11/05/09 update: While the recently-passed Senate Bill 36 is effective immediately, the provisions requiring licensees to obtain special mortgage origination designations will go into effect no sooner than December 1, 2010.
Last week, we reported on new legislation that makes it more difficult for lenders and loan modification firms to defraud homeowners. In addition to these, a series of further laws grant other protection to California homebuyers.
No sooner than December 1, 2010, mortgage originators will be forbidden from issuing loans unless they obtain a special designation from the Department of Real Estate (DRE). Sellers will be prohibited from requiring buyers to use a specific escrow or insurance agency in a purchase agreement.
Effective January 1, 2010, all contracts, including real estate purchase agreements, must be translated into the language of negotiation. Also on January 1, 2010, the crime of mortgage fraud will be considered a felony. The rules governing reverse mortgages are also then altered to require lenders to make further disclosures to clarify the nature of these relatively unknown and often confusing loans.
first tuesday take: In the next week or two, first tuesday will publish more detailed “Legislative Watches” on this material, clarifying the application of these new laws to help you keep abreast of the most current news in California real estate. Stay tuned to our Legislative Watch section to keep track of what’s coming your way from Sacramento.
Re: “Schwarzenegger signs seven new mortgage laws”, from the Los Angeles Times
Also see our Sacramento Gossip section for other California real estate bills passed or pending.