North Carolina Becomes First State To Ban Overcharging By Mortgage Broker

18 Aug North Carolina Becomes First State To Ban Overcharging By Mortgage Broker

NC Governor Mike Easely signed a law making NC the first state to ban mortgage brokers from charging borrowers for unnecessary and unneeded surcharges such as “yield spread premiums” which essentially gives a kick-back to brokers who guided borrowers into higher interest loans subprime loans – whether they need it or not. The Center for Responsible Lending issued a press release North Carolina Acts to Rein in Reckless Home Lending with the passage of the North Carolina Home Loan Protection Act (HB 1817). According to the CRL

The new law directly addresses the current subprime crisis, weeding out questionable business practices on mortgage financing that are driving massive subprime foreclosures. A key provision in the law requires lenders to verify that their customers have the ability to repay the loans they are offered. This is particularly important for subprime mortgages with adjustable interest rates, since lenders must consider future rate increases before approving loans.

“North Carolina is simply saying that lenders must return to common-sense underwriting practices,” said Michael Calhoun, President of the Center for Responsible Lending. “Until the subprime market veered out of control, all reputable lenders documented income and verified a home buyer’s ability to repay the mortgage.”

Susanne Robicsek, Charlotte NC Bankruptcy Lawyer

Related Posts Plugin for WordPress, Blogger...
The following two tabs change content below.
Concentrating in Consumer Bankruptcy Law since 1988; Wake Forest Law School JD 1987 Law Office of Susanne M. Robicsek since 1993, Law Clerk to Judge Rufus Reynolds, US Bankruptcy Judge for Middle District of NC; Burns Price & Arneke, PA, David Badger and Associates, PA.

Latest posts by Susanne Robicsek, North Carolina Bankruptcy Attorney (see all)

No Comments

Sorry, the comment form is closed at this time.