HB 240 (BR 858) - G. Stumbo, R. Webb, R. Adkins, A. Arnold, E. Ballard, J. Barrows, P. Bather, B. Buckingham, T. Burch, J. Callahan, M. Cherry, L. Clark, J. Coleman, D. Graham, J. Gray, C. Hoffman, J. Jenkins, Ji. Lee, M. Marzian, R. Meeks, H. Moberly, F. Nesler, S. Nunn, R. Palumbo, D. Pasley, T. Riner, A. Smith, K. Stein, R. Thomas, J. Thompson, J. Wayne, R. Wilkey
AN ACT relating to home loan protection.
Create new sections of KRS Chapter 367 to prohibit certain practices when lenders make high-cost home loans; prohibit the making of a high-cost home loan to a borrower who refinances when the new loan does not have a reasonable net benefit to the borrower; prohibit a creditor making a high-cost home loan to finance any points or fees; provide that no prepayment fees or penalties shall be included in the loan documents for a high-cost home loan; prohibit a high-cost home loan from containing a scheduled payment that is more than twice as large as the average of earlier scheduled payments; provide that no yield spread premium shall be paid to any broker by the creditor or other party in connection with a high-cost home loan; prohibit a high-cost home loan from including payment terms under which the outstanding principal balance will increase because the regular periodic payments do not cover the full amount of interest due; prohibit a high-cost home loan from containing a provision that increases the interest rate after default; provide that a high-cost home loan cannot be closed at any place other than the office of the lender, loan broker, attorney, title insurer, or similar place of business; provide that no more than two periodic payments can be consolidated and paid in advance from the loan proceeds provided to the borrower; prohibit a mandatory arbitration clause that limits the borrower's right to judicial relief; provide that no high-cost home loan can require the borrower to waive his or her right to participate in class action remedies; provide that a creditor cannot make a high-cost home loan without certification that the borrower has received counseling on the advisability of the loan; prohibit a creditor from making a high-cost home loan without regard to repayment ability; restrict when a creditor may pay a contractor under a home improvement contract from the proceeds of a high-cost home loan; prohibit a creditor from charging a borrower any fees or other charges to modify, renew, extend, or amend a high-cost home loan or to defer any payment due under the terms of a high-cost home loan; prohibit a creditor from financing any credit insurance or any other life or health insurance; prohibit a creditor from recommending or encouraging default on an existing loan prior to the closing of a high-cost home loan that refinances any portion of the existing loan; restrict when a creditor may charge a late payment fee; prohibit a high-cost home loan that allows the creditor to accelerate the indebtedness; prohibit charging a fee for informing or transmitting to any person the balance due to pay off a high-cost home loan or to provide a release upon prepayment; require the lender to provide certain disclosures at least three days prior to closing a high-cost home loan; allow the borrower to cure any default and reinstate a high-cost home loan; provide for a borrower's claims against a seller and provide for liability of assignees and other holders in high-cost home loans; prohibit bad faith attempts to avoid application of this Act; and provide for civil and administrative actions.
Jan 10-introduced in House
Feb 4-to Banking and Insurance (H)
Feb 5-posted in committee