Cal. Appellate Court on Option ARMs

Posted by NCBRC - August 12, 2011

Yesterday in the case of Boschma, et al v. Home Loan Center, Inc., No. G043716, a California Appellate Court held that homeowners sufficiently stated a claim for a state UDAP violation based on the lender’s disclosure that suggested only the possibility of negative amortization and interest rate increases, when both were certain.  The interest rate was going to rise from the introductory teaser rate, and if the borrowers paid according to the payment schedule in the TIL disclosure negative amortization was also a certainty.

Click here for the opinion.

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