Updates to the mortgage laws you need to know

Recently, Governor Schwarzenegger signed 7 new mortgage laws, all of which should provide protection to consumers and help the markets to continue improving. The 7 laws included provisions to:

  1. Tighten restrictions on mortgage brokers so they cannot steer borrowers to riskier, higher-interest loans when they qualify for less-expensive ones
  2. Set licensing requirements for all residential loan originators.
  3. Makes it a felony to commit fraud on a mortgage loan application.
  4. Require lenders to give more and clearer information to those interested in reverse mortgages, which let seniors borrow against their homes’ equity.
  5. Create a registration program for appraisal management firms.
  6. Allow buyers of foreclosed homes to choose local escrow officers, rather than being forced to use the escrow company chosen by the seller.
  7. Require that mortgage loan documents be written in the same language the verbal negotiations were conducted in.

All of these laws should help to make the next year easier for buyers and sellers to protect themselves and their investments.

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