Fall 2019 States In Brief

California

The Governor of California signed into law Assembly Bill 539, the Fair Access to Credit Act, concerning California’s Financing Law. The Bill authorizes a finance lender with respect to a loan of a bona fide principal amount of $2,500 or more but less than $10,000 to contract for or receive charges at a rate not exceeding an annual simple interest rate of 36% plus the Federal Funds Rate. The Bill is effective January 1, 2020.

Illinois

Illinois passed House Bill 2699 which amends the Mortgage Act concerning mortgage releases. The Bill adds “a person authorized by the mortgagor, grantor, heir, legal representative, or assign” to the list of persons who may request that the mortgagee of real property make, execute, and deliver an instrument in writing releasing a mortgage or deed of trust. It also amends the time before a mortgagee or trustee is subject to penalty for failure to comply with the mortgage release provisions from one month to thirty (30) days. The Bill is effective January 1, 2020.

Illinois passed Senate Bill 1134, concerning service by publication in a judicial foreclosure action. The new section places the responsibility on the lender to cause publication, rather than the clerk of court. The Bill is effective January 1, 2020.

Indiana

Indiana issued an emergency rule concerning mortgage loan originator temporary authority. The rule makes several updates to the definitions and licensing provisions to permit a mortgage loan originator to obtain temporary authority to act. The emergency rule was effective November 24, 2019.

Maryland

Maryland amended several regulations concerning licensed mortgage lenders. One amendment updates the definition of a “higher-priced mortgage loan” to defer to federal law. These regulation amendments were effective October 4, 2019.

Montana

The Montana Department of Administration has updated its renewal fees for mortgage brokers, mortgage lenders, mortgage servicers and mortgage loan originators. The amendments were adopted on
October 29, 2019, and are effective beginning with the 2020 renewal season.

New York

The Governor of New York signed into law Assembly Bill 92 concerning mortgages being processed for modification. The Bill creates a new section in the banking law, NY CLS Bank § 6-n, in relation to a financial institution selling or transferring a mortgage during a modification. The Bill was effective November 12, 2019.

New York’s Governor also signed Senate Bill 4182 concerning a mortgage servicer’s obligations for vacant and abandoned property. The Bill was signed on August 14 and was effective immediately.

North Carolina

The North Carolina General Assembly passed Senate Bill 529, concerning fees for returned checks. The Bill increases the maximum fee permitted for processing a returned check from $25 to $35. The Bill became law without the Governor’s signature and was effective October 1, 2019.

Pennsylvania

The Pennsylvania Department of Banking announced the adjusted “base figure” for calendar year 2020. Under the Loan Interest and Protection Law, certain restrictions and limitations are applicable to loans with a loan amount equal to or less than the base figure. The adjusted base figure for calendar year 2020 is $260,404. The adjusted base figure is effective January 1, 2020.

Texas

Texas passed Senate Bill 2330, concerning temporary authority for mortgage loan originators. The Bill permits a registered mortgage loan originator, an individual licensed by another state or governmental jurisdiction, and a residential mortgage loan originator licensed by a regulatory official to engage in business as a mortgage loan originator under a different Chapter to have temporary authority. The Bill was effective November 24, 2019.

Texas adopted a new rule under its mortgage loan originator licensing regulations, which implements the requirement of the Texas Occupations Code Chapter 55 regarding licensing military service members, military veterans, and military spouses. The regulation was effective November 7, 2019.

Vermont

The Vermont Commissioner of Taxes released the “declared rate” for 2020. While Vermont does not have state high-cost loan limitations, a disclosure is required in connection with a first mortgage loan in which the borrower is expected to be charged in excess of four points or an interest rate in excess of three percent over the rate established by 32 V.S.A. § 3108 (“declared rate”). The declared rate for 2020 is 5.5%. Therefore, any first mortgage loan with an interest rate greater than 8.5% would trigger this disclosure. The rate change is effective January 1, 2020.

Washington

Washington updated its regulations under the Consumer Loan Act concerning, among other things, temporary authority to act as a mortgage loan originator. With the exception of adding provisions regarding temporary authority, the amendments are largely for clarification purposes. The regulation amendments were effective November 24, 2019.

Washington also amended its regulations under the Mortgage Broker Practices Act concerning, among other things, temporary authority to act as a mortgage loan originator. The amendments make other changes and updates that are largely for clarification purposes. These amendments to the regulation were effective November 24, 2019.

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