Senate File 313 - Introduced SENATE FILE 313 BY DAWSON A BILL FOR An Act relating to evidence of title by state banks for certain 1 loans. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2099XS (4) 88 gh/rn
S.F. 313 Section 1. Section 524.905, subsection 1, Code 2019, is 1 amended to read as follows: 2 1. Rules for loans. A state bank may make permanent loans, 3 construction loans, or combined construction and permanent 4 loans, secured by liens on real property, as authorized by 5 rules adopted by the superintendent under chapter 17A . 6 a. The rules shall include provisions as necessary to ensure 7 the safety and soundness of these loans, and to ensure full and 8 fair disclosure to borrowers of the effects of provisions in 9 agreements for these loans, including provisions permitting 10 change or adjustment of any terms of a loan, provisions 11 permitting, requiring, or prohibiting repayment of a loan on 12 a basis other than of equal periodic installments of interest 13 plus principal over a fixed term, provisions imposing penalties 14 for the borrower’s noncompliance with requirements of a loan 15 agreement, or provisions allowing or requiring a borrower to 16 choose from alternative courses of action at any time during 17 the effectiveness of a loan agreement. 18 b. The rules shall provide that state banks, when loaning 19 for the purposes of acquisition or refinance of acquisition 20 when a new mortgage, deed of trust, or other similar instrument 21 is filed, may evidence title with any of the following: 22 (1) A written legal opinion prepared by an attorney admitted 23 to practice law in the state where the real property is 24 located. 25 (2) A title guaranty certificate issued by the title 26 guaranty division of the Iowa finance authority. 27 (3) A commercial title insurance policy describing any 28 liens and insuring title to the real property and the validity 29 and enforceability of the mortgage, deed of trust, or other 30 similar instrument as a lien on the real property. 31 EXPLANATION 32 The inclusion of this explanation does not constitute agreement with 33 the explanation’s substance by the members of the general assembly. 34 This bill provides that the Iowa superintendent of banking 35 -1- LSB 2099XS (4) 88 gh/rn 1/ 2
S.F. 313 shall adopt rules allowing state banks, when loaning for 1 the purposes of acquisition or refinance of acquisition 2 when a new mortgage, deed, or other similar instrument is 3 filed, to evidence title with a written legal opinion from 4 an attorney admitted to practice law in the state where the 5 property is located, a title guaranty certificate issued by 6 the title guaranty division of the Iowa finance authority, 7 or a commercial title insurance policy insuring title to the 8 property and the validity of the new instrument as a lien on 9 the property. 10 -2- LSB 2099XS (4) 88 gh/rn 2/ 2