Consumer Protection

SACRAMENTO -- Attorney General Kamala D. Harris today announced seven bills in the California Homeowner Bill of Rights to protect homeowners from unfair practices by banks and mortgage companies passed out of Legislative committees.

The bills include measures to protect tenants in the foreclosure process, allow local communities better remedies against blight and allow the Attorney General’s office more power to investigate and prosecute mortgage-related crimes.

“All Californians have been impacted by the toll the mortgage and foreclosure process has taken on our neighborhoods,” said Attorney General Harris. “Our California Homeowner Bill of Rights will provide relief for homeowners, tenants and communities. I thank the authors and supporters of these important bills.”

AB 2314 and SB 1472 would provide local jurisdictions with additional tools to fight blight from abandoned homes. These tools include increased penalties against the owners of blighted property, including the cost of taking control of that property. AB 2314 and SB 1472 unanimously passed the Assembly and Senate Judiciary Committees.

Another bill is aimed at providing greater protections to California tenants. AB 2610 and SB 1473 would provide California tenants with the same protections that they are currently afforded under federal law. This legislation would require purchasers of foreclosed homes to honor the terms of existing leases and give tenants at least 90 days before commencing eviction proceedings. The bills passed the Assembly and Senate Judiciary Committees on a 7 to 3 and 3 to 2 vote, respectively.

Two bills would provide additional tools for the Attorney General’s office to investigate and prosecute mortgage frauds and crimes. AB 1950 would extend the statute of limitations on mortgage-related crimes, including loan modification scams and the unlicensed sale of real estate. This legislation would also provide the Attorney General’s office with funding to prosecute these and other mortgage-related crimes through a $25 fee to be paid by servicers upon the recording of a notice of default. AB 1950 passed the Assembly Public Safety Committee on a 4 to 2 vote.

Attorney General Harris formed a Mortgage Fraud Strike Force last year to investigate and prosecute mortgage fraud. In August, the Strike Force filed its first suit against a law firm that took millions from desperate homeowners: http://oag.ca.gov/news/press_release?id=2552&y=&m=

AB 1763 and SB 1474 would allow the Attorney General to convene a special grand jury to investigate and indict the perpetrators of financial crimes involving victims in multiple jurisdictions. Both bills passed out of their houses’ Public Safety Committees unanimously.

SAN FRANCISCO – California Attorney General Kamala D. Harris today announced a settlement with Arbitron Inc., the nation’s dominant provider of radio audience ratings, over allegations that the method it used to collect ratings information discriminated against radio stations with predominantly African-American and Latino audiences. The settlement is the result of a consumer protection lawsuit filed jointly by the State of California and the cities of Los Angeles and San Francisco.

Attorney General Harris, Los Angeles City Attorney Carmen A. Trutanich and San Francisco City Attorney Dennis Herrera alleged that Arbitron Inc.’s implementation of “Portable People Meters” (PPM) to measure radio station listenership in California beginning in 2008 violated the state’s Unfair Competition Law, False Advertising Law and Unruh Civil Rights Act by dramatically undercounting minority audiences, causing sharp declines in advertising rates and revenue for many broadcasters.

“This settlement ensures that California’s diverse audiences will be fully counted by Arbitron’s ratings systems and that broadcasters serving these communities will have the opportunity to compete fairly in the marketplace,” said Attorney General Harris. “I am pleased that Arbitron will be revising its practices in the state and thank my partners in this effort, City Attorneys Carmen Trutanich and Dennis Herrera.”

Arbitron’s ratings are based on information provided by sample groups of listeners. In deploying a new system that relied on electronic metering devices in place of personal listenership diaries, Arbitron’s listener recruitment methodology failed to reflect the diversity of broadcast audiences in California markets, according to the complaint filed in San Francisco Superior Court.

The settlement mandates that Arbitron meet concrete metrics in its efforts to ensure that its audience sampling methods are fair and representative of California’s diverse media markets. Specifically, Arbitron will improve its sample-audience recruitment by increasing address-based outreach to 65 percent of its total recruitment activity by December 31, 2012. Previously, recruitment was conducted primarily via land-line telephone, a survey method that failed to adequately include minority households. Arbitron will also take all reasonable steps to increase minority participation in their sample audience panels in five California major media markets. Additionally, Arbitron will begin incorporating country of origin as a standard demographic characteristic collected from participating Hispanic households—an additional benefit to Spanish-language media outlets. The Columbia, Md.-based media research firm also has agreed to pay a total of $400,000 to the plaintiffs: $150,000 each to the State of California and City of Los Angeles and $100,000 to the City and County of San Francisco.

