Mortgage Lending Practices

2010 Legislation

Last Updated: March 18, 2010

NCSL Staff Contact: Heather Morton, Denver, (303) 364-7700

Legislation tracked under this topic includes lending standards, subprime lending and predatory mortgage lending. To date, 25 states and Puerto Rico have legislation pending in 2010. One state has enacted legislation in 2010. Wisconsin enacted legislation that specifies that a mortgage broker has an agency relationship with a residential mortgage loan applicant or investor on whose behalf the mortgage broker provides, or contracts to provide, mortgage brokerage services.

AZ | CA | CT | DE | GA | ILIN | IA | MD | MA | MI | MS | MO | NJ | NY | NC | OK | OR | PA | PR | SC | TN | UT | WA | WV | WI
STATES
BILL SUMMARY
Alabama
none
Alaska
none
Arizona

H.B. 2270
Provides that a mortgage broker shall not: (1) Make, provide or arrange for a residential mortgage loan without verifying the borrower's reasonable ability to pay the scheduled payments of principal, interest, real estate taxes, homeowner's insurance, assessments and mortgage insurance premiums, as applicable. (2) Engage in churning. (3) Make or assist in making any residential mortgage loan with the intent that the loan will not be repaid and that the residential mortgage broker will obtain title to the property through foreclosure. (4) Make, provide or arrange for a residential mortgage loan that is of a lower investment grade if the borrower's credit score or comparable underwriting data, if the mortgage broker does not use credit scoring or if a credit score is unavailable, indicates that the borrower may qualify for a residential mortgage loan available from or through the mortgage broker that is of a higher investment grade unless the borrower is informed that the borrower may qualify for a higher investment grade loan with a lower interest rate or lower discount points or both a lower interest rate and lower discount points and consents in writing to receive the lower investment grade loan. (5) Charge a fee for a product or service if the product or service is not actually provided or misrepresent the amount charged by or paid to a third party for a product or service. (6) Compensate, whether directly or indirectly, coerce or intimidate an appraiser for the purpose of influencing the independent judgment of the appraiser with respect to the value of real estate that is to be covered by a residential mortgage or that is being offered as security according to an application for a residential mortgage loan. This section does not limit a mortgage broker’s or exempt person's ability to rely on criteria other than the borrower's income and financial resources to establish the borrower's reasonable ability to repay a residential mortgage loan, except that the other criteria must be verified through reasonably reliable methods and documentation. A statement by the borrower to the mortgage broker or exempt person of the borrower's income and resources is not sufficient to establish the existence of the income or resources when verifying the borrower's reasonable ability to pay.

 

S.B. 1288
Passed Senate 3/1/10
Prohibits a high-cost home loan (loan) from containing a provision for a scheduled payment that is more than twice as large as the average of earlier scheduled monthly payments, unless the balloon payment is due at least 60 months after the date of the loan. Exempts the loan from the prohibition if the payment schedule is adjusted to account for the seasonal or irregular income of the borrower or if the loan is a bridge loan in connection with the acquisition or construction of a dwelling intended to become the borrower’s principal dwelling. Prohibits a loan from providing for a payment schedule with regular periodic payments that cause the principal balance to increase. Stipulates that provisions do not prohibit negative amortization as a consequence of a temporary forbearance, bridge loan or restructure sought by the borrower. Prohibits a lender from engaging in a pattern or practice of extending credit to consumers under loans based on the consumers’ collateral without regard to the obligor’s repayment ability, including the obligor’s current and expected income, current obligations, employment status and other financial resources other than the obligor’s equity in the dwelling that secures repayment of the loan. Prohibits a lender from making a loan containing a provision for a prepayment penalty unless: a) the penalty is permitted by law; and b) the penalty does not apply after the two year period following consummation if the source of the prepayment monies is a refinancing by the creditor and the amount of the periodic payment of principal or interest, or both, does not increase during the four year period after consummation. Prohibits a lender from charging a borrower an amount for a service or product if the borrower does not receive the service or product. Defines high-cost home loan and obligor.

Arkansas
none
California

A.B. 919
Passed Assembly 6/2/09
Requires a mortgage or deed of trust that is secured by residential real property, as defined, to have an attached Residential Mortgage Participant Rider form, as set forth, that identifies by name any appraiser, lender, loan originator, and real estate broker, as defined, who were involved in the origination of the mortgage or deed of trust and his or her professional license number, if any. The bill prohibits the county recorder from accepting a mortgage or deed of trust for recordation if a Residential Mortgage Participant Rider form is not included.

 

A.B. 1534
Died pursuant to Art. IV, Sec. 10(c) of the Constitution 1/31/10
Prohibits a general building contractor from originating, directly or through a related entity, a consumer loan, as defined, to be used for the purchase of a home that is for sale by the contractor or a related entity of the contractor.

 

A.B. 2024
This bill requires any lender that rejects a loan modification request to send a notification to the borrower that specifically states the reasons why the loan modification request is rejected.

 

A.B. 2043
The Community Redevelopment Law authorizes the establishment of redevelopment agencies in communities in order to address the effects of blight, as defined, in those communities and requires those agencies to prepare, or cause to be prepared, and approve a redevelopment plan for each project area. Existing law authorizes the agency use of tax increment financing for redevelopment projects and for the repayment of redevelopment agency debts. This bill redefines the term "redevelopment" to include the provision of loan assistance to qualified homeowners participating in the federal Home Affordable Modification Program. The bill authorizes a redevelopment agency to use redevelopment funds to issue loans, up to a maximum of $75,000, to reduce the principal mortgage balance of a borrower that has received a mortgage modification under the federal Home Affordable Modification Program and meets other specified requirements.

 

A.B. 2236
This bill requires a mortgagee, trustee, or beneficiary, or an authorized agent of that person, to include on all notices informing a borrower that he or she has either failed to make a required minimum payment or failed to make a payment when due, the name and the contact information, including the address and telephone number, of the mortgagee, trustee, beneficiary, or authorized agent who has the authority pursuant to state and federal law to modify the terms and conditions of the borrower's loan.

 

A.J.R. 20
Urges the Congress to enact H.R. 230 to provide all homeowners, including those in California, the opportunity to refinance their current home loans with a lower interest rate and to assist qualified home buyers with mortgage financing.

 

H.R. 21
Resolves that the state of California and local governments should explore the potential divestiture of all financial interests in banking and other financial institutions that fail to cooperate with foreclosure prevention efforts that include temporary moratoriums on foreclosures, renegotiation of mortgage principles to reflect current values, and good faith negotiations with mortgagees.

Colorado
none
Connecticut

S.B. 54
Clarifies that a person licensed under §§36a-555 to 36a-573, inclusive, of the general statutes is exempt from the mortgage broker license requirement; prohibits mortgage brokers from imposing excessive prepaid finance charges.

Delaware

S.B. 40
Requires certain mortgage lenders to provide a homeowner with six months written notice of a change in the interest rate on a mortgage on the homeowner’s principal residence. This act exempts state and federally chartered banks, their affiliates, and subsidiaries, as they are already subject to significant regulation of their mortgage practices.

