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90_SB1076sam001
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1 AMENDMENT TO SENATE BILL 1076
2 AMENDMENT NO. . Amend Senate Bill 1076 by replacing
3 Sections 5 through 99 of the bill with the following:
4 "Section 5. Definitions. For the purpose of this Act:
5 "Mortgagee" means the holder of an indebtedness secured
6 by a mortgage of a single family residence or the entity that
7 provides the servicing of the mortgage, meaning the receipt
8 of payments from the mortgagor and the administration of the
9 loan on behalf of the entity that holds the mortgage.
10 "Mortgage insurance" means insurance, including any
11 mortgage guaranty insurance, against the nonpayment of, or
12 default on, a mortgage or loan involved in a residential
13 mortgage transaction.
14 "Mortgagor" means a natural person whose interest in a
15 single family residence is the subject of a mortgage for
16 which the mortgagee has required mortgage insurance.
17 "Private mortgage insurance" means mortgage insurance
18 other than mortgage insurance made available under the
19 federal National Housing Act, title 38 of the United States
20 Code, or title V of the Housing Act of 1949.
21 "Private mortgage insurance ratio" means a principal
22 balance outstanding on a residential mortgage equal to less
23 than 80% of the original value at the time at which the
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1 consumer entered into the original residential mortgage
2 transaction relating to the property securing the loan.
3 Section 10. Application. This Act applies only to the
4 principal single family residence of the mortgagor.
5 Section 15. Transaction notice. If at the time a person
6 enters into a transaction to obtain a mortgage for his or her
7 principal residence and the mortgagee requires mortgage
8 insurance to effect the transaction, the mortgagee shall
9 disclose in writing the current private mortgage insurance
10 ratio for the mortgage and the monthly and annual cost of
11 private mortgage insurance. The mortgagee shall furnish a
12 written statement to the person disclosing the conditions
13 under which he or she may cancel private mortgage insurance
14 and an address and telephone number which may be used to
15 contact the mortgagee to effect the cancellation.
16 Section 20. Notification statement. After July 1, 1998,
17 in addition to the requirements of Section 15 of this Act,
18 within 30 days after the end of a calendar year ending during
19 which the private mortgage insurance ratio has been exceeded,
20 the mortgagee shall inform the mortgagor in writing of the
21 procedure to cancel the private mortgage insurance together
22 with a telephone number and address to notify the mortgagee
23 of the request to effect the cancellation. The statement
24 required by this Section may be printed on or included with
25 any other annual statement that is required by any federal or
26 State law to be made by the mortgagee to the mortgagor.
27 Section 25. Effect of cancellation. Within 30 days
28 after a mortgagor's request for cancellation of private
29 mortgage insurance, the mortgagee shall effect the
30 cancellation of the private mortgage insurance. The
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1 mortgagee shall, in writing, inform the mortgagor of the
2 cancellation. This statement may be included in any monthly
3 statement provided by the mortgagee to the mortgagor. The
4 mortgagee shall not impose any fee or charge to the mortgagor
5 for the cancellation of the private mortgage insurance.
6 Section 30. Penalty.
7 (a) A mortgagee that violates this Act is guilty of a
8 petty offense and shall be fined $500.
9 (b) A mortgagee that violates this Act is liable for
10 damages to the mortgagor injured by the violation.
11 Section 40. Severability. The provisions of this Act
12 are severable under Section 1.31 of the Statute on Statutes.
13 Section 99. Effective date. This Act takes effect
14 January 1, 1998.".