THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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1 SENATE BILL No. SENATE BILL No. October, 0, Introduced by Senator BOOHER and referred to the Committee on Banking and Financial Institutions. A bill to amend 00 PA 0, entitled "Consumer mortgage protection act," by amending sections,, and (MCL.,., and.), section as amended by 0 PA ; and to repeal acts and parts of acts. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: Sec.. As used in this act: SENATE BILL No. (a) "Commissioner" OR "DIRECTOR" means the commissioner of the office of financial and insurance regulation of the department of licensing and regulatory affairs.director OF THE DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES. (b) "Depository institution" means a bank, savings and loan association, savings bank, or credit union THAT IS chartered under state or federal law. (c) "Home improvement installment contract" means an agreement 0' DAM

2 0 0 consisting of or more documents that covers the sale of goods or furnishing of services to a buyer for improvements to the buyer's principal dwelling, if that dwelling is located in this state and used for occupancy of or fewer families, under which the buyer promises to pay in installments all or any part of the price of the goods or services. (d) "Mortgage loan" means a loan or home improvement installment contract secured by a first or subordinate mortgage or any other form of lien or a land contract that covers real property located in this state that is used as the borrower's principal dwelling and is designed for occupancy by or fewer families. Mortgage loan does not include any of the following: (i) A loan transaction in which the proceeds are used to acquire the borrower's principal dwelling. (ii) A reverse-mortgage transaction. (iii) An open-end credit plan. As used in this subparagraph, "open-end credit plan" means a loan in which the lender reasonably contemplates repeated advances. (iv) A loan transaction in which the proceeds are not used primarily for a personal, family, or household purpose. (e) "Person" means an individual, corporation, limited liability company, partnership, association, governmental entity, or any other legal entity. (f) "Reverse-mortgage" means a nonrecourse loan under which both of the following apply: (i) A mortgage or other form of lien securing or more advances is created in the borrower's principal dwelling. 0' DAM

3 0 0 (ii) The principal, interest, or shared appreciation or equity is payable only after the borrower dies, the dwelling is transferred, or the borrower ceases to occupy the dwelling as a principal dwelling. (g) "Regulated lender" means a depository institution; a licensee or a registrant under the consumer financial services act, PA, MCL.0 to.0, PA, MCL.0 to., the secondary mortgage loan act, PA, MCL. to., or the mortgage brokers, lenders, and servicers licensing act, PA, MCL. to.; or a seller under the home improvement finance act, PA, MCL.0 to.. (h) "State and federal laws" means, individually and collectively, or more of the laws or regulations of this state or the federal government which regulate or are applicable to a mortgage loan or a person that is brokering, making, servicing, or collecting a mortgage loan, including, without limitation, the truth in lending act, USC 0 to f, real estate settlement procedures act of, Public Law -, Stat., equal credit opportunity act, USC to f, fair housing act, title VIII of the civil rights act of, Public Law 0-, Stat., fair credit reporting act, USC to x, the homeowners protection act of, Public Law 0-, Stat., the fair debt collection practices act, USC 0nt and to o, DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT, PUBLIC LAW -0, consumer financial services act, PA, MCL.0 to.0, mortgage brokers, lenders, and 0' DAM

4 0 0 servicers licensing act, PA, MCL. to., the secondary mortgage loan act, PA, MCL. to., PA, MCL.0 to., and home improvement finance act, PA, MCL.0 to.. Sec.. At the time a person applies for a mortgage loan, the lender shall provide the applicant the following document:with A COPY OF THE SPECIAL INFORMATION BOOKLET DESCRIBED IN CFR 0., ISSUED UNDER THE AUTHORITY OF THE REAL ESTATE SETTLEMENT PROCEDURES ACT OF, PUBLIC LAW -. "BORROWERS BILL OF RIGHTS. You have the RIGHT to shop for the best loan for you and compare the charges of different mortgage brokers and lenders.. You have the RIGHT to be informed about the total cost of your loan including the interest rate, points, and other fees.. You have the RIGHT to obtain a "Good Faith Estimate" of all loan and settlement charges before you agree to the loan or pay any fees.. You have the RIGHT to know what fees are nonrefundable if you decide to withdraw your loan application.. You have the RIGHT to ask your mortgage broker to explain exactly what the mortgage broker will do for you.. You have the RIGHT to know how much the mortgage broker is getting paid by you and the lender for your loan.. You have the RIGHT to ask questions about charges and loan terms that you do not understand.. You have the RIGHT to a credit decision that is not based on your race, color, religion, national origin, sex, marital 0' DAM

5 0 0 status, age, or whether any income is derived from public assistance.. You have the RIGHT to know the reason if your loan application is turned down. 0. You have the RIGHT to receive the HUD settlement costs booklet "Buying Your Home"." Sec.. () No later than December, 00, the office of financial and insurance services THE DEPARTMENT OF FINANCIAL AND INSURANCE SERVICES shall develop and make available to local units of government, financial institutions, and other interested persons or more model programs for financial education. () The program required under this section shall be designed to teach personal financial management skills and the basic principles involved with saving, borrowing, investing, and protection against predatory and other fraudulent lending practices. Enacting section. Section of the consumer mortgage protection act, 00 PA 0, MCL., is repealed. Enacting section. This amendatory act takes effect 0 days after the date it is enacted into law. 0' Final Page DAM