State:

Bill Summary: 

S.B. 385
Signed by governor 10/5/07, Chapter 301
Requires the commissioner of Financial Institutions to apply the Interagency Guidance on Nontraditional Mortgage Product Risks and statement to all state-regulated financial institutions, including, but not limited to, privately insured, state-chartered credit unions, and authorizes the commissioner to issue emergency and final regulations for clarification purposes, as specified. The bill also requires the commissioner of Real Estate and the commissioner of Corporations to apply the guidance and statement to real estate brokers and licensees, respectively, and authorizes those commissioners to adopt emergency and final regulations or rules for clarification purposes, as specified. The bill requires the secretary of Business, Transportation and Housing to ensure that these commissioners coordinate their policymaking and rulemaking efforts. Requires specified financial institutions, specified real estate brokers, finance lenders, and persons licensed under the California Residential Mortgage Lending Act to adopt and adhere to policies and procedures that are reasonably intended to achieve the objectives set forth in the guidance and statement. 

H.B. 1322
Signed by governor 6/1/07, Chapter 386
Adds definitions of the terms "borrower" and "residential mortgage loan" to the statutes governing mortgage brokers. Clarifies the application of the "Mortgage Broker Registration Act" to residential mortgage loans. Eliminates the exemption for federal housing administration (FHA)-approved mortgagees and appointed FHA correspondents. Specifies that a mortgage broker has a duty of good faith and fair dealing in all communications and transactions with a borrower. Prohibits a mortgage broker from recommending or inducing the borrower to enter into a transaction that does not have a reasonable, tangible net benefit to the borrower, as defined by rules of the director of the division of real estate (director). Gives the director additional rule-making authority and the authority to assess administrative fines of up to $1,000 for a first offense and $2,000 for subsequent offenses. Requires a mortgage broker to make an inquiry about, and to take into consideration, the borrower's current and prospective income and other factors prior to recommending, brokering, or originating a residential mortgage loan. Requires certain disclosures and prohibits the use of specified acts or practices, including those deemed unconscionable. Incorporates requirements of federal laws, including the "Real Estate Settlement Procedures Act". Establishes rules of conduct for situations in which a person acts as both a mortgage broker and a real estate broker or salesperson. Limits fees. In provisions relating to false and deceptive inducements to the creation of a mortgage loan by a mortgage broker or mortgage originator, adds mortgage lenders, mortgage loan applicants, real estate appraisers, and closing agents to the persons to whom the prohibitions apply. Reduces the mental state required to be proven in an action for violation of anti-fraud provisions from "knowingly" to "knew or reasonably should have known". Invokes the authority of the attorney general under the "Colorado Consumer Protection Act" to investigate and punish misconduct by mortgage brokers. Allows the attorney general to seek injunctions against persons violating anti-fraud provisions, prohibiting them from conducting further business for up to five years. Appropriates $495,084 and 2.5 FTE to the division of regulatory agencies and $383,206 and 4.0 FTE to the department of law for implementation of the act. Appropriates $297,288 and 1.7 FTE to the department of public safety, Colorado Bureau of Investigation, from fingerprint processing fees for expenses related to criminal history record checks.

S.B. 216
Signed by governor 6/1/07, Chapter 389
Creates a duty of good faith and fair dealing for mortgage brokers in their communications and transactions with borrowers, including the duty not to recommend or induce the borrower to enter into a transaction that does not have a reasonable, tangible net benefit to the borrower. Specifically lists acts and practices that are deemed unconscionable when committed by mortgage brokers or mortgage originators. In regard to such acts and practices, waives the otherwise applicable requirement that there be evidence of bad faith overreaching or unequal bargaining power before a court may find an act or practice unconscionable. Directs the banking board and the director of the division of real estate to adopt rules incorporating appropriate provisions of the "Interagency Guidance on Nontraditional Mortgage Product Risks" promulgated by the United States department of the treasury and other federal agencies. Removes the existing $200 limit on mortgage broker registration fees. Appropriates $392,242 and 1.5 FTE to the Department of Regulatory Agencies, of which $48,456 is allocated for the purchase of legal services from the Department of Law, for the implementation of the act. Appropriates an additional $265,085 and 3.0 FTE to the Department of Law, consumer protection division, for the implementation of the act.

H.B. 7073
Signed by governor 6/11/07, Public Act 118
Protects consumers from the unauthorized use of their personal information and resulting solicitations by prohibiting mortgage lenders from using any credit bureau's "lead generating" product in Connecticut.

