Anti-Predatory Lending Bill Passes Calif. Assembly

Posted by Orb Staff on June 02, 2009 No Comments
Categories : Residential Mortgage

fornia bill that would eliminate incentives leading to risky loans has been passed by the state's assembly. Assemblymember Ted Lieu, D-Torrance, is the sponsor behind A.B.260, which also seeks to prohibit steering and prohibit brokers and lenders from making false or deceptive statements connected with a subprime loan. "We must enact landmark reforms to address the systemic failures in California's subprime mortgage industry," Lieu said in a statement. "These failures have not only devastated California's economy, they have contributed to a national and international financial meltdown." A.B.260 would establish regulations for prepayment penalties, ban negative amortization loans and establish penalties and enforcement mechanisms to prevent abusive subprime lending, Lieu's office says. California, formerly the epicenter of subprime lending, posted the highest foreclosure rate in the nation in April, with one in every 138 homes receiving a foreclosure filing, according to RealtyTrac. Gov. Arnold Schwarzenegger vetoed similar legislation last year but has since called a special session of the Legislature to address the state's mortgage crisis. SOURCE: Office of Assemblymember T

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