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PAG LIN
1 1 Section 1. Section 535.9, Code 1995, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 4. This section shall not apply to a loan
1 4 that is a qualified loan, as defined in 12 U.S.C. } 2279aa,
1 5 for a period of two hundred seventy days following the closing
1 6 of the loan, if the loan is sold or committed to be sold into
1 7 the agricultural mortgage secondary market as provided in 12
1 8 U.S.C. } 2279aa et seq. If prior to the end of the two
1 9 hundred seventy-day period, the loan becomes collateral for
1 10 securities guaranteed under 12 U.S.C. } 2279aa et seq., this
1 11 section shall not apply to the loan for the remainder of the
1 12 term of the loan.
1 13 EXPLANATION
1 14 Currently section 535.9 applies to loans used for the
1 15 purpose of purchasing real property, including agricultural
1 16 land. The section provides that whenever a borrower prepays
1 17 part of all of the outstanding balance of a loan, the lender
1 18 cannot receive an amount in payment of interest which is
1 19 greater than the amount determined by applying the rate of
1 20 interest agreed upon by the lender and the borrower to the
1 21 unpaid balance of the loan for a period of time during which
1 22 the borrower had the use of the money loaned. It prohibits a
1 23 lender from imposing any penalty or other charge in addition
1 24 to the amount of interest due as a result of the repayment of
1 25 that loan at a date earlier than is required by the terms of
1 26 the loan agreement.
1 27 This bill provides that the restrictions on prepayment
1 28 penalties do not apply to a loan that is a qualified loan, as
1 29 defined in 12 U.S.C. } 2279aa, for a period of 270 days
1 30 following the closing of the loan, if the loan is sold or
1 31 committed to be sold into the agricultural mortgage secondary
1 32 market ("Farmer Mac"). The bill also provides that the
1 33 restrictions do not apply, if prior to the end of the 270-day
1 34 period, the loan becomes collateral for securities guaranteed
1 35 under 12 U.S.C. } 2279aa et seq.
2 1 LSB 1821SC 76
2 2 da/cf/24
Text: SSB00208 Text: SSB00210 Text: SSB00200 - SSB00299 Text: SSB Index Bills and Amendments: General Index Bill History: General Index
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