The California State Senate passed a bill Wednesday preventing lenders from requiring the use of a specific title or escrow service provider for a buyer of real estate-owned (REO) property. AB 957, or the Buyer’s Choice Act, passed the senate, 33-4, after lawmakers adopted an urgency clause on Sept. 1. The legislation awaits Gov. Arnold Schwarzenegger’s signature and will take immediate effect upon being signed. After its introduction in February, the senate passed the bill on May 13, 77-0. Amendments were attached, and the bill went back to the senate for its enrollment in September. Current federal law prohibits a seller of property to be purchased with federally assisted mortgage loans from dictating to the buyer to purchase insurance from any particular company. The Buyer’s Choice Act expands that policy to single-family REO property until Jan. 1, 2015. The Act does not prohibit a buyer from accepting a title insurer or escrow agent recommended by the seller if written notice of the right to make an independent selection is provided. Sellers caught violating the Buyer’s Choice Act are liable to the buyer for three times the amount of all charges made for the title or escrow service. Write to Jon Prior.

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