House File 2151 - Introduced
HOUSE FILE
BY UPMEYER
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act creating the home loan protection Act, and providing a
2 penalty.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 5147YH 81
5 eg/cf/24
PAG LIN
1 1 Section 1. NEW SECTION. 535D.1 TITLE == PURPOSE.
1 2 1. This chapter shall be known and may be cited as the
1 3 "Home Loan Protection Act".
1 4 2. This chapter shall be liberally construed to effectuate
1 5 its purpose of protecting the homes and the equity of
1 6 individual borrowers. This chapter is to be construed as a
1 7 consumer protection statute for all purposes.
1 8 Sec. 2. NEW SECTION. 535D.2 DEFINITIONS.
1 9 As used in this chapter, unless the context otherwise
1 10 requires:
1 11 1. "Affiliate" means any company that controls, is
1 12 controlled by, or is under common control with another company
1 13 as set forth in 12 U.S.C. } 1841 et seq.
1 14 2. "Annual percentage rate" means the annual percentage
1 15 rate for a loan calculated according to the provisions of the
1 16 federal Truth in Lending Act, 12 C.F.R. pt. 226.
1 17 3. "Bona fide discount points" means an amount knowingly
1 18 paid by a borrower for the express purpose of reducing, and
1 19 which in fact does result in a bona fide reduction of, the
1 20 interest rate applicable to a home loan; provided the
1 21 undiscounted interest rate for the home loan does not exceed
1 22 the conventional mortgage rate by two percentage points for a
1 23 home loan secured by a first lien, or by three and one=half
1 24 percentage points for a home loan secured by a subordinated
1 25 lien.
1 26 4. "Borrower" means any natural person obligated to repay
1 27 a home loan, including a coborrower, cosigner, or guarantor.
1 28 5. "Brokering" means to act as a mortgage broker in
1 29 connection with a home loan.
1 30 6. "Conventional mortgage rate" means the most recently
1 31 published annual yield on conventional mortgages published by
1 32 the board of governors of the federal reserve system, as
1 33 published in statistical release H.15 or any publication that
1 34 may supersede it, as of the applicable time set forth in 12
1 35 C.F.R. } 226.32(a)(1)(i).
2 1 7. "Conventional prepayment penalty" means any prepayment
2 2 penalty or fee that may be collected or charged in a home
2 3 loan, and that is authorized by law other than this chapter,
2 4 provided the home loan does not do either of the following:
2 5 a. Have an annual percentage rate that exceeds the
2 6 conventional mortgage rate by more than two percentage points.
2 7 b. Permit any prepayment fees or penalties that exceed two
2 8 percent of the amount prepaid.
2 9 8. "Creditor" means the same as "lender" as set forth in
2 10 24 C.F.R. } 3500.2. "Creditor" also means a mortgage broker.
2 11 9. "Excluded points and fees" means, in connection with a
2 12 home loan, up to and including one percent of the total loan
2 13 amount attributable to bona fide fees paid to a federal or
2 14 state government agency that insures payment of some portion
2 15 of a home loan plus an amount not to exceed two percent of the
2 16 total loan amount attributable to bona fide discount points or
2 17 a conventional prepayment penalty. In no case shall the total
2 18 excluded points and fees in connection with a home loan exceed
2 19 three percent of the total loan amount.
2 20 10. "Flipping" means making a home loan to a borrower that
2 21 refinances an existing home loan and the new loan does not
2 22 have reasonable, tangible net benefit to the borrower
2 23 considering all of the circumstances, including, but not
2 24 limited to, the terms of both the new and refinanced loans,
2 25 the cost of the new loan, and the borrower's circumstances.
2 26 11. "High=cost home loan" means a home loan in which the
2 27 terms of the loan meet or exceed one or more thresholds.
2 28 12. "Home loan" means an extension of credit, including an
2 29 open=end credit plan, in which all of the following apply:
2 30 a. The loan does not exceed the maximum original principal
2 31 obligation as set forth in and from time to time adjusted
2 32 according to the provisions of 12 U.S.C. } 1454(a)(2).
2 33 b. The loan is considered a federally related mortgage
2 34 loan as set forth in 24 C.F.R. } 3500.2.
2 35 c. The loan is neither a reverse mortgage transaction nor
3 1 a loan primarily for business, agricultural, or commercial
3 2 purposes.
3 3 13. "Manufactured home" means the same as set forth in 24
3 4 C.F.R. } 3280.2.
