Fall 2014 States In Brief

California AB 1770

The Governor of California signed into law Assembly Bill 1770, which implements new requirements regarding the payoff of home equity lines of credit. This bill is effective    July 1, 2015 and will remain in effect until July 1, 2019.

California SB 1051

The Governor of California signed into law Senate Bill 1051, which repeals the sunset date for the California Buyer’s Choice Act. Current California law prohibits a mortgagee or beneficiary under a deed of trust who acquired title to a 1-4 unit residential property at a foreclosure sale from requiring as a condition of the sale that the buyer purchase title insurance or escrow services from a particular provider. Current law provides for the repeal of this prohibition effective January 1, 2015. This legislation repeals the sunset date, meaning the prohibition will continue to be in effect indefinitely. The legislation is effective January 1, 2015.

District of Columbia Regulations

The Acting Commissioner of the District of Columbia Department of Insurance, Securities and Banking amended its regulations implementing D.C.’s foreclosure mediation program. The amended regulations clarify the operation of the foreclosure mediation programs by adjusting the required timeframes for several notice, mailing, and other requirements; removing the mediation administrator’s authority to accept certain documents on behalf of the lender; changing the process for requesting and issuing a final mediation certificate; and establishing a process to appeal findings of the mediation administrator. The regulations were effective June 27, 2014.

Georgia DBF Rules

The Georgia Department of Banking issued final rules regarding record-keeping requirements and administrative fines. The final rules were effective September 18, 2014.

The final rules clarify that financial institutions may retain records electronically. The final rules also add an additional provision to the administrative fines section. This new provision states that any licensed mortgage originator that fails to report any of the events set forth in O.C.G.A. section 7-1-1007(d) within ten days of obtaining knowledge of the underlying events is subject to a fine of $1,000 per occurrence.

Illinois SB 2730

The Governor of Illinois signed into law SB 2730, which expedites the foreclosure process when it is discovered, after a foreclosure has been completed, that a junior lienholder was not named in the foreclosure complaint. This bill is currently effective.

New York Subprime Calculation Rule Extended

The New York Department of Financial Services extended its emergency rule which adjusts by 75 basis points the calculation used to trigger the definition of a subprime home loan in New York for most FHA-insured loans. The emergency rule will continue to be in effect until December 14, 2014.

New Jersey SB 1229

The Governor of New Jersey signed into law SB 1229, which revises the notice requirements to municipality clerks during foreclosure proceedings. The legislation also authorizes municipalities to adopt ordinances regulating the care, maintenance, security, and upkeep of the exterior of vacant and abandoned properties on which a summons and complaint in an action of foreclosure has been filed. The legislation was effective on August 15, 2014.

North Carolina HB 1133

The Governor of North Carolina signed into law House Bill 1133, which makes various technical corrections to existing law. The legislation was effective August 11, 2014.

Currently law requires a mortgage servicer to mail a notice containing specific information to the borrower at least 45 days before foreclosure is initiated. Among other things, current law requires that the notice contain the address, telephone number, and other contact information for the consumer complaint section of the Office of the Commissioner of Banks. The legislation revises this section to require this information for the State Home Foreclosure Prevention Project of the Housing Finance Agency instead.

The legislation also revises the definition of “home loan” as that term is used in the interest and usury provisions applicable to certain first lien loans and amends the Good Funds Settlement Act.

Oklahoma Dollar Amount Changes

The Oklahoma Department of Consumer Credit released changes in dollar amounts under the Uniform Consumer Credit Code. Certain amounts are subject to change every year. The maximum late charge for consumer loans is not less than $5.00 and not more than the greater of $24.50 (for 2014) or 5% of an installment delinquent for more than 10 days. This change was effective July 1, 2014.

Oregon Licensing Rules

The Oregon Department of Consumer and Business Services/Division of Finance and Corporate Securities amended the rules pertaining to mortgage lending licensing to align them with the Nationwide Licensing System and Registry and updating citations referenced in the rules. These rules are effective January 1, 2015. 

Rhode Island SB 2447

The Governor of Rhode Island signed into law identical SB 2447 and HB 7792, which amend current law regarding closing or settlement protection. The legislation provides that closing or settlement protection must be provided in connection with any lender’s title policy on residential property of four units or less. The legislation further provides that the fee for such closing or settlement protection must be filed with and approved by the state insurance commissioner. The legislation is currently effective.

Vermont Regulations

The Vermont Department of Financial Regulation adopted regulations that update the rules for the licensing and regulation of mortgage brokers. The new regulations were effective October 1, 2014.

Posted in Newsletters, States In Brief


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