State court tosses out local mortgage rules

Local governments cannot regulate mortgage-lending operations that saddle heavy interest rates on home buyers who would not qualify for traditional loans, the state Supreme Court ruled last week.

The 4-3 decision prevents Oakland and Los Angeles from enforcing local mortgage rules and blocks other cities from adopting lending ordinances.

Ruling in a challenge to Oakland’s ordinance, the divided court said that only the California Legislature can set lending controls. Allowing cities or counties to expand upon state mortgage laws would create a hodgepodge of unworkable rules, Justice Janice Rogers Brown wrote for the majority.