The Assembly Banking and Finance Committee this week moved California Chamber of Commerce-opposed legislation that erodes housing availability.
SB 1150 (Leno; D-San Francisco) has been labeled a job killer because it increases liability risk and the cost of residential loans by allowing parties not on the original mortgage loan to interfere with appropriate foreclosures and creates a private right of action for violations of overly complex and burdensome requirements.
Although the committee approved amendments limiting the scope of who qualifies as a successor in interest to the party on the original mortgage loan, acknowledging the mortgager’s duty to determine creditworthiness, and providing a safe harbor for mortgagers that comply with forthcoming federal regulations, SB 1150 is retroactive and still greatly expands the private rights of action that may be levied against lenders.
Consequently, the availability of credit will be compromised if SB 1150 becomes law. If lenders must assume more risk for loans, which they will under the mandates in SB 1150, mortgage loans will become more expensive. These costs will be passed on to many Californians, pricing them out of homeownership.
Key Vote
SB 1150 passed Assembly Banking and Finance on June 20, 8-2:
Ayes: Dababneh (D-Encino), Bonilla (D-Concord), Brown (D-San Bernardino), Chau (D-Monterey Park), Gatto (D-Glendale), Low (D-Campbell), Ridley-Thomas (D-Los Angeles), M. Stone (D-Scotts Valley).
Noes: T. Allen (R-Huntington Beach), Kim (R-Fullerton).
Absent/abstaining/not voting: Achadjian (R-San Luis Obispo), Hadley (R-Torrance).
SB 1150 will be considered next by the Assembly Judiciary Committee.