 

S.B. 51
Requires certain mortgage lenders to provide a homeowner with a written notice, within five business days after the mortgage loan becomes 60 days delinquent, which provides the homeowner with important information about how to reinstate the loan. This act exempts state and federally chartered banks, their affiliates, and subsidiaries, as they are already subject to significant regulation of their mortgage practices.

District of Columbia
none
Florida
none
Georgia

H.B. 264
Relates to conveyances to secure debt in general, so as to revise provisions relating to regulation of security conveyances; repeals certain obsolete provisions relating to due on sale clauses which have been preempted by federal law; provides certain new regulations with respect to certain residential mortgages and deeds to secure debt; prohibits prepayment penalties, negative amortization, and yield spread compensation of loan originators; requires loan originators to verify ability to repay.

 

H.B. 1209
Relates to licensing of mortgage lenders and mortgage brokers, so as to provide that certain notice shall be provided to mortgage customers regarding flood plains.

 

H.R. 775
Requests that the United States Congress pass legislation that comprehensively addresses the needs of subprime consumers and eliminates unnecessary home mortgage foreclosures.

 

S.B. 54
Repeals and reenacts the "Georgia Fair Lending Act"; prohibits abusive home loan practices; provides for definitions; provides for prohibited practices and limitations relating to covered home loans and high-cost home loans; creates specific and numerous consumer protections for covered home loans and high-cost home loans; provides for penalties and enforcement; provides for exceptions for unintentional violations.

 

S.B. 57
Passed Senate 3/10/09
Relates to the "Georgia Fair Lending Act," so as to provide for and change definitions; provides for limitations on home loans and high-interest home loans; provides for duties for mortgage brokers.

 

S.R. 759
Requests mortgage lending institutions to adopt rent-to-own programs to help to eliminate unnecessary home mortgage foreclosures.

Guam
none
Hawaii
none
Idaho
none
Illinois

H.B. 537
Passed House 4/3/09
Amends the Residential Mortgage License Act of 1987. Provides that no licensee may make, provide, or arrange a mortgage loan with a prepayment penalty (rather than permitting prepayment penalties under specified conditions). Provides that prepayment penalties are prohibited in connection with the sale or destruction of a dwelling secured by a residential mortgage loan. Amends the High Risk Home Loan Act to provide that for any loan that is subject to the provisions of the Act and is not subject to the provisions of the Home Ownership and Equity Protection Act of 1994, no lender shall make a high risk home loan that includes a penalty provision (rather than permitting prepayment penalties under specified conditions). Amends the Interest Act. Deletes a provision providing that notwithstanding specified provisions, the lender, in the case of any nonexempt residential mortgage loan, shall have the right to include a prepayment penalty that meets specified criteria.

 

H.B. 705
Passed House 4/1/09
Further amends the Residential Real Property Disclosure Act. Provides that the predatory lending database program shall be expanded to include Kane, Peoria, and Will counties. Provides that the inception date of the expansion of the program to Kane, Peoria, and Will counties shall be July 1, 2010. Provides that the Department of Financial and Professional Regulation shall submit semi-annual reports that include information by county for each reporting period. Adds to the information to be included in the reports: the number of licensed mortgage brokers and loan originators entering information into the database; the number of investigations based on information obtained from the database, including the number of licensees fined, the number of licenses suspended, and the number of licenses revoked; a summary of the non-traditional mortgage products offered; and a summary of how the Department is actively using the program to combat mortgage fraud.

 

H.B. 856
Amends the Illinois Banking Act, the Illinois Savings and Loan Act of 1985, the Savings Bank Act, and the Illinois Credit Union Act. Provides that a bank, savings and loan association, savings bank, or credit union organized under the laws of the state that is a lender for a residential mortgage must retain a permanent 25 percent interest in the value of the loan.

 

H.B. 1094
Amends the Illinois Housing Development Act. Provides that the Authority must use at least $1,000,000,000 of its borrowing authority to refinance residential adjustable-rate mortgages with increased interest rates that take effect within five years after the effective date of the amendatory Act. Provides that the Authority must work with entities in the private sector to make and manage the loans.

 

H.B. 2084
Amends the High Risk Home Loan Act. Makes a technical change in a section concerning the prohibition on certain home loans.

 

H.B. 2699
Amends the Deposit of State Moneys Act. Requires the state treasurer to implement and administer, by rule, a program requiring financial institutions to make mortgage loans on residential property in order for that financial institution to be eligible for investment of state funds in that financial institution. Requires the rules to contain provisions concerning not rejecting residential mortgage loans because of the location of the property, minimum assets to be invested in residential mortgage loans, minimum annual new residential mortgage loans, and reporting and auditing. Requires the treasurer to report annually to the General Assembly.

 

H.B. 3740
Amends Public Act 95-0731. Provides that amounts appropriated from the Predatory Lending Database Program Fund to the Department of Revenue for grants pursuant to the Predatory Lending Database Program, administered by the Illinois Housing Development Authority, may also be expended for grants to any HUD-certified counseling agency in any county for: mortgage default counseling activities listed in the U.S. Department of Housing and Urban Development Housing Counseling Program Handbook; and counseling to a borrower as specified in the Residential Real Property Disclosure Act.

 

H.B. 3751
Amends the Illinois Worker Adjustment and Retraining Notification Act. Provides that, if an employer orders a mass layoff, relocation, or employment loss and fails to notify employees, then an employee shall be allowed to suspend interest payments on a home mortgage for 180 days and then pay the deferred interest in equal installments over the remaining term of the mortgage loan.

 

H.B. 3752
Amends the Illinois Banking Act. Provides that, on and after the effective date of the amendatory Act, any bank chartered under the Act that does business with the state must not offer either (i) No Income No Asset Loans or (ii) No Income, No Job, and No Asset Loans to customers or prospective customers.

 

H.B. 3864
Amends the Residential Mortgage License Act of 1987. Provides that at the time a mortgage loan is made or brokered, a licensee must provide to the borrower, in the mortgage document, a summary of the terms of the mortgage agreement. The summary must be listed on the first page of the document in an area titled "SUMMARY OF TERMS". The summary must be listed in bold, 14-point font.

 

H.B. 5044
Amends the Financial Institutions Code. Provides that the Department shall create a version of its website that is in Spanish for pages that contain information about predatory lending.

 

H.J.R. 25
Urges Congress to pass legislation that requires the original lender for a residential mortgage to retain a permanent 25 percent interest in the value of the loan.

 

S.B. 252
Amends the High Risk Home Loan Act. Makes a technical change in a section concerning the prohibition on certain home loans.

 

S.B. 268
Passed House 5/31/09
Amends the Residential Real Property Disclosure Act. Provides that a predatory lending database program shall be established within Cook, Kane, and Will counties (instead of Cook County). Provides that the inception date of the program as it applies to Kane and Will counties shall be January 1, 2010.

 

S.B. 2777
Amends the High Risk Home Loan Act. Makes a technical change in a Section concerning the prohibition on certain home loans.

 

S.B. 3286
Passed Senate 3/10/10
Amends the High Risk Home Loan Act. Provides that the term "points and fees" does not include fees paid to the United States Department of Veterans Affairs required by law, fees paid to the Federal Housing Administration required by law, or fees paid to the United States Department of Agriculture's Rural Development Loan Program required by law.

