California enacts mortgage law on co-borrowing with divorces

On September 22, California's Governor signed AB 3100, changing requirements for conventional home mortgage loans. Starting January 1, 2027, loans secured by owner-occupied properties with up to four units must allow existing borrowers to purchase another borrower’s property interest, assuming the seller’s mortgage in cases of divorce or legal separation, if qualified. This aligns state law with federal guidelines under the Garn-St. Germain Act, requiring lenders to clarify the loan assumption process in loan documents.