Radio stations serving primarily African American and Latino audiences were disproportionately affected by the sample audience recruitment methods Arbitron began using with its switch to the PPM ratings scheme in 2008. Of the 18 stations serving minority audiences in Los Angeles, 16 experienced ratings decreases in excess of 30 percent under the initial PPM system. Three of these fell by over 70 percent. One Los Angeles radio station whose audience is mostly African-American, was rated 0.0 for a significant portion of the day immediately after implementation of the new PPM ratings. One Spanish- language radio station that had previously enjoyed a number one ranking in the Los Angeles market saw its ratings plummet by more than 50 percent under Arbitron’s PPM ratings for September 2008.

Arbitron’s PPM methodology was criticized by minority broadcasters and the Media Ratings Council, the independent industry body that accredits media ratings systems, which has found problems with minority representation in Arbitron’s sample audiences in the past.

“Through this settlement, Arbitron has agreed to take important steps to ensure that minority radio stations are reasonably treated in order that they may fairly compete in the California marketplace,” said Los Angeles City Attorney Carmen A. Trutanich. “In a city as diverse as Los Angeles, it is important that all of our residents and our businesses be equally represented and able to compete in our field of commerce. Only then will all Californians have a voice.”

“Assuring the integrity of broadcast rating methodologies is essential to protect media outlets that serve California’s diverse communities,” said San Francisco City Attorney Dennis Herrera. “These measures set all-important ad rates and revenue, and largely determine the success or failure of media outlets in a competitive industry. I’m grateful for the hard work and expertise of my co-counsel in this case, Attorney General Kamala D. Harris and L.A. City Attorney Carmen Trutanich. I am also appreciative to Arbitron and its legal team for their cooperative approach and willingness to negotiate with us in good faith.”

The case is the People of the State of California v. Arbitron, Inc., San Francisco Superior Court.

A copy of the settlement is attached to the online version of this release at www.oag.ca.gov.

SAN FRANCISCO -- Attorney General Kamala D. Harris today announced that Wal-Mart has agreed to pay $2.1 million for overcharging consumers in violation of a 2008 judgment against the retail chain.

Today’s modified judgment is the result of Wal-Mart’s failure to comply with a 2008 judgment that required the retail chain to resolve errors in pricing at checkout stands.

“Consumers should feel confident that the price on the shelf will be the same price they are charged at the cash register,” said Attorney General Harris. “Californians who shop at Wal-Mart should know that they have the right to ask for the appropriate discount.”

In December 2005, the Attorney General’s office and the San Diego District Attorney’s office investigated allegations that Wal-Mart stores in California were scanning items at a higher price than the prices advertised on store shelves and signs. Through random price-checking, county Departments of Weights and Measures across the state found that 164 Wal-Mart stores in 30 counties had made scanning errors.

According to the terms of the 2008 judgment, consumers who were overcharged at the cash register should have immediately received $3 off the lowest advertised price of the item. If the price was less than $3, the item was to be given to the consumer for free.

Starting in November 2010, Departments of Weights and Measures in 11 counties conducted investigations to monitor Wal-Mart’s compliance and found continued errors in pricing at Wal-Mart checkout stands.

Today, Attorney General Kamala D. Harris, San Diego District Attorney Bonnie M. Dumanis and San Diego City Attorney Jan I. Goldsmith filed a Stipulated Modified Judgment with the San Diego Superior Court resolving Wal-Mart’s failure to comply with the requirements of the 2008 judgment.

The $3 off program was originally scheduled to end in November 2012, but with today’s action has been extended to November 2013. Wal-Mart will also be required to put new, large signs describing the policy, in both English and Spanish, at each of the approximately 3,000 checkout stands at its 180 stores and super centers in California.

Wal-Mart has also agreed to designate a person at every Wal-Mart store in California to ensure pricing accuracy. Any price discrepancy must be reported within three hours to Wal-Mart’s corporate headquarters, which receives and maintains price audit information, consumer complaints and inspection reports for all California Wal-Mart stores.

Wal-Mart has agreed to pay new penalties and costs totaling $2.1 million. These funds will be divided between County Weights and Measures officials, the California Department of Measurement Standards, the Attorney General’s office, the San Diego District Attorney’s office and the San Diego City Attorney’s office.

A copy of the judgment and the sign that will be posted at all Wal-Mart checkout stands is attached to the online version of this release at www.oag.ca.gov.

SAN FRANCISCO -- Attorney General Kamala D. Harris today announced that three of the nation’s leading online dating providers have issued a joint statement of business principles that online dating providers should follow to help protect members from identity theft, financial scams and sexual predators.

