US 2008 Introduced Predatory Mortgage & Subprime Lending Legislation Resources in United States

US 2008 Introduced Predatory Mortgage & Subprime Lending Legislation Resources

State:	Bill Summary:
Arizona	H.B. 2517 Prohibits a mortgage broker from making, providing or arranging 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. For loans with an interest rate that may vary, the reasonable ability to pay shall be determined based on a fully indexed rate and a repayment schedule that achieves full amortization over the life of the loan. For all residential mortgage loans, the borrower’s income and financial resources must be verified by tax returns, payroll receipts, bank records or other similarly reliable documents.
California	A.B. 529 Passed Assembly 1/24/08 Requires the entity responsible for collecting payments of principal and interest from a borrower on a first-lien mortgage loan, secured by residential real property, as specified, where the interest rate on the loan is initially fixed and then becomes adjustable, or for which the borrower may select one of several payment amounts each month, to notify the borrower of specified items of information no more than 120 days, and no less than 90 days, prior to an interest rate adjustment or the resetting of the loan to a fully amortizing loan, as specified. The bill requires the notification to be personally delivered or mailed, as specified.
	H.B. 1830 Passed Assembly 5/29/08 Establishes “subprime loans,” as defined, as new categories of regulated loans, and makes various conforming changes to existing law relative to these loans. The bill prohibits a subprime loan from including prepayment penalties and from including a provision for negative amortization. The bill prohibits a person from making a subprime loan unless at the time the loan is consummated the person reasonably believes the consumer will be able to make the scheduled payments, including taxes and insurance, and creates a rebuttable presumption regarding repayment ability in certain circumstances. The bill, among other things, prohibits a licensed person who originates subprime loans from receiving a yield spread premium or other incentive compensation, in certain circumstances and prohibits a person from originating a subprime loan unless an escrow or impound account is established for a specified period of time. Authorizes a licensing agency to levy administrative penalties in an amount up to $10,000 against a person who violates the provisions regulating covered and subprime loans and makes a person who makes a willful and knowing violation of those provisions of law liable to the consumer in the amount of $25,000 or the consumer’s actual damages, whichever is greater. The bill authorizes the attorney general, city attorney, or district attorney to bring an action for specified civil penalties for a violation of the provisions regulating covered and subprime loans. The bill provides that it is a defense against foreclosure on a property secured by a covered or subprime loan if the loan is in violation of the laws regulating those loans. The bill’s provisions apply to covered and subprime loans originated on or after January 1, 2009.
	H.B. 1837 Prohibits a covered loan from including a prepayment penalty after the first 24 months from the date of consumation of the loan and authorizes a covered loan to include a prepayment penalty before that time period if specified conditions are satisfied. The bill defines the terms “subprime loan” and “nontraditional loan” and prohibits these loans from including prepayment fees or penalties. The bill prohibits a licensed person from receiving any compensation for originating a subprime loan or nontraditional loan with an interest rate above the wholesale par rate for which the consumer qualifies. The bill’s provisions would apply to consumer loans originated on or after January 1, 2009.
	A.B. 2161 Passed Assembly 5/27/08 Existing law requires the commissioner to apply the guidance on nontraditional mortgage product risks, as specified, to these licensees and authorizes the commissioner to adopt regulations in this regard. Requires the commissioner, on or before January 1, 2010, and annually thereafter, until January 1, 2012, to submit a written report to the Legislature regarding the aggregated data the commissioner receives pursuant to the consumer complaint process involving loans covered by the guidance implemented pursuant to these regulations.
	A.B. 2301 The California Residential Mortgage Lending Act provides for the licensure and regulation by the Commissioner of Corporations of persons engaged in the business of making residential mortgage loans or servicing those loans. This bill declares the intent of the Legislature to enact legislation requiring licensees to provide to borrowers, in addition to their credit score, the average annual percentage rate that qualified borrowers with a similar credit score received.
	A.B. 2359 Passed Assembly 5/29/08 Prohibits a broker, trustee, or mortgagee, or his or her agent, beneficiary, or assigns from requiring as a condition of an agreement regarding a covered loan, subprime loan, or nontraditional mortgage, as defined, that a borrower or an applicant for the loan waive any rights, duties, remedies, forums, or procedures of California law with respect to a residential mortgage or mortgage foreclosure. Prohibits a broker, trustee, or mortgagee, or his or her agent, beneficiary, or assigns from refusing to enter into an agreement with a borrower or an applicant regarding a covered loan, subprime loan, or nontraditional mortgage solely because he or she refuses to waive rights, duties, remedies, forums, or procedures provided for in those provisions. The bill also provides that the exercise by a borrower or applicant of the right to refuse to waive legal rights, duties, remedies, forums, or procedures, including a rejection of an agreement to arbitrate, shall not affect any other term of the agreement. This bill also places on the broker, trustee, or mortgagee or his or her agent, beneficiary, or assigns, the burden of proving that any waiver of rights, duties, remedies, forums, or procedures of California law with respect to these loans, including any agreement to arbitrate a claim or dispute, was knowingly and voluntarily made by the borrower or applicant and was not a condition of the agreement. This provision would apply to an agreement to waive any rights, duties, remedies, forums, and procedures of California law with respect to those loans, including an agreement to arbitrate, that is entered into, altered, modified, renewed, or extended on or after January 1, 2009.
	A.B. 2594 Passed Assembly 5/19/08 Authorizes a redevelopment agency, until January 1, 2013, to expend money from the fund to (1) purchase, assume, or refinance subprime and nontraditional mortgages, as defined, on homes owned by persons of low or moderate income residing within its jurisdiction, or make loans to those homeowners; (2) purchase homes within its jurisdiction that have been foreclosed and are vacant, and sell those homes to persons or families of low or moderate income; and (3) provide mortgage or credit counseling services to existing or prospective homeowners that meet a specified income level within its jurisdiction. Authorizes the agency to expend any money that is not held in the fund to (1) purchase, assume, or refinance, or assist lenders or nonprofit or for-profit developers in purchasing, assuming, or refinancing, subprime or nontraditional mortgages on homes owned by persons meeting a specified income level within its jurisdiction, or make loans to those homeowners; and (2) purchase, or assist lenders or nonprofit or for-profit developers in purchasing, homes within its jurisdiction that have been foreclosed and are vacant and sell those homes, without regard to income.
	S.B. 926 Died pursuant to Art. IV, Section 10(c) of the Constitution 1/31/08 Until January 1, 2013, this bill requires, commencing at 120, 90, and 45 days prior to any projected increase of at least 10 percent in mortgage payment amount for a loan made on or before December 31, 2007, that is for an owner-occupied residence, the mailing of specified information related to the interest rate change and payment due, in plain language and in the language in which the mortgage was negotiated, as specified. Until January 1, 2013, and as applied to residential mortgage loans made on or before December 31, 2007, that are for owner-occupied residences, this bill requires, prior to the filing of any notice of default, a mortgagee, trustee, servicer, or beneficiary to conduct an in-person meeting with the borrower, as defined, to assess the borrower’s financial situation, provide the borrower with a list of HUD-certified credit counselors in the borrower’s geographic area, and explore options for the borrower to avoid foreclosure. The bill also requires the mortgagee, trustee, servicer, or beneficiary to offer, if feasible, other nonforeclosure options, as specified. The bill precludes the filing of a notice of default until 30 days after that meeting, and would, upon that filing, require the mortgagee, trustee, servicer, or beneficiary to include a specified declaration regarding the meeting and the offering of alternative terms and options, which, upon a willful misstatement of material fact, may subject that person to a specified civil penalty subject to a civil action by the attorney general, district attorney, county counsel, or city attorney. If a notice of default had already been filed prior to the enactment of this act, the bill would instead require, prior to the notice of sale, an in-person or, at the borrower’s option, telephonic meeting between the above-described parties. Upon filing a notice of sale, the aforementioned declaration requirements and penalty provisions would also apply thereto. The bill also sets forth procedures by which the borrower would be contacted prior to those in-person meetings, defined as “due diligence” on the part of the mortgagee, trustee, servicer, or beneficiary, which would require and include preliminary contact by electronic mail, first class mail, telephone, and certified mail, as specified. The bill also requires specified mailings to the resident of a property that is the subject of the notice of default. Until January 1, 2013, this bill also sets forth specified penalties of up to $1,000 a day for the failure to maintain residential property purchased at a foreclosure sale, as specified and subject to a 14-day abatement period. Until January 1, 2013, this bill gives a tenant or subtenant in possession of a rental housing unit that has been sold due to foreclosure, 90 days to remove himself or herself from the property, as specified.
