US 2005 Introduced Predatory Mortgage & Subprime Lending Legislation Resources in United States
US 2005 Introduced Predatory Mortgage & Subprime Lending Legislation Resources
| State: | Bill Summary: |
| Alabama | H.B. 524 Requires banks engaged in sub-prime consumer lending to give periodic public notice that they are sub-prime lenders, and the notice would contain a schedule of interest rates and charges. |
| California | A.B. 408 Existing law requires the secretary of Business, Transportation and Housing to monitor and investigate the lending patterns and practices of financial institutions for compliance with the prohibition against discrimination in the availability of, or in the provision of, financial assistance for the purpose of purchasing, construction, rehabilitation, improving, or refinancing housing accommodations. Existing law also requires the secretary to adopt regulations applicable to all persons who are in the business of originating residential mortgage loans in this state and who are not depository institutions. This bill repeals these provisions. |
| S.B. 790 Revise the definition of a covered loan. Prohibits a prepayment penalty after the first 12 months after the date of the consummation of the loan. Requires a borrower to be offered loan counseling and sign a certification that he or she has received or waived the counseling before a covered loan may be made. |
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| Connecticut | H.B. 6240 Failed Joint Favorable deadline 3/17/05 Protects the equity and property of homeowners in the state, to provide necessary consumer protection and to safeguard the economic vitality of the state. |
| H.B. 6695 Failed Joint Favorable deadline 3/17/05 Prohibits any person from offering a reverse annuity mortgage loan that a) authorizes the mortgage lender to take an interest in the appreciated value of the home, b) assesses a maturity fee, or c) assesses a prepayment penalty in excess of three percent of the borrowed amount if paid off in the first year, two percent of the borrowed amount if paid off in the second year, and one percent of the borrowed amount if paid off in the third year, and requires the mortgage lender to notify consumers that they may wish to contact an independent housing counselor if they are unsure about whether to rescind the reverse annuity mortgage loan. |
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| S.B. 618 Protects consumers by requiring that the Connecticut Abusive Home Loan Lending Practices Act apply to reverse mortgages. |
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| S.B. 1217 Failed Joint Favorable deadline 3/17/05 Inserts the definition of “prepayment penalty” from section 36a-746a of the general statutes into section 36a-2 of the general statutes; applies the same prepayment penalties limitation currently in high cost mortgages to all mortgages in the state whereby prepayment penalties cannot exceed three percent of the principal paid off during the first year, two percent during the second year and one percent during the third year. Prohibits prepayment penalties when the mortgagee is refinancing a mortgage with the same lender or affiliate of such lender; requires that all refinancing of existing mortgages have some benefit to the borrower applying the current language in the high cost mortgage statute, section 36a-746e(8) of the general statutes. Requires the borrower’s written consent to change the payment due date on a mortgage loan and requires lenders whose loans are subject to the Truth in Lending Act to notify the borrower that they may wish to contact a housing counselor to determine whether to cancel the loan within the three-day rescission period. The notice refers the borrower to the United States Department of Housing and Urban Development for further information. |
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| Florida | S.B. 2446 Died in committee 5/6/05 Prohibits an employee or agent of a financial institution from denying loans or restricting the number of loans made to residents of a particular geographic area of a community based on race, national origin, or income of residents of that area; provides penalty. |
| Georgia | H.B. 808 Enacts a new chapter, the “Georgia Predatory Lending Prevention Act”; provides a short title; provides for legislative findings; provides for definitions relating to predatory lending; lists prohibited practices; provides for severability. |
| Illinois | H.B. 2047 Amends the Illinois Fairness in Lending Act. Makes a technical change in a section concerning the short title. |
| S.B. 278 Amends the Illinois Fairness in Lending Act. Provides that “equity stripping” and “loan flipping” shall only include loans that qualify as high risk home loans. Amends the High Risk Home Loan Act. Provides that “points and fees” does not include: i) fees paid to the Veterans Administration required by law; ii) fees paid to the Federal Housing Administration required by law; iii) fees paid for private mortgage insurance; or iv) all fees paid to a mortgage broker by a lender if the loan is less than $50,000, or 50 percent of fees paid to a mortgage broker by a lender if the loan is between $50,000 and $100,000. |
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| Indiana | H.B. 1480 Allows a borrower to prepay part or all of the unpaid balance of a home loan without a prepayment penalty or other fee. |
| Iowa | H.F. 422 Creates the “Iowa High-Cost Mortgage Act” in new Code chapter 535D. Applies to lenders who are licensed mortgage bankers or brokers under Code chapter 535B that make high-cost mortgages. A “high-cost mortgage” is secured by the borrower’s principal dwelling and is subject to a high rate of interest or a high percentage or amount of points and fees. Provides prohibitions, restrictions, and guidelines for lenders and high-cost mortgages. Addresses prepayment penalties, increased interest upon default, balloon payments, negative amortization, required disclosures, arbitration clauses, insurance, refinancing, home improvement contracts, acceleration, documentation procedures, loan criteria, late payment charges, and payoff information. A mortgage banker or broker can have the person’s license, issued pursuant to Code chapter 535B, suspended or revoked by the superintendent of the division of banking for a violation of the new Code chapter. |
