On September 11, 2018, the California governor approved a bill that amends residential mortgage loan modification requirements for supervised financial organizations negotiating in one or more of five specified languages.
The bill amends Section 1632.5 of the California Civil Code to now require any supervised financial organization that 1) negotiates a modification of any terms of a mortgage loan with a borrower primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean and 2) offers a borrower a final loan modification in writing, to deliver a form or forms that summarize the modified loan terms in the same language as the negotiation. These disclosure forms must be delivered at the time the final loan modification offer is made.
The bill also requires the California Department of Business Oversight (CDBO) to make available specified forms relating to mortgage lending disclosures in each of the five languages listed above so that they may be used by supervised financial organizations. The CDBO is allowed to create these forms using BCFP and Fannie Mae forms as guidance.
The amendments to Section 1632.5 of the Civil Code are effective 90 days following the issuance of forms by the CDBO, but in no instance before January 1, 2019.