 

H.B. 3287
Passed Senate 3/10/10
Amends the High Risk Home Loan Act. Provides that "high risk home loan" does not include a loan for reverse mortgage financing of residential real estate, including under programs regulated by the Federal Housing Administration (FHA).

 

S.B. 3495
Amends the Residential Real Property Disclosure Act. Provides that any contract awarded by the Department of Financial and Professional Regulation under the predatory lending database program must be procured using competitive sealed bidding.

Indiana

H.B. 1206
Passed House 2/2/10
Establishes a voluntary five star mortgage program for creditors (including mortgage brokers) that offer qualifying mortgages to Indiana customers after June 30, 2010. Requires the department of financial institutions (department) to adopt guidelines to implement the program. Provides that to qualify as a five star mortgage lender, a creditor must provide to the department a certification attesting that the creditor: (1) offers or will offer to Indiana customers one or more mortgage products that qualify as five star mortgages; (2) does not have a record of any violation of the law concerning mortgage appraisal fraud or other laws concerning mortgage transactions; and (3) does not have a director or an executive officer with a record of a felony involving fraud, deceit, or misrepresentation. Provides that to qualify as a five star mortgage, a mortgage: (1) must require: (A) a down payment of at least 10 percent of the purchase price of the dwelling, in the case of a purchase money transaction; or (B) that the customer have equity of at least 10 percent in the dwelling, in the case of a refinancing; (2) must have a fixed rate of interest; (3) must provide for an escrow account for the payment of taxes and insurance, if the creditor regularly provides for such escrow accounts in the creditor's ordinary course of business; (4) may not have a term that exceeds 30 years; and (5) may not include a prepayment penalty or fee. Requires a five star mortgage lender to provide a written statement to any Indiana customer who: (1) applies for a five star mortgage offered by the lender; and (2) does not qualify for the mortgage based on the lender's underwriting standards. Provides that the statement must set forth the reasons why the customer did not qualify for the five star mortgage. Allows a creditor that qualifies as a five star mortgage lender to include that fact in marketing materials or solicitations directed at Indiana customers, subject to the department's guidelines. Provides that the department's guidelines may provide for the following: (1) Reporting requirements for five star mortgage lenders. (2) A civil penalty for creditors that falsely hold themselves out as five star mortgage lenders. (3) The use of a statement, a seal, or another designation on paperwork associated with a five star mortgage that indicates that the mortgage product is a five star mortgage. (4) A requirement that a creditor that qualifies as a five star mortgage lender and files a certification with the department shall periodically submit a renewal certification. (5) A fee for certifications and renewal certifications submitted by creditors participating in the program. Requires the department to publish on the department's Internet web site a list of all creditors that have a current and accurate certification or renewal certification on file with the department. Provides that the authority of the boards of trustees of the public employees' retirement fund (PERF) and of the state teachers' retirement fund (TRF) to invest in pooled funds includes the authority to invest in pools consisting in part or entirely of five star mortgages. Allows the PERF board to maintain alternative investment programs within: (1) the PERF annuity savings account; and (2) the legislators' defined contribution plan; that invest in pooled funds consisting in part or entirely of five star mortgages, or that otherwise invest in five star mortgages. Allows the TRF board to maintain alternative investment programs within the TRF annuity savings account that invest in pooled funds consisting in part or entirely of five star mortgages, or that otherwise invest in five star mortgages.

Iowa

H.F. 699
Establishes a financial literacy and counseling program to be administered by the Iowa Finance Authority in collaboration with the Department of Commerce. The one-year pilot program is to be operated in the five counties with the highest mortgage foreclosure rates as of the effective date of the Act. A mortgage banker or mortgage broker issuing mortgage loans to consumers within the five counties must recommend participation in the pilot program to any consumer seeking a mortgage loan with origination fees greater than five percent, and must notify the consumer that the mortgage loan may have attributes that are predatory. A person who offers education, advice, or counseling through the pilot program shall not be held liable for any damages incurred from actions taken based on the education, advice, or counseling obtained under the pilot program. The bill appropriates $5,000 from the state general fund for the 2009-2010 fiscal year to the Authority for administration of the program and directs the Authority to fund the pilot program with moneys declared by the Authority to be surplus. The Authority, in collaboration with the Department of Commerce, must report its findings and recommendations for statewide implementation of the pilot program to the General Assembly by January 15, 2011.

 

H.F. 2409
Passed Senate 3/15/10
H.S.B. 674
Became H.F. 2409 2/12/10
This bill repeals a provision in Code chapter 535A, relating to prohibiting the practice of red-lining in mortgage lending, which requires a reporting financial institution to file a copy of its federally required mortgage loan disclosure statement with the Iowa Finance Authority by March 31 following the calendar year covered by the statement. The bill makes conforming changes as necessary to other sections of the Code chapter, and repeals Code section 535A.5, relating to responsibility for administration of specified Code sections, and reinserts it in a modified form in Code §535A.2 to which it remains applicable. The bill also deletes definitions of reporting financial institution and mortgage loan disclosure statement currently contained in the Code chapter.

Kansas
none
Kentucky
none
Louisiana
none
Maine
none
Maryland

H.B. 1254
S.B. 943
Authorizes mortgage brokers to charge borrowers for the actual cost of specified services or goods required to complete a loan application process.

 

H.B. 1399
Requires a lender to provide to a borrower a specified written notice regarding home buyer education or housing counseling in connection with specified mortgage loans; requires the Department of Housing and Community Development to provide and maintain specified information; prohibits a lender from closing on a mortgage loan unless the lender has provided the borrower with the required notice.

 

H.B. 1407
Prohibits a person subject to regulation as a mortgage loan originator from making a payment, threat, or promise to another person for the purpose of influencing the independent judgment of the person in connection with a residential mortgage loan; prohibits a person subject to regulation as a mortgage loan originator from making a payment, threat, or promise to an appraiser of a property for the purpose of influencing the independent judgment of the appraiser with respect to the value of the property.

Massachusetts

H.B. 858
Requires banks and lending institutions to issue monthly statements to their mortgage loan customers which includes, but is not limited to, the following information: the balance of principal remaining to be paid; the most current interest rate available for the amount of principal remaining on said loan at the time such mortgage statement is printed; a confirmation of the most recent payment received; and the balance of any escrow accounts and a description of any payments from such escrow accounts.

 

H.B. 1049
Provides that a mortgagor shall not be required to pay a prepayment fee or penalty, or be have funds refused by a bank for property insurance or tax payments, due to limitations set by state or federal agencies for ceiling amounts held in escrow, for the term of the loan. Provides that residential real estate payments under the terms of a first mortgage including property tax and insurance premiums shall be recalculated as needed.