The agreement between the Attorney General and online dating providers eHarmony, Match.com and Spark Networks (operator of such websites as JDate and ChristianMingle), states that the companies will protect their members through the use of online safety tools, including checking subscribers against national sex offender registries and by providing a rapid abuse reporting system for members.

The websites will also continue to proactively educate members about safe online dating practices, and will supply members with online safety tips, including fraud prevention guidance and tips for safely meeting people offline. These tips and financial scam warnings will be issued on an ongoing basis to registered members.

“I commend these companies for committing to these important consumer protections,” said Attorney General Harris. “Consumers should be able to use websites without the fear of being scammed or targeted. It is a priority for this office to ensure consumers are protected online, and companies who are creating in the Internet space have a continued opportunity to innovate and thrive.”

Providers will continue their efforts to screen members for safety threats, whether financial or physical, using a number of protective tools, including looking for fake profiles and checking sex offender registries to prevent registered sex offenders from using their fee-based services. Any member who is identified as a registered sex offender will not be allowed to use these services.

This joint statement also ensures that the online dating service providers have rapid abuse reporting systems, which give members access to a website, email address and/or phone number to report any suspected criminal activity, including physical safety concerns and fraud. This agreement reflects best practices that these industry leaders are following.

“In the interest of protecting and educating users, I strongly encourage all online dating companies to adopt the same principles as these industry leaders,” Attorney General Harris said.

Last year, Attorney General Harris established an eCrime Unit to prosecute identity theft, data intrusions and crimes involving the use of technology. Attorney General Harris will assign a liaison from the eCrime Unit to deal with reports of suspected criminal activity provided by the three online dating providers and other providers who adopt these principles.

In 2011, 40 million Americans used an online dating service and spent more than $1 billion on online dating website memberships. Of couples married in the last three years, one in six met through an online dating service and one in five people have dated someone they met through an online dating site.

“eHarmony has the greatest concern for the safety and security of our members. These types of practices have been part of our commitment to member safety and education for many years.” said eHarmony CEO Jeremy Verba. “We are proud to join Attorney General Harris, Match.com and Spark Networks in setting an example for the rest of the online dating industry.”

“We commend Attorney General Harris for working with us to communicate best practices for a safe and enjoyable online dating environment,” said Match.com President Mandy Ginsberg. “We have always been committed to setting the standard for positive consumer experiences in online dating, and we were happy to work with the Attorney General, eHarmony and Spark Networks to encourage best practices throughout the industry.”

“The safety of our members and integrity of our sites is of fundamental importance to us, and we have always taken a multi-faceted approach to creating and maintaining safe online communities like JDate and ChristianMingle,” said Greg Liberman, President and CEO of Spark Networks. “We are honored Attorney General Harris has recognized our efforts to date and look forward to our continuing collaboration with the Attorney General, eHarmony, and Match.com to protect the safety and privacy of online daters and encourage others in the industry to follow our examples.”

A copy of the agreement is attached to the online version of this release at www.oag.ca.gov.

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About the Companies:

About eHarmony, Inc.

Santa Monica, Calif.-based eHarmony, Inc. (www.eharmony.com) was founded in 2000 and is a pioneer in using relationship science to match singles seeking long-term relationships. Its service presents users with compatible matches based on key dimensions of personality that are scientifically proven to predict highly successful long-term relationships. On average, 542 people marry every day in the U.S. as a result of being matched on eHarmony, nearly 5% of new marriages.* Currently, eHarmony operates online matchmaking services in the United States, Canada, United Kingdom, Australia and Brazil, and through its affiliation with eDarling, in 11 countries throughout continental Europe.

* 2009 survey conducted for eHarmony by Harris Interactive.®

About Match.com

Founded in 1995, Match.com was the original dating website and pioneer of the online dating industry. Throughout its sixteen year history, Match.com has been responsible for more dates, relationships and marriages than any other website. Today, Match.com operates leading subscription-based online dating sites in 25 countries, 8 languages and across five continents. Match.com is an operating business of IAC and is headquartered in Dallas, Texas. For more information, visit www.match.com.

About Spark Networks, Inc.

Spark Networks, Inc. (www.Spark.net) is one of the world’s leading providers of online personals services. Spark Networks’ shares trade on the NYSE Amex under the symbol “LOV” (NYSE Amex: LOV). The Spark Networks portfolio of consumer websites includes, among others, JDate.com (www.JDate.com), ChristianMingle.com (www.ChristianMingle.com), BlackSingles.com® (www.BlackSingles.com) and SilverSingles®.com (www.SilverSingles.com).