3 5 14. "Mortgage broker" means the same as set forth in 24
3 6 C.F.R. } 3500.2.
3 7 15. a. "Points and fees" means any of the following:
3 8 (1) All items included in the definition of finance charge
3 9 in 12 C.F.R. } 226.4(a) and 12 C.F.R. } 226.4(b) except
3 10 interest or the time price differential.
3 11 (2) All real estate=related fees described in 12 C.F.R. }
3 12 226.32(b)(1)(iii), which includes fees for title insurance,
3 13 abstracts of title, credit reports, or appraisals.
3 14 (3) All compensation paid directly or indirectly to a
3 15 mortgage broker from any source, including a mortgage broker
3 16 that originates a loan in its own name in a table=funded
3 17 transaction.
3 18 (4) The cost of all premiums financed by a creditor,
3 19 directly or indirectly for any credit life, credit disability,
3 20 credit unemployment, or credit property insurance, or any
3 21 other life or health insurance, or any payments financed by
3 22 the creditor directly or indirectly for any debt cancellation
3 23 or suspension agreement or contract, except that insurance
3 24 premiums or debt cancellation or suspension fees calculated
3 25 and paid in full on a monthly basis shall not be considered
3 26 financed by the creditor.
3 27 (5) The maximum prepayment fees and penalties that may be
3 28 charged or collected under the terms of the loan documents.
3 29 (6) All prepayment fees or penalties that are incurred by
3 30 the borrower if the loan refinances a previous loan originated
3 31 or currently held by the same creditor or an affiliate of the
3 32 creditor.
3 33 (7) For open=end loans, "points and fees" are calculated
3 34 by adding the total points and fees known at or before
3 35 closing, including the maximum prepayment penalties which may
4 1 be charged or collected under the terms of the loan document,
4 2 plus the minimum additional fees the borrower would be
4 3 required to pay to draw down an amount equal to the total
4 4 credit line.
4 5 b. "Points and fees" does not include any of the
4 6 following:
4 7 (1) Taxes, filing fees, recording, or other charges and
4 8 fees paid or to be paid to public officials for determining
4 9 the existence of or for perfecting, releasing, or satisfying a
4 10 security interest.
4 11 (2) Bona fide and reasonable fees paid to a person other
4 12 than the creditor or an affiliate of the creditor for any of
4 13 the following: fees for tax payment services; fees for flood
4 14 certification; fees for pest infestation or flood
4 15 determination; appraisal fees; fees for inspections performed
4 16 prior to closing; credit reports; surveys; attorney fees, if
4 17 the borrower has the right to select the attorney from an
4 18 approved list or otherwise; notary fees; escrow charges, so
4 19 long as not otherwise included under paragraph "a",
4 20 subparagraph (1); title insurance premiums; or fire and hazard
4 21 insurance and flood insurance premiums, provided that the
4 22 conditions in 12 C.F.R. } 226.4(d)(2) are met.
4 23 16. "Threshold" means any of the following items, as
4 24 defined:
4 25 a. "Rate threshold" means, for a home loan, the annual
4 26 percentage rate equals or exceeds the rate set forth in 12
4 27 C.F.R. } 226.32(a)(1)(i), without regard to whether the home
4 28 loan may be considered a "residential mortgage transaction" or
4 29 an extension of "open=end credit" as those terms are set forth
4 30 in 12 C.F.R. } 226.2.
4 31 b. "Total points and fees threshold" means:
4 32 (1) For loans in which the total loan amount is twenty
4 33 thousand dollars or more, the total points and fees payable in
4 34 connection with the home loan less any excluded points and
4 35 fees exceed five percent of the total loan amount.
5 1 (2) For loans in which the total loan amount is less than
5 2 twenty thousand dollars, the total points and fees payable in
5 3 connection with the home loan less any excluded points and
5 4 fees exceed the lesser of one thousand dollars or eight
5 5 percent of the total loan amount.
5 6 17. "Total loan amount" means the principal of the loan
5 7 minus those points and fees that are included in the principal
5 8 amount of the loan. For open=end loans, the total loan amount
5 9 shall be calculated using the total line of credit allowed
5 10 under the home loan at closing.
5 11 Sec. 3. NEW SECTION. 535D.3 PROHIBITED ACTS AND
5 12 PRACTICES.
5 13 1. A creditor making a home loan shall not finance,
5 14 directly or indirectly, any credit life, credit disability,
5 15 credit unemployment, or credit property insurance, or any
5 16 other life or health insurance, or any payments directly or
5 17 indirectly for any debt cancellation or suspension agreement
5 18 or contract, except that insurance premiums or debt
5 19 cancellation or suspension fees calculated and paid in full on
5 20 a monthly basis shall not be considered financed by the
5 21 creditor.