 

S.B. 471
Provides that a partial payment by a borrower shall be accepted by a mortgagee or mortgage servicer and applied to mortgage debt, provided that the debt arises from a mortgage loan with high points, fees or interest in violation of chapter 183C or a mortgage loan having the following characteristics: (i) adjustable rate loans with an introductory period of three years or less; (ii) a debt-to income ratio in excess of 50 percent of recurring debt under the fully indexed rate; (iii) the loan was approved on a stated income basis; (iv) interest only loans or (v) the loan-to-value ratio is 100 percent or the loan carries pre-payment penalties of greater than three months interest. The partial payment shall be applied in the following priority order: (i) interest, (ii) principal, and (iii) any taxes and insurance that the mortgagee or mortgage servicer is obligated to pay on the mortgage loan on behalf of the borrower. A regularly scheduled mortgage payment subsequent to a partial payment shall be applied as if the partial payment was a full payment. No mortgagee or mortgage servicer shall be required to accept a partial payment in consecutive months or more than two partial payments in a twelve month period. A partial payment shall not constitute a default of the mortgage loan if made in accordance with this section, provided that the difference between the total monthly mortgage payment and the partial payment is remitted within 90 days of the date that the total monthly mortgage payment was due and the mortgagee has paid the amount of monthly mortgage payment owed by that date in full by said date. Upon receipt of a partial payment, the mortgagee or mortgage servicer shall issue to the borrower a statement reflecting the deficiency payment due and specifying that the next regularly scheduled payment will not be reduced by the amount of any deficiency payments. A borrower who has made a partial payment under this section shall clearly identify the funds being remitted to complete the mortgage payment on which a partial payment was previously made. Late fees shall not be assessed in connection with a partial payment or deficiency payment made in accordance with this section. Nothing in this section shall preclude or limit the right to initiate a foreclosure proceeding pursuant to chapter 244. The attorney general shall enforce this section and may obtain injunctive or declaratory relief for this purpose.

Michigan

H.B. 4065
Replaces the Consumer Mortgage Protection Act with the Home Loan Protection Act.

 

H.B. 4066
A mortgage broker or lender licensee or registrant shall not fail or neglect to do any of the following in connection with the brokering, servicing, or making of any mortgage loan: (a) Act in good faith and with fair dealing in any transaction, practice, or course of business. (b) Safeguard and account for any money handled for the borrower. (c) Follow reasonable and lawful instructions from the borrower. (d) Use reasonable skill, care, and diligence. (e) Timely and clearly disclose to the borrower material information that might reasonably affect the borrower's rights, interests, or ability to receive the borrower's intended benefit from the mortgage loan, including, but not limited to, the total compensation the broker would receive from any of the loan options the licensee or registrant presents to the borrower. (f) Make reasonable efforts to secure a mortgage loan that is reasonably advantageous to the borrower considering all the circumstances, including, but not limited to, the rates, charges, and repayment terms of the loan.

 

H.B. 4067
A mortgage broker or lender licensee or registrant shall not fail or neglect to do any of the following in connection with the brokering, servicing, or making of any secondary mortgage loan: (a) Act in good faith and with fair dealing in any transaction, practice, or course of business. (b) Safeguard and account for any money handled for the borrower. (c) Follow reasonable and lawful instructions from the borrower. (d) Use reasonable skill, care, and diligence. (e) Timely and clearly disclose to the borrower material information that might reasonably affect the borrower's rights, interests, or ability to receive the borrower's intended benefit from the mortgage loan, including, but not limited to, the total compensation the broker would receive from any of the loan options the licensee or registrant presents to the borrower. (f) Make reasonable efforts to secure a mortgage loan that is reasonably advantageous to the borrower considering all the circumstances, including, but not limited to, the rates, charges, and repayment terms of the loan.

 

H.B. 4585
Provides that a high-cost home loan is subject to the following additional limitations and prohibited practices: (a) A creditor shall not directly or indirectly finance any points or fees in excess of two percent of the loan amount in connection with a high-cost home loan. (b) A creditor shall not include in the loan documents for a high-cost home loan or charge a borrower in a high-cost home loan any prepayment fees or penalties. (c) A high-cost home loan shall not contain a scheduled payment that is more than twice as large as the average of earlier scheduled payments. This subdivision does not apply when the payment schedule is adjusted to the seasonal or irregular income of the borrower. (d) A high-cost home loan shall not include payment terms under which the outstanding principal balance or accrued interest will increase at any time over the course of the loan because the regularly scheduled periodic payments do not cover the full amount of interest due. (e) A high-cost home loan shall not contain a provision that increases the interest rate after default. This subdivision does not apply to interest rate changes in a variable rate loan otherwise consistent with the provisions of the loan documents, if the change in the interest rate is not triggered by the event of default or the acceleration of the indebtedness. (f) A high-cost home loan shall not include terms under which more than two periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the borrower. (g) A creditor shall not make a high-cost home loan without first receiving certification from a counselor from an independent nonprofit organization approved by the United States Department of Housing and Urban Development, by a state housing financing agency, or by the regulatory agency that has jurisdiction over the creditor, that the borrower has received counseling on the advisability of the loan transaction. A counselor or counseling agency that is affiliated with a mortgage broker or mortgage lender, as those terms are defined in section 1a of the mortgage brokers, lenders, and servicers licensing act, 1987 PA 173, MCL 445.1651a, is not considered an independent nonprofit organization for purposes of this subsection. (h) A creditor shall not pay a contractor under a home-improvement contract from the proceeds of a high-cost home loan, unless the instrument is payable to the borrower or jointly to the borrower and the contractor or, at the election of the borrower, through a third-party escrow agent in accordance with terms established in a written agreement signed by the borrower, the creditor, and the contractor before the disbursement. (i) A creditor shall not charge a borrower a fee or other amount to modify, renew, extend, or amend a high-cost home loan or to defer any payment due under the terms of a high-cost home loan. (j) A high-cost home loan document that creates a debt or an interest in property to secure a debt shall include the following notice, printed conspicuously on the face of the document: "Notice: This is a high-cost home loan subject to special rules under state law. A purchaser or assignee of this high-cost home loan may be liable for all claims and defenses of the borrower with respect to the home loan."

 

H.B. 4586
Revises provisions concerning notices and disclosures under the Consumer Mortgage Protection Act.

 

