California Assembly Bill: SB 1275, which would have a negative impact on lender/servicers in California, and ultimately mortgage borrowers in the state, failed this morning on a reconsideration vote in the State Assembly. The bill failed 29-36, and is not expected to be revived. A number of organizations, including the California Mortgage Broker’s Association, opposed the bill for the following reasons:
- Measure is unnecessarily complex and riddled with procedural traps
- Promotes strategic defaults negatively impacting communities
- Fails to require tender by borrowers as a symbol of good faith
- SB 1275 invites litigation through inclusion of TWO private rights of action
- Inappropriately meddles with pending litigation
- The measure may be preempted for federally chartered institutions creating an unlevel playing field exacerbated by the recent credit union only carve-out
For full bill text, click here
To read more about the California Mortgage Brokers Association’s opposition, click here
