There were a total of 7 new laws effecting real estate signed by Gov. Schwarzenegger on October 11, 2009. Below is a brief explanation of each with links to full details for those that want to know more. Add these to many other recent changes in our industry and you can see why everyone is having a bit of difficulty figuring all these new rules and regulations out.
AB-260 by Assemblyman Ted Lieu (D-Torrrance). The law takes effect on January 1, 2010 and tightens restrictions on mortgage brokers from steering borrowers to riskier, higher interest loans when they qualify for less expensive ones. Good news is that this bill also bans negative-amortization loans – these are loans that offer monthly payment options so low the loan balance (principle) can actually grow over time. The law also limits prepayment penalties to be no more than 2% of the loan balance.
SB-36 by Sen Ron Calderon (D-Montebellow), sets licensing requirements for all residential loan originators. More.
SB-239 by Senator Fran Pavley (D-Agoura Hills), makes it a felony to commit fraud on a mortgage. More.
AB-329 by Assemblyman Mike Feuer (D-Los Angeles), requires lenders to give more and clearer information to those interested i reverse mortgages. Reverse mortgages let seniors borrow against their home’s equity. More.
SB-237 by Sen. Ron Calderon creates a registration program for appraisal management firms. More.
AB-957 by Assemblywoman Cathleen Galgiani (D-Stockton). This bill allows buyers of foreclosed homes to choose local escrow officers, rather than being forced to use the escrow company chosen by the Seller. More.
AB-1160 by Assemblyman Paul Fong (D-Cupertino). Requires that mortgage loan documents be written in the same language the verbal negotiations were conducted in. More.
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