H.B. 4587
Provides that a creditor shall not directly or indirectly finance any credit life, credit disability, or credit unemployment insurance in which the creditor is named as a beneficiary, any other life or health insurance, or any payments directly or indirectly for any debt cancellation or suspension agreement or contract. However, insurance premiums or debt cancellation or suspension fees calculated and paid in equal monthly installments are not considered financed by the creditor. A creditor shall not knowingly or intentionally make a home loan to a borrower that refinances an existing home loan if the new loan does not have reasonable, tangible net benefit to the borrower considering all of the circumstances. A creditor shall not recommend or encourage default or encourage a borrower to stop making payments on an existing loan or other debt before and in connection with the closing or planned closing of a home loan that refinances all or any portion of that existing loan or debt. A creditor shall not do any of the following: (a) Charge a borrower a late payment fee unless the loan documents specifically authorize the fee, the fee is not imposed unless the payment is past due for 10 days or more, and the fee does not exceed five percent of the amount of the late payment. (b) Charge more than one late payment fee with respect to any single late payment. (c) Charge a late payment fee for a default on a loan payment if the default is the result of the creditor or servicer deducting a late payment fee from a previous payment made on the home loan. However, a creditor may apply any payment made to any unpaid balances of payments due in the order of maturity, even if the result is a late payment fee accruing on one or more subsequent payments due. A home loan may not contain a provision that permits the creditor in its sole discretion to accelerate the indebtedness. This subsection does not prohibit acceleration of the loan in good faith due to the borrower's failure to abide by the material terms of the loan. A creditor shall not charge a fee for verbally informing a person of the balance due to pay off a home loan. A creditor shall not charge a person a fee for transmitting one written statement of the balance due to pay off a home loan within a 12-month period. A creditor may charge a fee that does not exceed $25 to provide a second written statement of the balance due to pay off a home loan within a 12-month period. If a person requests more than two written statements of the balance due to pay off a home loan within a 12-month period, a creditor may charge a reasonable fee for any additional written statements transmitted to that person. A creditor shall provide a written statement of the balance due to pay off a loan under subsection (6) within seven business days after the request is made. Subject to subsection (9), a creditor shall not do any of the following in connection with a home loan: (a) Steer, counsel, or direct a consumer to rates, charges, principal amount, or prepayment terms that are not reasonably advantageous to the borrower considering all of the circumstances, including, but not limited to, the characteristics of the property that secures or will secure the loan and the loan terms for which the borrower qualifies. (b) Materially mischaracterize a borrower's credit history or the home loans available to a borrower from the creditor. (c) Materially mischaracterize the appraisal value of a dwelling. (d) If unable to suggest, offer, or recommend to a borrower a reasonably advantageous home loan, discourage a borrower from seeking a home loan from another creditor. Subsection (8) does not prohibit a creditor from providing a borrower with accurate, unbiased, general information about consumer home loans, underwriting standards, ways to improve credit history, or any other matter relevant to a borrower. A creditor shall not charge or collect any prepayment fee or penalty on a home loan. A prepayment penalty provision in a home loan is void and unenforceable. A creditor shall not extend a home loan to a borrower unless the creditor reasonably determines at the time the home loan is consummated that the borrower is able to repay the loan according to the loan terms. For purposes of subsection (11), the use of an automated underwriting system that complies with the provisions of subsection (11) to underwrite, approve, accept, or otherwise identify a home loan as meeting acceptable credit standards constitutes a reasonable method for determining a borrower's ability to repay a home loan. Provides that it is an affirmative defense to an action under this act by a borrower against a creditor if the creditor relied upon one or more deliberate material misstatements, misrepresentations, or omissions made by the borrower in a home loan application or other loan document.

 

H.B. 4588
Revises references to home loans in local preemption provisions under Consumer Mortgage Protection Act.

 

H.B. 4589
Prescribes civil sanctions and penalties for the Consumer Mortgage Protection Act.

 

H.B. 4591
Provides general revision to the Consumer Mortgage Protection Act.

 

H.B. 4592
Revises the title and general definitions for the Consumer Mortgage Protection Act.

 

H.B. 4593
Revises claims and defenses in civil actions for Consumer Mortgage Protection Act.

 

H.R. 35
Memorializes the Congress of the United States to create the Homeowners and Bank Protection Act.

 

S.B. 929
Requires banks and financial institutions to publish mortgage loan modification criteria.

 

S.B. 932
Requires mortgage brokers and lenders to make disclosures regarding the notice of assignment of mortgages and creates remedies.

 

S.B. 933
Requires second mortgage brokers and lenders to make disclosures regarding the notice of assignment of mortgages and creates remedies.

Minnesota
none
Mississippi

S.B. 2590
Died in committee 2/2/10
Provides consumer protections from certain mortgage lending practices relating to balloon payments, negative amortization and prepayment penalties.

 

S.B. 2605
Died in committee 2/2/10
Provides consumer protections from certain mortgage lending practices relating to balloon payments, negative amortization and prepayment penalties.

Missouri

H.B. 1876
Prohibits lenders from imposing a fine, fee, or penalty for prepaying a loan and repeals the provision allowing a prepayment fee to be charged on a second mortgage loan.

Montana
No Regular 2010 Session
Nebraska
none
Nevada
No Regular 2010 Session
New Hampshire
none
New Jersey

A.B. 370
This bill increases and clarifies the permissible categories of fees chargeable by residential mortgage lenders and residential mortgage brokers. The “New Jersey Residential Mortgage Lending Act,” sections 1 through 39 of P.L.2009, c.53 (C.17:11C-51 et seq.), created these new designations related to mortgage lending activities, and persons and entities will begin receiving licenses under these designations no later than July 31, 2010, or a later date approved by the Secretary of the United States Department of Housing and Urban Development, in accordance with the provisions of the act and applicable federal law. Under the bill, when combined with the existing statutory law, a residential mortgage lender, once licensed, may charge only the following fees in connection with any mortgage loan transaction not involving a secondary mortgage loan: (1) credit report fee; (2) appraisal fee; (3) application fee, except that a residential mortgage lender shall not charge an application fee if a residential mortgage broker, pursuant to the bill, charges an application fee in connection with the loan; (4) commitment fee; (5) warehouse fee; (6) fees necessary to reimburse the residential mortgage lender for charges imposed by third parties; (7) discount points, which shall be disclosed as a percentage of the loan amount or a fraction thereof, payable to reduce the interest rate on that loan; (8) lock-in fee; and (9) origination fee, or alternatively, points, which shall be disclosed as a percentage of the loan amount or a fraction thereof. Additionally, a residential mortgage broker, once licensed, may charge only the following fees in connection with any mortgage loan transaction not involving a secondary mortgage loan: (1) application fee; and (2) broker fees, which may be disclosed as a percentage of the loan amount or a fraction thereof, or as a flat fee, and a portion of which may be disclosed as an origination fee to meet Federal Housing Administration or Veterans Benefits Administration loan requirements, and which shall be payable only at closing. Unchanged by the bill is the authority of the commissioner of Banking and Insurance to authorize by regulation mortgage lender or broker fees not expressly authorized under the statutory law.

 