SACRAMENTO --- Attorney General Kamala D. Harris today announced the appointment of Professor Katherine Porter of the University of California, Irvine School of Law as the California monitor of the commitment by the nation’s five largest banks to perform as much as $18 billion worth of homeowner and borrower benefits in the state. Attorney General Harris’ decision to appoint a California monitor was made independent of the national settlement, and Professor Porter’s role is focused exclusively on ensuring compliance in California.

This California commitment is part of a national federal-state mortgage settlement penalizing robo-signing and other servicing and foreclosure misconduct that is currently pending approval in a federal court in Washington, D.C. Upon approval of the settlement, California’s monitor will assist the Attorney General’s office in holding the banks accountable for their commitments to the state and ensuring that the promised benefits are delivered to homeowners in full and on time.

“Hundreds of thousands of California homeowners will benefit from the commitments of up to $18 billion extracted from mortgage lenders. We must enforce full and timely compliance with these commitments, and the appointment of Professor Porter as our California monitor is central to that enforcement,” said Attorney General Harris. “Professor Porter’s wealth of experience and knowledge will protect the interests of homeowners and ensure the settling banks deliver on their promises,” Attorney General Harris continued.

“I will work hard to make sure banks hold up their promises to change troubling practices so that families and communities across California see the benefits of the settlement,” said Professor Porter. “Part of repairing the damage of the mortgage crisis is restoring public confidence that our largest financial institutions will treat consumers fairly and follow the law.”

Katherine Porter is a Professor at University of California, Irvine School of Law. She specializes in commercial and consumer law, including mortgage foreclosures and bankruptcy, and just released a book, Broke: How Debt Bankrupts the Middle Class. In 2007, Porter authored an empirical study that offered some of the first systemic evidence of the problems in mortgage servicing that harmed homeowners. She has worked with other government entities, including the Federal Trade Commission and the Consumer Financial Protection Bureau, on issues relating to mortgage servicing.

Upon approval of the settlement, Professor Porter will verify the extent and timeliness of lenders meeting their obligations to California homeowners. Using information obtained by the national monitor of the mortgage settlement, former North Carolina Commissioner of Banks Joseph Smith, Professor Porter will review lender filings, homeowner reports and complaints, and other compliance documents to ensure that benefits committed by the banks are performed and result in meaningful relief to California borrowers. She will regularly report the results of her findings to the Attorney General’s Office.

The appointment of Professor Porter as the state’s monitor is one of a series of enforcement mechanisms to ensure transparent compliance with the national settlement and the separate California agreement. Bank of America, Wells Fargo, and JP Morgan Chase will face significant financial penalties if they do not meet their guarantee of a minimum of $12 billion in principal reductions and short sales for homeowners within the state. Unlike the larger national agreement, which is only enforceable in a federal court in Washington, D.C., the agreement reached with California empowers Attorney General Harris to enforce the penalty provisions in California state court.

California secured the estimated $18 billion in borrower benefits and relief as part of a national multistate settlement to penalize robo-signing and other bank servicing and foreclosure misconduct. The agreement comes after California departed from the multistate negotiations last September when the relief to California was estimated at $4 billion. Attorney General Harris insisted on more relief for the most distressed homeowners, on stronger enforcement provisions, and that California and other states preserve key investigations into mortgage misconduct.

California’s separate commitment also creates important incentives to ensure that banks will reduce the principal mortgage balance of underwater homeowners in California’s hardest-hit counties and that the principal reductions in these and other California communities will occur within the first year of the settlement. Professor Porter will ensure that both the California-specific and national settlements are properly implemented in the state.

“The California commitment provides a path for thousands of struggling homeowners in California to retain their homes, while preserving our ability to investigate banker crime and predatory lending,” added Attorney General Harris. “This is one important stride in our ongoing efforts to address the mortgage and foreclosure crisis that has devastated too many California communities.”

Attorney General Harris earlier this month joined Assembly Speaker John A. Pérez, Senate President pro Tem Darrell Steinberg and other state legislators to unveil the California Homeowner Bill of Rights, designed to protect homeowners from unfair practices by banks and mortgage companies and to help consumers and communities cope with the state’s urgent mortgage and foreclosure crisis. The legislation would make permanent and available to everyone the interim reforms agreed to as part of the California commitment, including a single point of contact for mortgage-holders and restrict the unfair and inherently deceptive system of dual-track foreclosures. State legislators authoring key components of the Homeowner Bill of Rights include Assemblymembers Wilmer Carter, Mike Davis, Mike Eng, Mike Feuer, Holly Mitchell, Nancy Skinner, Senate President pro Tem Darrell Steinberg, and Senators Mark DeSaulnier, Loni Hancock, Mark Leno, and Fran Pavley.

