The bill imposes limits on prepayment penalties, prohibits negative amortization home loans, and makes it a felony for a mortgage broker to steer a home owner to a loan for which he or she is not qualified or for the broker to make a materially false statement. The broker is held to a strict standard of good faith.
The deed of trust act is amended to provide that the notice of foreclosure must include a notice identifying the various legitimate options available to the homeowner. (This is something that was absent from a bill I previously discussed.)
This bill addresses a portion of the foreclosure crisis. Other bills, particularly the foreclosure recovery scam legislation recommended by the Attorney General’s Office, are still pending.