(a) The Legislature finds and declares:
(1) Sales of foreclosed properties have become a dominant portion of homes on the resale real estate market.
(2) The recent troubled real estate market has resulted in a concentration of the majority of homes available for resale within the hands of foreclosing lenders and has dramatically changed the market dynamics affecting ordinary home buyers.
(3) Preserving the fair negotiability of contract terms is an important policy goal to be preserved in real estate transactions.
(4) The potential for unfairness occasioned by the resale of large numbers of foreclosed homes on the market requires that protections against abuses be made effective immediately.
(5) The federal Real Estate Settlement Procedures Act (RESPA) creates general rules for fair negotiation of settlement services, prohibits kickbacks and specifically prohibits a seller in a federally related transaction from requiring a buyer to purchase title insurance from a particular insurer.
(6) California law does not specifically prohibit a seller from imposing, as a condition of sale of a foreclosed home, the purchase of title insurance or escrow services from a particular insurer or provider.
(7) Therefore it is necessary to add this act to California law to provide to a home buyer protection that follows the RESPA model and applies to, and prevents, the conditioning of a sale of a foreclosed home on the buyer’s purchase of title insurance from a particular insurer or title company and/or the buyer’s purchase of escrow services from a particular provider.
(b) It is the intent of the Legislature that, for the purpose of this act, the sale of a residential real property is deemed to include the receipt of an offer to purchase that residential real property.
(Added by Stats. 2009, Ch. 264, Sec. 1. (AB 957) Effective October 11, 2009.)
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