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Planner’s Thoughts is a well written and rather scholarly blog by Larry Stratton. The senior associate at Hausman & Sosa, LLP, he specializes in estate planning at the firm. Larry is also a principal of the financial planning firm of Stratton Financial and Estate Planning located in Southern California’s San Gabriel Valley.

He’s got articles that I just don’t see on other people’s blogs. Well done Larry.

Recent Articles:

    Texas: Surety Not Liable for Counsel Fees in Excess of Bond

    In the recent case of Colonial American Casualty and Surety Co. v. Scherer, — S.W.3d –, 2007 WL 135969 (2007), a Texas appellate court ruled that a surety issuing an administrator’s bond was not liable for attorney’s fees in excess of the stated penal amount on the face of the bond. In that case, the stated penal sum was $30,000.

    This case has some significance to California because while the Texas appellate court was applying Texas law, and was interpreting the language of the specific bond, the court cited numerous California cases in reaching its decision.

    But yet a California court would probably still use a somewhat different approach given that the Bond and Undertaking Law [Cal. Code of Civil Procedure § 995.010] establishes a regime for asserting claims against bonds given in a proceeding, which would include probate matters. No matter what the bond provides there are avenues for seeking counsel fees from a surety on a “proceeding bond” if the surety fails to honor a claim in a timely manner [see Cal. Code of Civil Procedure § 996.480].

    Wolves in Experts’ Clothing

    California Governor Arnold Schwarzenegger has signed a bill making it more difficult to engage in reverse mortgage scams. Under Senate Bill 1609, reverse mortgage applicants will be required to receive independent advice concerning the pros and cons of the loan from an independent counseling agency. The agency would not have an interest in the loan transaction.

    According to a September 6, 2006 Oakland Tribune article written by Becky Bartindale, the idea for the law came from a real-live incident of loan fraud:

    The idea behind Senate Bill 1609 came from Shirley Hochhausen, managing attorney for Community Legal Services in East Palo Alto, as part of Simitian’s annual “There Ought to be a Law” contest. Hochhausen proposed the measure after seeing too many clients such as Johnny Damon, 66, who is now at risk of losing his East Palo Alto home of 34 years.

    Damon, who worked as a cement finisher for the city of Palo Alto, was sold a $200,000 reverse mortgage last September. Damon bought his home for about $50,000 in 1977, and it is now worth about $700,000.

    But according to a lawsuit filed last month, the brokerage company arranged a traditional mortgage, unbeknownst to Damon.

    So instead of receiving the income he was counting on, the suit alleges, Damon was stuck with monthly loan payments he cannot afford, and the president of the brokerage company absconded with $190,000 in loan proceeds.

    Hat tip to Prof. Beyer for bringing this to my attention. Also, Julia Wei of the Dirtlaw Blog posted a good analysis of this statute on her blog.

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