2. Opening Remarks – Commissioner Wayne Bell  Operations Report – Jeff Mason, Chief Deputy Commissioner  Enforcement Update- Rick Fong, Assistant Commissioner, Enforcement  Audit Report and Update – Dan Sandri, Assistant Commissioner, Audits  Consumer Recovery Account– Tad Egawa, Assistant Commissioner, Legal Affairs  Licensing Resources- Tom Pool, Assistant Commissioner Licensing & Administration  Q & A- Wayne Bell and Panel

3. Jeffrey Mason Chief Deputy Commissioner

4. $49.2 MILLION BUDGET 7/1/2013 – 3/31/20147/1/2014 – 3/31/2015 Revenues $36,302,000$37,813,000 Expenditures $30,803,000$34,165,000

5. License Population Peak 11/2007: 549, 250 License Population as of 4/23/2015: 401,509

6. 7/1/13 – 3/31/147/1/14 – 3/31/15% Change Exams Scheduled RES29,67532,2469% REB5,9435,312-11% New Licenses RES11,95615,31728% REB3,9543,463-12% Renewals RES39,75937,524-6% REB22,46621,605-4% Renewal Rate RES74%75%1% REB85%86%1% Total Licensees403,842401,845-.49%

7. MORTGAGE LENDING ACTIVITY Need MLO Endorsement to Originate Residential Loans MLO Stats Jan. 2014Jan. 2015 Approved Individuals15,74315,668 Approved Companies4,1794,595 Approved Branches794854 Total MLOs20,71621,117

8. Applications for Public Report 7/1/13 - 3/31/147/1/14 - 3/31/15 Final2,0201,801 Renewal309279 Amendment126179 Total Applications Received 2,4552,259

9. 7/1/13 - 3/31/14 7/1/14 – 3/31/15 % Change License Denials11622089% Disciplinary Actions (Revocations, Surrenders, Suspensions, Public Reprovals) 60375125% Desist & Refrain Orders 778510% Citations159

10. FY 11/12FY 12/13FY 13/14FY 14/15 YTD (10 Months) Claims Filed243180152140 Claims Paid9477104102 Amount Paid$3,165,669$2,625,615$4,286,536$4,106,002 Total Active Claims 391

12. Dan Sandri Chief Auditor

16. $4,933,780.15 in total trust fund shortages Breakdown by real estate activity:  $3,153,424.23 – Property Management  $144,146.00 – Mortgage Loans  $1,653,418.81 – Broker Escrow  $791.11 – Sales

17. Payments by check or cash, usually received in person or by mail Payments by check or cash, usually received in person or by mail Very few wire transfers Very few wire transfers Accounting entries recorded by hand Accounting entries recorded by hand Two entries required to record a transaction in control record and ledger cards Two entries required to record a transaction in control record and ledger cards

18. Payments often received via ACH or credit card, through a payment processor Payments often received via ACH or credit card, through a payment processor Wire transfers are common Wire transfers are common Accounting records are almost always on computer Accounting records are almost always on computer One entry covers journal and ledger recording of transaction. One entry covers journal and ledger recording of transaction.

19. Reporting required if broker engaged in 5 or more broker escrow transactions per the exemption or if activities total $1 million or more in calendar year. Reporting required if broker engaged in 5 or more broker escrow transactions per the exemption or if activities total $1 million or more in calendar year. Report due from broker within 60 days of calendar year end. Report due from broker within 60 days of calendar year end. For 2013, 205 brokers reported total activities of $8.66 billion. For 2013, 205 brokers reported total activities of $8.66 billion. Broker escrow operations facing increased audit focus. Broker escrow operations facing increased audit focus.

20. Contact: Dan Sandri – Assistant Commissioner, Audits Dan.Sandri@dre.ca.gov 916 263-8704

21. Tad Egawa Assistant Commissioner Legal Affairs

22. CALIFORNIA BUREAU OF REAL ESTATE’S CONSUMER RECOVERY ACCOUNT

23. Last resort victim’s fund to compensate innocent members of the public who are victimized by dishonest real estate licensees

24. HISTORICAL BACKGROUND Operative on January 1, 1964Operative on January 1, 1964 12% of License Fees12% of License Fees (B&P Code §10450.6) $3,500,000/year$3,500,000/year

25. CONSUMER RECOVERY ACCOUNT Claims History Since 1964, BRE has paid approximately $51 million to victims Approximately 54% of all applications paid

26. CLAIMREQUIREMENTSCLAIMREQUIREMENTS

27. WHO MAY FILE “Aggrieved Person” CONSUMER INNOCENT MEMBER OF THE PUBLIC WHO MAY FILE “Aggrieved Person” CONSUMER INNOCENT MEMBER OF THE PUBLIC

28. 1)Final Judgment 2)Licensed Activity 3)Actual and Direct Loss 1)Final Judgment 2)Licensed Activity 3)Actual and Direct Loss

29. COVERAGE LIMITS (B&P Code § 10474.5) as of 2008 $50,000/per transaction$50,000/per transaction $250,000/per licensee$250,000/per licensee COVERAGE LIMITS (B&P Code § 10474.5) as of 2008 $50,000/per transaction$50,000/per transaction $250,000/per licensee$250,000/per licensee

30.  EMERALD BAY FINANCIAL INC. AND THREE INDIVIDUAL REAL ESTATE LICENSEES  30 VICTIMS  TRUST DEED INVESTMENTS  CalBRE AWARDED $1,000,000 TO VICTIMS

32. Tom Pool Assistant Commissioner Licensing & Administration

33. Processing Times Phone Wait Times

34.  Average Number of Calls per Month  21,130  8 Staff Dedicated to Phones  Many Calls Involve Status of Applications

35. Help Me Help You - Jerry Maguire

36.  Salesperson terminations  Update contact information (email and phone numbers)  Salesperson changes of employing broker  Broker main office address changes  Mailing address changes  Print license certificate  Broker renewals  Salesperson renewals

37.  54, 537 Sales Renewals in FY 13/14  7,504 Sales Renewals by Mail  86% of renewals on-line  30,539 Broker Renewals in FY 13/14  9,722 Broker Renewals by Mail  68% of renewals on-line

38.  17,226 Renewals by Mail  Currently 4 Week Backlog  eLicensing instantaneous  25,839 Actual Hours to Process  eLicensing Saves 13 Yrs./13 PYs

39.  Combo Applications  38,781 REB Exam Applications  5,297 Did Not Use Combo Application  91,596 RES Exam Applications  26,764 Did Not Use Combo Application  Website Resources  New Videos on RES/REB exam/app process  Posting of Current Processing Times  Posting of FAQs

42. WinWin Spread the eWord!

43. This power point presentation will be made available in its entirety on the CalBRE website. www.bre.ca.gov