Attorney General Harris also continues her work to have the Federal Housing Finance Agency authorize Fannie Mae and Freddie Mac – holders or guarantors of over 60 per cent of California mortgages – to participate in targeted programs of principal reduction that will benefit struggling homeowners, stabilize the country’s housing market, and benefit taxpayers.

The state’s Mortgage Fraud Strike Force continues its work to crack down on all forms of mortgage misconduct. Earlier this month, three prominent attorneys were arrested and are accused of running a loan modification scam.

A photo of Professor Porter is attached to the electronic version of this release at http://oag.ca.gov/

SACRAMENTO -- Attorney General Kamala D. Harris today announced the arrests of the owners and managing attorney of a law firm that took thousands of dollars in up-front loan modification fees for services that were never performed for homeowners, many of whom ended up losing their homes.

Gregory Flahive of El Dorado Hills, 39, Cynthia Flahive of Folsom, 41, and Mike Johnson of Elk Grove, 42, were arrested today on 19 felony counts, including grand theft by false pretense, conspiracy and false advertising. They were booked at the Sacramento County Jail with bail set at $50,000 bail each.

“Homeowners facing foreclosure are being targeted by predators, including those who use their law license to gain credibility and scam innocent Californians,” Attorney General Harris said. “My office’s Mortgage Fraud Strike Force is dedicated full-time to cracking down on these deceptive practices and protecting homeowners from fraud like this.”

Gregory and Cynthia Flahive, ex-spouses and owners of Flahive Law Corporation, and Johnson, the firm’s managing attorney, took up-front fees of up to $2,500 from homeowners in Placer, Sacramento, Butte and Yuba counties for loan modification services that were never performed. In California, it is illegal for foreclosure consultants to collect money for services before they are performed.

The Folsom-based law firm advertised their services on flyers, radio and televised infomercials, offering to provide loan modification services and help clients with bankruptcy, IRS tax relief and credit card modification.

In a 2010 infomercial, the Flahives said that, as a law firm, they had “extra leverage” with the banks. They described one of their unique services as a “mortgage violation audit” in which they reviewed a client’s loan documents to find bank violations that could be used as leverage to modify a client’s home loan.

In fact, the investigation revealed that, in some instances, the client’s lender had no record of contact with the Flahive Law Corporation.

Former clients of the Flahive Law Corporation filed complaints with the Attorney General’s office, as well as with the Better Business Bureau and the State Bar of California.

The State Bar of California launched an investigation, which was turned over to the Attorney General’s Mortgage Fraud Strike Force in summer 2011.

In one example of the firm’s deceptive practices, a victim who sought to lower his mortgage payments was told by Gregory Flahive to reject his lender’s offer of modification. The homeowner was told the Flahive Law Corporation could secure a better interest rate, reduce his principal, and possibly get his second mortgage eliminated. Four months later, the victim lost his home to foreclosure.

Agencies that assisted in serving today’s search and arrest warrants include the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Folsom Police Department, the Rancho Cordova Police Department and the El Dorado Sheriff’s Department.

“SIGTARP and its law enforcement partners are shutting down mortgage modification fraud, and holding a degree in law will not be a sufficient defense against prosecution,” said Christy Romero, Deputy Special Inspector General for SIGTARP.

Attorney General Harris formed a Mortgage Fraud Strike Force in May 2011 to investigate and prosecute mortgage fraud. In August, the Strike Force filed its first suit against a law firm that took millions from desperate homeowners: http://oag.ca.gov/news/press_release?id=2552&y=&m=. In December, a Strike Force investigation led to the arrests of three officers of a Stockton real estate company who ran a scam similar to that of Flahive Law Corporation. http://oag.ca.gov/news/press_release?id=2586&y=2011&m=

The investigation showed that the Flahive Law Corporation processed loan modifications for hundreds of Californians – and investigators believe there may be more victims in this case. If you are a former client of the Flahive Law Corporation, or if you want to report fraud or file a complaint, visit http://oag.ca.gov/consumers/loan-modification.

Photos are available from the Press Office. Please contact (415) 703-5837.

SAN FRANCISCO -- Attorney General Kamala D. Harris today, as part of National Consumer Protection Week, warned California homeowners to beware of phone solicitations from scam artists claiming to provide assistance related to the recent national mortgage settlement.

Under California law, it is illegal to charge an up-front fee for loan modification services. Third parties that claim to offer homeowners access to funds under the national mortgage settlement are likely running a scam. Homeowners receiving such solicitations should not provide any personal or financial information and should report the solicitation to the California Department of Justice (http://ag.ca.gov/contact/complaint_form.php?cmplt=CL ).