A.B. 1440
S.B. 774
This bill establishes, as an addition to the state’s existing efforts to combat mortgage foreclosures through the “Mortgage Stabilization and Relief Act,” P.L.2008, c.127 (C.55:14K-82 et al.), a new Mortgage Education and Foreclosure Avoidance Program. The program targets “at risk” borrowers and “at risk” refinancing borrowers, as measured under the bill by their credit score and other factors relating to the loan amount on a purchase or refinance. The program shall be established in the New Jersey Housing and Mortgage Finance Agency. The agency shall contract with a consulting organization, which shall be a qualifying HUD certified housing counseling agency or other, similar organization recognized by the agency, to assist in the development, administration, and training for the program. The program, as developed by the consulting organization, shall be proposed and adopted in regulation by the agency. In accordance with the bill, the program shall include: (1) educational presentations and materials regarding mortgages; (2) educational presentations and materials regarding real estate transactions; (3) an awarding of a standardized certificate of completion to the at risk borrowers and refinancing borrowers, indicating completion of the educational component of the program, the date of issue, and an expiration date; and (4) a monitoring system, which shall continue for two years after the date of the borrowers’ purchase or refinance following their participation in the educational component of the program, and provides for further educational or counseling opportunities, or referrals to other programs on mortgage stabilization and relief offered by the state. The program shall be administered by HUD certified counseling agencies that are approved, following application to the agency, to participate in the program, or by the consulting organization contracted to assist in the development, administration, and training for the program. Any individual employed or otherwise contracted by an approved HUD certified counseling agency to administer the program shall not participate in providing the program to at risk borrowers or refinancing borrowers until that individual successfully completes the educational component of the program. At the time of accepting any application for any mortgage for a residential property in this state, a lender or broker, as the case may be, shall provide a written disclosure to the applicant, prepared by the agency through regulation, informing the applicant of the requirements of this act concerning at risk borrowers and refinancing borrowers. The applicant shall acknowledge receipt of this written disclosure from the lender or broker through a signed statement, and the original or an electronic copy shall be maintained by the lender or broker for a period as determined by the agency by regulation. An at risk borrower or refinancing borrower shall not be eligible to close on any mortgage from a lender or through a broker in order to purchase or refinance a residential property unless the borrower possesses a valid, non-expired certificate of completion for the program. An at risk borrower or refinancing borrower possessing an expired certificate of completion may only be eligible to close on a mortgage by successfully repeating the program. In order for a lender, or a broker on behalf of a lender, to close on a mortgage loan with an at risk borrower or refinancing borrower, the lender or broker shall first request and maintain a copy of the borrower’s valid, non-expired certificate of completion. Any mortgage loan between a lender, or a broker on behalf of a lender, and an at risk borrower or refinancing borrower shall be in violation of the bill and subject the lender or broker to liability set forth by the agency in regulation, including, but not limited to, a civil monetary penalty, if the lender or broker does not request, obtain, and maintain an at risk borrower’s or refinancing borrower’s certificate of completion prior to closing on a mortgage transaction as required by the bill. However, a lender or broker shall not be liable for a violation under the bill if the lender or broker complies with the notice, collection and record keeping requirements for written disclosures and certificates of completion set forth in the bill. In order to fund the program, the bill requires a $25 Mortgage Education and Foreclosure Avoidance Program surcharge applied to each mortgage application processed by a lender or broker, payable to the existing Housing Assistance and Recovery Program Support Fund established by section 10 of P.L.2008, c.127 (C.55:14K-90). In the alternative, the New Jersey Housing and Mortgage Finance Agency may establish in regulation a fee for the program of not more than $150, charged to each participating “at risk” borrower or refinancing borrower, if the agency determines, in consultation with the Department of Banking and Insurance, that the program fee represents a more effective means of funding the program than the surcharge on mortgage applications.

 

A.B. 1442
S.B. 773
This bill, titled the “Residential Property Lease-Purchase Act,” regulates those transactions in which a property owner contracts with a tenant-buyer for a residential lease agreement with accompanying option to purchase agreement, with the intention of permitting the tenant-buyer to reside at the property with the option of purchasing the property. The bill applies to residential real property in this state, consisting of one to four dwelling units, at least one of which is occupied by the tenant-buyer as a primary residence. Any residential lease agreement with accompanying option to purchase agreement shall be in writing in a form containing at least 12-point type. The property owner shall provide an executed copy of the written lease agreement, properly notarized by a notary public who is commissioned pursuant to the “Notaries Public Act of 1979,” P.L.1979, c.460 (C.52:7-10 et seq.), to the tenant-buyer who will reside at the property, at the time at which the tenant-buyer signs the agreement. Among the requirements for inclusion in the residential lease agreement are: the monthly rental obligation for the tenant-buyer residing on the property; the length of time of the residential lease agreement; the mailing address to which the monthly rental obligation shall be remitted; the amount of any security deposit required; and an indication that all information concerning the investment or deposit of the security deposit shall be provided to the tenant-buyer under the agreement, as required by section 1 of P.L.1967, c.265 (C.46:8-19). As a condition of a residential lease agreement executed pursuant to the bill’s provisions, an option to purchase agreement shall be executed for the same property between the property owner and tenant-buyer. As with the residential lease agreement, the option to purchase agreement shall be in writing, and notarized by a notary public at the time the tenant-buyer signs the agreement. The terms and conditions of the option to purchase agreement shall be contingent upon the tenant-buyer’s fulfillment of all obligations under the residential lease agreement. The failure to fulfill any obligation under the residential lease agreement shall render the option to purchase agreement voidable by the property owner. The option to purchase agreement shall contain provisions concerning any fee or other consideration provided by the tenant-buyer as consideration for the agreement, as well as provisions concerning the amount of money to be provided, in monthly installments in excess of the monthly rental obligation, and credited toward the purchase of the property. With respect to the amount of any fee or other consideration provided as consideration for the option to purchase agreement: (1) the entire fee or other consideration shall be provided by the tenant-buyer at the time the agreement is executed; (2) the property owner may declare some or all of the fee or other consideration to be non-refundable, regardless of whether the tenant-buyer exercises his right to purchase the property from the property owner pursuant to the option to purchase agreement, or declare that some or all of the fee or other consideration shall be credited toward the purchase of the property, if the tenant-buyer does exercise his right to purchase the property, so long as this declaration is agreed to by the tenant-buyer and expressly stated in the agreement; and (3) the fee or other consideration provided to the property owner shall not constitute an equitable ownership interest in the property. With respect to any money provided as a monthly credit towards the purchase of the property: (1) the property owner may declare some or all of the money to be non-refundable, if the tenant-buyer does not exercise his right to purchase the property from the property owner pursuant to the option to purchase agreement, so long as this declaration is agreed to by the tenant-buyer and expressly stated in the agreement; and (2) the money provided to the property owner shall not constitute an equitable ownership interest in the property. If the tenant-buyer exercises his right to purchase the property from the property owner pursuant to the option to purchase agreement, any amount still owed toward the purchase price or other consideration on the property, as set forth in the agreement, following the application of any of the above described fee, money, or other consideration credited toward the purchase, shall be the sole responsibility of the tenant-buyer. A tenant-buyer or property owner may bring an action in a court of competent jurisdiction for legal and equitable relief against the other party for failing to comply with the provisions of the bill, or if the other party violates any of the provisions set forth in any written residential lease agreement or option to purchase agreement between the parties. The relief sought by the tenant-buyer or property owner may include enforcement or rescission of any agreement, damages, including consequential damages, and restitution. In addition, a property owner, in accordance with N.J.S.2A:18-51 et seq. and any other applicable state eviction law, may initiate an eviction action against a tenant-buyer as a tenant under a residential lease agreement, for failure to comply with the provisions of that agreement.

 

A.B. 1939
This bill will allow an aggrieved employee or former employee of an employer who has been found to be in violation of the “Millville Dallas Airmotive Plant Job Loss Notification Act,” P.L. 2007, c.212 (C.34:21-1 et seq.), also more commonly referred to as the “plant closing law,” or the “NJ WARN Act,” to request a suspension of the payment of interest on a mortgage loan that was secured by the person before entry of the court order finding a violation of that act. The suspension would remain in effect for 180 days from the date of the order and interest that was incurred during that time shall be paid, after the expiration of the suspension, in equal installments over the remaining term of the mortgage loan. The bill would only apply to a person who is domiciled in this state and to a mortgage securing a primary residence located in this state. To obtain the suspension, a person would submit to the mortgagee a written request which shall include: (1) a copy of the court order finding a violation of P.L.2007, c.212 (C.34:21-1 et seq.); and (2) an affidavit stating that the person is an aggrieved employee or former employee of the employer named in the order and further that the person is a mortgagor of the mortgage loan with respect to which the request is being made.

