HB 1254 -- High-Cost Loans

Sponsor:  Thompson

This bill regulates high-cost home loans and establishes certain
lender reporting requirements.  High-cost loans are defined by
the bill by reference to interest rate, points, and fees.  The
bill prohibits specific practices, including prepayment
penalties, issuing high-cost loans stipulating negative
amortization, "flipping," making misleading statements about a
residential home loan transaction, and compensating or
intimidating appraisers to influence their judgment with regard
to the value of the real estate.

The bill penalizes persons who in bad faith attempt to avoid
application of the provisions.  High-cost loan lenders acting in
good faith who fail to comply with the bill's provisions will not
be deemed violators if they take specified steps to comply.
Lenders who violate the bill's provisions are subject to
forfeiture of all principal and interest on loans made in
violation.

The bill requires lenders, including those with certain federal
reporting exemptions, to report to the Director of the Division
of Finance the number, amounts, and average interest rates of
several types of loans made by the lender for the calendar year
grouped by borrowers' census tract, income level, racial
characteristics, and gender.

The provisions of the bill will be effective on January 1, 2003.

Missouri House of Representatives
Last Updated October 11, 2002 at 9:00 am