Submitted by Susan Luupton, Responsible Lending
Risky subprime loans have led to unprecedented foreclosures in North Carolina. HB 1817 (NC Home Loan Protection Act) was written to protect NC borrowers from these abusive home loans.
HB 1817 protects borrowers during the underwriting and origination process. It increases consumer protections against mortgage broker abuses and reins in abusive underwriting practices for rate spread loans (roughly 8-10% under current rates). New protections for rate spread loans would prohibit prepayment penalties and require full documentation of ability to repay. It also increases mortgage broker duties, includes yield spread premiums in the points and fees under existing NC law, and makes the lender liable for the acts of mortgage brokers making loans on their behalf.
HB 1817 is a compromise bill that has the support of the NC Banker's Association, the NC Credit Union League, NC NAACP, AARP-NC, the NC Justice Center, El Pueblo, the NC Council of Churches and the many other organizations that are members of the Coalition for Responsible Lending.