	S.B. 1242 Requires a person or entity that arranges financing in connection with a sale, lease, or exchange of real property and acts as an agent with respect to that property to make a written disclosure of those roles and his or her compensation, within 24 hours, to all parties to the sale, lease, or exchange and any related loan transaction. Requires the representative of an equity purchaser to provide to the parties to a contract written proof of licensure, as specified. The bill also requires the representative to provide a statement under penalty of perjury and written proof to the parties to the contract that he or she has either (1) satisfied a certain minimum professional liability coverage requirement and has an unrestricted real estate license in good standing, as described by the regulations of the Real Estate Commissioner, that is not restricted pursuant to the Real Estate Recovery Program, as specified, or (2) met a certain minimum bonding requirement. Requires residential mortgage lenders or loan servicers of higher-priced mortgage loans, as defined, with variable interest rates to provide borrowers notice of any rate reset 120 days prior to that reset, as specified. Provides that any person who knowingly and willfully defrauds a creditor by acknowledging in the documentation for an owner-occupied residential mortgage loan that the property secured by the loan is to be owner-occupied when that property is actually intended, and used, as rental property, shall be liable for a civil penalty not to exceed 20 percent of the total amount of the residential mortgage loan, with specified exceptions. This bill authorizes a credit against those taxes for each taxable year beginning on or after January 1, 2008, and before January 1, 2011, in an amount equal to 20 percent of any contribution made by a qualified taxpayer, as defined, during the taxable year to any nonprofit, HUD-approved credit counseling agency that assists homeowners with mortgage problems. The bill requires the Franchise Tax Board to report annually to the Legislature with regard to those credits, as specified. This bill, in modified conformity with federal law, provides for an exclusion from gross income for discharges of indebtedness on a principal residence that occur on or after January 1, 2007.
Connecticut	H.B. 5166 Failed Joint Favorable deadline 3/6/08 Limits permissible prepayment penalties on mortgages.
	H.B. 5577 Enrolled 5/29/08 Creates three mortgage assistance programs and establishes a 10-member mortgage assistance program committee to develop standards for and procedures to implement them within the Department of Economic and Community Development (DECD). The programs must be funded by state bonding and loan repayments under the programs. The governor, House speaker, Senate president pro tempore, House and Senate majority and minority leaders, the banking commissioner and the Banks Committee chairpersons must each appoint one member to the mortgage assistance program committee. The committee must elect a chair from among its members. The committee must develop written standards that, at a minimum, establish (1) the standards for qualifying mortgages and mortgagors for the emergency mortgage assistance programs; (2) the scope and nature of the emergency assistance available; and (3) the terms and conditions under which DECD will provide, and be repaid for the assistance provided under the programs. The committee must also develop an application for relief and procedures for the committee’s determination of eligibility. The standards and procedures the committee will develop must be adopted in regulations by DECD by October 1, 2008. For all loans, the bill establishes a fiduciary duty from all lenders and mortgage brokers to borrowers. The bill prohibits the financing of insurance and refinancing that do not benefit the borrower. It requires mortgage professionals to use reasonable care, requires disclosures with regard to yield spread premiums, and prohibits the influencing of real estate appraisals. It also prescribes on-line continuing education for mortgage lending professionals and increases mortgage broker surety bonds. The bill also allows the banking commissioner to impose a case-by-case foreclosure moratorium of up to six months. The bill defines “nonprime loans.” For nonprime loans, it establishes a specific fiduciary duty. It prohibits certain provisions in a nonprime loan, such as prepayment penalties and interest rate increases after default. It also prohibits the making of these loans unless the borrower is properly qualified and takes a course, funds are escrowed, and a specific notice is provided. For all of these lending provisions, the bill defines a “mortgage broker” as a Department of Banking (DOB)-licensed person who, for a fee, commission, or other valuable consideration, negotiates, solicits, arranges, places, or finds a mortgage, or his successors or assigns. It defines a “lender” as any DOB-licensed person or entity originating a mortgage, or its successors or assigns.
	S.B. 21 Failed Joint Favorable deadline 3/6/08 Amends definition of high cost home loan; amends mortgage licensing provisions.
	S.B. 208 Authorizes the State Bond Commission to issue bonds of the state in accordance with §3-20 the proceeds of which shall be used by the Department of Economic and Community Development for the purpose of providing a grant-in-aid to the Connecticut Housing Finance Authority for the emergency mortgage assistance payment program established pursuant to §8-265dd of the General Statutes.
	S.B. 423 Failed Joint Favorable deadline 3/6/08 Reduces foreclosure by removing incentives to placing borrowers in loans that they cannot afford or cost significantly more that the borrower would qualify for; creates accountability by conferring legal rights on borrowers who have been taken advantage of by unscrupulous lenders; prohibits certain loan practices that are antithetical to homeownership; and prohibits loan terms that significantly increase the likelihood of default and foreclosure.
Delaware	H.B. 162 Creates the Delaware Predatory Mortgage Lending Prevention Act which prohibits unfair lending practices in relation to residential home loans, and provides civil and administrative enforcement procedures.
Florida	H.B. 381 Withdrawn prior to introduction 1/3/08 Provides an exception of individual remedies to the enforcement of the Florida Fair Lending Act. Provides for private actions for violations of the Florida Fair Lending Act and of prohibitions on equity skimming. Provides for awards of damages, court costs, and attorney’s fees.
	H.B. 979 Died in committee 5/2/08 Relates to subprime loans; revises terminology; creates, revises, and deletes definitions; prohibits specified terms in subprime loan agreements; revises required disclosures to borrowers; provides for right of rescission within specified period; revises provisions relating to applicability of remedies, lender notices of default, and corrections & unintentional violations; provides for civil remedies for violations.
	S.B. 2846 Died in committee 5/2/08 Prohibits specified terms in subprime loan agreements. Requires a certificate of completion for lender to make payments to contractor under a home improvement contract. Requires lenders to provide payoff balances within a specified period upon request. Requires a lender to disclose to the borrower the terms and costs associated with a fixed rate loan. Prohibits charging points and fees in certain refinancing.
Illinois	S.B. 1879 Creates the Mortgage Steering Act. Prohibits mortgage loan steering or other specified fee and loan practices, based upon (i) the borrower’s credit history, (ii) the borrower’s capacity to repay the loan, and (iii) the property on which the loan is secured, because of that borrower’s race, gender, age, disability, or national origin. Provides that the attorney general shall enforce the Act and grants the Attorney General the additional listed enforcement powers. Provides for injunctive relief, restitution, and civil penalties for violations of the Act. Provides that a person who suffers actual damages as a result of a violation of the Act by a lender may bring an action against that lender and may be awarded actual economic damages or any other relief that the court deems proper. Provides that any waiver or modification of the rights, provisions, or remedies of the Act shall be void and unenforceable.
Georgia	S.B. 475 Revises 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.
Indiana	H.B. 1211 Requires the department of local government finance (DLGF) to establish an electronic system for the collection and storage of sales disclosure form data for real estate conveyances. Provides that the system must allow closing agents to input the sales disclosure form data into the system; and (2) submit the form electronically to a data base maintained by the DLGF. Requires the DLGF to make the data base accessible to county auditors, county and township assessors, and the legislative services agency. Requires the DLGF to establish electronic systems that automatically apply: (1) the mortgage deduction to a person entitled to the deduction; and (2) the homestead credit to a person entitled to the credit. Provides that the systems must allow closing agents to: (1) input information about the mortgage transaction that is the basis for the deduction or the credit; and (2) submit the form electronically to data bases maintained by the DLGF. Requires the DLGF to make the data bases accessible to county auditors. Requires a county auditor to accept an electronic filing for the mortgage deduction or the homestead credit if the filing is complete. Prohibits a county auditor from requiring any other information or form of identification for a person to claim the mortgage deduction or the homestead credit. Requires the DLGF to establish an electronic system for the collection and storage of the: (1) names; and (2) license, registration, or certificate numbers; of certain professionals that participate in or assist with residential mortgage transactions. Provides that the system must allow closing agents to: (1) input the required information with respect to each professional involved in the transaction; and (2) submit the form electronically to a data base maintained by the DLGF. Requires the DLGF to make the data base accessible to: (1) the state agencies responsible for regulating the specified professionals; and (2) the homeowner protection unit in the attorney general’s office. For residential mortgage transactions that close after June 30, 2008, and before January 1, 2010, requires a closing agent to do the following at the time of closing: (1) In the case of a first lien purchase money mortgage transaction, provide the customer with the sales disclosure form prescribed by the DLGF and the applications for the homestead credit and the mortgage deduction. (2) In the case of a refinancing, provide the customer with the application for the mortgage deduction. (3) Require the customer to complete and sign the form or forms provided. (3) Collect the signed and completed forms for filing. (4) Inform the customer of other specified property tax deductions by providing the customer with a form prescribed by the DLGF that describes the deductions. Requires the closing agent to file the signed forms with the appropriate county auditor. For a residential mortgage transaction that closes after December 31, 2009, requires a closing agent to input and submit the following information to the appropriate data bases maintained by the DLGF, as applicable: (1) Information to enable the customer to obtain the mortgage deduction and the homestead credit. (2) Sales disclosure form data. (4) The names and license, certificate, or registration numbers of specified professionals involved in the transaction. Provides that: (1) purchase money mortgage transactions; and (2) refinancings of first lien mortgage transactions; are subject to regulation under the Uniform Consumer Credit Code (UCCC). Requires settlement service providers to make closing documents available to borrowers at least 48 hours before the closing. Provides that if terms of the home loan set forth in the documents provided differ from the terms presented to the borrower at the time of closing, the borrower is entitled to delay or reschedule the closing without penalty and without forfeiting the right to enter into the loan or the purchase contract. Prohibits a creditor from: (1) recommending or issuing a stated income or no documentation loan to a prospective borrower; or (2) recommending or issuing a home loan to a prospective borrower without first conducting a reasonable inquiry into the prospective borrower’s creditworthiness. Provides that if a creditor conducts a reasonable inquiry, the creditor is not liable if the borrower later defaults on a home loan issued by the creditor. Requires creditors to offer: (1) a temporary forbearance, subject to terms agreed upon by the creditor and the borrower; (2) a payment plan; or (3) an option for the refinancing, restructuring, or workout of existing indebtedness; whenever a home loan becomes 60 days past due. Requires various state agencies to form the mortgage lending and fraud prevention task force to coordinate the state’s efforts to: (1) regulate the various participants involved in originating, issuing, and closing home loans; (2) enforce state laws and rules concerning mortgage lending practices and mortgage fraud; and (3) prevent fraudulent practices in the home loan industry and investigate and prosecute cases involving mortgage fraud. Requires the securities commissioner and the director of the department of financial institutions to cooperate to determine the appropriate state agency or department to regulate a person subject to regulation, licensure, or registration under both the loan broker statute and the UCCC. Repeals provisions that exclude mortgage transactions from the UCCC. Beginning with the school year that begins in 2010, requires school corporations and accredited nonpublic schools to include in their curricula for grades 9 through 12 instruction designed to: (1) increase students’ awareness of consumer transactions, including mortgage transactions; and (2) foster personal financial responsibility. Provides that a school corporation or an accredited nonpublic school may provide the instruction by integrating it into its mathematics curriculum. Requires the department of education and the department of financial institutions to develop guidelines to assist teachers assigned to provide the instruction.
