What does Assembly Bill 284 really mean?

Hello welcome to Todd Miller TV. I wanted to talk about this Assembly Bill 284. There’s just a lot of misinformation about what it means and what the consequences are. And what the future’s gonna be. I’m just hearing and seeing all these reports that are just/they’re just not right. So I’m gonna go kinda I’m gonna go through what this is and what it is, and try to set the record straight. Okay? So, Assembly bill 284 is a new thing to legislate your past over the summer. And what it does is it puts the more restriction on what the bank has to go through before they foreclose on a property. Now, when they says some more restrictions, there’s actually really nothing in here they don’t already have to do. They just/ they’re trying to raise the bar a little bit. So, I’m gonna go through those, and I’m gonna go to like, what the outlook for this really is. So, one of the things that they said was well, if the bank say Wells Fargo, Forecloses on a house, and in the meantime they had sold the note, that has to be recorded. That’s an assignment, they have to record that assignment. That’s all that’s saying is you know, you have to record that assignment. So, that’s a new thing, that’s a different thing. And that’s before you can file the notice of default. You just have to make sure you’ve recorded that. So they could still file a notice of default tomorrow. They just have to/ before they file that say “Oh by the way, we assigned to this, then this person assigned it to this,” and then you notarize that, and then they can file the notice of default. That’s a little bit of a change. There’s a of talk about this Thousand dollars if they don’t, if they foreclose and they don’t remove the deed of trust against the person. There’s a 21 day window. There always was a fine, it was 500 bucks before, which is now a thousand. It’s just more revenue to the state. I don’t know if it’s ever been enforced, but that’s a total none issue. That’s not gonna stop anybody. They now have to provide this affidavit statement saying, they do have the ability to foreclose. A lot’s been written and said about this and how this is gonna stop and they’re not gonna want to do it. But the truth is, they’re gonna do it. Either the trustees gonna do it, or the bank’s gonna do it, or somebody’s gonna provide the statement saying they have the legal authority to do it. You know, it’s not gonna stop somebody whose gonna do an illegal foreclosure but the truth is that the banks, this is a business for them, they have to turn this properties back in to cash so they can re-coupe the money and re-loan the money. They’re not gonna let people stay in the house for free, they’re gonna figure it out, so this new statement thing isn’t a big deal. They’ve added/ they’ve raised the penalty on mortgage fraud to $500,000 to a max of $5,000 if you commit mortgage fraud. That’s very vague, specifically saying what that is. But the bottomline is it’s not mortgage fraud to forecloses on a house. Just because the paperwork wasn’t exactly right. There’s a difference between fraud and making it an error in a paperwork. There’s a big difference there between fraud and a paperwork error. That’s not gonna stop the banks, they’re not gonna be scared to death. Another thing is, that they said it’s now a felony if they false representation concerning Title. So, there’s always been along the books. It was a gross dismeanor before, it’s now a class C felony and it’s not any major new thing that’s gonna stop. It’s not like they’re gonna go get the president of the Bank of America because when they file the notes of default, some of the paperwork is wrong and they’re gonna go get them and throw them in prison. The truth is, that none of this is really new or a big deal. So, the thing you probably heard that’s got people scared to death is “Oh my gosh in the last month there’s been 40 or 50 or 90 or whatever notice of default file.” Well there’s a reason for this. The banks are having to adjust to this new policy, they’re having to figure out, how do we make sure you’ve done everything right before we do this. It’s not gonna stop them. There’s gonna be an adjustment period just like with the SRPD. The banks will fill them out now they’ve got a process in place. It took like a whole for them to figure this out ’cause you know it started on October, and on October 1st it took them about a week to figure it out, this is something’s gonna be figured out. It takes a few weeks or a couple of months but we’ve got the time. This is why we’ve got the time, So you’ve probably heard a number being thrown around, that how many current notice of defaults have been filed. And the current number ranges from 15,000 to 25,000, that’s how many sort of out there that have been foreclosed. So we’re gonna go with the smallest number, we’re just gonna go worst case scenario, 15,000. So 15,000 properties are out there that could still come in to our inventory. That the bank’s can still file the notice of Trustee sale. Okay? So what is the absorption rate? How long is it gonna take?Well despite how you may think, we only have 3,500 total sales a month. And according to the September Trustee Sale report, the total number of sales at the Trustee Sale that either went to the bank or 3rd party meaning, a completed Trustee sale was 1,872. 1,872 is not a big number considering there are 15,000 properties out there. That’s about an eight month supply of houses. Of those 1,872 roughly it was 1,300 went back to the bank, 560 or so were bought by a third party through Trustee sale. So we’ve got this eight month inventory, and normally it takes 3 or 4 months, 4 months basically for the notice of default to be/to win the/it sold to the trustee sale. So we’ve really got a 4 month period for the banks to figure this out and when they do, they can start doing their recordings properly so they could comply with the law. The banks aren’t gonna wait that long, I honestly don’t think we’re gonna see substantial change in inventory. This is the very short term. It’s gonna take the banks about a month probably to figure this out. And then we’re gonna get back probably by December/January to the normal number. It’s gonna take like we’ve already seen, it’s gonna take atleast 8 months just to get through everything we have and not counting the current inventory that’s out there. The worst thing we’re gonna see is maybe a lower level of REO properties coming out in the late spring or early summer maybe. We may not see anything if the banks figure this out pretty quick which you know they’re gonna do ’cause I’ve just shown you these are not major changes, these are a lot of minor things, they’re some procedural things for the banks that they’re gonna have to do the paperwork differently or figure out. Then they’re gonna turn the firehose back on, and all of those notice
of defaults that would have been filed this month or all getting filed maybe next month or in December and what we’re gonna see is, we’re gonna see the law happened with the notice of default. Very few filed now, then we’re gonna have a big month with their filing everything because they wanted to file it. They had to wait ’til December then we’re gonna see that. November, December, January. I’m gonna tell you right now I told you so this is not gonna be a big deal and we’ll track the notice of default numbers and in November/December we’ll see what they are. We’ll see if they really pick up. So the bottomline is, this is much to do about nothing. I don’t think this is a big deal. There’s a lot of scare and a lot of scarcity out there with what this means. It’s not that big of a deal. So anyway, I just wanted to share that. I’m kind of passionate about this because I just sometimes think people overreact to what they hear, what they think without really looking at the actual rannifications of this. Anyway, that was my update for today and I hope to see you on another video. Thanks a lot.