Californians seeking relief under the state’s recent $18 billion mortgage settlement are advised to heed the following tips to avoid falling prey to scams that often arise around high profile settlements:

- Be skeptical of third party phone solicitations. Only your bank/loan servicer can assist you with regard to the recent national mortgage settlement.
- Do not give your personal financial information to a solicitor such as your bank account number, social security number or even the name of your loan servicer. Your bank will already have this information.
- Never pay an up-front fee for mortgage-related services. It is against California law and should be reported to the California Department of Justice.
- Call your bank to see if you qualify for relief under the settlement.

For free, trustworthy advice:

- Call a HUD approved counselor – (888) 995-4673
- Call Keep Your Home CA – (888) 954-5337

If you think you may be eligible for relief under the national mortgage settlement, call your bank directly:

Bank of America/Countrywide – (877) 488-7814
JPMorgan Chase/Washington Mutual – (866) 372-6901
GMAC Mortgage/Ally Financial – (800) 766-4622
Citibank/CitiMortgage – (866) 272-4749
Wells Fargo/Wachovia – (800) 288-3212

For additional information regarding the mortgage settlement, please visit: http://oag.ca.gov/nationalmortgagesettlement and our frequently asked questions page: http://oag.ca.gov/nationalmortgagesettlement/faqs

SACRAMENTO – Attorney General Kamala D. Harris today announced the California Homeowner Bill of Rights designed to protect homeowners from unfair practices by banks and mortgage companies and to help consumers and communities cope with the state’s urgent mortgage and foreclosure crisis.

Joined by Senate President pro Tem Darrell Steinberg and Assembly Speaker John A. Pérez, Attorney General Harris announced her sponsorship of six bills designed to guarantee:
- Basic standards of fairness in the mortgage process, including an end to dual-track foreclosures
- Transparency in the mortgage process, including a single point of contact for homeowners
- Community tools to prevent blight after banks foreclose upon homes
- Tenant protections after foreclosures
- Enhanced law enforcement to defend homeowner rights – paid for by fees imposed on banks
- A special grand jury to investigate financial and foreclosure crime

“California communities and families are being devastated by the mortgage and foreclosure crisis. We must ensure the deceptive practices that caused it never happen again,” said Attorney General Harris. “The California Homeowner Bill of Rights will provide basic fairness and transparency for homeowners, and improve the mortgage process for everyone.”

The legislation builds on the California commitment announced by Attorney General Harris earlier this month, which is expected to result in $18 billion of benefits for California homeowners. That agreement included reforms for mortgages owned by the five banks that were signing parties. The California Homeowner Bill of Rights will strengthen those protections, make them permanent, and apply them to all mortgages in the state.

“When I secured the California commitment, I made clear it was only one of many steps I am taking to comprehensively address the mortgage and foreclosure crisis,” Attorney General Harris continued. “I want to thank Senate President pro Tem Steinberg, Assembly Speaker Pérez and all the other lawmakers who are supporting this urgent package of legislation for homeowners.”

“I want to congratulate the Attorney General on the victory she won on behalf of the people of California,” said Speaker John A. Pérez. “Our state has suffered greatly as the result of bad actors in the banking and financial industries, and this settlement holds them accountable as we continue the difficult work of recovering the housing market and stemming the tide of foreclosures, evictions and auctions.”

“Millions of Californians have already lost their homes to foreclosure and the mortgage crisis is far from over,” said Senate President pro Tem Darrell Steinberg. “This landmark settlement negotiated by Attorney General Harris helps thousands of Californians but thousands more need the same help. We need to put these protections into law so that more people can save their homes.”

CALIFORNIA HOMEOWNER BILL OF RIGHTS LEGISLATIVE PACKAGE

If passed, the following bills would:

ASSEMBLY BILL 1602 / SENATE BILL 1470– THE FORECLOSURE REDUCTION ACT OF 2012

Authors: Assemblymen Mike Eng and Mike Feuer; Senators Mark Leno, Fran Pavley, and Senate President pro Tem Darrell Steinberg
-Require creditors to provide documentation to a borrower that establishes the creditor’s right to foreclose on real property prior to recording a notice of default.
-Require creditors to provide documentary evidence of ownership, the chain of title to real property, and the right to foreclose, at the time of the filing of a notice of default.
-Prohibit creditors from recording a notice of default when a timely-filed application for a loan modification or other loss mitigation measure is pending.
-Prohibit creditors from recording a notice of sale when a timely-filed application for a loan modification or other loss mitigation measure is pending.
-Prohibit creditors from recording a notice of sale while a borrower is in compliance with the terms of a trial loan modification or after another loss mitigation measure has been approved.
-Require creditors to disclose why an application for a loan modification or other loss mitigation measure has been denied.
-Require that notices of foreclosure sales be personally served, including notices of foreclosure sale postponement.
-Provide homeowners with a private right of action in instances in which the requirements set forth in the legislation are not followed

