H.F. No. 1840 - Summary

• Removes references to "subprime" terminology from Minnesota residential mortgage lending statutes and replaces with "investment grade" classification system based on annual percentage rate thresholds relative to U.S. Treasury securities.

• Modifies Section 58.13 to prohibit originators from offering lower investment grade loans when borrowers qualify for higher investment grade loans, unless borrower is informed and consents in writing.

• Amends Section 58.137 prepayment penalty provisions to replace "subprime loan" references with specific annual percentage rate thresholds: 2 percentage points above Treasury securities for adjustable-rate first-lien loans, 3 points for other first-lien loans, and 5 points for subordinate-lien loans.

• Repeals Section 58.02, subdivision 27, which previously defined "subprime loan," effective July 1, 2019.

• All changes effective July 1, 2019.