New California Law:  AB 957  – the Big Gorilla Meets A New Gorilla

REALTOR® Outlook

By Kay Wilson-Bolton

October 16, 2009

Every “market” has its own unique influences that make a mark in history.

When the market we know today became driven by banks and asset managers, they formed alliances with various service providers for title and escrow. The goal was to increase efficiency and reduce costs. I’m not sure either of those goals was met but those alliances created major hardships on our local title and escrow providers, because they were excluded from all this new business.

Millions of dollars have been spent in  other cities and counties on services that have been traditionally provided by local companies.

A new law was signed by the governor on Sunday, October 11, 2009 that enacts the Buyer’s Choice Act. This new law, “prohibits a mortgagee or beneficiary under a deed of trust who acquired title to residential real property improved by 1-4 dwelling units at a foreclosure sale (or trustee’s sale) from, requiring, directly or indirectly, as a condition of selling the property, that the buyer purchase title insurance or escrow services in connection with the sale from a particular title insurer or escrow agent.”

The law does not prohibit a buyer from agreeing to accept a title insurer or an escrow company  recommended by the seller if written notice of the right to make an independent selection is first provided by the seller to the buyer.

It is interesting to note this law applies only to REO transactions.  Furthermore, the real estate agent of the REO seller is included under this definition.

A “seller” who violates these provisions will be liable to the buyer for an amount equal to three times all charges made for the title insurance or escrow services. In addition, any person in violation will be deemed to have violated his or her licensing law and will be subject to discipline by the Department of Real Estate.

However, a transaction is not invalidated solely because of the failure of any person to comply with any provision of this law.

A validating principal is the existing Section 9 of federal law Real Estate Settlement and Procedures Act which prohibits a seller in all transactions from requiring the home buyer to use a particular title insurance company as a condition of sale.

In fact, buyers may sue a seller who violates this provision for an amount equal to three times all charges made for the title insurance.  However it is not a violation of Section 9 to require a buyer to use a particular title insurance company so long as the seller pays for it.  This new California law does not clarify this distinction as to whether to law applies or doesn’t apply depending on who pays for the title insurance or escrow services.

So, if you have a favorite title or escrow company and want to use it in your next transaction, ask your agent to submit a copy of the new law along with your offer. Your choice of title and escrow will likely be ignored and REO agents will not advocate your request, but at least this is a set towards fair and equitable competition.

Corporate sellers will get the message after a while and agree to let  money for these services be spent in Ventura County instead of places far from home.

Kay Wilson-Bolton served the real estate industry since 1976. She is the broker for CENTURY 21 Buena Vista with offices in Santa Paula and Ventura. She brings a regional perspective to local issues. She can be reached at 805.340.5025. Her web address is



About Kay Wilson-Boltonhttp://www.kaywilsonbolton.netWith a full-time career in real estate, I can add to your bank of knowledge, not only in real estate but in many areas of life that deal with people and relationships and choices. My real estate career has taught me many lessons about planning ahead and looking forward. I believe in helping along the way so that they can be the best they can be in any situation. I serve as a Fire Department Chaplain and Coordinator for the Many Meals Project which serves homeless and hungry families in my community. The event is far more than many meals. As a result of my work with the homeless population in my community, I received the Good Neighbor Award 2017 from the National Association of Realtors and named as a Champion of Homes in 2015 by the California Association of Realtors. I make pastoral visits to the inmates in the County Jail System and offer them what God says about "all things being new" and His remarkable plan for our lives. I have served my community as Mayor and in many volunteer capacities. I serve others by serving God first. My husband is involved in prison ministry and is a graphic artist. We live a simple life in Santa Paula with an office cat named Scout, three rescued poodles and a cat named Tony Diane at home.

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