5 22 2. A creditor shall not knowingly or intentionally engage
5 23 in the act or practice of flipping a home loan.
5 24 3. A creditor shall not recommend or encourage default on
5 25 an existing loan or other debt prior to and in connection with
5 26 the closing or planned closing of a home loan that refinances
5 27 all or any portion of such existing loan or debt.
5 28 4. A creditor shall not impose a late payment charge
5 29 unless the loan documents specifically authorize the charge,
5 30 the charge is not imposed unless the payment is past due for
5 31 ten days or more, and the charge does not exceed five percent
5 32 of the amount of the late payment. A late payment charge
5 33 shall not be imposed more than once with respect to a
5 34 particular late payment. If a late payment charge is deducted
5 35 from a payment made on the home loan and such deduction
6 1 results in a subsequent default on a subsequent payment, a
6 2 late payment charge shall not be imposed for such default. A
6 3 creditor may apply any payment made in the order of maturity
6 4 to a prior period's payment due even if the result is late
6 5 payment charges accruing on subsequent payments due.
6 6 5. The terms of a home loan shall not include a provision
6 7 that permits the creditor, in its sole discretion, to
6 8 accelerate the indebtedness. This subsection does not
6 9 prohibit acceleration of a loan in good faith due to the
6 10 borrower's failure to abide by the material terms of the loan.
6 11 6. A creditor shall not charge a fee for informing or
6 12 transmitting to any person the balance due to pay off a home
6 13 loan or to provide a release upon prepayment. Payoff balances
6 14 shall be provided within a reasonable time but in any event no
6 15 more than five business days after the request.
6 16 Sec. 4. NEW SECTION. 535D.4 HIGH=COST HOME LOANS.
6 17 A high=cost home loan is subject to the following
6 18 additional limitations and prohibited practices:
6 19 1. A creditor shall not directly or indirectly finance any
6 20 points or fees.
6 21 2. Prepayment fees or penalties shall not be included in
6 22 the loan documents.
6 23 3. A scheduled payment shall not be for more than twice
6 24 the amount of the average of earlier scheduled payments. This
6 25 subsection does not apply when the payment schedule is
6 26 adjusted to the seasonal or irregular income of the borrower.
6 27 4. The loan shall not include payment terms under which
6 28 the outstanding principal balance or accrued interest will
6 29 increase at any time over the course of the loan because the
6 30 regularly scheduled periodic payments do not cover the full
6 31 amount of interest due.
6 32 5. The loan shall not contain a provision that increases
6 33 the interest rate after default. This subsection does not
6 34 apply to interest rate changes in a variable rate loan
6 35 otherwise consistent with the provisions of the loan
7 1 documents, provided the change in the interest rate is not
7 2 triggered by the event of default or the acceleration of the
7 3 indebtedness.
7 4 6. The loan shall not include terms under which more than
7 5 two periodic payments required under the loan are consolidated
7 6 and paid in advance from the loan proceeds provided to the
7 7 borrower.
7 8 7. A creditor shall not make a loan without first
7 9 receiving certification from a counselor with a third=party
7 10 nonprofit organization approved by the United States
7 11 department of housing and urban development, a housing
7 12 financing agency of this state, or the regulatory agency that
7 13 has jurisdiction over the creditor, that the borrower has
7 14 received counseling on the advisability of the loan
7 15 transaction.
7 16 8. A loan shall not be extended to a borrower unless a
7 17 reasonable creditor would believe at the time the loan is
7 18 closed that the borrower residing in the home will be able to
7 19 make the scheduled payments associated with the loan based
7 20 upon a consideration of the borrower's current and expected
7 21 income, current obligations, employment status, and other
7 22 financial resources, other than the borrower's equity in the
7 23 collateral that secures the repayment of the loan. There is a
7 24 rebuttable presumption that the borrower residing in the home
7 25 is able to make the scheduled payments to repay the obligation
7 26 if, at the time the loan is consummated, the borrower's total
7 27 monthly debts, including amounts under the loan, do not exceed
7 28 fifty percent of the borrower's monthly gross income as
7 29 verified by tax returns, payroll receipts, and other third=
7 30 party income verification.