	H.B. 1360 Passed House 1/30/08 Requires the homeowner protection unit (unit) within the attorney general’s office to establish a toll free telephone number to receive calls from persons having information about suspected fraudulent transactions and practices concerning residential real estate transactions. Requires the unit to share information reported by callers to the telephone number with appropriate law enforcement and regulatory agencies. Requires the department of local government finance (DLGF) to establish an electronic system for the collection and storage of sales disclosure form data for real estate conveyances. Provides that the system must allow closing agents to input the sales disclosure form data into the system; and (2) submit the form electronically to a data base maintained by the DLGF. Requires the DLGF to make the data base accessible to county auditors, county and township assessors, and the legislative services agency. Requires the DLGF to establish electronic systems that automatically apply: (1) the mortgage deduction to a person entitled to the deduction; and (2) the homestead credit to a person entitled to the credit. Provides that the systems must allow closing agents to: (1) input information about the mortgage transaction that is the basis for the deduction or the credit; and (2) submit the form electronically to data bases maintained by the DLGF. Requires the DLGF to make the data bases accessible to county auditors. Requires a county auditor to accept an electronic filing for the mortgage deduction or the homestead credit if the filing is complete. Prohibits a county auditor from requiring any other information or form of identification for a person to claim the mortgage deduction or the homestead credit. Requires the DLGF to establish an electronic system for the collection and storage of the: (1) names; and (2) license, registration, or certificate numbers; of certain professionals that participate in or assist with residential mortgage transactions. Provides that the system must allow closing agents to: (1) input the required information with respect to each professional involved in the transaction; and (2) submit the form electronically to a data base maintained by the DLGF. Requires the DLGF to make the data base accessible to: (1) the state agencies responsible for regulating the specified professionals; and (2) the homeowner protection unit in the attorney general’s office. For residential mortgage transactions that close after June 30, 2008, and before January 1, 2010, requires a closing agent to do the following at the time of closing: (1) In the case of a first lien purchase money mortgage transaction, provide the customer with the sales disclosure form prescribed by the DLGF and the applications for the homestead credit and the mortgage deduction. (2) In the case of a refinancing, provide the customer with the application for the mortgage deduction. (3) Require the customer to complete and sign the form or forms provided. (3) Collect the signed and completed forms for filing. (4) Inform the customer of other specified property tax deductions by providing the customer with a form prescribed by the DLGF that describes the deductions. Requires the closing agent to file the signed forms with the appropriate county auditor. For a residential mortgage transaction that closes after December 31, 2009, requires a closing agent to input and submit the following information to the appropriate data bases maintained by the DLGF, as applicable: (1) Information to enable the customer to obtain the mortgage deduction and the homestead credit. (2) Sales disclosure form data. (4) The names and license, certificate, or registration numbers of specified professionals involved in the transaction. Specifies that evidence of compliance with the licensing and registration requirements for loan brokers, originators, and principal managers shall include a national criminal history background check by the Federal Bureau of Investigation (FBI). Specifies that the securities commissioner (commissioner) shall require each: (1) equitable owner of a loan brokerage business; (2) director, manager, or officer of an applicant for licensure as a loan broker; and (3) applicant for registration as an originator or a principal manager; to submit fingerprints for a national criminal history background check by the FBI. Prohibits the commissioner from releasing the results of a national criminal history background check to a private entity. Allows the commissioner to designate a multistate automated licensing system and repository (system) as the sole entity responsible for processing applications for: (1) licenses for loan brokers; and (2) certificates of registration for originators and principal managers. Increases the amount of the bond that a licensed loan broker must maintain with the commissioner from $50,000 to $100,000. Eliminates the exemption from the loan broker statute for persons authorized to make loans on behalf of, or insured by, certain federal agencies. Specifies that a loan broker is subject to the state statute requiring disclosure of a breach of the security of any records: (1) maintained by the broker; and (2) containing the personal information of a borrower or prospective borrower. Prohibits loan brokers, originators, and principal managers from disposing of unencrypted, unredacted personal information with respect to borrowers or prospective borrowers without first taking certain actions to render the personal information illegible or unusable. Prohibits a person from performing specified acts in connection with a contract for the services of a loan broker. Provides that first lien mortgage transactions are subject to regulation under the Uniform Consumer Credit Code (UCCC). Requires a creditor, a mortgage servicer, or an agent of a creditor to acknowledge a written offer made in connection with a proposed short sale of property that is subject to a mortgage that is at least 10 days delinquent. Provides that the acknowledgment must be provided not later than 10 business days after the date of the offer. Requires the creditor, servicer, or agent to accept or reject the short sale offer not later than 20 business days after receipt of the offer. For an adjustable rate mortgage, requires a creditor to provide a one page disclosure document that provides the following information: (1) The mortgage transaction’s fully indexed rate. (2) The maximum monthly payment that could be required under the terms of the mortgage transaction, including amounts owed for taxes and insurance, if the creditor will establish an escrow account for taxes and insurance. Provides that a creditor is not liable to the debtor or any other person if the estimate of monthly taxes and insurance provided in the disclosure document differs from the actual taxes and insurance owed at any time during the mortgage. Specifies that a violation of the home loan practices act is a deceptive act subject to action by the attorney general. For a deceptive act involving home loan practices, increases: (1) the damages that may be awarded to an aggrieved consumer; and (2) the amount of the civil penalties that may be imposed on a violator. Provides that any civil penalties collected by the attorney general shall be deposited in the home owner protection unit account in the general fund. Prohibits a creditor from recommending or issuing to a prospective borrower: (1) a stated income or no documentation loan; or (2) a home loan if the creditor does not first conduct a reasonable inquiry into the prospective borrower’s creditworthiness. Provides that if a creditor conducts a reasonable inquiry, the creditor is not liable if the borrower later defaults on a home loan issued by the creditor. Requires settlement service providers to make closing documents available to borrowers at least 48 hours before the closing. Provides that if terms of the home loan set forth in the documents provided differ from the terms presented to the borrower at the time of closing, the borrower is entitled to delay or reschedule the closing without penalty and without forfeiting the right to enter into the loan or the purchase contract. Increases the statutory damages that may be recovered by a person aggrieved by a violation of the home loan practices act (act) from: (1) two times; to (2) four times; the amount of the finance charges under the contract. Enhances the crime involving a knowing or intentional violation of the act from a Class A misdemeanor to a Class D felony. Increases the civil penalty for the violation of: (1) the act; or (2) an injunction issued to enjoin a violation of the act; from $10,000 to $20,000. Requires the real estate appraiser licensure and certification board to require each initial applicant for licensure or certification as a real estate appraiser to submit fingerprints for a national criminal history background check by the FBI. Prohibits the board from releasing the results of a national criminal history background check to a private entity. Requires various state agencies to form the mortgage lending and fraud prevention task force to coordinate the state’s efforts to: (1) regulate the various participants involved in originating, issuing, and closing home loans; (2) enforce state laws and rules concerning mortgage lending practices and mortgage fraud; and (3) prevent fraudulent practices in the home loan industry and investigate and prosecute cases involving mortgage fraud. Requires the Indiana housing and community development authority to provide, not later than November 1, 2008, a report to the legislative council that includes the following: (1) An identification of new and existing funding sources that can be used to assist Indiana homeowners in refinancing their existing mortgage transactions, in order to prevent the foreclosure of the homes secured by the mortgages. (2) A plan for the rehabilitation of areas in Indiana that have been adversely or disproportionately affected by mortgage foreclosures. Requires the securities commissioner and the director of the department of financial institutions to cooperate to determine the appropriate state agency or department to regulate a person subject to regulation, licensure, or registration under both the loan broker statute and the UCCC. Repeals provisions that exclude mortgage transactions from the UCCC. Beginning with the school year that begins in 2010, requires school corporations and accredited nonpublic schools to include in their curricula for grades 9 through 12 instruction designed to: (1) increase students’ awareness of consumer transactions, including mortgage transactions; and (2) foster personal financial responsibility. Provides that a school corporation or an accredited nonpublic school may provide the instruction by integrating it into its mathematics curriculum. Requires the department of education and the department of financial institutions to develop guidelines to assist teachers assigned to provide the instruction.
