UPDATE (June 22, 2020): COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020”, last Thursday the bill failed in Assembly. Many mortgage loan market participants breathed a sigh of relief as the bill would have enacted sweeping new forbearance standards beyond federal CARES Act mandates for residential and multifamily mortgages.
A proposed piece of COVID-19 relief legislation could have major implications for California lenders and servicers, particularly in the mortgage lending industry, if passed into law. The assembly bill, entitled “COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020,” (“AB 2501”) is intended to provide relief to residential and multifamily mortgage borrowers, as well as borrowers under loans secured by a mobile home or motor vehicle, by requiring the loan servicers to provide forbearance to borrowers experiencing a financial hardship during the Covid-19 emergency. It is also notable that borrowers under certain payday loans, known as deferred deposit transactions, would also benefit from AB 2501 although the specified relief is not forbearance but fee restrictions and a requirement for payment plan options in accordance with specified procedures.
Continue Reading AB 2501 – COVID-19 Homeowner, Tenant, and Consumer Relief Law of 2020