Senate Study Bill 3022





                                       SENATE FILE       
                                       BY  (PROPOSED COMMITTEE ON
                                            COMMERCE BILL BY
                                            CO=CHAIRPERSONS BEHN
                                            and WARNSTADT)


    Passed Senate, Date               Passed House,  Date             
    Vote:  Ayes        Nays           Vote:  Ayes        Nays         
                 Approved                            

                                      A BILL FOR

  1 An Act relating to the prepayment of agricultural loans secured
  2    by a real estate mortgage.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  4 TLSB 5641SC 81
  5 kk/je/5

PAG LIN



  1  1    Section 1.  Section 535.9, subsection 1, Code 2005, is
  1  2 amended to read as follows:
  1  3    1.  As used in this section, "loan" means a loan of money
  1  4 which is wholly or in part to be used for the purpose of
  1  5 purchasing real property which is a single=family or a two=
  1  6 family dwelling occupied or to be occupied by the borrower, or
  1  7 which is payable over a term of five years or less for the
  1  8 purpose of purchasing agricultural land.  "Loan" includes the
  1  9 refinancing of a contract of sale, and the refinancing of a
  1 10 prior loan, whether or not the borrower also was the borrower
  1 11 under the prior loan, and the assumption of a prior loan.
  1 12                           EXPLANATION
  1 13    This bill relates to the prepayment of loans secured by
  1 14 real estate mortgages for the purchase of agricultural land.
  1 15 Code section 535.9 prohibits mortgage lenders from receiving
  1 16 additional interest other than due under the terms of the loan
  1 17 agreement and from imposing penalties for prepayment of a loan
  1 18 earlier than required by the loan agreement.  The bill
  1 19 restricts the definition of "loan" with regard to the purchase
  1 20 of agricultural land to agricultural loans payable over a term
  1 21 of five years or less so that loans to purchase agricultural
  1 22 land which are payable for a term of more than five years may
  1 23 have additional interest or penalties imposed for prepayment
  1 24 of the loan.
  1 25 LSB 5641SC 81
  1 26 kk:nh/je/5