 

S.B. 992
This bill will allow an aggrieved employee or former employee of an employer who has been found to be in violation of the “Millville Dallas Airmotive Plant Job Loss Notification Act,” P.L.2007, c.212 (C.34:21-1 et seq.), also more commonly referred to as the “plant closing law,” or the “NJ WARN Act,” to request a suspension of the payment of interest on a mortgage loan that was secured by the person before entry of the court order finding a violation of that act. The suspension would remain in effect for one year from the date of the order and interest that was incurred during that time shall be paid, after the expiration of the suspension, in equal installments over the remaining term of the mortgage loan. The bill would only apply to a person who is domiciled in this state and to a mortgage securing a primary residence located in this state. To obtain the suspension, a person would submit to the mortgagee a written request which shall include: (1) a copy of the court order finding a violation of P.L.2007, c.212 (C.34:21-1 et seq.); and (2) an affidavit stating that the person is an aggrieved employee or former employee of the employer named in the order and further that the person is a mortgagor of the mortgage loan with respect to which the request is being made.

New Mexico
none
New York

A.B. 170
Passed Assembly 1/25/10
S.B. 5102
Prohibits home improvement contractors from also acting on behalf of mortgage brokers; prohibits a mortgage broker from paying a home improvement contractor directly unless they perform their own inspection of the completed work.

 

A.B. 257
S.B. 6668
Requires mortgage lenders and brokers to provide consumers with a mortgage bill of rights pamphlet which must be read and signed by the consumer prior to applying for a mortgage.

 

A.B. 1240
Enacts the "disclosure in lending act"; provides greater disclosure to borrowers; requires a depiction, chart or table be given to borrowers of certain information; requires the banking department to establish a website dedicated to the risk of sub-prime mortgages; grants enforcement actions.

 

A.B. 1430
Requires mortgagee banks to provide written notice to mortgagor when such mortgagor is no longer required to maintain personal mortgage insurance coverage; provides such notice shall be delivered to the mortgagor within 30 days of the date upon which the mortgagor shall have acquired sufficient equity in real property subject to the mortgage so as to eliminate the necessity for personal mortgage insurance.

 

A.B. 2096
S.B. 1221
Prohibits mortgagees from requiring mortgagors of certain pieces of real property to purchase flood insurance coverage exceeding the actual value of the loan.

 

A.B. 3197
Requires any entity that provides mortgages to inform its customers of the potential adverse effect mortgage rate shopping may have on the customers' credit ratings.

 

A.B. 3318
S.B. 2590
Requires the mortgage bill of rights, as proposed in a chapter of the laws of 2009, to be printed and posted on the Banking Department Web site in the eight languages that are most spoken in the state.

 

A.B. 3386
Enacts the "Home Equity Fraud Act" to control improper activities by home improvement contractors and finance companies; prohibits mortgage brokers or agents from acting as home improvement contractors; provides additional protections for mortgagors and home owners.

 

A.B. 4734
Relates to the dealings of mortgage brokers and home improvement contractors; specifies that the staff of a home improvement contractor shall not act on behalf of a mortgage broker, and that a mortgage broker shall not pay a home improvement contractor unless they performs their own inspection of the completed work.

 

A.B. 5441
S.B. 4506
Permits a one-time deferral of two consecutive monthly mortgage payments for the balance of the term of the mortgage on a residential mortgage; provides that the mortgage term be automatically extended by the period of such deferral and that the amount of monthly payments remain the same and not be recalculated.

 

A.B. 5683
Increases the bond limit of the state of New York mortgage agency for the purpose of refinancing subprime loans at risk of foreclosure.

 

A.B. 6828
Enacts the "New York Sub-prime Predatory Lending Prevention Act"; establishes guidelines for sub-prime loans; establishes duties of mortgage bankers and mortgage brokers; relates to the qualifications for licensing and certification of real estate appraisers.

 

A.B. 7705
S.B. 2073
Waives mortgage tax on the refinanced mortgage that replaces an adjustable rate mortgage initially offered at a sub-prime rate.

 

A.B. 8610
S.B. 2843
Provides that where a home improvement contractor is acting as a mortgage broker without being registered as required under the Banking Law, a mortgage banker, mortgage broker or exempt organization may not engage in such transaction with the contractor, and shall promptly notify the banking department that such person is acting as an unregistered broker.

 

A.B. 8917
Enacting clause stricken 1/25/10
Relates to home mortgage loans, the crime of mortgage fraud and the filing of transfers and assignments of mortgages.

 

S.B. 134
Requires a loan counseling disclosure as part of contract of sale for the transfer of property; provides that such form shall be signed at the time of contract and attached to the contract of sale.

 

S.B. 2367
Requires mortgage lenders and brokers to provide consumers with a mortgage bill of rights pamphlet which must be read and signed by the consumer prior to applying for a mortgage.

 

S.B. 3956
Imposes certain requirements with respect to permissible interest rate discounts, interest rate increases and the use of negative amortization provisions in alternative mortgage instruments and removes the statutory provisions on graduated payment mortgage instruments which currently limit such provisions to mortgages on one to six family units given by a natural person.

 

S.B. 4875
Relates to refinancing of an existing mortgage loan; provides for a separate disclosure which compares monthly payments under the previous mortgage with the combined monthly payments for the new mortgage loan, property tax and insurance.

 

S.B. 6636
Requires mortgage lenders and brokers to provide consumers with a mortgage bill of rights pamphlet which must be read and signed by the consumer prior to applying for a mortgage.

North Carolina

H.B. 1184
Clarifies that delivery fees charged by United States government agencies to borrowers do not count as points or fees in home loans, but risk-based fees charge by United States government agencies do count as discount points.

 

S.J.R. 180
Supports the implementation of the Homeowners and Bank Protection Act.

North Dakota
none
Ohio
none
Oklahoma

H.B. 1689
Creates the Predatory Lending Prevention Act of 2009.

 

S.C.R. 1
Memorializes Congress to enact a Homeowners and Banks Protection Act for specific purposes.

Oregon

H.B. 3706, Special Session
Passed both houses 2/25/10
Includes loans and extensions of credit in definition of 'real estate, goods or services' for purposes of Unlawful Trade Practices Act. Modifies definition to specify that loans and extensions of credit do not include transactions involving pawnbroker. Limits enforcement actions and rulemaking authority of attorney general with respect to specified unlawful practices of state regulated lenders.

Pennsylvania

H.B. 925
Regulating the amount of flood insurance coverage required by persons purchasing mortgages from lenders.

 

H.B. 986
Passed House 4/29/09
Provides that a licensee engaging in the mortgage loan business shall not be or designate the exclusive recipient of notices or other communications sent from a lender or servicer to a consumer.

 

S.B. 937
Provides that a mortgage lender may not reduce the available line of credit on a home equity open-end loan unless: (i) the lender pays for and provides a copy to the homeowner of a full written appraisal of the home completed within 30 days of written notice to the homeowner of proposed reduction of the available line of credit and considers any contrary appraisal evidence presented by the homeowner in writing at least 10 days prior to the proposed reduction date; or (ii) the lender provides written notice to the homeowner at least 180 days prior to the date of the proposed reduction of the available line of credit and considers any appraisal evidence presented by the homeowner in writing at least ten days prior to the proposed reduction date.

