§14A-3-309.4. Additional disclosures for subsection 10 mortgages.
1,722 words·~8 min read·
/ok/title-14a-consumer-credit-code/14a-3-309-4·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(1)In addition to other disclosures required under this title, for each subsection 10 mortgage referred to in subsection
(10)of Section 1-301 of this title, the creditor shall provide the following disclosures in conspicuous type size:
(a)"You are not required to complete this agreement
merely because you have received these disclosures or
have signed a loan application";
(b)"If you obtain this loan, the lender will have a
mortgage on your home. You could lose your home, and
any money you have put into it, if you do not meet
your obligations under the loan”;
(c)in the case of a credit transaction with a fixed rate
of interest, the annual percentage rate and the amount
of the regular monthly payment;
(d)in the case of any other credit transaction, the
annual percentage rate of the loan, the amount of the
regular monthly payment, the amount of any balloon
payment, a statement that the interest rate and
monthly payment may increase, and the amount of the
maximum monthly payment, based on the maximum interest
rate allowed pursuant to Section 1204 of the
Competitive Equality Banking Act of 1987. The regular
payment disclosed under this paragraph shall be
treated as accurate if it is based on an amount
borrowed that is deemed accurate and is disclosed
under subparagraph
(e)of this section;
(e)for a mortgage refinancing, the total amount the
consumer will borrow, as reflected by the face amount
of the note; and where the amount borrowed includes
premiums or other charges for optional credit
insurance or debt-cancellation coverage, that fact
shall be stated, grouped together with the disclosure
of the amount borrowed. The disclosure of the amount
borrowed shall be treated as accurate if it is not
more than One Hundred Dollars ($100.00) above or below
the amount required to be disclosed; and
(f)“mortgage loan rates, closing costs and fees vary
based on many factors. These include your credit
history and financial circumstances, your employment
history, the loan-to-value that is represented by your
home and the amount of the loan you have requested,
and the type of property that will secure your loan.
The loan rate and fees could also vary based on which
creditor or broker you select. As a borrower, you
should shop around and compare loan rates and fees.
You should also consider talking to a qualified,
independent credit counselor or other experienced
financial advisor regarding the rate, fees and
provisions of this mortgage loan before you proceed.
A list of qualified, independent counselors is
available by calling the Oklahoma Department of
Consumer Credit or the Oklahoma State Banking
Department. Remember: property taxes and homeowner’s
insurance are your responsibility, and not all
creditors provide escrow services that enable them to
make those payments on your behalf. You should ask
your creditor about these services. Your payments on
existing debts contribute to your credit ratings. You
should not accept any advice to ignore your regular
payments to your existing creditors."
(a)The disclosures required by this section shall be
given not less than three
(3)business days prior to
consummation of the transaction.
(i)After providing the disclosures required by this
section, a creditor may not change the terms of
the extension of credit if such changes make the
disclosures inaccurate, unless new disclosures
are provided that meet the requirements of this
section.
(ii)A creditor may provide new disclosures pursuant
to subparagraph
(i)of this paragraph by
telephone, if:
(aa)the change is initiated by the consumer; and
(bb)at the consummation of the transaction under
which the credit is extended:
(I)the creditor provides to the consumer
the new disclosures, in writing; and
(II)the creditor and consumer certify in
writing that the new disclosures were
provided by telephone, by not later than
three
(3)days prior to the date of
consummation of the transaction.
(c)The Administrator may, if the Administrator finds that
such action is necessary to permit homeowners to meet
bona fide personal financial emergencies, prescribe
regulations authorizing the modification or waiver of
rights created under this subsection, to the extent and
under the circumstances set forth in the regulations.
(i)A subsection 10 mortgage referred to in
subsection
(10)of Section 1-301 of this title
may not contain terms under which a consumer must
pay a prepayment penalty for paying all or part
of the principal before the date on which the
principal is due.
(ii)For purposes of this subsection, any method of
computing a refund of unearned scheduled interest
is a prepayment penalty if it is less favorable
to the consumer than the actuarial method, as
that term is defined in Section 933(d) of the
Housing and Community Development Act of 1992.