	S.B. 89 Passed Senate 1/24/08 Requires the homeowner protection unit (unit) within the attorney general’s office to establish a toll free telephone number to receive calls from persons having information about suspected fraudulent transactions and practices concerning residential real estate transactions. Requires the unit to share information reported by callers to the telephone number with appropriate law enforcement and regulatory agencies. Allows the Indiana housing and community development authority (authority) to make or participate in the making of: (1) construction loans; and (2) mortgage loans; for multiple family residential housing under terms approved by the authority. Requires the authority to ensure that a mortgage loan: (1) acquired by the authority; or (2) made by a mortgage lender with funds provided by the authority; may not know knowingly be made to a person whose adjusted family income exceeds 125% of the median income for the geographic area involved. For purposes of allocating federal low income housing credits, provides that a “qualified building” is a building that is used or will be used to provide residential housing for special needs populations. (Current law provides that a “qualified building” is a building that is used or will be used to provide residential housing for persons with disabilities.) Provides that the authority’s authority to issue bonds is subject to the approval of the public finance director. (Current law provides that the authority’s bonding authority is subject to the approval of the governor.) Repeals provisions concerning job and contract awarding preferences for the authority’s program for making or participating in the making of mortgage loans for multiple family residential housing. Repeals provisions concerning the articles of incorporation of sponsors, builders, or developers of multiple family residential housing. Beginning with the school year that begins in 2010, requires school corporations and accredited nonpublic schools to include in their curricula for grades 9 through 12 instruction designed to: (1) increase students’ awareness of consumer transactions, including mortgage transactions; and (2) foster personal financial responsibility. Provides that a school corporation or an accredited nonpublic school may provide the instruction by integrating it into its mathematics curriculum. Requires the department of education and the department of financial institutions to develop guidelines to assist teachers assigned to provide the instruction. Increases the amount of the bond that a licensed loan broker must maintain with the commissioner from $50,000 to $100,000. Eliminates the exemption from the loan broker statute for: (1) persons authorized to make loans on behalf of, or insured by, certain federal agencies; and (2) licensed real estate brokers and salespersons who render loan related services in a real estate transaction. Specifies that evidence of compliance with the licensing and registration requirements for loan brokers, originators, and principal managers may include a national criminal history background check by the Federal Bureau of Investigation (FBI). Specifies that the securities commissioner (commissioner) shall require each: (1) equitable owner of a loan brokerage business; and (2) applicant for registration as an originator or a principal manager; to submit fingerprints for a national criminal history background check by the FBI. Prohibits the commissioner from releasing the results of a national criminal history background check to a private entity. Allows the commissioner to designate a multistate automated licensing system and repository (system) as the sole entity responsible for processing applications for: (1) licenses for loan brokers; and (2) certificates of registration for originators and principal managers. Allows the commissioner to check the qualifications and background of each: (1) equitable owner of a loan brokerage business; and (2) applicant for registration as an originator or a principal manager; by accessing the system. Specifies that a loan broker is subject to the state statute requiring disclosure of a breach of the security of any records: (1) maintained by the broker; and (2) containing the personal information of a borrower or prospective borrower. Prohibits loan brokers, originators, and principal managers from disposing of unencrypted, unredacted personal information with respect to borrowers or prospective borrowers without first taking certain actions to render the personal information illegible or unusable. Prohibits a person from performing specified acts in connection with a contract for the services of a loan broker. Provides that: (1) first lien mortgage transactions are subject to regulation by; and (2) creditors making first lien mortgage transactions must be licensed by; the department of financial institutions. Requires a creditor, a mortgage servicer, or an agent of a creditor to acknowledge a written offer made in connection with a proposed short sale of property that is subject to a mortgage transaction that is at least 10 days delinquent. Provides that the acknowledgment must be provided not later than 10 business days after the date of the offer. Requires the creditor, servicer, or agent to accept or reject the short sale offer not later than 20 business days after receipt of the offer. Requires the department of insurance to establish an electronic system for the collection and storage of the: (1) names; and (2) license, registration, or certificate numbers; of certain professionals that participate in or assist with residential mortgage transactions. Provides that the system must allow closing agents to: (1) input the required information with respect to each professional involved in the transaction; and (2) submit the form electronically to a data base maintained by the department of insurance. Requires the department of insurance to make the data base accessible to: (1) the state agencies responsible for regulating the specified professionals; and (2) the homeowner protection unit in the attorney general’s office. Specifies that a violation of the home loan practices act is a deceptive act subject to action by the attorney general. For a deceptive act involving home loan practices, increases: (1) the damages that may be awarded to an aggrieved consumer; and (2) the amount of the civil penalties that may be imposed on a violator. Provides that any civil penalties collected by the attorney general shall be deposited in the home owner protection unit account in the general fund. Prohibits a creditor from recommending or issuing to a prospective borrower: (1) a stated income or no documentation loan; or (2) a home loan if the creditor does not first conduct a reasonable inquiry concerning the prospective borrower’s ability to repay the loan. Provides that if a creditor conducts a reasonable inquiry, the creditor is not liable if the borrower later defaults on a home loan issued by the creditor. Requires a settlement service provider to make closing documents available to a borrower at least 48 hours before the closing, subject to the settlement service provider’s ability to obtain the closing documents from the creditor making the home loan, after the settlement service provider’s good faith effort to obtain the closing documents from the creditor. Provides that if: (1) the borrower does not receive the closing documents within the time required; or (2) the terms of the home loan set forth in the documents provided differ from the terms presented to the borrower at the time of closing; the borrower is entitled to delay or reschedule the closing without penalty and without forfeiting the right to enter into the loan or the purchase contract. Increases the statutory damages that may be recovered by a person aggrieved by a violation of the home loan practices act (act) from: (1) two times; to (2) four times; the amount of the finance charges under the contract. Enhances the crime involving a knowing or intentional violation of the act from a Class A misdemeanor to a Class D felony. Increases the civil penalty for the violation of: (1) the act; or ( 2) an injunction issued to enjoin a violation of the act; from $10,000 to $20,000. Requires the real estate appraiser licensure and certification board to require each initial applicant for licensure or certification as a real estate appraiser to submit fingerprints for a national criminal history background check by the FBI. Prohibits the board from releasing the results of a national criminal history background check to a private entity. Requires various state agencies to form the mortgage lending and fraud prevention task force to coordinate the state’s efforts to: (1) regulate the various participants involved in originating, issuing, and closing home loans; (2) enforce state laws and rules concerning mortgage lending practices and mortgage fraud; and (3) prevent fraudulent practices in the home loan industry and investigate and prosecute cases involving mortgage fraud. Requires the Indiana housing and community development authority to provide, not later than November 1, 2008, a report to the legislative council that includes the following: (1) An identification of new and existing funding sources that can be used to assist Indiana homeowners in refinancing their existing mortgage transactions, in order to prevent the foreclosure of the homes secured by the mortgages. (2) A plan for the rehabilitation of areas in Indiana that have been adversely or disproportionately affected by mortgage foreclosures. Requires the securities commissioner and the director of the department of financial institutions to cooperate to determine the appropriate state agency or department to regulate a person subject to regulation, licensure, or registration under both the loan broker statute and the UCCC. Makes technical changes.
