Synopsis As Introduced Creates the Predatory Home Loan Practices Act. Prohibits various practices and charges in connection with home loans made to persons with respect to their primary residence. Prohibits the imposition of prepayment penalties, flipping of loans, and lender financing of credit insurance. Imposes limitations on high-cost loans. Prohibits loans unless the lender reasonably believes that the borrower is able to make scheduled payments to repay the loan without respect to the borrower's equity in the property. Authorizes a borrower to obtain damages for violations of the Act.
Replaces everything after the enacting clause. Amends the Residential Mortgage License Act of 1987. Provides that the Attorney General may enforce violations of certain provisions under the Consumer Fraud and Deceptive Business Practices Act. Provides that a borrower injured by a violation of certain standards, duties, prohibitions, or requirements in the Act shall have a private right of action. Provides that no licensee shall make, provide, or arrange for a residential mortgage loan without verifying the borrower's reasonable ability to pay the principal and interest on the loan, real estate taxes, homeowner's insurance, assessments, and mortgage insurance premiums. Provides for the fiduciary duty of a broker. Prohibits prepayment penalties. Provides that a licensee shall provide notice of change in loan terms to a borrower. Provides that when comparing different loans, the licensee must not state or imply that monthly loan payments, if they include amounts escrowed for payment of property taxes and homeowner's insurance, are comparable with monthly loan payments that do not include these amounts. Requires lenders to provide the borrower with a complete copy of any appraisal. Prohibits licensees from making verbal promises to refinance on more favorable terms. Prohibits the following activities by a loan broker or lender: (i) equity stripping and loan flipping and (ii) encouraging default. Adds a severability clause. Amends the Interest Act. Provides that certain provisions of the Interest Act apply to a residential mortgage loan. Makes other changes.
House Floor Amendment No. 3 In a provision concerning the verification of a borrower's ability to repay, provides that for a residential mortgage loan made by a licensee (rather than all residential mortgage loans), the borrowers income and financial resources must be verified by tax returns, payroll receipts, bank records, or other similarly reliable documents. Provides that licensees (instead of lenders) are required to provide a borrower with a copy of all appraisals. Makes a technical change.