Winter 2017-2018 States In Brief

California

The Governor of California signed into law Senate Bill 2, which enacts the Building Homes and Jobs Act. The Act imposes an additional recording fee that will be made available to local governments and the Department of Housing and Community Development for certain purposes. The legislation is currently effective.

Illinois

The Illinois Department of Financial and Professional Regulation adopted final amendments to the regulations implementing the Illinois Residential Mortgage License Act. The amendments repeal many existing rules and revise others to ensure consistency with underlying statutes and to reflect changes to federal laws over recent years. The amendments were effective October 6, 2017.

The Illinois General Assembly enacted House Bill 2965 which amends the Residential Mortgage License Act of 1987. The amendment takes effect on January 1, 2018.

New Jersey

The New Jersey Department of Banking and Insurance issued a bulletin adjusting the maximum principal amount for a loan to be considered “high cost” under New Jersey’s Home Ownership Security Act of 2002. The adjustment was effective for all completed applications on loans received by the lender on or after January 1, 2018.

The New Jersey Department of Banking and Insurance adopted changes to how appraisal fees are defined and charged for first mortgage loans under the New Jersey Administrative Code. The amendment was effective December 18, 2017.

Ohio

The Ohio Division of Financial Institutions released the prepayment penalty adjustment for 2018. Under Ohio law, a prepayment penalty may not be charged for the prepayment or refinancing of a residential mortgage obligation of less than $75,000 (adjusted annually) that is made or arranged by a mortgage broker, loan officer, or non-bank mortgage lender and is secured by a first lien. The dollar amount to which the prepayment penalty restriction applies is $89,261 for 2018. Therefore, effective January 1, 2018, a prepayment penalty is prohibited for a prepayment or refinancing of a residential mortgage loan of less than $89,261.

The Governor of Ohio signed into law House Bill 199 relating to mortgage lending. Specifically, this Bill creates the Ohio Residential Mortgage Lending Act for the purpose of regulating all non-depository lending secured by residential real estate, and also limits the application of the existing “Mortgage Loan Law” to unsecured loans and loans secured by other than residential real estate or a dwelling. The legislation was effective January 1, 2018.

Oregon

The Oregon Department of Consumer and Business Services adopted temporary rules related to the recently passed Mortgage Loan Servicers Practices Act. The temporary rules were effective
October 20, 2017 and the Act was effective January 1, 2018.

Pennsylvania

The Pennsylvania Department of Banking announced the adjusted “base figure” for calendar year 2018. Under the Loan Interest and Protection Law, certain disclosure requirements, fee restrictions, and other limitations are applicable to loans with a loan amount equal to or less than the base figure. The adjusted base figure for 2018 is $250,324. This new base figure was effective January 1, 2018.

The Governor of Pennsylvania signed into law Senate Bill 951, amending the Pennsylvania Mortgage Licensing Act to include mortgage servicing activity licensure. The Bill requires the Pennsylvania Department of Banking and Securities to adopt regulations in accordance with these amendments. These licensing provisions will become effective upon the effective date of the regulations that the Department adopts.

Texas

The Texas legislature passed Senate Joint Resolution 60 related to home equity lending, which was voted into law on November 7, 2017. The amendments were effective January 1, 2018. In accordance with these constitutional changes, the Finance Commission of Texas and the Texas Credit Union Commission have proposed amendments to the Texas Administrative Code.

The Finance Commission of Texas revised several of its regulations related to residential mortgage loan companies, mortgage bankers and residential mortgage loan originators. The revisions were effective as of January 7, 2018.

Vermont

The Vermont Commissioner of Taxes released the “declared rate” for 2018. While Vermont does not have state high-cost loan limitations, a high rate/high point disclosure is required for first mortgage loans where the borrower is expected to be charged more than four points and/or the interest rate (note rate) is more than three percent over the “declared rate.” The declared rate for 2018 is 4%. Therefore, a loan with an interest rate of more than 7% in 2018 would trigger this disclosure. The declared rate for 2017 was 3.6%, so this change reflects a 0.4% increase. The new rate was effective January 1, 2018.

Posted in Newsletters, States In Brief, Uncategorized

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