ASSEMBLY BILL 2425 / SENATE BILL 1471 – DUE PROCESS REFORM LEGISLATION

Authors: Assemblywoman Holly Mitchell; Senators Mark DeSaulnier and Fran Pavley
-Require creditors to provide a single point of contact to borrowers in the foreclosure process who will be responsible for providing accurate account and other information related to the foreclosure process and loss mitigation efforts.
-Require creditors to provide a dedicated electronic mail address, facsimile number and mailing address for borrowers to submit information requested as part of a loan modification, short sale or other loss mitigation option.
-Authorize borrowers to challenge the unlawful commencement of a foreclosure process in court.
-Impose a $10,000 civil penalty on the recordation or filing of “robosigned” documents, defined as documents that contain information that was not verified for accuracy by the person or persons signing or swearing to the accuracy of the document or statement.
-Require that certain documents be recorded in a county recorder’s office.

ASSEMBLY BILL 2314 / SENATE BILL 1472 – BLIGHT PREVENTION LEGISLATION

Authors: Assemblywoman Wilmer Carter; Senator Fran Pavley
-Prevent blight enforcement actions from being taken against new purchasers of blighted property for 60 days, provided that repairs are being made to the property.
-Require banks that release liens on foreclosed property to inform local code enforcement agencies of the release so that demolition of blighted property can proceed.
-Increase fines against owners of blighted property from $1,000 per day to $5,000 per day, and allow the imposition of the costs of a receivership over blighted property to be imposed directly against the owner of blighted property.

ASSEMBLY BILL 2610/ SENATE BILL 1473 – TENANT PROTECTION LEGISLATION

Authors: Assemblywoman Nancy Skinner; Senator Loni Hancock
-Require purchasers of foreclosed homes to honor the terms of existing leases and give tenants at least 90 days notice before commencing eviction proceedings.

ASSEMBLY BILL 1950 – ENHANCEMENT OF ATTORNEY GENERAL ENFORCEMENT

Author: Assemblyman Mike Davis
-Impose a new $25 fee to be paid by servicers upon the recording of a notice of default. The fee would be deposited into a real estate fraud prosecution trust fund that would support the Attorney General’s efforts to deter, investigate and prosecute real estate fraud crimes, including the work of the Mortgage Fraud Strike Force.
-Extend the statute of limitations from one year to four years from the date of discovery for violations of law commonly occurring in connection with foreclosure-related scams, including acting as a real-estate agent without a license and charging up-front fees for loan modification services.

SENATE BILL 1474 / ASSEMBLY BILL 1763 – ATTORNEY GENERAL SPECIAL GRAND JURY

Authors: Assemblyman Mike Davis; Senator Loni Hancock
-Authorize the Attorney General to impanel a special grand jury for the purposes of investigating and indicting multi-jurisdictional financial crimes against the state.

SAN FRANCISCO --- California residents who purchased products with LCD panels (computer monitors, laptops, and PCs) from 1999 to 2006 are encouraged to visit a new class action website for information on how to file a claim related to a half billion dollar settlement with manufacturers that engaged in price-fixing.

Consumers are encouraged to visit www.lcdclass.com for more information, and to obtain copies of the settlement agreements and register to receive a claim form. Consumers can also call 855.225.1886 or write: LCD Class, P.O. Box 8025, Faribault, MN, 55021-9425.

In October 2010, Attorney General Kamala D. Harris filed a lawsuit against ten companies for engaging in price fixing of LCD panels from 1999 to 2006 that resulted in higher prices for California residents and businesses, as well as government agencies.

The settlements announced in December 2011 resolve Attorney General Harris’ claims against seven companies, along with those of seven other attorneys general and a national class action. As part of the settlements, the companies that engaged in price fixing will provide a fund for consumers and businesses in 25 states, including California. The settling companies have also resolved claims brought by Attorney General Harris for civil penalties under California’s Unfair Competition Law, as well as restitution for government agencies that purchased the flat screen LCD panels.

Attorney General Harris is joined in these settlements by the attorneys general of Arkansas, Florida, Michigan, Missouri, New York, West Virginia and Wisconsin, as well as a class action brought on behalf of private claimants in the United States District Court for the Northern District of California.

