On June 30, Governor Newsom signed into law AB 130, which includes a new provision to the California Civil Code, Section 2924.13. The new law (previously discussed here) became effective on July 1. The purpose of the law was purportedly to make it more difficult for loan servicers to non-judicially foreclose on so-called “zombie mortgages.” Continue Reading New California Law on Servicing of Second Mortgages Causes Confusion Among Lenders and Servicers
On June 30, California Governor Newsom has signed AB 130, a budget trailer bill related to housing. This legislation includes new requirements for mortgage servicers of subordinate mortgages, defined in the bill, and took effect immediately. The text of the new statute, which comprises a very small portion of the full bill, may be found (here).Continue Reading California Enacts New Mortgage Servicing and Foreclosure Standards
On May 23, the Texas Supreme Court issued an opinion holding that in determining whether a commercial loan is usurious under Texas state law, the “actuarial method” must be employed. This requires the applicable amount of interest to be calculated using the loan’s declining principal balance on a monthly basis, rather than always using the original principal balance of the loan. This decision was in response to a question posed to the 5th Circuit Court of Appeals regarding a dispute over usurious interest charges.Continue Reading Texas Supreme Court Issues New Interpretation of Texas Usury Law
On March 14, the U.S. Court of Appeals for the Fourth Circuit vacated the dismissal of a lawsuit alleging a failure to reasonably investigate a disputed debt.Continue Reading Fourth Circuit Expands FCRA Liability: Legal Inaccuracies Now Actionable
In January 2025, the Maryland Office of Financial Regulation (the “OFR”) issued a guidance stating that assignees of residential mortgage loans, including certain passive trusts, were required to hold a Maryland mortgage lender license and, in certain circumstances, an installment loan license (previously discussed here). In response to this, the Maryland House and Senate passed separate but identical bills known as the Maryland Secondary Market Stability Act of 2025 (the “Act”). The Act was signed into law by Maryland Governor Wes Moore on April 22, and became effective immediately. Continue Reading Maryland Enacts Law Exempting Passive Trusts from Mortgage and Installment Loan Licensing Requirements
California Assembly Bill 3108 became effective on January 1, 2025 and could conceivably make certain business purpose loans secured by owner-occupied property subject to mortgage fraud claims by the borrowers. The primary goal of the new law—passed unanimously by the State Assembly and nearly unanimously by the State Senate (with one apparent absentee)—is to protect borrowers from certain predatory practices by mortgage lenders and brokers. However, unintended consequences may arise.Continue Reading California AB 3108 Creates Potential Mortgage Fraud Issue for Lenders on Owner-Occupied Mortgage Loans Made for a Business Purpose
This week, the CFPB filed an emergency notice in the Fifth Circuit Court of Appeals, indicating that it no longer opposes a pause in compliance with its Section 1071 small business data-collection rule (previously discussed here, here, and here). This marks a significant departure from its previous stance as it navigates ongoing legal challenges from lenders.Continue Reading CFPB Signals Shift in Position on Section 1071
Effective November 23, 2024, the Texas Department of Savings and Mortgage Lending (the “DSML”) adopted new rules affecting mortgage loan companies, mortgage bankers, individual residential mortgage loan originators, and mortgage servicers.Continue Reading Texas Passes Law Expanding Mortgage Borrower Protections
On September 20, Governor Newsom signed AB 2424, which establishes a significant set of new foreclosure notification and sale requirements for mortgage lenders. The law is effective as of January 1, 2025.Continue Reading California Passes Law Extending new Protections to Mortgage Borrowers
On August 13, the CFPB announced an advisory opinion on the applicability of the Truth in Lending Act (TILA) and Regulation Z to “contracts for deed.” A contract for deed is an arrangement in which a consumer purchases a home from a seller subject to the purchaser paying for the home over time. The purchaser moves into the home and assumes responsibility for taxes, insurance, home maintenance and repairs, but does not take title to the home until all payments due are made to the seller. The arrangement is also known by other names, such as “land sales contract,” “land installment contract,” and “agreement for deed.” The arrangement is very similar in many respects to an installment sales contract for the purchase of goods. Continue Reading CFPB Announces Advisory Opinion on Applicability of TILA and Regulation Z To Contracts for Deed
On July 18, the CFPB proposed a new interpretive rule that would characterize earned wage access (“EWA”) products as extensions of credit and subject to the Truth in Lending Act and Regulation Z. Under the interpretive guidance, both the “tipping” function on EWA products, and the “expedited funds delivery fee” would be treated as finance charges, and would require the creditor to make the disclosures required for unsecured extensions of credit under Regulation Z. However, an employer-sponsored program which is provided at no cost to the employee (i.e., without what the CFPB has deemed a “finance charge”) would not require such disclosures.Continue Reading CFPB Proposes Interpretive Rule Characterizing Earned Wage Access Products as Loans