Legal Question in Real Estate Law in California

My question concerns California Civil Code Section 2945.1, and the definition of a "Foreclosure Consultant" -

"Foreclosure consultant" means any person who makes any

solicitation, representation, or offer to any owner to perform for

compensation or who, for compensation, performs any service which the

person in any manner represents will in any manner do any of the

following: etc....."

The scenario I'm speaking of is an equity purchaser (investor) seeking to purchase a residence in foreclosure using the C.A.R. NODPA. If the investor does assist the equity seller (homeowner) in saving the home from foreclosure by negotiating a short sale with the lender, but does not receive compensation from the homeowner, is the investor considered a foreclosure consultant?

Thanks in advance.


Asked on 6/05/11, 8:24 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

It sounds more like the person described in your scenario is an "equity purchaser" as defined in Civil Code section 1695.1(a). You should probably review Civil Code sections 1695 through 1695.17 re "home equity sales contracts." You may know about these provisions already. As to whether an individual can be both a foreclosure consultant and an equity purchaser in the same transaction, I doubt this was the intention of 2945.1, but to be safe I would suggest applying the definition literally and asking yourself whether any loss or detriment to the selling homeowner inures to the benefit of the purchaser, whether as a direct fee or circuitously through the lender. I don't think so, but it's possible.

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Answered on 6/06/11, 9:16 am


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