| S.F. 277 Creates a new Code chapter known as the “Home Loan Protection Act”. The bill is based on federal legislation designed to apply to all creditors that make real estate loans, including home equity loans. Prohibits various creditor practices in making and refinancing certain consumer home loans. When making home loans, a creditor isrestricted in all of the following areas: financing insurance premiums or debt cancellation fees; “flipping” a home loan (i.e., refinancing a home loan with no net benefit to a borrower); encouraging default on an existing loan prior to closing on a refinancing loan; imposing a late payment charge; and accelerating indebtedness. Additional restrictions apply to creditors that make loans meeting certain thresholds known as “high-cost” home loans. Provides for its enforcement and remedies. Any person who knowingly violates the bill is guilty of a serious misdemeanor. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $250 but not more than $1,500. |
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| Kentucky | S.B. 173 Relates to the purpose of the Kentucky’s civil rights chapter, to include a prohibition on discrimination because of sexual orientation and gender identity; relates to prohibited discrimination in various labor and employment practices, to include sexual orientation and gender identity; relates to prohibited discrimination in places of public accommodation and advertisements therefor, to include sexual orientation and gender identity; relates to the state and local human rights commissions, to include prohibition of discrimination on the basis of sexual orientation and gender identity in the scope of their powers and duties; relates to prohibited discrimination in certain housing, real estate, and other financial transactions, to include sexual orientation and gender identity; relates to prohibited discrimination in certain insurance sales, to include sexual orientation and gender identity; relates to prohibited discrimination in certain credit transactions, to include sexual orientation and gender identity; amends KRS 344.010 to include definitions for “sexual orientation” and “gender identity”; and makes various technical amendments. |
| Michigan | H.B. 4343 Replaces the Consumer Mortgage Protection Act with the Home Loan Protection Act. |
| H.B. 4344 Provides for enforcement of the Home Loan Protection Act through the Consumer Protection Act. |
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| H.B. 4345 Requires state bank compliance with the Michigan Home Loan Protection Act. |
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| H.B. 4346 Requires state savings bank compliance with the Michigan Home Loan Protection Act. |
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| H.B. 4347 Requires domestic credit union compliance with the Michigan Home Loan Protection Act. |
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| H.B. 4348 Requires savings and loan compliance with the Michigan Home Loan Protection Act. |
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| H.B. 4349 Requires mortgage broker compliance with the Michigan Home Loan Protection Act. |
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| H.B. 4350 Requires secondary market mortgage broker compliance with the Michigan Home Loan Protection Act. |
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| New Jersey | A.B. 1360 Amends the New Jersey Home Ownership Security Act of 2002, which prohibits certain abusive lending practices commonly known as predatory lending. The current law includes in the calculation of “points and fees” certain fees paid to creditors, mortgage brokers and affiliates of creditors and mortgage brokers. Amends the definition of points and fees so that these fees, when paid to affiliates of creditors and mortgage brokers, will now be excluded from the calculation of points and fees. The calculation of points and fees payable in connection with a loan is one factor used to determine whether a loan is a covered home loan or a high-cost home loan subject to the prohibited lending practices set forth in the law. |
| New Mexico | H.B. 994 Revises definitions in the Home Loan Protection Act. |
| S.B. 694 Amends provisions concerning the practice of flipping a home loan; provides for reliance on rules; amends sections of the Home Loan Protection Act. |
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| S.B. 913 Enacts a new section of the Home Loan Protection Act to provide for exemptions to that Act. |
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| New York | A.B. 2847 Requires rejection by the superintendent of Banks of an application for certain discretionary activities, subject to provisions pertaining to the credit needs of local communities where discrimination has been found in opening and closing branches or in extending credit, based on income, sex, sexual orientation, or race within the previous five years or has imposed any geographic requirements or restrictions in extending credit or providing services. |
| A.B. 2853 Requires applicants for registration as a mortgage broker to successfully complete certain pertinent courses of instruction and to demonstrate their competency and trustworthiness; provides for exemptions; provides for continuing education requirements. |
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| A.B. 3546 Prohibits banking organizations originating loans secured by real property from engaging in practices with a “discriminatory effect;” defines “discriminatory effect” as underwriting or lending policy or practices whose total effect tends to cause or result in a prohibited discriminatory credit or banking practice unless such policy is necessary for a legitimate banking purpose. |
