Tuesday, October 13, 2009

Governor signs several new mortgage laws

The title above links to an L.A. Times story about mortgage- and real estate related bills that our Governator signed into law yesterday. Among them:

"The new law also bans so-called negative-amortization loans, which offer the option of monthly payments so low that the loan amounts can actually grow over time." - This is huge.

"Late Sunday night, the governor signed AB 260 by Assemblyman Ted Lieu (D-Torrance). The measure, which takes effect Jan. 1, tightens restrictions on mortgage brokers so they cannot steer borrowers to riskier, higher-interest loans when they qualify for less-expensive ones. " - Also huge.

"AB 957, by Assemblywoman Cathleen Galgiani (D-Stockton), allows buyers of foreclosed homes to choose local escrow officers, rather than being forced to use the escrow company chosen by the seller." - Not so huge, in fact this is completely useless. Now, if there was a bill that prevented seller banks from making buyers prequalify with them, that would be huge.

2 comments:

  1. Anonymous10:34 AM

    Hi Judy,

    I really appreciate your blog. Thanks for taking the time to maintain it.

    I'd really like to get more elaboration from you on your comment:

    "Now, if there was a bill that prevented seller banks from making buyers prequalify with them, that would be huge."

    What would this mean for buyers, sellers, and the industry as a whole?

    Thanks!

    ReplyDelete
  2. Anon, to clarify: many seller banks and listers of foreclosure properties insist that a buyer get pre-approved with a specific lender (them) before their offer is even considered. Yes, a buyer should be pre-approved, but most already have been pre-approved with their own preferred lender. This takes time and effort, and it can be a real hassle to even track down/get calls returned by the selling bank or listing agent's lender. It's just another hoop for buyers to jump through.

    ReplyDelete