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GA SB57
Bill
Status
Engrossed
3/10/2009
Primary Sponsor
Bill Hamrick
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AI Summary
- Defines "subprime home loan" as a loan where the APR exceeds the comparable U.S. Treasury securities yield by 3% or more for first-lien loans or 5% or more for subordinate-lien loans
- Prohibits prepayment fees or penalties on both subprime home loans and high-cost home loans, eliminating the previous allowance of up to 2% in the first 12 months and 1% in the second 12 months for high-cost loans
- Requires creditors making subprime home loans to verify borrowers' ability to repay based on income, credit history, employment, debt-to-income ratio, and the fully indexed interest rate assuming full amortization — prohibiting reliance solely on borrower equity
- Designates mortgage brokers as agents of the borrower, requiring them to act in the borrower's best interest, disclose total compensation, and make reasonable efforts to secure the most favorable loan terms; also prohibits compensation to or from brokers that varies based on subprime or FHA loan terms
- Bans "loan flipping" of subprime home loans — refinancing an existing loan into a new subprime loan that does not provide a reasonable, tangible net benefit to the borrower — with an effective date of July 1, 2009
Legislative Description
Georgia Fair Lending Act; definitions; provide for limitations on homeloans; fees for filling documents
Last Action
House Committee Favorably Reported
4/12/2010
Committee Referrals
Judiciary3/12/2009
Banking and Financial Institutions1/28/2009
Full Bill Text
No bill text available