California Title Companies No Longer Able To Provide Default Information

On September 25, 2008, the Governor of California signed Senate Bill 133 ("SB 133"), which became effective January 1, 2009. This new legislation instituted a program for the California Department of Insurance to register, regulate and monitor title company marketing representatives and addressed what the legislation referred to as the "problem of illegal rebates and inducements dispensed by title marketing representatives". The bill regulates who may be employed as a title marketing representative by forcing such individuals to obtain certain certificates and hold said certificates for certain lengths of time.

The changes to California Insurance Code Section 12404 under SB 133 impact existing title companies and their sales and marketing practices. In addition, there are severe penalties imposed upon a title sales representative found to be in violation of SB 133 including a 5 year revocation of license and monetary sanctions, as well as an investigation and potentially severe monetary sanctions against the Title Company, including up to a $10,000 fine.

Since January 1, 2009, there are a number of newly-prohibited activities and expenditures for Title Companies. One of the main prohibitions pertaining to the foreclosure sector is the prohibited activity of creating and/or providing marketing/informational materials that are not exclusively related to title insurance. For example, flyers related generally to short sales, foreclosures, REO processes, auction processes, tax issues, loan modifications and refinances, HELOCs, and new construction are prohibited unless they solely discuss how these items are handled in the title insurance process or how these items impact a preliminary title report and title policy. Hence the reason your California title company may no longer be able to provide you with notice of default listings. As an alternative I highly recommend you check out http://www.defaultresearch.com/ for obtaining pre foreclosure listings for your county.