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

When There’s a New Sheriff in Town, the Old Practices Are Suspect and the Usual Suspects Become Persons of Interest

In a recent column, Bob Hunt cautions that there’s a new sheriff in town and identifies that new sheriff as the Consumer Financial Protection Bureau (CFPB). Then, he goes on to explain that the Bureau is not new, in that it began operations in July 2011, but that “the real estate industry is just beginning to understand the extent of the CFPB’s regulatory powers and the aggressiveness with which it is exercising them.”

Among other things, the CFPB is charged with enforcing the Real Estate Settlement Procedures Act (RESPA); and as Hunt observes, “Unlike the Department of Housing and Urban Development (HUD), which was previously charged with RESPA enforcement, the CFPB can initiate civil actions in its own name, with its own attorneys.”

According to an article by Paul Moreno—originally posted at on March 18, 2013, and republished one year ago, on pages 12–13 in the May 2013 issue of the Orange County REALTOR®the CFPB, was given a structure and powers that place it “outside our constitutional system.”

Moreno, who is director of academic programs at Hillsdale’s Kirby Center for Constitutional Studies and Citizenship in Washington, D.C., explains that Congress “allotted the Bureau an independent source of revenue, guaranteed its insulation from legislative or executive oversight, and gave it the power to define and punish ‘abusive’ practices.”

And it’s that power to define and punish that has Hunt concerned. He offers as examples monetary penalties that include “$5,000 per day for violation of a consumer protection law, $25,000 per day if the violation is deemed reckless, and up to $1 million per day for any violation committed knowingly.”

In addition, declares Gary Cunningham, former deputy assistant secretary at HUD, “If the CFPB files suit, the defendant can expect a broadly circulated press release in its home market and elsewhere in industry publications, which states complaint allegations as facts . . . and seems intended to be very harmful to the defendant’s reputation.”

Cunningham warns individual agents, teams, and brokerages that the CFPB “is not backing off” and urges them to stay away from gray areas and out of the Bureau’s crosshairs. When there’s a new sheriff in town, the old practices are suspect and the usual suspects become persons of interest.

To become better acquainted with this new sheriff, read “Agents and Teams Beware: There’s a New RESPA Sheriff in Town” by Bob Hunt, which begins on page 18 in the May 2014 issue of the Orange County REALTOR®. To learn more about the new RESPA-TILA Integrated Disclosures Rule, which will take effect on August 1, 2015, read the sidebar that accompanies Hunt’s article.

By Sherri Butterfield


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