New law aims to curb predatory lending

Here ye here ye, from this point forward no is responsible for anything they do. A feeble attempt by the government to blame financial institutions for doing what the government wanted them to do. Get everyone in a home, whether they qualify or not. And, now it's time for the government to blame the insurance industry for our health care system. Oh please government, I forgot to buy toilet paper....come wipe me.

Very interesting re: the neg am loans considering a large percentage of sales in Santa Cruz (not including Watsonville and SLV) were made with neg am loans during the last two years of the real estate bubble. IMHO, this is the reason why we haven't seen huge price declines on the Westside and Eastside homes. Those loans are only starting to reset next year.

Another interesting point is that the foreclosed homes are NOT being relisted on MSL, which is not only skewing the Unsold Inventory Index (PLEASE Gary, Jondi etc. do NOT refer to the market conditions as "normal" in your column this month), but will force another Supply & Demand situation in our county.

Please banks - leave the market alone and let the basic economy principle of supply and demand correct the market conditions!!

How is higher price defined? Loans have different terms where one provision is often a trade off with another provision.

How does a "fiduciary responsibility" interact with a commission-based industry and where there are more parties to the transaction than just the borrower? And I understand there was a previous fiduciary duty in this state due to a court ruling. Was that existing duty violated by any of lending practices that went on?

Was it legal to make "false or misleading statements" before? And what's the standard of proof for proving a violation of that? I thought that's why these transactions required written contracts.

A Congresswoman (Dem) plans to introduce legislation to eliminate stricter state laws that give consumers more rights than federal law. If the Dem is successful then the predatory law above would have no teeth because it would be preempted by federal law. A huge defeat. Please call folks on the financial services panel and ask to defeat this legislation. http://financialservices.house.gov/members.ht...

http://in.reuters.com/article/fundsNews/idINN...

And where is Boutell in this debate?

With one hand the government chastsises the banks with predatory lending laws, and with the other they hand them our money. Somewhat confusing.

wildman wrote:

With one hand the government chastsises the banks with predatory lending laws, and with the other they hand them our money. Somewhat confusing.

Really? You are confused? Oh well. Go back to your job, slave!

Too bad it's not retroactive. I had a woman mortgage person just about cause me to lose my home. She totally lied, and the title company didn't even alert me to this. She lied right in front of them!

Disabuser is right. There are already federal lending regulations that prohibit these things. The California Department of Real Estate can already revoke licenses for these violations. If no one was enforcing these existing laws and regulations, who is to say that any new legislation will do anything at all?

Interesting that banks are exempt. Banks, that don't have to disclose Yield Spread Premium in the first place. And doing away with loan programs that served a purpose, rather than just requiring them to be written responsibly is not going to help. I can just hear the borrowers now, getting pissed because they want a no-point loan and NO ONE will be allowed to have those anymore. Then the media will just write about how lenders charge too much in points to make a loan.

Guess I'll have to read the actual bill text, because these general terms about what it "will do" are scary and vague.

We have been trying to get a loan modification with Litton Loan Serving since November 2008. We were denied in June. Our loan has gone from a 6.725% to a 8.725%. Would this be considered a predatory loan?
We contacted HUD in 02/09 we were directed to Auriton, in 05/09 our counselor told us if we kept making the payments Litton would not help us so stop paying them!
We are now in default and they still won't help.
I called and their repayment schedule was $10,000 down and $6027.00 a month for 16 months with late fees of $250.00 a month and @ 8.725% until the 16 months are over.
We want to make fair house payments. Is there any help out there?