Puerto Rico

H.B. 570
Amends the Law of the Office of the Commissioner of Financial Institution; empowers the Commissioner to order the institutions that grant mortgage loans to grant moratoriums on repayment of principal for up to six months to families that due to loss or damage to their homes caused by earthquake, storm, cyclone, hurricane, fire or other disasters cannot fully comply with the payment thereof.

 

H.B. 1578
Relates to the law to regulate the business of Puerto Rico Mortgage Loans; amends the law known as the Mortgage Institutions Act; imposes penalties.

 

H.J.R. 572
Directs all financial institutions in Puerto Rico, assigned to the Office of the Commissioner of Financial Institutions (OCIF) to establish a moratorium for fiscal years 2009-2010 and from 2010 to 2011, to pay the monthly amount of mortgage the principal residence of every public servant who has been involuntarily removed from his job in the Government of the Commonwealth, under the provisions of Law No. 7 of 9 March 2009.

 

S.J.R. 257
Directs all financial institutions in Puerto Rico, assigned to the Office of the Commissioner of Financial Institutions (OCIF), to establish a moratorium for fiscal years 2009-2010 and from 2010 to 2011, to pay the monthly amount of mortgage the principal residence of every public servant who has been involuntarily removed from his job in the Government of the Commonwealth, as specified.

Rhode Island
none
South Carolina

H.B. 3049
Provides for the termination of acceptance of mortgage insurance premium payments and the return of escrowed mortgage insurance premiums by a lender who required mortgage insurance in connection with a consumer home loan transaction under certain circumstances.

 

H.B. 3790
Passed House 5/1/09
Enacts the "South Carolina Mortgage Lending Act", by adding Chapter 22 to Title 37 so as to require the licensing of a mortgage lender, loan originator, or someone acting as a mortgage lender; provides definitions; establishes qualifications for licensure and grounds for revocation, suspension, renewal, and termination; describes prohibited activities; provides for record-keeping, trust and escrow accounts, and annual reports; provides for enforcement through administrative action by the commissioner of the Consumer Finance Division of the Board of Financial Institutions and through criminal penalties, and provides for participation in a national mortgage registry; amends §§37-1-301, 37-3-105, 37-3-501, and 37-23-20, all relating to definitions in connection with mortgage lending and brokering and high-cost and consumer home loans, so as to conform definitions, and adds a definition for "adjustable rate mortgage"; amends §§37-23-40, 37-23-45, and 37-23-75, all relating to protections for the borrower in a high-cost or consumer home loan transaction, so as to require certain disclosures in connection with an adjustable rate mortgage; amends §29-4-20, relating to the definition of "reverse mortgage", so as to conform the definition; and amends Chapter 58, Title 40, relating to the registration of mortgage loan brokers, so as to change the registration requirements to licensing requirements, to conform definitions to those set forth in the South Carolina Mortgage Lending Act, requires certain professional courses, an additional year of experience, and a fingerprint check for mortgage brokers and loan originators, requires certain records be kept and made accessible, adds certain prohibitions in connection with a real estate appraisal, requires and prescribes mortgage broker agreements, authorizes enforcement by the Department of Consumer Affairs and prescribes administrative penalties including fines and injunctions and a criminal penalty, requires certain reports and filings, and provides for participation in a nationwide mortgage registry.

 

H.B. 4533
Adds §29-1-60 so as to provide notwithstanding another provision of law or contract, when a mortgagee makes a payment on a loan secured by a mortgage, the mortgagor shall apply at least 30 percent of the payment received toward the principal balance of the loan secured by the mortgage, and to provide a penalty.

 

H.B. 4534
Adds §29-1-70 so as to provide a mandatory minimum grace period of 20 days for a mortgage payment, defines the term grace period, and provides that this section does not apply to a simple interest or other mortgage in which interest accrues daily.

 

H.R. 3403
Memorializes the United States Congress to implement the Homeowners and Bank Protection Act.

South Dakota
none
Tennessee

H.B. 8
S.B. 711
Limits fee that high-cost home loan lenders may charge for third or subsequent pay-off statement provided to borrower in 12-month period to $10.

 

H.B. 704
S.B. 2016
Requires that a mortgage counselor be consulted before an adjustable rate mortgage can be completed.

 

H.B. 1926
S.B. 749
Requires a lender of a high-cost home loan to verify that the borrower has received appropriate housing counseling.

 

H.J.R. 146
Urges Congress to implement the Homeowners and Bank Protection Act.

Texas
No Regular 2010 Session
Utah

H.B. 53
Enrolled 2/11/10
Modifies provisions related to licensure and prohibited conduct for those engaging in foreclosure rescue or loan modification assistance.

Vermont
none
Virginia
none
Washington

H.B. 1586
Defines nontraditional mortgages.

 

S.B. 5858
Prohibits a mortgage broker from receiving a yield spread premium payment prior to or after the closing of a residential mortgage loan.

 

S.B. 6767
Prohibits a residential mortgage loan modification from being made unless a disclosure summary of all material terms is placed on a separate sheet of paper and has been provided to the borrower 30 days before the first payment of the loan modification.

West Virginia

H.B. 3097
S.B. 87
Relates to the prevention of predatory lending practices.

 

S.B. 97
Relates to the prevention of predatory lending practices.

Wisconsin

A.B. 471
Signed by governor 3/15/10, Act 188
This bill specifies that a mortgage broker has an agency relationship with the residential mortgage loan applicant or investor on whose behalf the mortgage broker provides, or contracts to provide, mortgage brokerage services (borrower). The mortgage broker owes all of the following duties to the borrower: 1. The mortgage broker must act in the borrower’s best interest and in the utmost good faith. The mortgage broker may not compromise the borrower’s rights or interests in favor of the mortgage broker’s or any other person’s. 2. The mortgage broker may not accept, give, or charge any undisclosed compensation or realize any undisclosed remuneration that inures to the benefit of the mortgage broker on an expenditure made for the borrower. 3. The mortgage broker must carry out all lawful instructions given by the borrower. 4. The mortgage broker must disclose to the borrower all material facts of which the mortgage broker has knowledge that might reasonably affect the borrower’s rights or interests or ability to receive the borrower’s intended benefit from the residential mortgage loan. This does not include facts that are reasonably susceptible to the knowledge of the borrower. 5. The mortgage broker must use reasonable care in performing the mortgage broker’s duties. 6. The mortgage broker must account to the borrower for all money and property received by the mortgage broker as the borrower’s agent. The bill does not prohibit a mortgage broker from contracting or collecting a fee for services provided, if the services were disclosed to the borrower before they were provided. The bill also does not require a mortgage broker to obtain a loan containing terms or conditions not available to the mortgage broker or to obtain a loan for the borrower from a mortgage lender with whom the mortgage broker does not have a business relationship. These duties may not be waived. The bill requires a mortgage broker, in each brokerage services contract and related disclosure statement, to identify the parties’ agency relationship and the mortgage broker’s duties.

Wyoming
none

 

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