Predatory Lending Measure Clears Assembly

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Los Angeles Times 
June 1, 2009
Reckard, E. Scott

The California Assembly has passed an anti-predatory mortgage lending bill proposed by Assemblyman Ted Lieu (D-Torrance) that would force mortgage brokers to act in a borrower's best interests by banning yield-spread premiums, which are payments made to brokers for who commission loans at higher interest. Additionally, AB 260 prevents deceptive statements about subprime loans and the steering of clients into "inferior" loans, prohibits negative amortization financing, and restricts prepayment penalties. The bill covers state-regulated independent mortgage brokers, who could lose their licenses and face fines of $10,000 per violation. The state Senate must now consider the legislation.
 

 

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