An Express Article from the California Land Title Association
Bulletin 13/14-89 - May 7, 2014
CLTA sponsored legislation to create a process for termination of a Home Equity Line of Credit (HELOC) unanimously passed the Assembly Committee on Banking and Finance yesterday. The bill is necessary to address continuing problems with HELOCs that are neither closed after a property is refinance or sold, nor released after a payoff pursuant to a payoff demand statement. Assembly Bill 1770 requires that when a lender receives a written request to terminate a HELOC from an authorized person, including a title company, the lender must terminate the HELOC and apply sums subsequently received to the HELOC.
Furthermore, the bill requires that the written request to terminate the equity line contain at least the name of each borrower, the account number and the street address of the property. A written request to terminate the HELOC must be provided to the borrower and be accompanied by a statement set forth in the bill explaining the reason for the termination and the rights and responsibilities of the borrower.
Update: AB 1770 passed out of the Assembly with no votes in opposition on Monday, May 19th.