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By G. David Lapin On March 26 2024

Here's Your Roundup Of Recent Major News Affecting California Real Estate, Housing, and Mortgages.

Understanding California's Assembly Bill 12

CALIFORNIA -  Understanding California's Assembly Bill 12: Changes to Security Deposits for Landlords. California's Assembly Bill 12 (AB 12) is set to bring notable alterations to security deposit regulations for landlords in the state. Signed into law by Governor Newsom, AB 12 is scheduled to take effect in July 2024, impacting rental agreements across California. 
Key Provisions of Assembly Bill 12:
Under AB 12, the maximum allowable security deposit for rental units is reduced to one month's rent, regardless of whether the unit is furnished or unfurnished.
Exceptions to this rule are made for military personnel, who may still be eligible for higher security deposit amounts.
Small-scale landlords, managing no more than two residential properties with up to four rental units, may retain the ability to request up to two months' rent as a security deposit, provided the property is owned by an individual, a personal LLC, or a family trust.
Implications for Landlords:
Landlords are advised to familiarize themselves with the new security deposit regulations outlined in AB 12, ensuring compliance with the law.
Disputes surrounding security deposit issues, which were previously primarily resolved in small claims court, may see an escalation, with some lawyers pursuing legal action for emotional distress and damages beyond the deposit amount.
Looking Ahead:
AB 12 aims to strike a balance between tenant protection and landlord interests, with the goal of improving housing affordability in California.
California joins a growing number of states, including Delaware, Alabama, and Massachusetts, in implementing limits on security deposits.
Landlords are encouraged to prepare for the implementation of AB 12, viewing it as an opportunity to refine their rental strategies and navigate the evolving rental landscape.
As the rollout of Assembly Bill 12 approaches, landlords are urged to stay informed about its implications and seek guidance if needed. For assistance or questions regarding AB 12 and property management, landlords can reach out to Authority Property Management, a trusted partner in the real estate industry.
REAL ESTATE -  Hanover Closes A Business Purpose Second Mortgage Hard Money Loan Closed in Palos Verdes Estates, California. A hard money loan closed on a SFR in Palos Verdes Estates, CA 90274. 

This working capital loan against an SFR provided recapitalization and reserves for the borrowers’ business.
Palos Verdes Estates is a coastal city in Los Angeles County, California, United States, situated on the Palos Verdes Peninsula and neighboring Rancho Palos Verdes and Rolling Hills Estates. The City of Palos Verdes Estates, incorporated December 20, 1939, is the oldest of the four cities on the Palos Verdes Peninsula. The city was master-planned by the noted American landscape architect and planner Frederick Law Olmsted Jr.
Residential SFR
Business Purpose
Purpose – Working Capital
Combined Loan-to-Value (As Is): 29%
Second Trust Deed
36 Month Term
Principle & Interest Payments
Los Angeles County, CALIFORNIA
MORTGAGE -  Ginnie Mae's Push for Budget Increase to Bolster Reverse Mortgage Portfolio Management. Ginnie Mae is pressing for a budget hike exceeding $26 million to effectively oversee its substantial reverse mortgage portfolio. The impetus for this call for additional funding stems from the White House's budget request, emphasizing the enhancement of the Home Equity Conversion Mortgage (HECM)-backed Securities (HMBS) program.
In its budget proposal to Congress, the U.S. Department of Housing and Urban Development (HUD) outlined plans to allot $67 million to Ginnie Mae for fiscal year 2025. This marks a notable increase of $24.6 million compared to the previous year's funding level.
Central to the HMBS program's priorities is addressing liquidity concerns for program issuers, especially against the backdrop of prevailing economic conditions characterized by inflation, escalating interest rates, and tightening financial markets. The recent default of a Ginnie Mae-guaranteed HMBS issuer underscores the urgency of shoring up liquidity to ensure the ongoing availability of HECMs for prospective borrowers.
To mitigate risks and stabilize the HMBS program, Ginnie Mae is actively seeking resources for program enhancements and liquidity support. This encompasses allocating additional budgetary resources for default management, bolstering oversight of the HMBS application process, conducting thorough operational impact assessments, and exploring avenues for new product development.
A crucial facet of this endeavor entails expanding Ginnie Mae's workforce to adeptly manage the HMBS portfolio. A portion of the requested funding is earmarked for hiring 19 additional full-time equivalent (FTE) employees. This augmented staff is indispensable for implementing operational reforms and addressing emerging needs within the reverse mortgage market.
Moreover, Ginnie Mae underscores the significance of appointing a dedicated product manager for the HMBS program to augment oversight and drive product development. This dedicated support is vital for scrutinizing and refining product features and guidance, ensuring the effective management of each major product line.


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