SSB 1235 (LSB 2413XC (2) 89)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON SCHULTZ)

A BILL FOR

An Act relating to loans originated by mortgage bankers.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 535.8, subsection 2, Code 2021, is amended to read as follows:
   2.  If a lender that is a financial institution as defined in section 537.1301 or a mortgage banker licensed pursuant to chapter 535B makes a loan in which the points and fees the borrower is charged by all lenders in connection with the loan do not exceed the amounts specified in 12 C.F.R. §1026.43(e)(3), the loan shall not be subject to the provisions of subsection 4, paragraphs “a”, “b”, and “d”, or subsection 5. This subsection applies to the financial institution lender that originates the loan and to subsequent purchasers of the loan originated by the financial institution.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to loans originated by mortgage bankers.
   The bill provides that if a lender that is a financial institution or a mortgage banker licensed pursuant to Code chapter 535B makes a loan in which the points and fees the borrower is charged in connection with the loan do not exceed the amounts specified in 12 C.F.R. §1026.43(e)(3), the loan shall not be subject to the provisions of Code section 535.8, subsection 4, paragraphs “a”, “b”, and “d” (providing for additional fees and the right to recover unlawful fees), or subsection 5 (authorizing the lender to offer to make a loan on all of the same terms except at a lower interest rate in exchange for the payment of an interest reduction fee).