Relating to home loans and foreclosures on residential real property.
Impact
If enacted, SB1284 will have significant implications for the mortgage industry and the protection of borrowers. The act mandates that mortgage servicers must make a good faith effort to contact borrowers in default or at risk of foreclosure to discuss potential options for restructuring their loans. Additionally, the bill enhances the notification requirements for borrowers regarding adjustable-rate home loans and ensures that clear, comprehensible information is provided. This could reduce the number of foreclosures by fostering communication between lenders and borrowers, allowing for resolutions before matters escalate to foreclosure proceedings.
Summary
SB1284 is an act relating to home loans and foreclosures on residential real property. The bill seeks to establish stricter regulations governing the practices of mortgage brokers and servicers, particularly concerning the provision of information to borrowers during the foreclosure process. Key provisions include mandatory contact between servicers and borrowers, requirements for notices of default, and explicit prohibitions against loan steering towards subprime loans when more advantageous options are available for the borrower. The overarching goal is to promote transparency and protect consumers from predatory lending practices.
Contention
Despite the positive intentions behind SB1284, opposition may arise regarding the increased regulatory burdens it places on mortgage lenders and servicers. Industry stakeholders may argue that these requirements could complicate loan processing and extend the timeframes for default resolution. Furthermore, some may contend that while the intent is to protect consumers, stricter regulations could lead to a tightening of credit availability, particularly for subprime borrowers as lenders navigate the new compliance landscape. Advocates for housing accessibility fear that such measures may inadvertently harm those they aim to protect by making it harder for them to secure loans.
Proposing a constitutional amendment to remove the requirement that a home equity loan be closed only at the office of the lender, an attorney at law, or a title company.
Proposing a constitutional amendment authorizing the legislature to provide for exceptions to the requirement that a home equity loan be closed only at the office of the lender, an attorney at law, or a title company.
Relating to providing property tax relief through the public school finance system, exemptions, limitations on appraisals and taxes, and property tax administration; authorizing the imposition of a fee.
Relating to providing property tax relief through the public school finance system, exemptions, limitations on appraisals and taxes, and property tax administration; authorizing the imposition of a fee.
Relating to prohibiting the non-judicial foreclosure of a loan for the purchase of certain residential property during a loan modification process; providing a penalty.