	S.B. 275 Provides that for an adjustable rate home loan that is closed after June 30, 2008, the creditor may not charge the borrower prepayment fees or penalties that are due and payable after the earlier of: (1) one year after the date of the closing of the loan; or (2) 60 days before the first scheduled adjustment of the loan’s rate. Provides that a person may not do either of the following unless the person is licensed in Indiana as a real estate broker or salesperson: (1) Conduct an open house in a home that is listed for sale in Indiana. (2) Conduct an open house or show a model home in a neighborhood or subdivision in which similar homes are or will be listed for sale in Indiana. For a mortgage foreclosure proceeding initiated after June 30, 2008, requires: (1) the clerk of the court to certify to the sheriff a copy of the judgment or decree not later than five business days after the praecipe is filed; and (2) the sheriff to conduct a sale of the property not later than 90 days after receipt of the judgment or decree.
Iowa	H.F. 2449 Provides that a mortgage broker acting in the capacity of a mortgage broker pursuant to Code §535B.1, subsection 5, shall be considered to have created an agency relationship with a borrower in all cases. Prohibits a lender, mortgage banker, or mortgage broker from making, providing, or arranging for a residential loan without verifying the borrower’s reasonable ability to pay.
Kentucky	H.B. 230 Amends KRS 360.100 to prohibit a lender from making a high-cost home loan with a prepayment penalty unless the lender offers the borrower a loan without a prepayment penalty; requires the lender to provide timely notice to the borrower of any material change in the terms of the high-cost home loan prior to the closing of the loan; requires the lender to timely inform the borrower if any fees payable by the borrower to the lender increase by more than ten percent or $100, whichever is greater; amends KRS 286.8-270 to provide that a mortgage loan broker who acts as an agent for a person attempting to obtain a loan shall be considered to have created an agency relationship with the borrower, shall act in the borrower’s best interest, and shall not compromise the borrower’s right or interest in favor of another’s right or interest.
	H.B. 272 Amends KRS 360.100 pertaining to high-cost home loans to delete the provision placing a cap on prepayment penalties; declares it is unlawful for any lender making a mortgage loan under this section, directly or indirectly, to make, provide, or arrange for a residential mortgage loan that requires a borrower to pay a prepayment penalty for paying all or part of the principal prior to maturity.
	H.B. 488 Creates a new section of Subtitle 2 of KRS Chapter 286 to declare it is unlawful to make, provide, or arrange for a residential mortgage loan that requires a borrower to pay a prepayment penalty for paying all or part of the principal prior to maturity; amends KRS 286.8-090 to authorize the executive director of the Office of Financial Institutions to revoke or suspend the license or take other action against a mortgage loan company, mortgage broker, or loan officer that makes, provides, or arranges for a residential mortgage loan that requires a borrower to pay a prepayment penalty for paying all or part of the principal prior to maturity; amends KRS 286.8-110 to delete subsection (4); amends KRS 360.100 to delete paragraph (a) of subsection (2); amends KRS 286.8-020 to conform.
	S.B. 186 Creates new sections of Subtitle 2 of KRS Chapter 286 to provide that, with regard to residential mortgage loans in a principal loan amount of under $200,000 and a loss ratio of greater than 80 percent, it shall be unlawful not to verify and document the borrower’s income and financial resources and not to verify the borrower’s reasonable ability to repay; requires an escrow account for taxes and insurance on these loans; specifies the method to determine reasonable ability to repay for loans with a variable interest rate; establishes criteria which, if met, the borrower shall be presumed to have a reasonable ability to repay; declares it is unlawful to make a residential mortgage loan product that has a higher interest rate, higher points and fees, or other unfavorable terms if the borrower’s credit score indicates the borrower may qualify for a residential mortgage loan product that has a lower interest rate, lower points and fees, or more favorable terms, unless there is a corresponding tangible benefit in servicing, underwriting, timely processing, origination fees, or closing costs; declares it unlawful to make a high-cost home loan without first requiring the borrower to obtain housing counseling; declares it unlawful for a residential mortgage loan to contain a provision that allows prepayment penalties more than 36 months after the loan or which exceed three percent in the first 12 months, two percent in the second 12 months, or one percent in the third 12 months; amends KRS 286.8-090 to permit the executive director to suspend or revoke a license or take other action against a mortgage loan company, loan broker, or loan officer who violates Section 1 or 2 of this Act; amends KRS 286.8-110 to delete provision regarding prepayment penalties; amends KRS 286.8-270 to require a mortgage loan broker to act in the borrower’s best interest and requires compliance with certain duties; amends KRS 360.100 to provide that a high-cost home loan with a fixed rate of interest for an introductory period that adjusts or resets after such period shall not contain any term which requires the borrower to pay a prepayment penalty after the beginning of the two-month period ending on the date of adjustment or reset; amends KRS 286.8-020 to subject certain entities to the provisions of Sections 1 and 2 of this Act.
Louisiana	H.B. 279 Prohibits the lending of a residential mortgage loan without due regard to the applicant’s ability to repay the loan.
	H.B. 499 Prohibits the financing of insurance in a residential home mortgage.
	H.B. 515 Prohibits the refinancing of an existing mortgage loan with no benefit to the consumer.
	H.B. 541 Prohibits a mortgage lender from financing with a borrower for periodic payments that would lead to an increase in the principal balance (negative amortization).
	H.B. 917 Requires consumer credit counseling prior to receiving a residential mortgage loan.
	H.B. 943 Repeals prepayment penalties for certain loans.
	S.B. 648 Relates to predatory lending; provides for legislative findings; provides for purpose; to provide for definitions; provides for regulation of high-rate, high-interest mortgages; provides for residential mortgage loans; provides for violations; provides for compliance; provides for reports.
	S.C.R. 89 Passed Senate 6/2/08 Requests the Senate Committee on Commerce, Consumer Protection, and International Affairs and the House Committee on Commerce to meet and function as a joint committee to study the conditions in the Louisiana housing finance market and address the issues and concerns relative to protecting Louisiana citizens from predatory lending practices.
Maryland	H.B. 944 Passed Senate 4/7/08 Prohibits a lender or credit grantor from completing a loan application for a subprime loan until the lender or credit grantor receives proof that the borrower has completed home buyer education or housing counseling.
	H.B. 1035 S.B. 532 Prohibits a creditor from maintaining suit in an action to foreclose a deceptive subprime mortgage on residential real property in Prince George’s County; establishes that a creditor may be liable for specified damages if the creditor fails to show to the satisfaction of the court that the mortgage is not a deceptive subprime mortgage.
	H.B. 1398 S.B. 535 Prohibits a creditor from maintaining suit in an action to foreclose a mortgage entered into by a homeowner unless the creditor shows to the satisfaction of the court that the mortgage is not a deceptive subprime mortgage; provides that a creditor may be liable for specified damages if the creditor fails to make the showing.
	S.B. 594 Withdrawn from further consideration 3/10/08 Prohibits a lender from requiring or authorizing the imposition of a prepayment penalty, fee, premium, or other charge in connection with specified subprime loans.
Massachusetts	S.B. 2299 Passed Senate 7/26/07 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; creates a centralized statewide foreclosure database of foreclosure activity to monitor and analyze foreclosures and foreclosure patterns at the Division of Banks; regulates licensing of mortgage loan originators and background investigation fees; criminalizes mortgage fraud in the Commonwealth.
Michigan	H.B. 5272 Allows for the regulation of certain predatory lending practices by municipalities.
	H.B. 5294 Provides a general revision to the consumer mortgage protection act; revises the title and general definitions.
	H.B. 5295 Provides a general revision to the consumer mortgage protection act; prohibits certain lending practices.
	H.B. 5296 Provides a general revision to the consumer mortgage protection act; regulates the rate spread and high-cost home loans and revises default provisions.
	H.B. 5297 Provides a general revision to the consumer mortgage protection act; revises provisions concerning notices and disclosures.
	H.B. 5299 Provides a general revision to the consumer mortgage protection act; revises claims and defenses in civil actions.
	H.B. 5302 Provides a general revision to the consumer mortgage protection act; provides for the general applicability of the act.
	H.B. 5303 Provides a general revision to the consumer mortgage protection act; revises references to home loans in local preemption provisions.
	H.B. 5304 Requires compliance with the home loan protection act by domestic credit unions.
	H.B. 5305 Requires compliance with the home loan protection act by state banks.
	H.B. 5306 Requires compliance with the home loan protection act by state savings banks.
	H.B. 5307 Requires compliance with the home loan protection act by mortgage brokers and lenders; imposes additional duties with respect to borrowers.
	H.B. 5308 Requires compliance with the home loan protection act by mortgage brokers and lenders in the secondary market; imposes additional duties with respect to borrowers.
	H.B. 5309 Requires compliance with the home loan protection act by savings and loan associations.
	H.B. 5310 Provides for enforcement of the home loan protection act through the Michigan consumer protection act.
	H.B. 5376 Creates the Michigan homeownership preservation fund in the state treasury. Fines assessed under subsection (1)(c) shall be deposited in the fund and used by the commissioner to do any of the following: (a) Award grants to finance financial literacy programs, homeownership training, and homeownership protection training. (b) Provide down payment assistance to individuals seeking home loans. (c) Provide loans and grants to low income individuals seeking to avoid foreclosure.
