Local News

House Gives Final Approval to New Mortgage Lending Rules

Posted August 16, 2001

— Legislation placing licensing requirements and establishing other standards for mortgage middlemen was given final approval Thursday by the state House.

The bill, approved in a 99-0 vote, would also require mortgage brokers to make reasonable efforts to find a loan that is ``reasonably advantageous to the borrower.''

The legislation now goes back to the Senate, which must decide whether to accept or reject House changes. If senators reject those changes, negotiators would be appointed to work out the differences.

Attorney General Roy Cooper praised the House action.

"With this new law, we'll be holding mortgage brokers to high standards and we'll be getting rid of those who would cheat their customers,'' said Cooper, who worked on the legislation and was a key advocate of other lending law reforms while in the Senate. "Buying a home is often the single largest purchase a consumer will make, and it's critical that they get a fair deal."

The bill would also forbid brokers from running misleading ads and prohibit them from setting prepayment penalties on loans of $150,000 or less.

Brokers now originate a majority of home mortgages in the state. A decade ago, the loans primarily were made by banks and other financial institutions.

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