(b)Notwithstanding the provisions of subparagraph
(a)of
this paragraph, a subsection 10 mortgage referred to
in subsection
(10)of Section 1-301 of this title may
contain a prepayment penalty, including terms
calculating a refund by a method that is not
prohibited under Section 933(d) of the Housing and
Community Development Act of 1992 for the transaction
in question if:
(i)at the time the subsection 10 mortgage is
consummated:
(aa)the consumer is not liable for an amount of
monthly indebtedness payments, including the
amount of credit extended or to be extended
under the transaction, that is greater than
fifty percent (50%) of the monthly gross
income of the consumer; and
(bb)the income and expenses of the consumer are
verified by a financial statement signed by
the consumer, by a credit report, and in the
case of employment income, by payment
records or by verification from the employer
of the consumer, which verification may be
in the form of a copy of a pay stub or other
payment record supplied by the consumer;
(ii)the penalty applies only to a prepayment made
with amounts obtained by the consumer by means
other than a refinancing by the creditor under
the subsection 10 mortgage, or an affiliate of
that creditor;
(iii)the penalty does not exceed in the aggregate more
than:
(aa)two percent (2%) of the loan amount prepaid
in the first twelve
(12)months after the
subsection 10 mortgage is consummated, or
(bb)one percent (1%) of the loan amount prepaid
in the second twelve
(12)months after the
subsection 10 mortgage is consummated;
the penalty does not apply after the end of the
two-year period beginning on the date on which
the subsection 10 mortgage is consummated; and
(v)the penalty is not prohibited under other
applicable law.
(c)Notwithstanding the provisions of subparagraph
(a)or
(b)of this paragraph, a subsection 10 mortgage
referred to in subsection
(10)of Section 1-301 of
this title consummated with funds advanced directly or
indirectly from a Federal Home Loan Bank may contain a
prepayment penalty.
(4)A subsection 10 mortgage referred to in subsection
(10)of Section 1-301 of this title may not provide for an interest rate applicable after default that is higher than the interest rate that applies before default. If the date of maturity of a subsection 10 mortgage referred to in subsection
(10)of Section 1-301 of this title is accelerated due to default and the consumer is entitled to a rebate of interest, that rebate shall be computed by any method that is not less favorable than the actuarial method, as that term is defined in Section 933(d) of the Housing and Community Development Act of 1992.
(5)A subsection 10 mortgage referred to in subsection
(10)of Section 1-301 of this title having a term of less than five
(5)years may not include terms under which the aggregate amount of the regular periodic payments would not fully amortize the outstanding principal balance.
(6)A subsection 10 mortgage referred to in subsection
(10)of Section 1-301 of this title may not include terms under which the outstanding principal balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of interest due.
(7)A subsection 10 mortgage referred to in subsection
(10)of Section 1-301 of this title may not include terms under which more than two periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the consumer.
(8)A creditor shall not make a payment to a contractor under a home improvement contract from amounts extended as credit under a subsection 10 mortgage referred to in subsection
(10)of Section 1- 301 of this title, other than:
(a)in the form of an instrument that is payable to the
consumer or jointly to the consumer and the
contractor; or
(b)at the election of the consumer, by a third party
escrow agent in accordance with terms established in a
written agreement signed by the consumer, the
creditor, and the contractor before the date of
payment.
(9)Any subsection 10 mortgage that contains a provision prohibited by this section shall be deemed a failure to deliver the material disclosures required under this title, for the purpose of Section 5-204 of this title.
(10)For purposes of this section, the term "affiliate" has the same meaning as in Section 2(k) of the Bank Holding Company Act of 1956.
(a)The Administrator may, by regulation or order, exempt
specific subsection 10 mortgage products or categories
of subsection 10 mortgages from any or all of the
prohibitions specified in subsections
(3)through
of this section, if the Administrator finds that the
exemption:
(i)is in the interest of the borrowing public; and
(ii)will apply only to products that maintain and
strengthen home ownership and equity protection.
(b)The Administrator, by regulation or order, shall
prohibit acts or practices in connection with:
(i)subsection 10 mortgage loans that the Board of
Governors of the Federal Reserve System has found
to be unfair, deceptive, or designed to evade the
provisions of this section; and
(ii)refinancing of subsection 10 mortgage loans that
the Board of Governors of the Federal Reserve
System has found to be associated with abusive
lending practices, or that are otherwise not in
the interest of the borrower. Added by Laws 2000, c. 217, § 12, eff. July 1, 2000. Amended by Laws 2003, c. 330, § 8, eff. Jan. 1, 2004.