California Gov. Arnold Schwarzenegger signed a bill yesterday aimed at protecting reverse mortgage borrowers from predatory lenders. The new law requires customers receive counseling from a Department of Housing and Urban Development-approved counselor before the loan closes.

The law also requires lenders to translate any documents into Spanish, Chinese, Tagalog, Vietnamese, or Korean if the mortgage was negotiated in that language. The law, which goes into effect Jan. 1, also prevents lenders from requiring customers take out an annuity as one of the conditions of the loan.

The governor also signed a second bill that allows the state’s Departments of Real Estate and Corporations to suspend the license of any mortgage broker who misleads the public about his or her experience.

Source: AP 

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