CLTA News Express
An Express Article from the California Land Title Association
California State Assembly Approves Major Subprime Lending Reform
Bulletin 07/08-148 - June 3, 2008
The California State Assembly recently approved legislation billed as the most comprehensive and far-reaching state legislation dealing with mortgage and lending reform in the country. AB 1830, introduced by Assemblymember Ted Lieu (D-Torrance), will now move to the Senate for committee hearings.
AB 1830 proposes to make sweeping changes to the mortgage industry, in an attempt to address the practices which lead to the current mortgage problems. The bill would eliminate certain bonuses for mortgage brokers who steer customers into high-risk loans, as well as require lenders to qualify borrowers based on their ability to pay over the life of the loan, not just the initial “teaser” rate. This bill would also ban certain types of practices, such as offering negative amortization loans and prepayment penalties.
AB 1830, which is titled “The Subprime Lending Reform Act of 2008,” was co-authored by 37 members of the Assembly. It is supported by a wide range of consumer groups, including The Greenlining Institute, The California Reinvestment Coalition and The Center for Responsible Lending.
