After the subprime crisis and the crash of the Real Estate market over the last couple of years, the legislative office has made some changes to California laws as we quickly approach the end of the 2009 year. A lot of new laws will be implemented to help the mortgage and lending industries. There will also be laws that will affect the Realtors in the business. Don't let this scare you, the laws are being put into place to help the current market conditions, and to improve the situations of many homeowners who have been affected by this crisis.

There have been many attempts to "stimulate" the economy, by giving tax credits for example. But Legislation is taking a different approach to help bring the Mortgage and Real Estate industry back up to par. Here are just a few of the new laws that I wanted to share with you:

Assembly passed Bill 957, it will be effective from October 11, 2009 until January 1, 2015. The Bill allows for anyone purchasing an REO to have a choice in who they will use for their escrow services. As the buyer, you can decide to use one recommended by your lender or bank, or you have the option to use the company of your choice. If the lender does not bring this to your attention, they will be held liable for damages.

After the fall of the mortgage industry and the subprime crisis, legislators are putting a tight leash on Mortgage Brokers. If you currently hold a Real Estate License, but are originating loans, in December 2010 you will be required to show proof that you have the proper education and passed proper testing, prior to being able to negotiate loans for any reason.

Mortgage brokers will now have "fiduciary" duty toward there borrowers. They will have to make borrowers interest a higher priority than their own.

Here's one I would have personally liked to see enforced years ago. Once we hit the 1st of the year, any fraudulent activity within the mortgage and loan industry will be considered a crime. If you violate this California State law, you will face one-year in prison. If this had been considered years ago, we would have been able to avoid the majority of the downfall we had due to fraudulent lending practices. Many Lenders knew what they were doing was wrong, but there was no one on their backs to tell them different. If people would have regulated the lenders more, a lot of homeowners wouldn't have had to worry about losing their homes. Big name banks would still be in business and not under investigation. Hundreds, even thousands of Realtors would still be able to do the job that they love, without worrying whether or not they are going to eat or be able to pay the mortgages on their own homes.

These are just a few of the new and upcoming laws that I wanted to share. Lets hope that legislation knows what they are doing this time around and that Brokers, Realtors and Lenders can work together to follow the rules. I don't think that the current market can get any worse than it is or has been.