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Obtaining Relief From The Automatic Stay

If they meet the necessary requirements, creditors may obtain relief from the automatic stay by filing a motion under § 362(d) of the Bankruptcy Code, which initiates a contested matter before the bankruptcy court. Upon the filing of a bankruptcy petition and commencement of a bankruptcy thereby, these automatic stay provisions enjoin most types of collection activities and other creditor actions against the debtor and its assets.

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April Amendments Change SB 1235 As Proposed

On April 9, 2018, significant changes were made to SB 1235 (Steve Glazer, D-Sacramento), which was introduced in the California State Senate on February 15th. If passed in its original form, the language of the Bill would have required disclosure of interest rates and imposed other regulations for commercial loans.

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Recordkeeping Requirements Under The CRMLA And CFLL, Part 2

This is the second part of an article on the requirements imposed by the California Residential Mortgage Lending Act (CRMLA) and the California Finance Lenders Law (CFLL) regarding recordkeeping by licensees. Both acts impose certain requirements on licensees, who must keep all of the following types of records:

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Recordkeeping Requirements Under The CRMLA And CFLL, Part 1

A mortgage loan originator, defined as any individual who offers or negotiates terms of a residential mortgage loan for the expectation of compensation or gain, must be licensed to operate in California. The California Residential Mortgage Lending Act (CRMLA) and the California Finance Lenders Law (CFLL) impose certain recordkeeping requirements on licensees.

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Grounds for Denying An FLL Or RMLA License

Under California law, a mortgage loan originator is any individual who offers or negotiates terms of a residential mortgage loan for the expectation of compensation or gain. Any person who provides services as a mortgage loan originator under the California Residential Mortgage Lending Act (CRMLA) or the California Finance Lenders Law (CFLL) must be employed by and sponsored by a Department of Business Oversight (DBO) licensee under the CRMLA or CFLL. Perhaps more importantly, a mortgage loan originator must herself be licensed to operate in California. What are the reasons an applicant may be denied a license under the CRMLA or CFLL?

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About California’s Usury Law

State usury and licensing laws differ significantly from state to state. California’s Constitution permits parties to contract for interest on a loan primarily for personal, family or household purposes at a rate that may not exceed 10% annually, based on the unpaid balance. For example, if payment of a loan of $100,000 is due at the end of one year and the borrower makes no payments during the year, the lender may charge $10,000 (10%) as interest. In the absence of an agreement, the rate of interest upon a loan or of any money or goods or accounts (after demand) is 7% annually.

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A new bill, SB 1235 (Steve Glazer, D-Sacramento), has been introduced in the California State Senate that would require disclosure of interest rates, as well impose other regulations, for commercial loans. Currently, interest rate disclosures have never been required for commercial loans. If passed, this bill would surely have significant effects on the commercial lending industry in California. Legal observers expect many trade groups to lobby against the bill in its present form.

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On January 8, 2018, Senators John Cornyn (R-TX) and Elizabeth Warren (D-MA) introduced a bill (S. 2282) that would alter where corporate debtors file Chapter 11 bankruptcy cases. A large number of lawyers, judges, and professors throughout the country have actively worked on the issue of venue reform since 2011. The legislation aims to increase some fairness and convenience to those that regularly deal with the corporation such as creditors and even employees.

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Avoid These Common Financing Statement Mistakes, Part 2

A security interest provides lenders with the promise of repayment if a borrower defaults on a loan. In this instance, the lender may recover the amount of the loan by seizing and selling the asset used as the loan’s underlying collateral. Perfection is an important component of a secured transaction and in many cases achieved by the filing of financing statements with the California Secretary of State.

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Avoid These Common Financing Statement Mistakes, Part 1

Lenders as secured parties must file their UCC-1 Financing Statement expediently and accurately to properly perfect their security interest in loan collateral. If a financing statement is incomplete, inaccurate, or untimely filed, it may remove a lender from a position of relative priority and allow secondary parties to claim a priority position.

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