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California Homeowners Can Stop Foreclosure with Loan Modifications, Forensic Loan Audits and Negotiated Mortgage Loan Modification Terms.
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13 Oct 09 California Passes New Mortgage Loan Modification Bills

California Governor Arnold Schwarzenegger approved 7 new mortgage relief laws that affect loan modifications and a range of mortgage processes. The new loan modification law will restrict how lawyers and loan modification companies can receive money. California loan modification options may quickly disappear without a financial motive for professionals to negotiate mortgage loan modifications. This law will affect a variety of consumer homeowner protections to home-mortgage holders and may permit a few to keep their homes.

The governor signed AB 260 which will take effect January 1, 2010 and will tighten restrictions on mortgage brokers so they will be unable to steer borrowers towards riskier, higher-interest loans when they qualify for safer, more affordable home mortgages.

The mortgage relief law will also prohibit negative-amortization home loans, which offer monthly payments that do not include any principal or even all of the monthly accrued interest, which can cause the amount of a home loan to increase over time.

The law also limits prepayment penalties to no more than 2% of the home loan balance and gives state regulators the power to enforce federal lending laws. The governor vetoed similar legislation last year at the urging of some groups in the mortgage and real estate industries. The California Association of Mortgage Brokers, the California Mortgage Association and the California Association of Realtors opposed this year’s version of the bill to no prevail.

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