S.B. 1167
Signed by governor 11/2/07, Public Act 95-0691
Amends the Home Equity Assurance Act. Provides that a governing commission with no less than $4,000,000 in its guarantee fund, may, if authorized by referendum, establish a Foreclosure Prevention Loan Fund to provide low interest emergency loans to eligible applicants that may be forced into foreclosure proceedings. Provides that if a majority of the voters on the public question approve the creation of a Foreclosure Prevention Loan Fund, the commission shall establish the program and administer the program with funds collected under the Guaranteed Home Equity Program, subject to specified conditions. Amends the Residential Mortgage License Act of 1987. Contains provisions concerning the issuance of written interpretations of the Act by the Department of Financial and Professional Regulation. Provides that the attorney general may enforce violations of specified provisions. Specifies the criteria for a private right of action under specified provisions. Provides that a licensee must follow specified rules concerning the verification of a borrower's ability to repay a residential mortgage loan. Provides that a mortgage broker shall be considered to have created an agency relationship with the borrower in all cases and shall comply with specified duties. Contains provisions concerning prepayment penalties by a licensee. Provides that a licensee must follow specified rules concerning notices of change in loan terms. Contains provisions concerning a licensee's duties with respect to (1) comparable monthly payment quotes, (2) the requirement to provide a borrower with a copy of all appraisals, and (3) the disclosure of refinancing options. Contains a prohibition on (1) financing certain insurance premiums, (2) equity stripping and loan flipping, (3) financing certain insurance premiums, and (4) encouraging default. Provides for the disclosure of refinancing options. Amends the Residential Property Disclosure Act. Provides that a predatory lending database program shall be established within Cook County and shall be administered in accordance with the Article. Provides that the inception date of the program shall be July 1, 2008. Contains provisions concerning the predatory lending database program. Adds provisions concerning the information to be contained in the predatory lending database program. Provides the standards for loan counseling. Provides that borrowers applying for reverse mortgage financing of residential real estate including under programs regulated by the Federal Housing Authority (FHA) that require HUD-certified counseling are exempt from the program and may submit a HUD counseling certificate to comply with the program. Changes the definitions of "distressed property purchaser" and "distressed property conveyance" in the Mortgage Rescue Fraud Act. Amends the Interest Act to provide that the lender, in the case of any nonexempt residential mortgage loan, as defined in specified provisions, shall have the right to include a prepayment penalty that extends no longer than the fixed rate period of a variable rate mortgage provided that, if a prepayment is made during the fixed rate period and not in connection with the sale or destruction of the dwelling securing the loan, the lender shall receive an amount that is no more than specified amounts.

S.B. 253
Signed by governor 6/18/07, Act 12
Relates to residential mortgage lending; provides for financing single premium insurance in connection with residential mortgage loans; provides limitations for financing single premium insurance.

S.C.R. 113
Adopted 6/28/07
Urges and requests the Office of Financial Institutions to study the suitability of current practices, standards, and laws applicable to the mortgage lending business conducted by companies located inside and outside the state in an effort to better protect consumers engaging in mortgage loan transactions. 

