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H.B. 294

             1     

REGULATION OF MORTGAGE LENDERS

             2     
1999 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Sponsor: Gerry A. Adair

             5      AN ACT RELATING TO MORTGAGE FINANCING; PROHIBITING CERTAIN CONDUCT.
             6      This act affects sections of Utah Code Annotated 1953 as follows:
             7      ENACTS:
             8          70D-1-19, Utah Code Annotated 1953
             9      Be it enacted by the Legislature of the state of Utah:
             10          Section 1. Section 70D-1-19 is enacted to read:
             11          70D-1-19. Prohibited conduct.
             12          (1) For purposes of this section "residential mortgage loan" means a mortgage loan secured
             13      by a dwelling that will be owned and occupied by a signatory to the mortgage loan within 90
             14      calendar days of the execution of the mortgage loan.
             15          (2) For a transaction involving a residential mortgage loan, a person subject to the
             16      notification requirements of Section 70D-1-10 , may not:
             17          (a) propose, prepare, or cause to be prepared a document, agreement, closing statement,
             18      or any other device or scheme, that does not reflect the true terms of a transaction;
             19          (b) knowingly participate in a transaction in which a device described in Subsection (2)(a)
             20      is used;
             21          (c) participate in a transaction in which a mortgagor enters into agreement that:
             22          (i) is not disclosed to the mortgage lender; and
             23          (ii) if disclosed, may have a material effect on the terms or the granting of a mortgage loan;
             24          (d) use or propose the use of two or more purchase agreements, one of which is not made
             25      known to a prospective mortgage lender or loan guarantor;
             26          (e) provide compensation, directly or indirectly, to an appraiser for the purpose of
             27      influencing the independent judgment of the appraiser with respect to the value of any real estate


             28      which is to be covered by a residential mortgage; or
             29          (f) participate in a transaction if at the time of the transaction the person knew or should
             30      have known that h :
             30a           (i) AS A RESULT OF THE TRANSACTION, THE TOTAL OF ALL RESIDENTIAL MORTGAGE
             30b      LOANS OUTSTANDING ON THE DWELLING THAT IS SECURED BY THOSE LOANS EXCEEDS THE
             30c      FAIR MARKET VALUE OF THE DWELLING; AND
             30d          (ii) BECAUSE THE RESIDENTIAL MORTGAGE LOANS EXCEED THE FAIR MARKET VALUE OF
             30e      THE DWELLING AS DESCRIBED IN SUBSECTION (2)(f)(i), h the mortgagor would not be able to pay
             30f      the mortgage loan in full.




Legislative Review Note
    as of 2-2-99 10:59 AM


A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel


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