|
April 24, 2008. Kentucky passed
a bill amending several provisions of the Mortgage Loan Company
and Mortgage Loan Broker Act (MLCMLBA), enacting the Kentucky
Residential Mortgage Fraud Act, and amending the state's
high-cost home loan laws. Among the amendments to the MLCMLBA:
mortgage loan originators and mortgage loan processors must
obtain a certificate of registration; licensing exemptions for
HUD-approved lenders and brokers, non-profit corporations, and
certain affiliates have been revised; all persons applying for
an initial license, registration, or claim of exemption must
pass a written examination (effective January 1, 2010); mortgage
brokers are deemed to have a duty of good faith and fair dealing
and are required to act in a borrower's best interest; a
mortgage loan may not be originated if the "total net income"
received by the lender or broker exceeds the greater of $2,000
or 4%; and the Office of Financial Institutions is authorized to
participate in the nationwide mortgage licensing system.
Additional provisions of the
MLCMLBA affected by the bill include office requirements,
license and registration renewal dates, notification
requirements, prepayment penalties, prescreened trigger leads,
recordkeeping requirements, suspension and revocation
provisions, and prohibited acts. In addition, the bill changes
the points and fees threshold for determining whether a loan is
considered a "high-cost home loan," and requires lenders to
timely notify borrowers of any "material changes" made to a
high-cost home loan prior to closing. Additional amendments to
the state's high-cost home loan laws include provisions
pertaining to: borrower repayment ability; prepayment penalties;
borrower counseling; interest-only loans; escrow accounts; late
fees; payoff statements; and servicing requirements.
Finally, the bill creates the
Kentucky Residential Mortgage Fraud Act, which makes residential
mortgage fraud a felony. |
