New rules and bills that will affect 2015 escrow practitioners

In addition to an extensive revamp of the Purchase Contract by California Association of Realtors, there are some laws and regulations to be aware of in 2015.

Effective January 1, 2015:

AB 1888 (Ting) – Eliminates placing the amount of transfer tax paid “on the back” of a recorded instrument or on a separately filed document in an effort to keep it out of the public record. Henceforth, there is no longer an option for a seller or buyer to request that transfer tax not be disclosed on the face of the conveyance document.

SB 1050 (Monning) – Provides for a change in the form of a notary acknowledgement certificate or jurat to include a notice at the top of the certificate in an enclosed box as follows:

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document, to which this certificate attached, and not the truthfulness, accuracy, or validity of that document.

The stated purpose is to reduce the opportunity for criminals to pass deceptive legal documents claiming a false right to money, authority, or real property by suggesting or stating that the notary’s seal and signature constitute an official endorsement of authenticity.

SB 1051 (Galgiani) – Sponsored by the Escrow Institute of California, SB 1051 extends indefinitely the Buyer’s Choice Act, originally enacted in 2009 with a “sunset date” of January 1, 2015. The Buyer’s Choice Act prohibits a seller (defined as a beneficiary under a deed of trust, who acquired by foreclosure sale, title to residential real property of four or fewer units) from, as a condition of receiving offers or selling residential real property to a buyer, requiring the buyer to purchase title insurance or escrow services in connection with the sale of that property from a company chosen by the seller.

Senate spending

AB 1698 (Wagner) – Will allow a false or forged instrument to be voided by action of a criminal court when the defendant has been convicted of, or has pled guilty to, the act resulting in the falsity or forgery. This could save victims in these cases from the time and expense of a quiet title action, but also contains provisions for a quiet title action for complex matters.

AB 1858 (Perea) – Requires that the name of an individual debtor on a UCC financing statement match the debtor’s name on his or her driver’s license, in an effort to better identify debtors for UCC searching and related purposes. Additionally, to address the potential discriminatory effect that this may have on those who lack a driver’s license, the bill would make it a civil rights violation for a secured party or proposed secured party to decline to provide credit, or offer to make the terms and conditions of such credit less favorable, because the debtor or proposed debtor does not have a valid DMV-issued license or identification card.


Effective July 1, 2015:

AB 1770 (Dababneh) – Sponsored by the California Land Title Association, AB 1770 seeks to provide a more predictable process for the payoff of revolving equity lines of credit to ensure the line of credit is properly frozen, the payoff demand is accurate, and the line of credit is closed and reconveyed without an intervening, additional advance by the borrower. AB 1770 contains a “Borrower’s Instruction to Suspend and Close Equity Line of Credit” and details for use and implementation.


Effective August 1, 2015:  mortgagerules

CFPB Regulations: Replaces required documents under TILA and RESPA.   Truth-In Lending Disclosures (TILA) and HUD-1 Statements are being replaced with new LOAN ESTIMATE and CLOSING DISCLOSURE documents.   This represents a fairly significant change affecting the timing of transactions, so it is one you will want to be familiar with in advance.


The California Legislature will reconvene on January 5, 2015 with bill introductions proceeding at a fast pace until the late February bill introduction deadline, and the beginning of policy committee hearings.


The above information is for educational and awareness purposes only.