SB 427 — Relating to loan form

(5) A requirement for compulsory arbitration which does not comply with federal law;

or (6) Blank or blanks to be filled in after the consummation of the loan.

A borrower must be given a copy of every signed document executed by the borrower at the time of closing.

(k) A licensee may not charge a borrower or receive from a borrower money or other valuable consideration as compensation before completing performance of all services the licensee has agreed to perform for the borrower unless the licensee also registers and complies Enr SB 427 with all requirements set forth for credit service organizations in §46A-6C-1 et seq.

of this code, including all additional bonding requirements as may be established therein.

(l) A licensee may not make or broker revolving loans secured by a primary or subordinate mortgage lien for the retail purchase of consumer goods and services by use of a lender credit card.

(m) In making any primary or subordinate mortgage loan, a licensee may not, and a primary or subordinate mortgage lending transaction may not, contain terms which:

(1) Collect a fee not disclosed to the borrower;

collect any attorney fee at closing in excess of the fee that has been or will be remitted to the attorney;

collect a fee for a product or service where the product or service is not actually provided;

misrepresent the amount charged by or paid to a third party for a product or service;

or collect duplicate fee or points to act as both broker and lender for the same mortgage loan, however, fees and points may be divided between the broker and the lender as they agree, but may not exceed the total charges otherwise permitted under this article:

Provided, That the fact of any fee, point or compensation is disclosed to the borrower consistent with the solicitation representation made to the borrower;

(2) Compensate, whether directly or indirectly, coerce or intimidate an appraiser for the purpose of influencing the independent judgment of the appraiser with respect to the value of real estate that is to be covered by a deed of trust or is being offered as security according to an application for a primary or subordinate mortgage loan;

(3) Make or assist in making any primary or subordinate mortgage loan with the intent that the loan will not be repaid and that the lender will obtain title to the property through foreclosure:

Provided, That this subdivision may not apply to reverse mortgages obtained under §47-24-1 et seq.

of this code;

(4) Require the borrower to pay, in addition to any periodic interest, combined fees, compensation or points of any kind to the lender and broker to arrange, originate, evaluate, maintain, or service a loan secured by any encumbrance on residential property that exceed, in Enr SB 427 the aggregate, six percent of the loan amount financed, including any yield spread premium paid by the lender to the broker:

Provided, That reasonable closing costs, as defined in §46A-1-102 of this code, payable to unrelated third parties may not be included within this limitation:

Provided, however, That no yield spread premium is permitted for any loan for which the annual percentage rate exceeds 18 percent per year on the unpaid balance of the amount financed:

Provided further, That if no yield spread premium is charged, the aggregate of fees, compensation or points can be no greater than five percent of the loan amount financed.

The financing of the fees and points is permissible and, where included as part of the finance charge, does not constitute charging interest on interest.

To the extent that this section overrides the preemption on limiting points and other charges on first lien residential mortgage loans contained in the United States Depository Institutions Deregulation and Monetary Control Act of 1980, 12 U.

S.

C.

§1735f-7a, the state law limitations contained in this section apply;

(5) Secure a primary or subordinate mortgage loan by any security interest in personal property unless the personal property is affixed to the residential dwelling or real estate;

(6) Allow or require a primary or subordinate mortgage loan to be accelerated because of a decrease in the market value of the residential dwelling that is securing the loan;

(7) Require terms of repayment which do not result in continuous monthly reduction of the original principal amount of the loan:

Provided, That the provisions of this subdivision do not apply to reverse mortgage loans obtained under §47-24-1 et seq.

of this code, home equity, open-end lines of credit, bridge loans used in connection with the purchase or construction of a new residential dwelling, or commercial loans for multiple residential purchases;

(8) Secure a primary or subordinate mortgage loan in a principal amount that, when added to the aggregate total of the outstanding principal balances of all other primary or subordinate mortgage loans secured by the same property, exceeds the fair market value of the property on the date that the latest mortgage loan is made.

For purposes of this subdivision, a broker or lender may rely upon a bona fide written appraisal of the property made by an independent third- Enr SB 427 party appraiser, duly licensed or certified by the West Virginia Real Estate Appraiser Licensing and Certification Board and prepared in compliance with the uniform standards of professional appraisal practice:

Provided, That this prohibition does not apply to any mortgage modification or refinancing loan made in participation with and in compliance with the federal Making Homes Affordable program, or any other mortgage modification or refinancing loan eligible under any government-sponsored enterprise requirements or funded through any federal or state program or litigation settlement;

(9) Advise or recommend that the consumer not make timely payments on an existing loan preceding loan closure of a refinancing transaction;

or (10) Knowingly violate any provision of any other applicable state or federal law regulating primary or subordinate mortgage loans, including, without limitation, §46A-1-101 et seq.

of this code.

Enr SB 427 The Clerk of the Senate and the Clerk of the House of Delegates hereby certify that the foregoing bill is correctly enrolled.

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Clerk of the Senate ...............................................................

Clerk of the House of Delegates Originated in the Senate.

In effect 90 days from passage.

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President of the Senate ...............................................................

Speaker of the House of Delegates __________ The within is ................................................

this the...........................................

Day of ..........................................................................................................., 2026.

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Governor 7