Monday, January 29, 2018 / by Sean Zanganeh
California's housing and foreclosure crisis has spurred many bills at the Capitol aimed at tightening rules in real estate transactions:
• AB 260: Gives mortgage brokers fiduciary duty to clients, meaning possible consequences if borrowers are given loans they can't afford.
• AB 603: Bans buyers of bank repos from booting existing renters for at least a year, unless renters aren't making payments.
• AB 674: Prevents loan-modification firms from getting advance fees.
• AB 919: Puts a special "rider" on mortgage deeds, listing lender, mortgage broker and appraiser to have a paper trail in case the loan later goes bad.
• AB 957: Makes banks allow buyers of repos to use their own title and escrow companies.
• AB 1160: Requires mortgage documents be translated into Spanish, Chinese, Tagalog, Vietnamese or Korean if the mortgage was negotiated in one of those languages.
• AB 1534: Blocks home builders from steering buyers to their own "in-house" mortgage operations.
• SB 94: Prevents loan-modification companies from charging fees up front.
• SB 97: Prevents state from taxing forgiven mortgage debt as additional income.
• SB 109: Makes real estate auction firms post more detailed information about bank-owned properties before auction, including existence of liens.
• SB 120: Prevents people who buy bank repos from shutting off utilities or changing locks to get tenants to move.
• SB 127: Provides more advance notice for foreclosure sales on county courthouse steps and more details about the properties to encourage more buyers.
• SB 239: Creates new category of mortgage fraud in state law, giving authorities more power to prosecute.
Source: Bee research
ALREADY IN ACTION
Here are some recently enacted state and federal real estate programs:
• An $8,000 federal tax credit for first-time buyers who close escrow on a new or existing home between Jan. 1 and Dec. 1, 2009, and live in it.
• A $10,000 state tax credit for buyers who close escrow on a new, unoccupied home in California between March 1, 2009, and March 1, 2010.
• President Obama's Making Home Affordable Plan, which went into effect March 4, provides government financial incentives to lenders to reduce payments to 31 percent of a borrower's income. Lenders can reduce interest rates and stretch loans to 40 years even if a borrower is behind on payments.
• The plan also helps borrowers who are current with payments but have seen their home's value decline, refinance into newer, cheaper loans. Borrowers can only owe 5 percent more than the home is worth, which limits the program in California.
• Gov. Arnold Schwarzenegger signed AB7XX and SB7XX earlier this year to launch a new 90-day foreclosure moratorium in California on June 15. It temporarily halts foreclosures by lenders that haven't tried hard to work out loan modifications or other alternatives to foreclosure with their borrowers.
Source: Bee research
Obviously.... some of these new plans of action can make or break your transactions, but many of these bills have been passed to help the home buyer/borrower. If you have any questions in regards to any of these bills, give me a ring and I would be more than happy to explain any of these to you.