Bill Text: CA AB406 | 2011-2012 | Regular Session | Introduced

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Bill Title: Adjustable rate mortgages: balloon payments.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-02-01 - Died pursuant to Art. IV, Sec. 10(c) of the Constitution. From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB406 Detail]

Download: California-2011-AB406-Introduced.html

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BILL NUMBER: AB 406	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Davis

                        FEBRUARY 14, 2011

   An act to add Section 2924m to the Civil Code, relating to
mortgages.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 406, as introduced, Davis. Adjustable rate mortgages: balloon
payments.
   Existing law requires applicants for adjustable rate loans to be
provided a specified disclosure notice. Existing law requires written
notice to be provided at least 90 days prior to the date of the
final payment on a balloon payment loan, as defined, that is secured
by a deed of trust or mortgage on real property containing one to 4
residential units.
   This bill would prohibit balloon payments from being included in
the terms of an adjustable rate loan, as defined, for real property
containing one to 4 residential units secured by a mortgage or deed
of trust on real property.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 2924m is added to the Civil Code, to read:
   2924m.  (a) An adjustable rate loan for real property containing
one to four residential units secured by a mortgage or deed of trust
on real property shall not provide for a balloon payment, as
described in paragraph (1) of subdivision (d) of Section 2924i.
   (b) For purposes of this section, "adjustable rate loan" means a
loan where monthly payments for the loan may be adjusted to reflect
changes in the variable interest rate of the loan.