Editor’s note: The following posting appears on the Inman News Blog. The blog enables readers to comment on postings and respond to other readers leaving comments in real time. Click here to join the discussion stemming from this post.

The California Department of Corporations is requiring all finance lenders and mortgage banker originators under its jurisdiction to fill out a survey showing the number and dollar amount of all nontraditional mortgage loans on their books as of Dec. 31, or sold over the preceding 12 months.

The survey, which is due April 3, will be “utilized in formulating appropriate guidance for our Department’s licensees and examination staff,” according to a March 19 letter to lenders.

California is one of 24 states that have yet to adopt the new federal guidance for nontraditional interest-only and payment-option ARM loans (the guidance says lenders have to qualify buyers at the fully indexed rate, and provide more complete disclosure of loan terms).

State Sen. Mike Machado, who chairs the Banking, Finance and Insurance Committee, has introduced Senate Bill 385, directing the California Department of Corporations to implement the federal guidance to lenders under the state’s jurisdiction.

Machado held a hearing in Sacramento Monday on subprime lending — the committee’s second in two months. Steven Krystofiak, president of the Mortgage Broker Association for Responsible Lending, tells Inman News that the Department of Corporations “has been getting barraged and hammered” in the hearings. The department, he says, has 25 examiners to supervise 4,800 lenders.

That said, Krystofiak wonders if it would have been helpful to have the information the state is now seeking months, or even years, ago. In addition to stats on interest-only and payment-option ARM loans, the survey seeks data on reduced documentation, piggyback and home equity loans.

At a hearing in Washington, D.C., Tuesday, Massachusetts Commissioner of Banks Steven Antonakes testified that state regulators have been frustrated in their attempts to police subprime lenders by federal preemption of state consumer protection laws.

Matt Carter, Inman News

Click here to join the discussion at the Inman News Blog.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
Real estate news and analysis that gives you the inside track. Subscribe to Inman Select for 50% off.SUBSCRIBE NOW×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription