New Bill Enhances the Process of Paying off HELOC at Closing
September 15, 2014
AB 1770 seeks to address situations where a lender fails to close a HELOC prior to close of escrow, which may result in the innocent buyer and new lender inheriting the underlying loan and lien. The bill creates a new form “Borrower’s Instruction to Suspend and Close Equity Line of Credit” that, when signed by the borrower and delivered to the lender, instructs the lender to suspend the line of credit for at least 30 days. If the borrower also satisfies the payoff demand, then the lender must close the line and release or reconvey the property. The bill becomes operative as of July 1, 2015, and sunsets July 1, 2019. See CBA’s Regulatory Compliance Bulletin for more information.