House Sponsors: DAVIS,STEVE-FOWLER-FORBY-HOFFMAN-HOLBROOK. Short description: CIV PRO-MORTGAGE-JOB LOSS Synopsis of Bill as introduced: Amends the Mortgage Foreclosure Article of the Code of Civil Procedure. Provides that, if a mortgagor of a single family residence experiences a temporary or permanent loss of employment because of a layoff, lockout, or strike and the employment had been the primary source of income of the mortgagor's household, the mortgagor may notify the mortgagee of those facts, the mortgagee may require the mortgagor to supply verification, and the mortgagor shall then supply verification. Provides that the mortgagee not then initiate or proceed with an action to foreclose on the mortgage or declare a default. Provides that the mortgagor shall make monthly interest and escrow payments, and when the mortgagor again becomes employed or one year has elapsed since the mortgagor or mortgagors began making monthly interest and escrow payments, the mortgagor shall resume regular monthly payments of principal and interest and shall remit additional monthly sums in equal monthly amounts that will pay in full, over a 6 month period, all principal that was unpaid during the loss of employment. Contains provisions concerning failure to comply, court stays, and applicability. FISCAL NOTE (Office of Banks and Real Estate) HB 2227 has no fiscal impact on the Office of Banks and Real Estate. Financial entities (mortgagees) would lose compound interest from delayed principal payments for up to an 18-month period. The Office of Banks and Real Estate is unable to cal- culate the fiscal impact on financial entities, because of un- known variables. HOUSING AFFORDABIILITY NOTE The proposed bill does not identify at what point in time the borrower may/shall notify the lender of his/her loss of emplyo- ment. As such, the financial impact on the lender cannot be determined. Both lenders and insurance companies will assume a higher degree of risk in making mortgage loans under this bill's provisions. To compensate for potentially higher losses, lenders may likely charge higher interest rates and insurance companies may establish higher premiums for mortgage insurance. In both cases, these can only be assumed but cannot be predict- ed or calculated with any degree of accuracy. Last action on Bill: SESSION SINE DIE Last action date: JAN-07-2003 Location: House Amendments to Bill: AMENDMENTS ADOPTED: HOUSE - 0 SENATE - 0 END OF INQUIRY Full Text Bill Status