Settling defendants include: Chimei Innolux Corp., Chi Mei Optoelectronics USA, Inc., Chi Mei Optoelectronics Japan Co., Ltd, HannStar Display Corporation, Hitachi, Ltd., Hitachi Displays, Ltd., Hitachi Electronic Devices, USA, Inc., Samsung Electronics, Co., Ltd., Samsung Electronics America, Inc., Samsung Semiconductor, Inc., Sharp Corporation, and Sharp Electronics Corporation.

SAN FRANCISCO – Attorney General Kamala D. Harris today announced an agreement committing the leading operators of mobile application platforms to improve privacy protections for millions of consumers around the globe who access the Internet through applications (“apps”) on their smartphones, tablets and other mobile devices.

Attorney General Harris forged the agreement with six companies whose platforms comprise the majority of the mobile apps market: Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research In Motion. These platforms have agreed to privacy principles designed to bring the industry in line with a California law requiring mobile apps that collect personal information to have a privacy policy. The majority of mobile apps sold today do not contain a privacy policy.

“Your personal privacy should not be the cost of using mobile apps, but all too often it is,” said Attorney General Harris.

“This agreement strengthens the privacy protections of California consumers and of millions of people around the globe who use mobile apps,” Attorney General Harris continued. “By ensuring that mobile apps have privacy policies, we create more transparency and give mobile users more informed control over who accesses their personal information and how it is used.”

Privacy policies are an important safeguard for consumers. Privacy policies promote transparency in how companies collect, use and share personal information. The agreement with the platforms is designed to ensure that mobile apps comply with the California Online Privacy Protection Act. The Act requires operators of commercial web sites and online services, including mobile apps, who collect personally identifiable information about Californians to conspicuously post a privacy policy.

This agreement will allow consumers the opportunity to review an app’s privacy policy before they download the app rather than after, and will offer consumers a consistent location for an app’s privacy policy on the application-download screen. If developers do not comply with their stated privacy policies, they can be prosecuted under California’s Unfair Competition Law and/or False Advertising Law.

The agreement further commits the platforms to educate developers about their obligations to respect consumer privacy and to disclose to consumers what private information they collect, how they use the information, and with whom they share it. The platforms will also work to improve compliance with privacy laws by giving users tools to report non-compliant apps and committing companies to implement processes to respond to these reports.

In six months, Attorney General Harris will convene the mobile application platforms to assess privacy in the mobile space.

There are more than 50,000 individual developers who have created the mobile apps currently available for download on the leading platforms. There are nearly 600,000 applications for sale in the Apple App Store alone, and another 400,000 for sale in Google’s Android Market. These apps have been downloaded more than 35 billion times.

These figures are expected to grow. An estimated 98 billion mobile applications will be downloaded by 2015, and the $6.8 billion market for mobile applications is expected to grow to $25 billion within four years.

The rapid growth and expansion in the mobile market exposes consumers to a wide variety of privacy invasions. Smartphones are often on and tethered to their user, transmitting rich data to the app developers. Users of mobile devices are vulnerable to privacy intrusion and abuse by numerous entities, app developers, analytic services and advertising networks. These entities could have access to sensitive information, including a user’s location, contacts, identity, messages and photos. Without a privacy policy, what companies do with the personal data they collect is largely invisible to consumers.

It is estimated that a majority of the mobile apps currently available for download through the platforms do not include even the most basic privacy protection: a privacy policy setting forth how personal data is collected, used and shared. One recent study found that only 5 percent of all mobile apps have a privacy policy.

A recent report by the Federal Trade Commission (FTC), Mobile Apps are Disappointing, evaluated the lack of privacy information available to parents before downloading mobile apps for their children. The FTC report recommended that mobile apps platforms do more to help parents and kids by providing a consistent means for app developers to display information about their privacy practices. The FTC specifically recommended that the platforms provide a designated space for developers to disclose their information in the app stores and markets and that the platforms improve enforcement of requirements for app developers to disclose the private data they collect.

Attorney General Harris, in August, 2011, convened Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research In Motion as the most direct way to improve compliance with California law requiring that mobile apps have privacy policies. The platforms have committed to these principles today and are now working to implement them.

“California has a unique commitment to protecting the privacy of our residents. Our constitution directly guarantees a right to privacy, and we will defend it,” added Attorney General Harris. “Forging this common statement of mobile privacy principles shows the power of collaboration -- among government, industry and consumers -- to create solutions to problems no one group can tackle alone.”

Last year, Attorney General Harris also established an eCrime Unit to prosecute identity theft, data intrusions, and crimes involving the use of technology.