SB 1026 Summary

• Prohibits mortgage brokers from making residential mortgage loans without first verifying the borrower's reasonable ability to pay principal, interest, taxes, insurance, and other required payments using reliable documents like tax returns, payroll receipts, or bank records.

• Requires variable-rate loans to be evaluated based on fully indexed rates and amortization schedules that achieve full payoff over the loan's life.

• Prohibits "churning" (knowingly arranging loans that lack reasonable tangible net benefit to the borrower) and intentional predatory lending designed to result in foreclosure and title acquisition.

• Bans steering borrowers to lower investment grade loans when they qualify for higher investment grade loans, unless the borrower is informed and provides written consent.

• Prohibits charging fees for products or services not actually provided, misrepresenting costs to third parties, compensating appraisers to influence property valuations, and updates pronouns in existing statutes to gender-neutral language.

• Requires mortgage brokers to reasonably supervise licensed loan originators they employ.