	S.B. 924 Requires a mortgage disclosure form as specified to prevent predatory lending practices.
	S.B. 1067 Prohibits the practice of home loan flipping.
Minnesota	H.F. 3348 Provides for the Foreclosure Crisis Intervention Act; modifies certain landlord and tenant provisions; modifies provisions relating to mortgage foreclosure procedures and process; provides for civil and criminal enforcement to prevent predatory lending practices; provides protections relating to manufactured homes and default; provides for data practices; provides remedies; provides forms and notices; makes technical, clarifying, and conforming changes; requires a report.
Mississippi	H.B. 743 Died in committee 2/19/08 Enacts the Mississippi Home Loan Protection Act; makes certain findings and defines certain terms; prohibits or restrict the following practices in connection with high-cost home loans; insurance and debt collection agreements, flipping the loan, recommendations of default, call provisions, fees for balance, balloon payments, negative amortization, increased interest rates, advance payments, mandatory arbitration clauses, lending without homeownership counseling, financing prepayment fees or penalties, home improvement contracts, and modification or deferral fees; provides for the preservation and enforcement of claims and defenses by borrowers; authorizes various methods for enforcement of the provisions of this act.
	H.B. 744 Died in committee 2/19/08 Provides for certain restrictions with regard to high-cost home loans; prohibits balloon payments, negative amortization and prepayment penalties in connection with high-cost home loans, and prohibits lenders from making high-cost home loans unless the borrowers have received home ownership counseling.
	S.B. 2825 Died in committee 2/19/08 Provides consumer protections from certain mortgage lending practices relating to balloon payments, negative amortization and prepayment penalties.
	S.B. 2856 Died in committee 2/19/08 Provides consumer protections from certain mortgage lending practices relating to balloon payments, negative amortization and prepayment penalties.
Missouri	H.B. 1667 This bill establishes the Missouri Homeowners’ Protection Act relating to residential mortgage brokers. In its main provisions, the bill: (1) Defines “creditor,” “flipping a home loan,” “fully indexed rate,” “points and fees,” “subprime loan,” and “total loan amount”; (2) Prohibits a mortgage broker from: (a) Engaging in the unfair act of flipping a home loan; (b) Issuing a home loan without verifying the borrower’s reasonable ability to pay; (c) Charging a fee when a subprime loan is prepaid in whole or part; (d) Making false, deceptive, or misleading statements, advertisements, or marketing materials; (e) Issuing a residential mortgage loan to be used for paying all or part of a special mortgage unless the borrower has obtained written certification from an authorized independent loan counselor on the advisability of the loan transaction; (f) Charging points or fees exceeding five percent of the total loan amount; and (g) Financing credit life, disability, unemployment, property insurance, or any other life or health insurance premiums through a home loan; (3) Requires the mortgage broker to inform the borrower when the periodic payment amount for a loan does not include property taxes or hazard insurance; (4) Requires mortgage brokers to act in the borrower’s best interest, to carry out lawful instructions of the borrower, and to disclose material facts that could adversely affect the borrower; (5) Allows a borrower to a private right of action for damages caused by a mortgage broker; and (6) Specifies that the crime of residential mortgage fraud will be a class D felony.
	H.B. 1985 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 second mortgage loans.
	S.B. 913 Creates statutory warranties for home buyers and homeowners and also prevents home solicitors from engaging in certain deceptive practices. This act prohibits certain unfair or deceptive practices relating to home improvement loans to the consumer. It prohibits home solicitations where a home improvement loan is made encumbering the person’s home to pay the loan and where the practice violates federal law. Violation of this provision constitutes a Class A misdemeanor.
New Hampshire	H.B. 1214 Inexpedient to legislate 3/5/08 Establishes a committee to study adjustable rate mortgages.
New Jersey	A.B. 1764 This bill, the “Teaser Rate Protection Act,” provides additional consumer protections for residential mortgage borrowers by prohibiting certain lending practices with respect to “home loans” and “high-cost home loans” as defined in the “New Jersey Home Ownership Security Act of 2002,” P.L.2003, c.64 (C.46:10B-22 et seq.), which prohibits certain abusive lending practices commonly known as predatory lending. Prohibits a creditor from making a home loan to a borrower without verifying and documenting the borrower’s reasonable ability to repay the loan, which shall include a reasonable inquiry into the borrower’s current and expected income, financial obligations, and employment. For adjustable rate, zero rate or “teaser rate” mortgages, which attract borrowers by offering low interest rates at the beginning of the loan but which contain provisions that allow rate increases after the initial rate expires, the reasonable ability to pay shall be determined based on a fully indexed rate and a repayment schedule that achieves full amortization over the life of the loan. The bill also prohibits a creditor from making a high-cost home loan to a borrower unless the creditor establishes an escrow account to ensure that payments for taxes, insurance premiums, and other charges related to the property are collected and paid by the lender. In addition, the bill prohibits the financing of points and fees in connection with a high-cost home loan.
	A.B. 1879 Provides additional consumer protections for residential mortgage borrowers by requiring certain disclosures not less than seven days prior to closing with respect to “home loans” as defined in the “New Jersey Home Ownership Security Act of 2002,” P.L.2003, c.64 (C.46:10B-22 et seq.). The bill prohibits a creditor from making a home loan unless the creditor has delivered to the borrower, at least seven days prior to the closing of the loan, a statement in writing, showing in clear and distinct terms the following items: (1) amount of the loan; (2) length of the loan; (3) final maturity date; (4) initial annual percentage interest rate; (5) amount of the initial monthly payment, including principal, interest, taxes, and insurance, and the amount of this payment expressed as a percentage of the borrower’s annual gross income; and (6) total points and fees to be paid. If the home loan provides for the possibility of an increase in the annual percentage interest rate, the creditor shall also include on the statement the following items: (1) maximum possible annual percentage interest rate; (2) date the annual percentage interest rate could increase; (3) frequency with which the annual percentage interest rate and monthly payment could increase; (4) maximum possible amount of monthly principal and interest payment, based on a fully indexed rate, and the amount of this payment expressed as a percentage of the borrower’s annual gross income; and (5) maximum possible amount of monthly payment, including principal, interest, taxes, and insurance premiums, based on a fully indexed rate, and the amount of this payment expressed as a percentage of the borrower’s annual gross income.
