January 2009 ushered in a wave of new laws that affect every aspect of business and life in California. Economic and environmental issues took center stage.
The Housing and Economic Recovery Act of 2008 was adopted, which appropriates $3.9 billion in one-time emergency funds to assist state and local governments in the redevelopment of abandoned and foreclosed residential properties. California leads the nation in foreclosures; 10 of California’s metropolitan areas are among the top 20 nationwide. Of these federal funds, $529 million is earmarked for California, but in Sonoma County the funds must be used to assist families whose incomes do not exceed $93,360. The act also established the “Hope for Homeowners” program, which authorizes the government to refinance up to $300 billion in mortgages of at-risk borrowers living in their homes who can afford to make reduced loan payments. To be eligible, among other things, the borrower cannot have intentionally defaulted on the mortgage, and the mortgage must have originated on or before Jan. 1, 2008. Also, the new mortgage cannot exceed 90 percent of the property’s appraised value.
Congress and the president approved a bill that allows a person, in calculating his or her income taxes, to exclude from his or her gross income an amount of principal residence indebtedness forgiven by the lender. The maximum amount excludable is $250,000 for a taxpayer filing single or as a married couple. This is aimed at helping homeowners who face the potential of losing their homes to foreclosure.
California adopted a measure that urges the president to permanently increase the federal conforming mortgage loan limit (currently $417,000) to the levels to which these limits were increased in the Economic Stimulus Act of 2008 (maximum for single family home of $729,750).
On pain of being fined up to $1,000 per day, lenders are now required to maintain vacant residential property they acquire through foreclosure proceedings.
Mortgage holders are also mandated to mail specified notices to tenants living in property being foreclosed upon and penalties are imposed on property owners (other than lenders) who fail to adequately maintain their foreclosed properties.
Sweeping legislation was adopted to transform the way in which cities plan and build their communities: all with the purpose of reducing the need to rely on single-occupancy vehicles. Greenhouse gas emissions from autos and light trucks came to 108 million metric tons in 1990. By 2004, these emissions were 135 million metric tons. Two years ago, California adopted the most aggressive GGE reduction laws perhaps in the world, requiring that by 2020 GGE had to be reduced to 1990 levels. Additional legislation was adopted last year that requires cities to plan their communities in ways that will reduce GGE. Codes have to be changed to require more energy-efficient buildings and new development is to be located near public transportation.
These are ambitious plans to attack monumental problems. It remains to be seen whether we are up to the challenge.
Jeffrey A. Walter is a partner at the Sonoma law firm of Walter & Pistole. To suggest a topic or ask a question, please visit www.SonomaSun.com, go to “Contact Us” and click on “Feedback.”
