The California Bureau of Real Estate Announces It Will Cite and Fine First And Ask Questions Later

In a move designed to “help educate both licensees and nonlicensees alike and to encourage and reinforce compliance with Real Estate Law,” the California Bureau of Real Estate (CalBRE) has announced that it will cite and fine first and then ask questions and hear explanations later, much later.

Gone is the more genteel, but perhaps archaic, process of holding lengthy, and often costly, administrative hearings to ascertain the facts and determine guilt or innocence. In its place is the presumption of guilt or, at least, of a serious misstep deserving of a citation and maybe worth fining about.

According to an article titled “Cal BRE’s Citation and Fine Program Now in Action,” which appeared on page 6 in the Spring 2014 issue of the Real Estate Bulletin, “A citation or other formal action will be considered when a violation is found after an investigation, audit, or examination of a licensee’s records by CalBRE in response to a complaint, through random selection of a licensee for an office visit, or from completion of a routine audit.”

While this system would seem to offer several advantages for the BRE—namely, those of saving time and reducing costs—announcement of the new system has caused many Bureau watchers to wonder which offenses will result in fines, whether information regarding specific citations issued will be made public, and how the money the BRE collects will be used.

Regarding the latter, the Real Estate Bulletin article reassures readers that “all money will go into CalBRE’s Real Estate Consumer Recovery Account, which is used to assist victims of real estate fraud committed by licensed agents and brokers.”

But this reassurance leaves unanswered the questions about which sorts of offenses will be singled out for fines that, by statute, can range from $0 to $2,500 per citation, what the additional costs of an administrative hearing might be, and whether an administrative law judge will be able to render fair and impartial decisions and, on occasion, to reverse a Bureau fine after the fact.

To learn more about CalBRE’s new cite-and-fine program, read “California Bureau of Real Estate Rolls Out Its New ‘Cite-and-Fine’ Program” by Bob Hunt, which appears on pages 42–43 in the August issue of the Orange County REALTOR®, and “CalBRE’s Citation and Fine Program Now in Action,” which begins on page 6 in the Spring 2014 issue (vol. 3, no. 4) of the Real Estate Bulletin and is cited by Bob Hunt in his article.

By Sherri Butterfield

Commissioner Wayne Bell Talks About Creating a Culture of Compliance in the Real Estate Industry

“I view myself as a cop on the beat,” said Real Estate Commissioner Wayne Bell. “Not every violation of the law is equal, not everyone who violates the law is bad, and we cannot treat everyone the same.”

Bell who, on June 5, was the third presenter in OCAR’s 2014 Distinguished Speaker Series, was explaining that the California Bureau of Real Estate (CalBRE), of which he is the chief officer, is bifurcating its activity into enforcement and compliance.

He went on to add, “We need to help those people who become noncompliant because they do not understand the law. We are prioritizing our cases and going after the ‘biggest and baddest’ ones first.”

On February 13, 2013, Jerry Brown appointed Bell to be California’s twenty-third real estate commissioner and to head the new California Bureau of Real Estate (CalBRE) within the Department of Consumer Affairs.

Before this appointment, Bell—who is licensed as both an attorney and a real estate broker—had served as chief counsel and assistant commissioner for legal policy and recovery at the California Department of Real Estate (DRE) and was the DRE’s special liaison to the Department of Justice.

Because of this association, industry watchers believed that Bell would place the new Bureau’s emphasis squarely on enforcement. And Bell seemed to confirm this belief during a Los Angeles appearance not long after his appointment by stating that his goal was to promote a fair, competent, and law-abiding real estate industry in California and that he intended to pursue criminal actions against unlicensed individuals.

But during his June OCAR appearance, a congenial commissioner spoke of “creating a culture of compliance in real estate.” He told REALTORS®, “What you do is hard work. I know that. I am proud to be a commissioner. And I am proud to work with you. Making the industry more professional is the job of all of us.”

Bell also talked about team names, retention of electronic records, employee versus independent contractor status, dual agency, and the Bureau’s Consumer Recovery Account. To learn what he had to say about these and other topics, read the article titled “Real Estate Commissioner Wayne Bell Talks About Team Names, Electronic Communications, and Creating a New Culture of Compliance,” which appears on pages 16–28 in the July 2014 issue of the Orange County REALTOR®.

By Sherri Butterfield

Sometimes Helping a Vet Doesn’t Require Either an Act of God or an Act of Congress

Much has been written lately about the U.S. Department of Veterans Affairs (VA) and its apparent mismanagement of claims for the health care to which active and former members of the United States military are entitled by virtue of their service. As a result, retired U.S. Army General Eric K. Shinseki—whom President Barack Obama appointed as the seventh secretary of veterans affairs in 2008—resigned abruptly in late May.

Unfortunately, health care may not be the only area in which veterans are being shortchanged. More than 20 million veterans are eligible for VA financing. Although the VA does not lend money to veterans, it does guarantee home loans for qualified vets, which means that the lender will not incur losses if the borrower encounters hard times and a foreclosure results. In most instances, 100 percent financing is available, no monthly private mortgage insurance is required, and a more favorable interest rate than that for conventional loans results in lower monthly payments.

But in his column this month, Bob Hunt points out thatvets who want to purchase homes using VA financing in South Orange County may be running into unexpected difficulty because most real estate agents in areas such as this one have never been involved in a transaction in which VA financing was used and are reluctant to accept offers that are contingent upon it. Hunt says Kevin Budde, a branch manager for PrimeLending in Laguna Niguel, attributes this reluctance to four persistent myths about VA financing.

These four myths are (1) that sellers will have to pay points based upon the loan amount, (2) that sellers have to pay additional closing cost fees that the veteran is not allowed to pay, (3) that VA appraisals often require “fix-it” work that increases the sellers’ costs, and (4) that VA-insured loans take much longer to close than do conventional loans. Hunt debunks each of these myths and goes on to address the issue of loan limits.

VA loan limits vary both within the state and across the nation. For example, the limit with no down payment in Orange County is $687,500. In Monterey County, it is $500,000. And in Arapahoe County, Colorado, it is $425,000. But a vet can buy above the limit by putting down 3 percent of the amount above the limit.

Sometimes, helping a vet doesn’t require either an act of God or an act of Congress. Sometimes, all that’s needed is a REALTOR® who understands how VA loans work and why they may be an excellent option for both the buyer and the seller.

To become better acquainted with VA financing, read “VA Financing Is an Excellent Option for Many Who Don’t Realize It” by Bob Hunt, which appears on pages 28–29 in the June 2014 issue of the Orange County REALTOR®. And for additional information about VA loans, read “8 Things REALTORS® Should Know About VA Loans” by Paul Scheper, which appeared on pages 8–9 in the September 2011 issue of the Orange County REALTOR®.

By Sherri Butterfield

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