known as Regulation O. The Rule bans mortgage foreclosure rescue and loan modification service providers from collecting fees until homeowners have a written offer from their lender or servicer that they deem acceptable. Under the proposed settlement, the defendants are banned from participating in the mortgage relief and debt relief industries, and are prohibited from misrepresenting various features of any product or service or making advertising claims that are unsupported by competent and reliable evidence. The proposed settlements also impose a $28.6 million judgment against all the defendants, reflecting the total amount of fees taken in by the scheme. The proposed judgment will be suspended as to the individual defendants provided they surrender certain of their assets, including a $200,000 house in Utah as required by the settlement orders. If it is later determined that any defendant provided false financial information to the FTC, the full amount of the judgment against them will become due. The proposed settlement also requires relief defendant April Norton to turn over unearned ill-gotten gains that she received from the scheme. The full judgment remains in effect against the corporate defendants. The settlements also resolves a contempt action the FTC concurrently filed against two individuals named in this case Philip J. Danielson and Tony D. Norton -- and four companies they controlled, Philip Danielson, LLC; Foundation Business Solutions, LLC; Direct Results Solutions, LLC; and Strata G Solutions, LLC, for violating a 2010 court order in a phony work-at-home scheme that falsely claimed ties to Google Inc. After a court shut down that scam and prohibited the defendants from making deceptive claims, Danielson and Norton turned their sights to preying on vulnerable homeowners in violation of that order, alleged the FTC. The settlement subjects the contempt defendants to a complete ban from telemarketing activities. They were filed in the U.S. Court for the District of Nevada. Named as defendants in the case were: FOUNDATION BUSINESS SOLUTIONS, LLC, a Utah Limited Liability Company; - emerchant, LLC, a Utah Limited Liability Company, also d/b/a FULL BIZ SOLUTIONS; LINDEN FINANCIAL GROUP, LLC, a Utah Limited Liability Company; ACUTUS LAW, P.C., a Utah Professional Page 5 of 8

6 Corporation, f/k/a DANIELSON SILVA ATTORNEYS AT LAW, P.C.; DIRECT RESULTS SOLUTIONS, LLC, a Utah Limited Liability Company; STRATA G SOLUTIONS, LLC, a Utah Limited Liability Company; PHILIP J. DANIELSON, in his individual and corporate capacity; TONY D. NORTON, in his individual and corporate capacity; SEAN J. COBERLY, in his individual and corporate capacity; TANYA L. HAWKINS, a/k/a Tanya L. Hawkins, in her individual and corporate capacity; CHAD E. VANSICKLE, in his individual and corporate capacity; and JENNIFER B. DANIELSON, in her individual and corporate capacity; and APRIL D. NORTON, in her individual (USDC Nevada, 2: 14-cv GMN-VCF) Did anyone reading this pay or collect an advance fee for a loan modification? You may want to consult an attorney. Especially if you collected the advance fee. As you can see from this e-alert and the prior issue, the Federal prosecutors are now chasing loan modification advance fee people with a vengeance. So if you have been involved in one as a participant, see your attorney now before the FTC sees you with the complaint. You will note this one was sealed. Reason? Allows the government to freeze assets first and let you know why later. Also makes it more difficult for the defendants to retain legal representation. SUPER LAWYER Alan Brown, our trial lawyer has been named as a super lawyer for the third year in a row. So if anyone has an issue with injuries or litigation in any form telephone for a free consultation. We can discuss the evaluation of your case and injuries. He is very good at obtaining excellent results. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. THE AUTHOR MAKES NO CLAIMS ABOUT ITS ACCURACY, COMPLETENESS, OR UP-TO-DATE CHARACTER. NO AUTHOR OR OWNER OF THIS DOCUMENT AND ITS WEBSITE IS ACTING AS YOUR ATTORNEY. LEGAL RULES AND TAX RULES CHANGE FREQUENTLY, THEREFORE, WE CANNOT GUARANTEE THAT ANY INFORMATION CONTAINED HEREIN OR ON A WEBSITE IS ACCURATE OR UP TO DATE Page 6 of 8

7 DATE/TIME LOCATION SPEAKERS AND SPEAKING ENGAGEMENTS NONE SET AT THIS TIME IF YOU WOULD LIKE AN ATTORNEY GUEST SPEAKER CONTACT HERMAN THORDSEN AT TOPIC SPONSOR SPEAKERS COST For over 40 years the attorneys the Thordsen Law Firm has represented clients in many areas of law including personal injury, administrative hearings, trusts, wills, criminal white collar defense, copyright and trademark protection, bankruptcy, civil lawsuits, as well as general real estate matters. THINGS YOU SHOULD NOT DO AFTER AN AUTOMOBILE ACCIDENT IF YOU ARE UNCERTAIN PLEASE CALL US FOR A FREE EVALUATION OF YOUR CASE Do not leave the scene. After an accident, you may feel the impulse to leave the scene and just go home. Ignore that impulse because leaving the scent of an accident is a crime and will make matters worse. In some cases it can be a felony. In one particular case we represent the driver that was hit and the other driver left the scene. The matter is being investigated as a possible felony. Do not apologize. It is a normal human reaction to apologize to someone when you feel you might be at fault, but not after a car accident. Merely saying words to the effect I m sorry can be used as an admission of liability if the matter goes to court. Do not talk with the other driver's insurance company or attorney. The other driver in the accident will have their insurance companies and/or attorneys contact you to obtain information about the accident. It's best to not to speak to them since they represent the other driver and obviously will be looking for information that will help their client. You should tell them to contact your insurance company or your attorney. If you or someone else is involved in an accident we have one of the top 100 attorneys in California and we will be able to answer questions you may have at no cost to you. For a free consultation call us at If we may serve you please contact one of our attorneys. Page 7 of 8

8 IF YOU WOULD LIKE TO SUBSCRIBE TO THE MORTGAGE E ALERT AT NO COST PLEASE SUBMIT THE FOLLOWING INFORMATION by to: Thordsen@ThordsenLawOffices.com By FAX: OR CONTACT US AT NAME: COMPANY: ADDRESS: CITY, STATE, ZIP CODE: TELEPHONE: If you do not desire to receive any further e mails from our firm please reply with the word UNSUBSCRIBE and you will be deleted from our e mail for all purposes. To ensure compliance with requirements imposed by the IRS, informs you that, if any advice concerning one or more U.S. Federal tax issues is contained in this communication (including any attachments), such advice is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter. Page 8 of 8