	A.B. 2780 This bill, entitled the “Save New Jersey Homes Act of 2008,” requires creditors to provide a three year period of extension to borrowers who are obligated to repay introductory rate mortgage loans on residential properties under certain circumstances. As defined in the bill, an introductory rate mortgage provides for a introductory interest rate that resets after a period of time. The bill provides a period of extension, during which the introductory rate does not reset, to “eligible borrowers” whose mortgage interest rates are about to reset. The bill also provides a period of extension, during which the introductory rate does not reset and during which foreclosure proceedings are suspended, to “eligible foreclosed borrowers” whose mortgages are being foreclosed pursuant to the “Fair Foreclosure Act,” P.L.1995, c.244 (C.2A:50-53 et seq.). The bill is intended to address an economic crisis resulting from the resetting of mortgage rates from low introductory rates to higher, variable rates, which is likely to contribute to the already increasing rate of defaults experienced by New Jersey homeowners. By providing a period of extension for existing mortgages, the bill allows time for creditors and borrowers to renegotiate more reasonable terms as to mortgage loans that are financially unworkable for the borrowers, so as to avoid foreclosures that result in a financial detriment to both creditor and borrower. The bill provides that prior to the date on which the interest rate will reset on an introductory rate mortgage, a creditor must provide to an eligible borrower a series of written notices, alerting the borrower to the impending interest rate reset, and providing certain information about the reset interest rate, any refinancing or renegotiation of the loan offered by the creditor, and the borrower’s right to obtain a three year period of extension under the terms of the bill. The creditor must provide an eligible borrower with a three year period of extension, during which the interest rate on the introductory rate mortgage shall not increase above the original introductory rate, on the condition that the eligible borrower provides a certificate of extension to the creditor, prior to the date that interest rate resets under the terms of the introductory rate mortgage. The certificate of extension must contain certain statements, including that the eligible borrower: (1) is unable to pay the monthly payments that will apply after the date that the interest rate resets; (2) agrees to continue monthly payments calculated at the introductory interest rate, during the period of extension; (3) agrees to pay the creditor, at the time of transfer of the property, any interest deferred on account of the period of extension; and (4) agrees to accept the creditor’s placement of a subordinate lien on the property to secure the repayment of the interest deferred on account of the period of extension. An eligible borrower who makes a knowing material misrepresentation in a certificate of extension is guilty of a crime of fourth degree. A creditor who grants a period of extension to an eligible foreclosed borrower shall have the right to record a subordinate lien on the eligible foreclosed borrower’s property to secure the borrower’s repayment of the amount of interest deferred by the period of extension and any arrearages owed on the mortgage. The subordinate lien shall have the same priority as the lien of the introductory rate mortgage. An eligible borrower who fails to make the appropriate payments during the period of extension forfeits all rights concerning the deferment of interest payments and suspension of foreclosure. The bill also provides that a creditor that issues to an eligible foreclosed borrower a notice of intention to foreclose an introductory rate mortgage pursuant to the “Fair Foreclosure Act,” P.L.1995, c.244 (C.2A:50-53 et seq.), shall send to the eligible foreclosed borrower a series of written notices, by regular and registered mail, separate and distinct from all other correspondence and written in plain language. The notices shall include: (1) A statement that the information in the notice is being provided as required by the “Save New Jersey Homes Act of 2008,” which was enacted by the New Jersey Legislature and which provides certain rights to borrowers who homes are the subject of a mortgage foreclosure action; (2) A list of alternatives to foreclosure that an eligible foreclosed borrower may pursue, including any refinancing of the loan offered by the creditor and any renegotiation of loan terms offered by the creditor; (3) An explanation of the eligible foreclosed borrower’s right to obtain a period of extension for three years and an explanation of the procedure that an eligible foreclosed borrower must follow to obtain a period of extension; and (4) A certification of extension form that can be completed by an eligible foreclosed borrower in order to obtain the period of extension. The notices shall be sent within 10 days of issuing the notice of intention and also at the time that the creditor applies for entry of final judgment of foreclosure. The notices shall be sent in envelopes with certain information on the outside front portion of the envelope that alerts the borrower to the enactment of the Save New Jersey Homes Act of 2008 and to the period of extension from foreclosure available under the act. The bill also provides that a creditor must provide an eligible foreclosed borrower with a three year period of extension, during which the interest rate on the introductory rate mortgage shall not increase above the original introductory rate, and during which foreclosure proceedings pursuant to the “Fair Foreclosure Act” are suspended. The creditor must grant this relief on the condition that the eligible foreclosed borrower provides a certification of extension to the creditor no later than 90 days of the date that the creditor applies for entry of final judgment of foreclosure. The certification of extension must contain certain statements, including that the eligible borrower agrees: (1) to continue monthly payments, with interest calculated at the introductory rate, during the period of extension; (2) to pay the creditor, at the time of transfer of the property, any interest deferred on account of the period of extension and any arrearages on the mortgage; and (3) to accept the creditor’s placement of a subordinate lien on the property to secure the repayment of the interest deferred on account of the period of extension, and any arrearages owed on the mortgage. A creditor who grants a period of extension to an eligible foreclosed borrower shall have the right to record a subordinate lien on the eligible foreclosed borrower’s property to secure the borrower’s repayment of the amount of interest deferred by the period of extension and any arrearages owed on the mortgage. The subordinate lien shall have the same priority as the lien of the introductory rate mortgage. An eligible foreclosed borrower who fails to make the appropriate payments during the period of extension forfeits all rights concerning the deferment of interest payments and suspension of foreclosure. Any person who violates any provision of the bill shall be liable to a penalty of not more than $10,000 for the first offense, and not more than $20,000 for the second and subsequent offense, which penalty may be collected in a summary proceeding pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.). The bill provides that its terms become effect immediately upon enactment, and remain in effect until January 1, 2011.
	S.B. 1619 Provides greater regulatory oversight and consumer protections concerning certain mortgage products, mortgage lending, and mortgage foreclosure practices. For current and future borrowers facing mortgage foreclosures, the bill provides additional consumer protections by expanding and clarifying the scope and provisions of P.L.1979, c.16 (C.17:16G-1 et seq.), concerning debt adjustment and credit counseling activities, to expressly incorporate certain “foreclosure consulting practices.” The bill clarifies that under existing law, foreclosure consultants who, directly or indirectly, solicit, offer to perform, or perform debt adjustment or credit counseling activities for property owners facing foreclosure with respect to such owners’ ability to retain ownership or possession of their property, are required to be licensed in this State as debt adjusters. The bill also includes “distressed property purchasers” as among those who must be licensed as debt adjusters under the law. A distressed property purchaser is anyone who acquires an interest in fee or a beneficial interest through a trust document in a distressed property, while allowing the debtor-owner to possess, occupy, or retain a leasehold interest or any present or future interest in fee in the property, or anyone involved in a joint venture or enterprise involving a distressed property conveyance. The bill provides the commissioner of Banking and Insurance with additional regulatory authority to oversee foreclosure consulting activities as well as other debt adjustment and credit counseling activities in this state. Such regulatory authority includes: i) permitting the commissioner to establish licensing requirements for any agent, officer, or employee of a debt adjuster, or any category of agent, officer, or employee, which may include disqualifications based upon standards of good moral character; and ii) permitting the commissioner, as part of any licensing application, to require the applicant, or any category of applicants, to consent to a criminal history record background check, and any additional background check as deemed appropriate. While the commissioner is already authorized to request an annual report from any debt adjuster concerning that adjuster’s activities conducted in the preceding calendar year, the bill emphasizes that the commissioner may also collect information from a debt adjuster encompassing only one or more particular activities, such as those activities primarily performed with respect to foreclosure consulting. The bill, concerning penalties for violations of the applicable debt adjustment and credit counseling law, would permit any person to bring an action for punitive damages, as well as receive attorney’s fees and costs of suit. Additionally, the bill clarifies the law’s penalty provisions by emphasizing that the commissioner’s existing authority to enjoin any licensed debt adjuster and “any other person concerned or in any way participating in” a violation, includes, with respect to distressed property conveyances, any mortgage banker, mortgage broker, or other licensee licensed pursuant to the “New Jersey Licensed Lenders Act,” P.L.1996, c.157 (C.17:11C-1 et seq.), any real estate broker, broker-salesperson, or salesperson licensed pursuant to R.S.45:15-1 et seq., or any real estate appraiser licensed or certified pursuant to the “Real Estate Appraisers Act,” P.L.1991, c.68 (C.45:14F-1 et seq.).
	S.B. 1853 Requires creditors to provide a three year period of extension to borrowers who are obligated to repay introductory rate mortgage loans on residential properties under certain circumstances. As defined in the bill, an introductory rate mortgage provides for a fixed interest rate for an introductory period that resets to a variable interest rate after a period of time. The bill provides a period of extension, during which the introductory rate does not reset, to “eligible borrowers” whose mortgage interest rates are about to reset. The bill also provides a period of extension, during which the introductory rate does not reset and during which foreclosure proceedings are suspended, to “eligible foreclosed borrowers” whose mortgages are being foreclosed pursuant to the “Fair Foreclosure Act,” P.L.1995, c.244 (C.2A:50-53 et seq.). The bill is intended to address an economic crisis resulting from the resetting of mortgage rates from low introductory rates to higher, variable rates, which is likely to contribute to the already increasing rate of defaults experienced by New Jersey homeowners. By providing a period of extension for existing mortgages, the bill allows time for creditors and borrowers to renegotiate more reasonable terms as to mortgage loans that are financially unworkable for the borrowers, so as to avoid foreclosures that result in a financial detriment to both creditor and borrower. The bill provides that prior to the date on which the interest rate will reset on an introductory rate mortgage, a creditor must provide to an eligible borrower a series of written notices, alerting the borrower to the impending interest rate reset, and providing certain information about the reset interest rate, any refinancing or renegotiation of the loan offered by the creditor, and the borrower’s right to obtain a three year period of extension under the terms of the bill. The creditor must provide an eligible borrower with a three year period of extension, during which the interest rate on the introductory rate mortgage shall not increase above the original introductory rate, on the condition that the eligible borrower provides an affidavit of extension to the creditor, prior to the date that the interest rate resets under the terms of the introductory rate mortgage. The affidavit of extension must state that the eligible borrower: (1) is unable to pay the monthly payments that will apply after the date that the interest rate resets; (2) agrees to continue monthly payments, calculated at the introductory rate, during the period of extension; (3) agrees to pay the creditor, at the time of transfer of the property, any interest deferred on account of the period of extension; and (4) agrees to accept the creditor’s placement of a subordinate lien on the property to secure the repayment of the interest deferred on account of the period of extension. An eligible borrower who makes a knowing material misrepresentation in an affidavit of extension is guilty of a crime of the fourth degree. A creditor who grants a period of extension to an eligible borrower shall have the right to record a subordinate lien on the eligible borrower’s property to secure the borrower’s repayment of the amount of interest deferred by the period of extension. The subordinate lien shall have the same priority as the lien of the introductory rate mortgage. An eligible borrower who fails to make the appropriate payments during the period of extension forfeits all rights concerning the deferment of interest payments. The bill also provides that a creditor must provide an eligible foreclosed borrower with a three year period of extension, during which the interest rate on the introductory rate mortgage shall not increase above the original introductory rate, and during which foreclosure proceedings pursuant to the “Fair Foreclosure Act” are suspended. The creditor must grant this relief on the condition that the eligible foreclosed borrower provides an affidavit of extension to the creditor, prior to the entry of final judgment of foreclosure pursuant to the “Fair Foreclosure Act” or prior to the period of redemption provided pursuant to New Jersey Court Rule 4:65-5 . The affidavit of extension must state that the eligible borrower: (1) agrees to continue monthly payments, calculated at the introductory rate, during the period of extension; (2) agrees to pay the creditor, at the time of transfer of the property, any interest deferred on account of the period of extension and any arrearages on the mortgage; and (3) agrees to accept the creditor’s placement of a subordinate lien on the property to secure the repayment of the interest deferred on account of the period of extension, and any arrearages owed on the mortgage. A creditor who grants a period of extension to an eligible foreclosed borrower shall have the right to record a subordinate lien on the eligible foreclosed borrower’s property to secure the borrower’s repayment of the amount of interest deferred by the period of extension and any arrearages owed on the mortgage. The subordinate lien shall have the same priority as the lien of the introductory rate mortgage. An eligible foreclosed borrower who fails to make the appropriate payments during the period of extension forfeits all rights concerning the deferment of interest payments and suspension of foreclosure. Any person who violates any provision of the bill shall be liable to a penalty of not more than $10,000 for the first offense, and not more than $20,000 for the second and subsequent offense, which penalty may be collected in a summary proceeding pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A: 58-10 et seq.). The bill provides that its terms becomes effect immediately upon enactment, and remain in effect until January 1, 2011.
