9-A §8-206-A. High-rate, high-fee mortgages - Maine Statutes

Title 9-A: MAINE CONSUMER CREDIT CODE

Article 8: TRUTH-IN-LENDING

Part 2: DISCLOSURE REQUIREMENTS

§8-206-A. High-rate, high-fee mortgages

1. In addition to other disclosures required under this article, for each high-rate, high-fee mortgage the creditor shall provide to the consumer the following disclosures in conspicuous type size.

A. "You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application." [1995, c. 326, §5 (NEW).]

B. "If you obtain this loan, the lender will have a mortgage on your home. You could lose your home and any money you have put into it if you do not meet your obligations under the loan." [1995, c. 326, §5 (NEW).]

[ 1995, c. 326, §5 (NEW) .]

2. In addition to the disclosures required under subsection 1, the creditor shall disclose:

A. For a credit transaction with a fixed rate of interest, the annual percentage rate and the amount of the regular monthly payment; or [1995, c. 326, §5 (NEW).]

B. For any other credit transaction, the annual percentage rate of the loan, the amount of the regular monthly payment, a statement that the interest rate and monthly payment may increase and the amount of the maximum monthly payment based on the maximum interest rate allowed pursuant to the federal Competitive Equality Banking Act of 1987, Public Law No. 100-86, Section 1204, 101 Stat. 552, 662 (1987). [1995, c. 326, §5 (NEW).]

[ 1995, c. 326, §5 (NEW) .]

3. The disclosures required by this section must be given to the consumer at least 3 business days prior to the consummation of the transaction.

[ 1995, c. 326, §5 (NEW) .]

4. After providing the disclosures required by this section, a creditor may not change the terms of the extension of credit if the changes make the disclosures inaccurate, unless new disclosures are provided that meet the requirements of this section.

A. A creditor may provide new disclosures by telephone under the following terms:

(1) The change is initiated by the consumer; and

(2) At the consummation of the transaction under which the credit is extended, the creditor provides to the consumer the new disclosures in writing and the creditor and the consumer certify in writing that those new disclosures were provided by telephone at least 3 days prior to the date of consummation of the transaction. [1995, c. 326, §5 (NEW).]

[ 1995, c. 326, §5 (NEW) .]

5. Upon determining that a modification of the disclosure process is necessary to permit consumers to meet bona fide personal financial emergencies, the administrator may adopt rules authorizing the modification or waiver of the rights of disclosure created under subsections 3 and 4 to the extent allowed under the regulations.

[ 1995, c. 326, §5 (NEW) .]

6.

[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §6 (RP) .]

7.

[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §7 (RP) .]

8.

[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §8 (RP) .]

9.

[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §9 (RP) .]

10. A high-rate, high-fee mortgage may not include terms under which the outstanding principal balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of interest due.

[ 1995, c. 326, §5 (NEW) .]

11.

[ 2007, c. 273, Pt. A, §§37,41 (AFF); 2007, c. 273, Pt. A, §10 (RP) .]

11-A. A creditor who makes a high-rate, high-fee mortgage shall report both the favorable and unfavorable payment history of the consumer to a nationally recognized consumer credit reporting agency at least annually during the period the creditor holds or services the loan.

[ 2003, c. 49, §3 (NEW) .]

12.

[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §11 (RP) .]

12-A.

[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §12 (RP) .]

13.

[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §13 (RP) .]

13-A. A creditor may not advertise that refinancing preexisting debt with a high-rate, high-fee mortgage will reduce a consumer's aggregate monthly debt payment without also disclosing that the high-rate, high-fee mortgage may increase both the consumer's aggregate number of monthly debt payments and the aggregate amount paid by the consumer over the term of the high-rate, high-fee mortgage.

[ 2003, c. 49, §5 (NEW) .]

13-B.

[ 2007, c. 273, Pt. A, §§37,41 (AFF); 2007, c. 273, Pt. A, §14 (RP) .]

13-C.

[ 2007, c. 273, Pt. A, §§37,41 (AFF); 2007, c. 273, Pt. A, §15 (RP) .]

14. A mortgage that contains a provision prohibited by this section is deemed a failure to deliver the material disclosures required under this article for the purpose of section 8-204.

[ 1995, c. 326, §5 (NEW) .]

15. The administrator may, by rule or order, exempt specific mortgage products or categories of mortgages from any of the prohibitions specified in subsections 10 and 11-A if the administrator finds that the exemption:

A. Is in the interest of the borrowing public; and [1995, c. 326, §5 (NEW).]

B. Applies only to products that maintain and strengthen home ownership and equity protection. [1995, c. 326, §5 (NEW).]

[ 2007, c. 273, Pt. C, §7 (AMD) .]

16. The administrator, by regulation or order, shall prohibit acts or practices in connection with:

A. Mortgage loans that the administrator finds unfair, deceptive or designed to evade the provisions of this section; and [1995, c. 326, §5 (NEW).]

B. Refinancing of mortgage loans that the administrator finds are associated with abusive lending practices or that are otherwise not in the interest of the borrowing public. [1995, c. 326, §5 (NEW).]

[ 1995, c. 326, §5 (NEW) .]

16-A.

[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §16 (RP) .]

16-B.

[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §17 (RP) .]

17.

[ 2007, c. 273, Pt. A, §§37,41 (AFF); 2007, c. 273, Pt. A, §18 (RP) .]

18. A political subdivision of this State is prohibited from enacting, issuing and enforcing ordinances, resolutions, rules, regulations, orders, requests for proposals or requests for bids pertaining to the making of a high-rate, high-fee mortgage by a person who:

A. Is subject to the jurisdiction of the Bureau of Consumer Credit Protection or the Bureau of Financial Institutions, including activities subject to this article; [2003, c. 49, §6 (NEW); 2007, c. 273, Pt. B, §5 (REV); 2007, c. 695, Pt. A, §47 (AFF).]

B. Is subject to the jurisdiction or regulatory supervision of the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, the Federal Deposit Insurance Corporation, the Federal Trade Commission or the United States Department of Housing and Urban Development; [2003, c. 49, §6 (NEW).]

C. Is subject to the jurisdiction or regulatory supervision of a department or agency of another state; or [2003, c. 49, §6 (NEW).]

D. Originates, purchases, sells, assigns, securitizes or services property interests or obligations created by financial transactions or loans made, executed or originated by a person referred to in paragraph A, B or C or assist or facilitate such transactions. [2003, c. 49, §6 (NEW).]

This subsection applies to all ordinances, resolutions, rules, regulations, orders, requests for proposals and requests for bids pertaining to financial or lending activities, including any ordinances, resolutions, rules, regulations, orders, requests for proposals and requests for bids disqualifying persons from doing business with a political subdivision based upon the making of a high-rate, high-fee mortgage or imposing reporting requirements or any other obligations upon persons regarding the making of a high-rate, high-fee mortgage.

This subsection applies retroactively to all ordinances, resolutions, rules, regulations, orders, requests for proposals and requests for bids in existence on the effective date of this subsection.

[ 2003, c. 49, §6 (NEW); 2007, c. 273, Pt. B, §5 (REV); 2007, c. 695, Pt. A, §47 (AFF) .]

SECTION HISTORY

1995, c. 326, §5 (NEW). 2003, c. 49, §§2-6 (AMD). 2007, c. 273, Pt. A, §§37, 41 (AFF). 2007, c. 273, Pt. A, §§6-18 (AMD). 2007, c. 273, Pt. B, §5 (REV). 2007, c. 273, Pt. B, §7 (AFF). 2007, c. 273, Pt. C, §7 (AMD). 2007, c. 695, Pt. A, §47 (AFF).