7 31 9. A creditor shall not pay a contractor under a home=
7 32 improvement contract from the proceeds of the loan, unless the
7 33 following conditions are met:
7 34 a. The creditor is presented with a signed and dated
7 35 completion certificate issued by the contractor showing that
8 1 the home improvements have been completed.
8 2 b. The instrument is payable to the borrower or jointly to
8 3 the borrower and the contractor, or, at the election of the
8 4 borrower, through a third=party escrow agent in accordance
8 5 with terms established in a written agreement signed by the
8 6 borrower, the creditor, and the contractor prior to the
8 7 disbursement.
8 8 10. A creditor shall not charge the borrower any fees or
8 9 other charges to modify, renew, extend, or amend the loan.
8 10 11. All loan documents that create a debt or pledge
8 11 property as collateral shall contain the following notice on
8 12 the first page in a conspicuous manner: "Notice: This is a
8 13 high=cost home loan subject to special rules under state law.
8 14 Purchasers or assignees of this high=cost home loan may be
8 15 liable for all claims and defenses by the borrower with
8 16 respect to the home loan."
8 17 Sec. 5. NEW SECTION. 535D.5 RIGHT TO CURE.
8 18 1. If a creditor asserts that a borrower is in default and
8 19 that grounds for acceleration exist and requires the payment
8 20 in full of all sums secured by the security instrument, the
8 21 borrower, or anyone authorized to act on the borrower's
8 22 behalf, shall have the right at any time, up to the time title
8 23 to the home is transferred by means of foreclosure by judicial
8 24 proceeding and sale or otherwise, to cure the default and
8 25 reinstate the home loan by tendering the amount or performance
8 26 as specified in this section.
8 27 2. Before a foreclosure action is filed or any other
8 28 action is taken to seize or transfer ownership of the home,
8 29 the creditor shall deliver a written notice to the borrower of
8 30 the right to cure the default which shall include all of the
8 31 following:
8 32 a. The nature of the default claimed on the home loan, and
8 33 the borrower's right to cure the default by paying the sum of
8 34 money required to cure the default, provided that a partial
8 35 payment made or tendered in response to the notice must be
9 1 accepted. If the amount necessary to cure the default will
9 2 change due to the application of a daily interest rate or the
9 3 addition of late fees, the notice shall give sufficient
9 4 information to enable the borrower to calculate the amount at
9 5 any point within thirty days from the date of the notice.
9 6 b. The date, not less than thirty days after the date of
9 7 the notice, by which the borrower must cure the default to
9 8 avoid acceleration and initiation of foreclosure or other
9 9 action to seize the home. The notice shall include the name,
9 10 address, and phone number of a person to whom the borrower
9 11 shall tender payment.
9 12 c. A statement that if the borrower does not cure the
9 13 default by the date specified the creditor may take steps to
9 14 terminate the borrower's ownership in the property by
9 15 requiring payment in full of the home loan and commencing a
9 16 foreclosure action or other action to seize the home.
9 17 d. The name, address, and phone number of the creditor and
9 18 the creditor's representative that a borrower may contact if
9 19 the borrower disagrees with the creditor's assertion that a
9 20 default has occurred or with the creditor's calculation of the
9 21 amount required to cure the default.
9 22 3. A borrower shall not be required to pay any of the
9 23 following:
9 24 a. A charge, fee, or penalty to exercise the right to cure
9 25 a default under this section.
9 26 b. Attorney fees relating to the borrower's default
9 27 incurred prior to the filing of a foreclosure action or other
9 28 action to seize or transfer ownership of the home. After an
9 29 action has been filed, the borrower may be liable for attorney
9 30 fees that are reasonable and actually incurred by the
9 31 creditor, based on a reasonable hourly rate and a reasonable
9 32 number of hours.
9 33 4. If the borrower cures the default after an action to
9 34 foreclose or otherwise seize or transfer ownership of the home
9 35 is filed, the creditor shall take the necessary steps to
10 1 terminate the foreclosure or other action.
10 2 Sec. 6. NEW SECTION. 535D.6 PURCHASE OR ASSIGNMENT OF
10 3 HIGH=COST HOME LOAN == CLAIMS.
10 4 1. A person who purchases or is otherwise assigned a high=
10 5 cost home loan is subject to all affirmative claims and any
10 6 defenses with respect to the loan that the borrower could
10 7 assert against the original creditor of the loan, provided
10 8 that this subsection shall not apply if the purchaser or
10 9 assignee demonstrates by a preponderance of the evidence that
10 10 all of the following conditions apply:
10 11 a. The purchaser or assignee has in place at the time of
10 12 the purchase or assignment of the subject loan, policies that
10 13 expressly prohibit its purchase or acceptance of assignment of
10 14 any high=cost home loans.