	S.R. 54 Memorializes the Congress of the United States to protect residential mortgage borrowers by enacting legislation to allow state predatory lending laws to apply to federally chartered financial institutions and their subsidiaries, or in the alternative, by enacting uniform federal legislation to restrict predatory lending practices by all federally chartered financial institutions and their subsidiaries.
New Mexico	H.B. 21 Relates to real estate; prohibits certain home loans; amends the home loan protection act.
New York	A.B. 30 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. 34 Makes a scheme to defraud a person in obtaining a credit loan secured by an interest in real property a felony; applies to reverse redlining situations; provides for various felony grades depending on the amount of money involved.
	A.B. 2248 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.
	A.B. 8357 Amends the New York State Banking Law pertaining to home loans by adding the following sections 6-m prohibiting pre-payment penalties on home loans; 6-n prohibit certain payment mortgages options such as stated income loans, low documentation loans or “pick-a-payment” option loans; 6-o elimination of “predatory lending” targeting and practices, which deceptively causes individuals into agreements causing the borrower to violate the terms of their agreement, in which they cannot repay; 6-p Elimination of targeting individuals with FICO credit scores of 660 and below in effort to offer borrowers sub-prime mortgages or mortgages through practices of underwriting which can result into foreclosure. The purposes of these amendments are to address the new forms of home loan exploitation that is not currently addressed in the New York State Banking Law.
	A.B. 8972 Passed Assembly 5/7/08 S.B. 6759 Enacts the “New York State Responsible Lending Act of 2007” to regulate subprime and nontraditional home loan lending.
	A.B. 8973 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 Web site dedicated to the risk of sub-prime mortgages; grants enforcement actions.
	A.B. 9547 Enacts the “fairness in lending act”; provides that a mortgage broker has a duty of agency relationship with a borrower; defines “yield spread premium” and prohibits such practice; provides for attorney general enforcement; outlines the duties of mortgage brokers.
	A.B. 9932 S.B. 5135 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.
	A.B. 10591 Defines predatory lending and establishes lending liability and penalties for such violations.
	A.B. 10679 S.B. 6394 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. 10817 S.B. 8143 Requires lender and mortgage loan servicers to give borrowers with high-cost home loans or higher-priced home loans notice before certain actions are taken; establishes all home loans shall be subject to certain standards and limitations; creates the crimes of residential mortgage fraud in the first, second, third, fourth and fifth degrees; relates to distressed property consulting contracts.
	A.B. 11018 S.B. 8302 Waives mortgage tax on the refinanced mortgage that replaces an adjustable rate mortgage initially offered at a sub-prime rate.
	S.B. 3695 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. 5311 Relates to issuance of sub-prime home loans.
	S.B. 6887 Prohibits the state, public authorities, and political subdivisions and districts from participating in business with financial institutions engaging in predatory lending or that facilitate predatory lending through the purchase, sale, securitization or underwriting of predatory loans; and relates to high cost home loans.
Oregon	S.B. 1090, Special Session Requires lender to ensure that subprime mortgage or nontraditional mortgage that lender offers is consistent with prudent lending practices. Specifies requirements for prudent lending practices. Requires lender to analyze borrower’s ability to make regularly scheduled payments under certain conditions. Requires mortgage that lender approves to include terms consistent with lender’s analysis and provisions for managing risks. Prohibits lender from ceding required analysis, qualification decision or underwriting duty to third party with business objectives that differ from lender’s. Creates rebuttable presumption that lender’s use of qualified automated underwriting system constitutes compliance with required underwriting standards. Requires lender to establish and follow written policies that comply with underwriting requirements set forth in Act. Requires lender to have evidence of borrower’s ability to repay mortgage if lender qualifies borrower with reduced documentation or mortgage includes combination of certain risks. Specifies conditions under which lender may charge prepayment penalty. Specifies disclosures lender must make to borrower. Prohibits lender from interpreting or complying with Act to evade obligations under federal law. Provides rulemaking, investigation and enforcement powers to Director of Department of Consumer and Business Services.
Pennsylvania	H.B. 38 Provides for 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.
	H.B. 40 Provides for prohibited acts and practices with respect to residential mortgages; further provides for attorney fees; and provides for foreclosure and other legal actions.
	H.B. 2428 Passed House 6/11/08 Prohibits lenders from requiring a borrower, as a condition of obtaining or maintaining a secured loan, to obtain property insurance coverage which exceeds the replacement value of buildings and structures situate on the land used to secure the loan. A borrower on a loan secured by real property may not be required to insure the value of the land.
	S.B. 250 Prohibits lenders from requiring a borrower, as a condition of obtaining or maintaining a secured loan, to obtain property insurance coverage which exceeds the replacement value of buildings and structures situate on the land used to secure the loan. A borrower on a loan secured by real property may not be required to insure the value of the land.
Rhode Island	S.B. 2065 Allows the full payment of mortgage loans to be made at any time without penalty.
South Carolina	S.B. 924 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 officer, limited loan officer, 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 the felony offense of mortgage fraud and penalties; provides for enforcement otherwise through the department of consumer affairs and through criminal penalties; amends chapter 58 of title 40, relating to the registration of mortgage loan brokers, so as to change the registration requirements to licensing requirements, to redefine “mortgage broker”, “exempt organization”, “residential real property”, inter alia, and to add new definitions, including “branch office”, “pattern of residential mortgage fraud”, “tablefunding”, and others; requires certain professional courses, an additional year of experience, and a fingerprint check for mortgage brokers and mortgage 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 criminal penalties; requires certain reports and filings; and provide for the felony offense of mortgage fraud and penalties; amends §§37-1-301, 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 to add a definition for “adjustable rate mortgage”; amends §37-23-45 and §37-23-75, both relating to disclosure to the borrower, so as to require certain disclosures in connection with an adjustable rate mortgage.
	S.B. 1090 Passed Senate 4/29/08 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 officer, limited loan officer, or someone acting as a mortgage lender; provide 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 the felony offense of mortgage fraud and penalties; provides for enforcement otherwise through the department of consumer affairs and through criminal penalties; amends §§37-1-301, 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 to add 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; and amends chapter 58 of title 40, relating to the registration of mortgage loan brokers, so as to change the registration requirements to licensing requirements, to redefine “mortgage broker”, “exempt organization”, “residential real property”, inter alia, and to add new definitions, including “branch office”, “pattern of residential mortgage fraud”, “tablefunding”, and others; requires certain professional courses, an additional year of experience, and a fingerprint check for mortgage brokers and mortgage 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 criminal penalties; requires certain reports and filings; and provides for the felony offense of mortgage fraud and penalties.
Tennessee	H.B. 3188 S.B. 3580 Limits fee that high-cost home loan lenders may charge for third or subsequent pay-off statement provided to borrow in 12-month period to $10.
	H.B. 3345 S.B. 3834 Requires mortgage counselor be consulted before an adjustable rate mortgage can be completed.
	H.B. 3392 S.B. 3818 Requires the department of financial institutions to report annually on the number of legal actions brought pursuant to the Tennessee Home Loan Protection Act to chair of House Commerce Committee and chair of Senate Commerce, Labor and Agriculture Committee.

US 2008 Introduced Predatory Mortgage & Subprime Lending Legislation Resources

US 2008 Introduced Predatory Mortgage & Subprime Lending Legislation Resources in United States

US 2008 Introduced Predatory Mortgage & Subprime Lending Legislation Resources

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