SACRAMENTO, Calif. The California Mortgage Bankers Association is calling on lenders to lobby against a California Senate bill that would impose restrictions on high-cost loans.
The state Senate Banking, Commerce and International Trade Committee had been scheduled to hold a hearing Wednesday on the Home Loan Protection Act. However, according to Jan Lynn Owen, executive director of the bankers group, the hearing was canceled at the request of the bills author, Sen. Joseph Dunn.The group has contacted the senators office and would like to work with him on the bill, Ms. Owen said.
The bill covers first mortgages with interest rates 3% above a standard specified in the bill and second mortgages with rates 5% above the standard.
Among other things, the bill would prohibit the financing of insurance policies through these loans and prepayment penalties that last more than three years or exceed a specified percentage of a loan.