L.D. 1869
Signed by governor 6/11/07, Chapter 273
Makes significant changes to current Maine law relating to residential mortgage loans and permissible high-rate, high-fee mortgages. The bill updates and amends current law to address predatory and abusive lending practices and to provide additional protections for Maine consumers. With regard to the making of residential mortgage loans, the bill includes the following provisions: (1) It lowers the threshold for fees that can be charged in connection with certain residential home mortgage loans from eight percent of the total loan amount to five or six percent based upon the total loan amount. (2) It prohibits creditors from recommending or encouraging default on an existing loan in connection with the closing or planned closing on a refinancing. (3) It prohibits creditors from “flipping” loans, which means the refinancing of a loan with no tangible net benefit to the borrower. (4) It places restrictions on the imposition of late payment fees or penalties. (5) It prohibits creditors from financing premiums or payments for credit insurance or debt cancellation agreements as part of the loan. (6) It prohibits the inclusion of a provision in mortgage loan contracts that permits the creditor, in its sole discretion, to accelerate the indebtedness. (7) It prohibits creditors from charging a fee to receive the amount of the payoff balance for a loan or to receive a release upon prepayment and also requires creditors to provide a payoff balance as required by law. (8) It requires that creditors have a reasonable belief at the time of closing that the borrower has the financial ability to make the scheduled payments on the loan. With regard to the making of high-rate, high-fee mortgages, the bill includes the following provisions. (1) It requires that, before making the loan, creditors receive certification that a borrower has received counseling on the advisability of such a loan from a third-party, nonprofit organization approved by the federal housing agency, a state housing financing agency or the state regulatory agency with jurisdiction over the creditor. (2) It prohibits creditors from financing any points or fees in connection with the loan. (3) It prohibits the inclusion of prepayment penalties or fees. (4) It prohibits scheduled payments more than twice as large as the average of earlier scheduled payments unless the payment schedule is adjusted according to the seasonal or irregular income of a borrower. (5) It prohibits payment terms under which outstanding principal or accrued interest will increase at any time because the scheduled payments do not cover the full amount of interest due. (6) It prohibits loan terms that increase the interest rate following a default. (7) It prohibits terms under which more than two periodic payments are consolidated and paid in advance from loan proceeds provided to the borrower. (8) It prohibits fees in connection with the modification of the loan or deferral of payments under the terms of the loan. (9) It requires certain disclosures related to the purchase or assignment of high-rate, high-fee mortgages and the effect on claims and defenses available to the borrower. The bill makes purchasers or assignees of high-rate, high-fee mortgages subject to all affirmative claims and any defenses that a borrower can assert against the creditor that originated the loan, except claims that the creditor did not have a reasonable belief at closing that the borrower had the financial ability to make scheduled payments, unless certain requirements are satisfied by the purchaser or assignee of the mortgage. (10) It prohibits creditors from paying a contractor for home improvements from the proceeds of a high-rate, high-fee mortgage unless the payment instrument is payable jointly to the borrower and the contractor or paid to an escrow account and the creditor has received proof that the home repairs are completed. The bill requires that a consumer be specifically notified if a prepayment penalty provision is added to the consumer's mortgage note just before closing. The bill applies consumer protections to so-called "piggy-back" loans, which are second-lien mortgages used in conjunction with first-lien loans to purchase real estate. This bill prohibits lenders and loan brokers from facilitating submission of false credit application information by a consumer. The bill regulates the sale and issuance of rate locks by lenders and brokers. The bill prohibits inclusion of contradictory information about prepayment penalties in a consumer's closing package. The bill requires disclosure to a consumer of any yield spread premium to be paid to a loan broker by a lender. The bill prevents unfair or deceptive practices with respect to trigger leads derived from consumers' credit reports. The bill increases the accountability of lenders and loan brokers operating across state lines by permitting state mortgage regulators to participate in a uniform automated nationwide mortgage licensing system once the system is developed and implemented. The bill adds two positions, an investigator and a staff attorney, within the Office of Consumer Credit Regulation, to implement the provisions. The bill makes creditors who violate the provisions enacted in the bill subject to monetary penalties and enforcement by the Department of Professional and Financial Regulation, Bureau of Financial Institutions, the Office of Consumer Credit Regulation as well as the Attorney General for entities regulated by the Office of Consumer Credit Protection. The bill also gives borrowers the right to bring a private court action against creditors for violations and to recover statutory, actual and punitive damages. The bill applies to all residential mortgage loans and high-rate, high-fee mortgages made in connection with residential property located in this state.

H.B. 4387
Signed by governor in part 11/29/07, Chapter 206
Protects and preserves home ownership and mortgage protection; relates to the licensing of loan originators, disbursement of public funds for the costs incurred by the division of banks for administrative fees and from civil administrative penalties; provides a pilot program for first-time homeowner counseling and best lending practices; requires the commissioner of banking to maintain a foreclosure database; relates to foreclosure, subprime loans and adjustable interest rates; provides that no mortgagee shall make a subprime loan at a variable or adjustable rate of interest unless the mortgagor opts in writing for the variable or adjustable rate subprime loan and receives certification of loan counseling with a qualified third party; provides that a tenant occupying a dwelling in foreclosure shall be deemed a tenant at will as specified. 

H.F. 931
Indefinitely postponed 5/2/07
S.F. 988
Signed by governor 5/14/07, Chapter 74
Prohibits certain predatory lending practices; prescribes criminal penalties; provides remedies. 

H.F. 1004
Signed by governor 4/20/07, Chapter 18
S.F. 809
Indefinitely postponed 3/31/07
Relates to mortgages; prohibits predatory lending practices. 

S.M. 41
Adopted 3/6/07
Requests the regulation and licensing department to conduct a study of the existing regulatory framework for consumer lending, consumer lending practices and consumer lending needs.

A.B. 8794
Substituted 6/21/07
S.B. 5618
Signed by governor 8/15/07, Chapter 552
Provides for a limit of the conforming loan size limit for a comparable dwelling as established by federal law on the principle loan amount of a home loan, in defining high cost home loan.

H.B. 1817
Signed by governor 8/16/07, Chapter 352
Protects consumers regarding covered loans and to increase the commissioner's disciplinary authority over licensees under the mortgage lending act. 

H.B. 5485
Effective without governor's signature 6/20/07, Chapter 54
Limits a borrowers recovery against a purchaser of assignee of a high cost home loan to the amount necessary to extinguish the borrowers liability under the loan plus cost, including reasonable attorneys' fees. This act also exempts federal credit unions and credit unions from the provisions of this chapter.

S.B. 371
Effective without governor's signature 6/20/07, Chapter 67
Limits a borrowers recovery against a purchaser of assignee of a high cost home loan to the amount necessary to extinguish the borrowers liability under the loan plus cost, including reasonable attorneys' fees. This act also exempts federal credit unions and credit unions from the provisions of this chapter.

H.B. 2513
Signed by governor 2/19/07, Chapter 47
Expands the subjects that may be covered in student life skills programs to include savings and investments, predatory lending practices and interest rates, consumer fraud, and identity theft and protection.