§ 24-10. Maximum fees on loans secured by real property. - North Carolina Statutes

§24‑10.  Maximum fees on loans secured by real property.

(a)        No lender on loansmade under G.S. 24‑1.1 shall charge or receive from any borrower or anyagent for a borrower, any fees or discounts unless otherwise allowed where theprincipal amount is less than three hundred thousand dollars ($300,000) and issecured by real property, which fees or discounts in the aggregate shall exceedtwo percent (2%) if a construction loan on other than a one or two familydwelling, and one percent (1%) on any other type of loan; provided, however, ifa single lender makes both the construction loan and a permanent loan utilizingone note, the lender may collect the fees as if they were two separate loans. Except as provided herein or otherwise allowed, no party shall pay for thebenefit of the lender any other fees or discounts.

(b)        Any loan made underG.S. 24‑1.1 in an original principal amount of one hundred thousanddollars ($100,000.00) or less may be prepaid in part or in full, after 30 daysnotice to the lender, with a maximum prepayment fee of two percent (2%) of theoutstanding balance at any time within three years after the first payment ofprincipal and thereafter there shall be no prepayment fee, provided that thereshall be no prepayment fee charged or received in connection with any repaymentof a construction loan; and except as herein provided, any lender and anyborrower may agree on any terms as to prepayment of a loan.

(c)        "Constructionloan" means a loan which is obtained for the purpose of financing fully,or in part, the cost of constructing buildings or other improvements upon realproperty and the proceeds of which, under the terms of a written contractbetween a lender and a borrower, are to be disbursed periodically as suchconstruction work progresses; and such loan shall be payable in full not laterthan 18 months in case of a loan made under the provisions of G.S. 24‑1.1(1)or 36 months in case of any other construction loan made after the execution ofthe note by the borrower.  A construction loan may include advances for thepurchase price of the property upon which such improvements are to beconstructed.

(d)        (1)        Anylender may charge to any person, firm or corporation that assumes a loan,secured by real property, the following fee:

a.         Where the mortgageor deed of trust contains a due on sale clause, a fee not to exceed fourhundred dollars ($400.00); provided, however, that if the original obligor isnot released from liability on the obligation, the fee shall not exceed onehundred twenty‑five dollars ($125.00).

b.         Where the mortgageor deed of trust does not contain a due on sale clause, a fee not to exceed onehundred twenty‑five dollars ($125.00).

The fees authorized by thissubsection may be paid in whole or in part by any party but the total shall notexceed the maximum fees set forth herein.

(2)        For purposes of thissubsection, the term "due on sale clause" means a contract provisionthat authorizes a lender to declare immediately due and payable all sumssecured by the lender's security instrument if all or any part of the securedproperty, or an interest therein, is sold or transferred without the lender'sprior written consent or contrary to the requirements of the mortgage or thedeed of trust.  For purposes of this subsection, no lender shall exercise itsrights under the due on sale clause if prohibited by federal law as of the dateof execution of the contract containing the clause.

(e), (f)  Repealed by SessionLaws 1985, c. 755, s. 2.

(g)        Notwithstanding thelimitations contained in subsection (a) of this section, a lender described inG.S. 24‑1.1A(a)(2) may charge or receive from any borrower or any agentfor a borrower, fees or discounts which in the aggregate do not exceed twopercent (2%) on loans made under G.S. 24‑1.1 or G.S. 24‑1.2(2) whensuch loans are secured by a second or junior lien on real property.  The feesor discounts are fully earned when the loan is made and are not a prepaymentpenalty under this Chapter or any other law of this State.

(h)        A bank, savings andloan association, savings bank, or credit union, or any subsidiary or affiliatethereof organized under the laws of this State or the United States, may chargea party to a loan secured by real property a reasonable fee as may be agreedupon by the parties for an appraisal performed by an employee of the bank,savings and loan association, savings bank, or credit union, or any subsidiaryor affiliate thereof.  Upon the request of the borrower, the lender shallprovide at no additional charge to the borrower a copy of any appraisal forwhich the lender has collected a fee under this subsection.  Provision of thecopy of an appraisal shall not be construed to create or imply any warrantywhich does not otherwise exist by the lender as to the accuracy of the appraisal.(1967, c. 852, s. 1; 1969, c. 40; c. 1303, s. 6; 1971, c. 1168; 1979,c. 684; c. 849, s. 1; c. 969; 1981, c. 933; 1983, c. 541, s. 1; 1985, c. 154,s. 2; c. 755, s. 2; 1991, c. 506, s. 5.)