10 15 b. The purchaser or assignee requires by contract that a
10 16 seller or assignor of home loans represents and warrants to
10 17 the purchaser or assignee either of the following:
10 18 (1) The seller or assignor will not sell or assign any
10 19 high=cost home loans to the purchaser or assignee.
10 20 (2) The seller or assignor is a beneficiary of a
10 21 representation and warranty from a previous seller or assignor
10 22 to that effect.
10 23 c. The seller or assignor exercises reasonable due
10 24 diligence at the time of purchase or assignment of home loans
10 25 or within a reasonable period of time after the purchase or
10 26 assignment of such home loans, intended by the purchaser or
10 27 assignee to prevent the purchaser or assignee from purchasing
10 28 or taking assignment of any high=cost home loans, provided
10 29 further that reasonable due diligence shall provide for
10 30 sampling and shall not require loan=by=loan review.
10 31 2. A borrower acting only in an individual capacity may
10 32 assert claims that the borrower could assert against a
10 33 creditor of the home loan against any subsequent holder or
10 34 assignee of the home loan limited to amounts required to
10 35 reduce or extinguish the borrower's liability under the home
11 1 loan plus amounts required to recover costs, including
11 2 reasonable attorney fees. Such claims shall be limited to the
11 3 following:
11 4 a. Within five years of the closing of a high=cost home
11 5 loan, a claim of a violation of this chapter in connection
11 6 with the loan, brought as an original action.
11 7 b. At any time during the term of a high=cost home loan,
11 8 after an action to collect on the home loan or foreclose on
11 9 the collateral securing the home loan has been initiated or
11 10 the debt arising from the home loan has been accelerated or
11 11 the home loan has become sixty days in default, any defense,
11 12 claim or counterclaim, or action to enjoin foreclosure or
11 13 preserve or obtain possession of the home that secures the
11 14 loan.
11 15 3. The provisions of this section shall be effective
11 16 notwithstanding any other provision of law, provided that
11 17 nothing in this section shall be construed to limit the
11 18 substantive rights, remedies, or procedural rights available
11 19 to a borrower against any creditor, assignee, or holder under
11 20 any other law. The rights conferred on borrowers by
11 21 subsections 1 and 2 are independent of each other and do not
11 22 limit each other.
11 23 Sec. 7. NEW SECTION. 535D.7 ENFORCEMENT == PENALTY.
11 24 1. The originating or brokering of a home loan that
11 25 violates a provision of this chapter is a violation of the
11 26 chapter.
11 27 2. Any person found by a preponderance of the evidence to
11 28 have violated this chapter shall be liable to the borrower for
11 29 the following:
11 30 a. Actual damages, including consequential and incidental
11 31 damages. The borrower shall not be required to demonstrate
11 32 reliance in order to receive actual damages.
11 33 b. For a violation of section 535D.3 or 535D.4, statutory
11 34 damages equal to two times the finance charges paid under the
11 35 loan and forfeiture of the remaining interest under the loan.
12 1 c. Punitive damages, when the violation was malicious or
12 2 reckless.
12 3 d. Costs, including reasonable attorney fees.
12 4 3. A borrower may be granted injunctive, declaratory, or
12 5 other equitable relief as the court deems appropriate in an
12 6 action to enforce compliance with this chapter.
12 7 4. The right of recision granted under 15 U.S.C. } 1601 et
12 8 seq., for a violation of that law shall be available to a
12 9 borrower by way of recoupment against a party foreclosing on
12 10 the home loan or collecting on the loan, at any time during
12 11 the term of the loan. Nothing in this chapter shall be
12 12 construed to limit recoupment rights available to the borrower
12 13 under any other law.
12 14 5. The remedies provided in this section are not intended
12 15 to be the exclusive remedies available to a borrower nor must
12 16 the borrower exhaust any administrative remedies provided
12 17 under this chapter or any other applicable law before
12 18 proceeding under this section.
12 19 6. Any person, including members, officers, and directors
12 20 of the creditor, who knowingly violates this chapter is guilty
12 21 of a serious misdemeanor.
12 22 7. A creditor acting in good faith, who fails to comply
12 23 with the provisions of this chapter, shall not be deemed to
12 24 have violated this chapter if the creditor establishes that
12 25 either:
12 26 a. Within thirty days of the loan closing, and prior to
12 27 receiving any notice that the creditor violated this chapter,
12 28 the creditor has made appropriate restitution to the borrower,
12 29 and appropriate adjustments are made to the loan.
