Housing and Mortgage News RSS Feed

Last Updated: Dec 31, 2009 - 8:33:49 AM

( SACRAMENTO ) – January 1, 2010 not only marks the New Year, but also the effective date for many new California laws.  Among the bills taking effect on January 1 are several important new laws that address some of California’s most pressing issues, including the mortgage crisis, water conservation and important consumer protections.

Landmark Mortgage Reform – AB 260 (Lieu)

Assembly Bill 260, by Assemblymember Ted Lieu (D-Torrance), is one of the most comprehensive new mortgage reform laws in the nation and is California’s response to bring trust and security back to the state’s mortgage market, protect borrowers from the most abusive lending practices that caused the foreclosure crisis, and reassure the secondary market that loans bought in California are sound.

“Look out Wall Street, California is no longer the Wild West,” said Assemblymember Ted Lieu.  “Although it took over two years, I am pleased to have been able to overcome the powerful interests blocking reform so that future generations won’t ever experience this type of crisis.  This is a big win for consumers and for the future of California’s housing market.”

Specific provisions of this bill include: prohibiting the steering of borrowers into higher-priced loans that are more risky than lower-interest, fixed-rate loans for which the borrower had actually qualified; banning negative amortization loans where the loan gets larger the longer the borrower holds the loan; and putting strict caps on prepayment penalties.  This bill also enacts a strong fiduciary standard for all mortgage brokers and banks acting as mortgage brokers, and prohibits lenders and brokers from making false or misleading statements relative to the terms of a subprime loan.

Water Conservation – AB 1061 (Lieu)

Nearly 33 percent of California homeowners live in Common Interest Developments (CID’s). Property owners within CID’s who take responsible steps to reduce their water use by installing water efficient landscapes or by changing their outdoor irrigation practices, while reducing their water costs, could be cited and fined by their CID. AB 1061 eliminates the ability of CID’s to prohibit, fine or assess a property owner for installing water efficient landscaping.

Consumer Protection – AB 992 (Lieu)

With the rapid decline of housing prices over the past few years, con artists are sending misleading letters asking for money to file property tax reduction requests. AB 992 puts an end to this scam by preventing these miscreants from sending solicitations that look like official government letters that attempt to collect a fee, and in some cases, even threaten a late fee if not acted upon immediately.  These scammers would face up to 6 months in jail and $2,500 fine per violation.  

For a complete list of Assemblymember Lieu’s legislation, please visit www.asm.ca.gov/lieu  

Assemblymember Ted W. Lieu is Chair of the California State Assembly Rules Committee, former Chair of the Assembly Banking & Finance Committee, and author of California ’s Foreclosure Prevention Act and comprehensive mortgage reform legislation.  He represents the 53rd Assembly District.