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| A.B. 5005 Outlaws discrimination because of alien status; includes alien status as a grounds for determining a commission of an unlawful discriminatory practice or a state civil rights violation; provides that it shall not be an unlawful discriminatory practice to make credit differentiations or decisions based upon an applicant’s alien status; defines the term “alien status.” |
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| A.B. 8726 Establishes the financial literacy for senior citizens program which is managed by the Department of Banking and provides information regarding mortgages, protections and obligations, preparation for retirement, establishing a budget, paying monthly bills, balancing check books, tax preparation and other obligations to persons over the age of 50. |
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| S.B. 3714 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. |
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| S.B. 3988 Prohibits geographic discrimination by creditors; and makes it an unlawful discriminatory practice to issue credit based upon geographic location of the residence of the applicant or debtor. |
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| Ohio | H.B. 381 Amends §203.75 of Am. Sub. H.B. 66 of the 126th General Assembly to fund the enforcement of predatory lending laws. |
| S.B. 162 Relates to civil penalties and advertisement requirements of licensed mortgage lenders; the application and civil penalties of the Mortgage Broker Law and duties and advertisements of mortgage brokers; the application of the Consumer Sales Practices Act relating to unfair and deceptive acts; the application, prohibitions, and civil penalties of the Consumer Credit Mortgage Loan Law and specifications about loans regulated under this law; and enacts consumer protection laws relating to mortgages. |
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| Oregon | H.B. 2635 Prohibits certain lending activities in connection with high-cost home loans. Creates private cause of action for damages. Applies to loans for which application is first made on or after January 1, 2006. |
| H.B. 2958 Requires a lender or seller imposing a prepayment penalty in terms and conditions of real estate loan agreement or land sale contract to ensure that the instrument identifying the terms and conditions of the penalty is recorded in deed or mortgage records in county in which real property is located. Specifies instruments that may satisfy requirement. |
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| Pennsylvania | H.B. 967 Provides for consumer equity protection and provides for home ownership protection. |
| H.B. 1469 Provides for mortgage banker and broker licensee limitations, for legislative findings, for limitations on covered loan terms and practices and for civil liability; and repeals provisions relating to restricted acts and practices. |
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| H.R. 178 Memorializes the Congress of the United States to preserve state and local government authority to regulate predatory lending practices. |
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| Tennessee | H.B. 1652 S.B. 1784 Limits the period for prepayment penalty to no longer than 24 months after date of consummation of loan of $100,000 or less for home improvements to owner-occupied residence where residence is collateral for loan. |
| H.B. 1713 S.B. 1786 Prohibits a high-cost home loan mortgage or deed of trust from containing a clause giving the lender the power of sale by non-judicial foreclosure. |
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| H.B. 1714 S.B. 1787 Enacts the “Tennessee Homeowners’ Protection Act of 2005.” |
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| Texas | H.B. 716 Relates to the punishment for false statements to obtain property or credit committed against an elderly person. |
| S.B. 618 Relates to disclosures in connection with certain home loans; provides a penalty. |
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| Wisconsin | A.B. 456 Passed Assembly 11/9/05 Eliminates the prepayment penalty requirements for variable rate loans and creates new requirements. Under the bill, a lender may not include a prepayment penalty in a variable rate loan unless the lender has, in writing, offered the borrower a variable rate loan without a prepayment penalty and the borrower initials the offer to indicate that the borrower has declined the offer. If the borrower declines the offer, the lender may include a prepayment penalty that applies if prepayment of the loan is made within the first three years of the loan and is not made in connection with the sale of the dwelling or mobile home secured by the loan. Limits the prepayment penalty or fee to three percent in the first year of the loan, two percent in the second year of the loan, or one percent in the third year of the loan, of the amount by which the prepayment exceeds 80 percent of the principal balance of the loan outstanding immediately prior to prepayment. |
| S.B. 230 Eliminates the prepayment penalty requirements for variable rate loans and creates new requirements. Under the bill, a lender may not include a prepayment penalty in a variable rate loan unless the lender has, in writing, offered the borrower a variable rate loan without a prepayment penalty and the borrower initials the offer to indicate that the borrower has declined the offer. If the borrower declines the offer, the lender may include a prepayment penalty that applies if prepayment of the loan is made within the first three years of the loan and is not made in connection with the sale of the dwelling or mobile home secured by the loan. Limits the prepayment penalty or fee to three percent in the first year of the loan, two percent in the second year of the loan, or one percent in the third year of the loan, of the amount by which the prepayment exceeds 80 percent of the principal balance of the loan outstanding immediately prior to prepayment. |
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