Phillip M. Adleson, Esq.
The Los Angeles city council voted on November 12th to amend the foreclosure registry ordinance to add a registration fee for any single family resident property when the status changes to foreclosure completed. Banks and lenders will have to pay $155 annually to register each foreclosed property, plus a one-time inspection fee of $356. Those who did not pay after 30 days would be charged $250 a day, up to a maximum of $100,000. The vote was approved unanimously by the council (15-0) after little discussion.
UTA, CMA and CMBA had sent a joint letter to the council opposing the ordinance. “…the proposed fee has no reasonable relationship to the role and duties of a trustee under a deed of trust. More importantly … the duties of a trustee under a deed of trust as to the real property are concluded once the property is sold at trustee’s sale and a trustee’s deed is executed and delivered to the purchaser whether that purchaser is the lender or some third party. As such, it makes absolutely no sense to require trustee under an extinguished deed of trust responsible for a fee due after it no longer has anything to do with real property.”
“There are may be legal and constitutional problems with this ordinance that have not been addressed in the courts,” said Phil Adleson, Esq., Adleson Hess & Kelly, UTA’s Corporate Counsel. Mr. Adleson, drafted UTA’s opposition letter, along with Michelle R. Rodriquez, Esq., a CMA Board Director and General Counsel to Woodland Hills Mortgage Corporation. “We will be exploring those.”
UTA’s Legal Resources Committee will consider contracting for a white paper on the possible challenges that can be brought to foreclosure registration ordinances like the L.A. Ordinance. Members are encouraged to provide information regarding their experiences/issues with respect to foreclosure registration ordinances to UTA’s Executive Director, Richard Meyers. A summary including how and if the issue was resolved and whether the member is aware of trial court litigation or administrative actions involving these type of ordinances would be helpful.