12 30 b. Within sixty days of the loan closing and prior to
12 31 receiving any notice that the creditor violated this chapter,
12 32 and the violation was not intentional but resulted from a bona
12 33 fide error notwithstanding the maintenance of procedures
12 34 reasonably adapted to avoid such errors, the borrower is
12 35 notified of the violation, appropriate restitution is made to
13 1 the borrower, and appropriate adjustments are made to the
13 2 loan. A "bona fide error" includes clerical, calculation,
13 3 computer malfunction and programming, and printing errors. An
13 4 error of legal judgment with respect to a creditor's
13 5 obligations under this chapter is not a bona fide error.
13 6 8. The remedies provided in this section are cumulative.
13 7 9. Whether a borrower is acting individually or on behalf
13 8 of others similarly situated, any provision of a home loan
13 9 document that requires a borrower to assert any claim or
13 10 defense in a forum that is less convenient, more costly, or
13 11 more dilatory for the resolution of a dispute than a judicial
13 12 forum established in this state where the borrower may
13 13 otherwise properly bring a claim or defense or limits in any
13 14 way any claim or defense the borrower may have is
13 15 unconscionable and void.
13 16 10. It is a violation of this chapter for any person to
13 17 attempt in bad faith to avoid the application of this chapter
13 18 by dividing any loan transaction into separate parts or
13 19 structuring a home loan transaction as an open=end loan for
13 20 the purpose of evading the provisions of this chapter when the
13 21 loan would have been a high=cost home loan if the loan had
13 22 been structured as a closed=end loan or engaging in any other
13 23 subterfuge with the intent of evading any provision of this
13 24 chapter.
13 25 Sec. 8. NEW SECTION. 535D.8 ATTORNEY GENERAL
13 26 ENFORCEMENT.
13 27 The attorney general and the county attorneys of this state
13 28 shall have jurisdiction to enforce this chapter through their
13 29 general regulatory powers and through civil process.
13 30 Sec. 9. NEW SECTION. 535D.9 NONEXCLUSIVE RIGHTS.
13 31 The rights conferred by this chapter are independent of and
13 32 in addition to any other rights conferred by law.
13 33 Sec. 10. NEW SECTION. 535D.10 APPLICABILITY.
13 34 1. This chapter shall apply to all transactions relating
13 35 to homes located in Iowa and governed by this chapter. This
14 1 chapter shall apply to all loans originated or entered into on
14 2 or after July 1, 2006.
14 3 2. If a conflict exists between this chapter and another
14 4 Code provision, including a conflict with a provision
14 5 contained in chapter 535, this chapter shall supersede the
14 6 other provision.
14 7 Sec. 11. Section 535.2, subsection 2, paragraph b,
14 8 subparagraph (6), Code 2005, is amended to read as follows:
14 9 (6) With respect to any transaction referred to in
14 10 paragraph "a" of this subsection, this subsection supersedes
14 11 any interest=rate or finance=charge limitations contained in
14 12 the Code, including but not limited to this chapter and
14 13 chapters 321, 322, 524, 533, 534, 536A, and 537. However,
14 14 this subsection shall not supersede the limitations contained
14 15 in chapter 535D.
14 16 EXPLANATION
14 17 This bill creates a new Code chapter known as the "Home
14 18 Loan Protection Act". The bill is based on federal
14 19 legislation designed to apply to all creditors that make real
14 20 estate loans, including home equity loans. The bill prohibits
14 21 various creditor practices in making and refinancing certain
14 22 consumer home loans. When making home loans, a creditor is
14 23 restricted in all of the following areas: financing insurance
14 24 premiums or debt cancellation fees; "flipping" a home loan
14 25 (i.e., refinancing a home loan with no net benefit to a
14 26 borrower); encouraging default on an existing loan prior to
14 27 closing on a refinancing loan; imposing a late payment charge;
14 28 and accelerating indebtedness. Additional restrictions apply
14 29 to creditors that make loans meeting certain thresholds known
14 30 as "high=cost" home loans. The bill provides for its
14 31 enforcement and remedies. Any person who knowingly violates
14 32 the bill is guilty of a serious misdemeanor. A serious
14 33 misdemeanor is punishable by confinement for no more than one
14 34 year and a fine of at least $250 but not more than $1,500.
14 35 LSB 5147YH 81
15 1 eg:nh/cf/24