Prohibited business practices: enforcement.

(1) Existing law prohibits any person from engaging in the business of, acting in the capacity of, advertising as, or assuming to act as, a real estate broker or a real estate salesperson without first obtaining a real estate license, as specified. This bill would additionally prohibit any person from engaging in the business of, acting in the capacity of, advertising as, or assuming to act as, a mortgage loan originator without having obtained a license endorsement, as specified. (2) Existing law, until January 1, 2013, prohibits any person who negotiates or arranges residential mortgage loan modifications, as specified, for a fee, from demanding or receiving preperformance compensation, as specified, or requiring security as collateral or taking a power of attorney from the borrower and makes a violation of that prohibition a misdemeanor subject to specified fines. Existing law, until January 1, 2013, also prohibits certain conduct by a real estate licensee in connection with a mortgage loan modification or forbearance, including demanding compensation before service is fully performed, taking a lien on property or wage assignment, or taking a power of attorney from the borrower. A violation of those prohibitions is a misdemeanor. This bill would extend the operation of the above-described provisions indefinitely. By extending the operation of existing crimes, this bill would impose a state-mandated local program. (3) Existing law provides that any person advertising or holding himself or herself out as practicing or entitled to practice law or otherwise practicing law who is not an active member of the State Bar, or any person acting or advertising themselves as a real estate broker, real estate salesperson, or mortgage loan originator without a license or license endorsement, is guilty of a misdemeanor. Existing law requires any person, including a person licensed to practice law, who performs a mortgage loan modification or other form of mortgage loan forbearance for a fee or other compensation, as specified, to provide a specified notice to the borrower concerning 3rd parties arranging loan modifications. Existing law also prohibits certain conduct by that person including, among other things, demanding compensation before service is fully performed, taking a lien on property or a wage assignment, or taking a power of attorney from the borrower. Existing law provides that a violation of these requirements or prohibitions is a misdemeanor with specified penalties. Existing law requires that a prosecution for these offenses be commenced within one year of the commission of the offense. This bill would extend the time to commence a prosecution for these offenses to 3 years from the discovery of the commission of the offense, or within 3 years after completion of the offense, whichever is later. (4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.