Policy & Legislation

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North Carolina 2008 Legislation

  • Regulate Mortgage Servicers (HB2463)
    This legislation requires mortgage loan servicers doing business in North Carolina to be licensed and imposes new standards on their loan collection activities, providing more protection for North Carolina homeowners
  • Emergency Foreclosure Reduction Program (HB 2623)
    This legislation creates a program within the Commissioner of Banks’ office designed to reduce the number of subprime foreclosures in North Carolina.
  • Earlier Notification of Mortgage Servicer Fee (HB 2188)
    This legislation does two things. First, it made technical corrections to provisions enacted last year providing new protections for consumers in loan servicing. Second, the law banned subprime yield-spread premiums (YSPs).

North Carolina's Predatory Mortgage Lending Law

  • Summary of 2007 North Carolina Predatory Lending Law (HB1817)

    This new law: Defines subprime loans and provides new protections. Strengthens the 1999 NC Predatory Lending Law by including yield spread premiums (kickbacks to brokers) in the 5% fee trigger for high cost home loans. If a loan is determined to be a high cost home loan, additional protections apply. Strengthens broker duties and gives the NC Commissioner of Banks new authority.

  • Frequently Asked Questions about the 2007 NC Predatory Lending Law (HB 1817) 
    Specifically, for subprime loans, the law bans prepayment penalties, prevents lenders from approving loans based solely on artificially low interest rates that the lender knows will rise, and requires verification and documentation that the borrower can make the monthly payments including property taxes and insurance.  The law requires mortgage brokers to find a loan that is "reasonably advantageous" to the borrower, and changes the 1999 law to include broker compensation (known as "yield spread premiums") when determining which loans receive extra protections.  The bill also allows the NC Commissioner of Banks to ban abusive lending practices.
  • Session Law 2007-352 House Bill 1817
    The 2007 NC Predatory Lending Law, House Bill 1817, protects North Carolina homeowners against dangerous lending practices that put them at high risk of losing their home.  Specifically, for subprime loans, the law bans prepayment penalties, prevents lenders from approving loans based solely on artificially low interest rates that the lender knows will rise, and requires verification and documentation that the borrower can make the monthly payments including property taxes and insurance.  The law requires mortgage brokers to find a loan that is "reasonably advantageous" to the borrower, and changes the 1999 law to include broker compensation (known as "yield spread premiums") when determining which loans receive extra protections.  The bill also allows the NC Commissioner of Banks to ban abusive lending practices.

Protect Homeowners & Reduce Foreclosures (HB 1374)

  • Summary of House Bill 1374, "Protect Homeowners & Reduce Foreclosures"

    This law makes the foreclosure process fairer and helps protect NC homeowners from abusive practices by the companies that collect and process mortgage payments ("loan servicers").  It also addresses two recent NC Supreme Court decisions that made it harder for homeowners to sue for illegal lending practices.

  • Frequently Asked Questions about the 2007 Protect Homeowners & Reduce Foreclosure Law (HB 1374)
    FAQ for HB 1374. What does the new mortgage servicing and foreclosure law do? N.C. has some of the strongest anti-predatory lending laws in the country.  Why didn’t laws already on the books stop recent lending abuses? How does this law protect homeowners from loan servicing abuses? How does this law make the foreclosure process fairer for homeowners? How does a request for information make the foreclosure process fairer for homeowners? How does a homeowner make a request for information? What is the difference between this NC “request for information” and the federal “qualified written request” or QWR? What NC Supreme Court decisions are reversed and why?  

  • Session Law 2007-351 HB 1374
    Actual language of House Bill 1374. The "Protect Homeowners & Reduce Foreclosures" law, passed unanimously in both the North Carolina House and Senate and was signed into law by Governor Easley on August 16, 2007. This law makes the foreclosure process fairer and helps protect NC homeowners from abusive practices by the companies that collect and process mortgage payments ("loan servicers").  It also addresses two recent NC Supreme Court decisions that made it harder for homeowners to sue for illegal lending practices.

Mortgage Broker Licensing Law (SB 904)

  • Summary 2001 Mortage Broker Licensing Law
    Summary of  the 2001 Mortgage Broker Licensing Law, SB 904. On August 29, 2001, Governor Mike Easley signed into law the NC Mortgage Lending Act, Senate Bill 904. This law passed both houses with strong support. It sets new licensing requirements for mortgage bankers, mortgage brokers and mortgage loan officers. It is the second phase of predatory lending reform in NC, following the NC Predatory Lending Act passed in 1999, which regulates the terms of a predatory loan. Both laws will substantially protect the equity that NC homeowners have invested in their homes by further curbing abusive lending practices. This legislation was endorsed by all major financial trade associations in the state as well as the Coalition for Responsible Lending.
  • FAQ 2001 NC Mortgage Broker Licensing Law
    FAQ for 2001 Mortgage Broker Licensing Law. What does this new law do? How is this new law different from the NC Predatory Lending Law passed in 1999?  What are the most important new consumer protections included in this law? What are the main licensing requirements included in the law? Who is covered by this law? Who is exempt? What are the new affirmative duties for mortgage brokers? What prohibited acts are included in the law? Why does this law repeat provisions already covered under the NC Predatory Lending Law, like the prepayment penalty prohibition?
  • Session Law 2001-393 SB 904 Mortgage Broker Licensing law
    An act to enact the mortgage lending act to govern mortgage brokers and bankers

NC 1999 Predatory Lending Law (SB 1149)