A California Chamber of Commerce-opposed job killer bill that erodes housing affordability is on the Assembly Floor.
SB 1150 (Leno; D-San Francisco) has been identified as a job killer because it increases liability risk and the cost of residential loans by allowing parties not on the original mortgage loan to interfere with appropriate foreclosures and creates a private right of action for violations of overly complex and burdensome requirements.
The availability of credit will be compromised. If lenders must assume more risk for loans, which they will under the mandates in SB 1150, mortgage loans will become more expensive. These costs will be passed on to many Californians, pricing them out of homeownership. Some lenders may choose to leave the mortgage lending market leading to job losses and even more limited loan availability. Already the high cost of housing in California makes it difficult for employers to attract and retain a workforce.
Amendments on August 15 expanded the private right of actions that may be levied against lenders. A private right of action is available in the underlying statute. SB 1150, however, now allows a private right of action for injunctive relief, the greater of treble damages or $50,000, and attorneys’ fees ONLY for the prevailing successor in interest.
Further, federal regulations governing the same issues as covered in this bill have just been released. It would be prudent to review the federal regulations before enacting any state regulations that may be in conflict.
The CalChamber is urging businesses to contact their Assembly representatives and ask them to vote no on SB 1150.