0112-hb 1373

CHAPATER 112

HB 1373 - FINAL VERSION

AN ACT relative to payments of first and second mortgage home loans.

SPONSORS: Rep. Francoeur, Rock 22; Rep. T. Reardon, Merr 23; Rep. G. Marshall, Graf 2; Sen. Fernald, Dist 11; Sen. Fraser, Dist 4

This bill requires lenders of a first or second mortgage home loan where payments will be applied on the date received to provide to the borrower, at the time of application for the loan, a written disclosure which explains how payments will be applied.

This bill also prohibits a prepayment penalty on a second mortgage home loan which has been in existence for 5 years.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT relative to payments of first and second mortgage home loans.

Be it Enacted by the Senate and House of Representatives in General Court convened:

112:1 New Paragraph; Written Disclosure Required; First Mortgage Home Loans; Interest Computation. Amend RSA 397-A:14 by inserting after paragraph II the following new paragraph:

III. For loans where the payment is applied on the date received, the licensee shall provide to the borrower, at the time the loan application is taken, a separate written disclosure which explains how the payments will be applied.

112:2 New Paragraph; Written Disclosure Required; Second Mortgage Home Loans; Interest Computation. Amend RSA 398-A:2 by inserting after paragraph VI the following new paragraph:

VI-a. For loans where the payment is applied on the date received, the licensee shall provide to the borrower, at the time of application for the loan, a separate written disclosure which explains how the payments will be applied.

112:3 Second Mortgage Home Loans; Prepayment Penalties Prohibited. Amend RSA 398-A:2, III to read as follows:

III. The borrower shall have the right to anticipate his or her debt in whole or in part upon payment of any prepayment penalty agreed upon between borrower and licensee, provided, however, that any penalty shall be clearly set forth in the loan documents; except that there shall be no penalty charged for prepayment of a second mortgage home loan after the loan has been in existence for 5 years. When an open-end loan agreement providing for advances from time to time by the licensee exists between the borrower and the licensee, monthly loan payments shall be selected by the borrower as stated in the note or open-end agreement.