Today's Trends in Credit Regulation

Recent State Mortgage Law Developments
By Peter L. Cockrell

Half a decade later, states continue to address issues perceived as having precipitated the national mortgage crisis by passing more and more legislation. In an effort assist mortgage lenders in the never-ending task of achieving compliance, we offer you the following quick survey of several recent state mortgage law developments.

California. California recently passed a law impacting documentation requirements for reverse mortgages. The new requirement provides that the reverse mortgage counseling certification required by Cal. Civ. Code § 1923.2 must indicate whether the counseling was conducted in person, unless the borrower elected to receive the counseling in another manner. This new requirement was effective January 1, 2013. The full text of the law is available here: Stats 2012 ch 641 § 1 (AB 2010)

Illinois. Illinois recently passed legislation amending the effective date of certain provisions of its High Risk Home Loan Act, 815 ILCS 137/1 et seq. The relevant provisions impact documentation and calculations relative to high risk home loans. The amendments delay the effective date for the provisions (originally effective January 1, 2013) until the effective date of federal regulations implementing Sections 1431, 1432, and 1433 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Michigan. Michigan recently amended its Mortgage Brokers, Lenders, and Servicers Licensing Act, Consumer Mortgage Protection Act, and Redlining Act. These statutes were amended to exclude from coverage loans the proceeds of which are not used primarily for a personal, family or household purpose, i.e., commercial loans.

Ohio. Ohio passed legislation amending its law regulating interest rates. The amendments impact interest rate calculations. No penalties may be imposed on prepayment or refinancing of a residential mortgage loan made or arranged by a mortgage broker, loan officer, or non-bank mortgage lender, of less than $85,080. The amendments were effective January 1, 2013. See

Pennsylvania. Pennsylvania amended certain calculations and disclosures relating to its Loan Interest and Protection Law. The dollar amount for loans subject to the Loan Interest and Protection Law was increased to an original bona fide principal amount of $234,692 or less. The dollar amount for 2012 was $230,110 or less. The amendments were effective January 1, 2013. See 41 Pa. Stat. § 101, available at

Peter L. Cockrell is an associate in the Hanover, MD office of Hudson Cook, LLP. Peter can be reached at 410-865-5418 or by email at

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