16-207.Contract rate; penalties
for prepayment of certain loans, recording fees; contracting for interest
in excess of limitation, penalties, attorney fees; loans excluded.
(a) Subject to the following provision, the parties to any bond, bill,
promissory note or other instrument of writing for the payment or
forbearance of money may stipulate therein for interest receivable upon
the amount of such bond, bill, note or other instrument of writing, at a
rate not to exceed 15% per annum unless otherwise
specifically authorized by law.
(b) The interest rate
limitation set forth in this subsection applies to all first mortgage loans
and contracts for deed to real estate, unless the parties agree in writing to
make the transaction subject to the uniform consumer credit code, K.S.A.
16a-1-101 to 16a-9-102, and amendments thereto. The interest rate limitation
set forth in this subsection does not apply to a second mortgage loan governed
by the uniform consumer credit code, K.S.A. 16a-1-101 to 16a-9-102, and
amendments thereto, unless the lender and the borrower agree in writing that
the interest rate for the loan is to be governed by this subsection. The
maximum rate of interest per annum for notes secured by real estate mortgages
and contracts for deed to real estate governed by this subsection shall be at
an amount equal to 1 1/2 percentage points above the yield of thirty-year
fixed rate conventional home mortgages committed for delivery within 61 to 90
days accepted under the federal home loan mortgage corporation's daily
offerings for sale on the last day on which commitments for such mortgages were
received in the preceding month unless otherwise specifically authorized by
law. Such interest rate shall be computed for each calendar month and be
effective on the first day thereof. The secretary of state shall publish notice
of such maximum interest rate not later than the second issue of the Kansas
register published each month.
(c) No penalty shall be assessed against any party for prepayment of any
home loan evidenced by a note secured by a real estate mortgage where such
prepayment is made more than six months after execution of such note.
(d) The lender may collect from the borrower: (1) The actual fees paid
a public official or agency of the state, or federal government, for filing,
recording or releasing any instrument relating to a loan subject to the
provisions of this section; and
(2) reasonable expenses incurred by the lender in connection with the
making, closing, disbursing, extending, readjusting or renewing of loans
subject to the provisions of this section.
(e) Any person so contracting for a greater rate of interest than
that authorized by this section shall forfeit all interest so contracted
for in excess of the amount authorized under this section; and in
addition thereto shall forfeit a sum of money, to be deducted from the
amount due for principal and lawful interest, equal to the amount of
interest contracted for in excess of the amount authorized by this
section and such amounts may be set up as a defense or counterclaim in
any action to enforce the collection of such obligation and the borrower
shall also recover a reasonable attorney fee.
(f) The interest rates prescribed in subsections (a)
and (b) of this section
shall not apply to a business or agricultural loan. For the purpose of
this section unless a loan is made primarily for personal, family or household
purposes, the loan shall be considered a business or agricultural loan.
For the purpose of this subsection, a business or agricultural loan shall
include credit sales and notes secured by contracts for deed to real
estate.
(g) Loans made by a qualified plan, as defined in section
401 of the internal revenue code, to an individual participant in such plan
or to a member of the family of such individual participant, are not subject
to the interest
rates prescribed in subsections (a) and (b) of this section.
(h) The interest rates prescribed in subsections (a) and (b) of this
section
shall not apply to a note secured by a real
estate mortgage or a contract
for deed to real estate where the note or contract for deed permits adjustment
of the interest rate, the term of the loan or the amortization schedule.
(i) A first mortgage loan incurred for personal, family or household
purposes may be subject to certain provisions of the uniform consumer credit
code, K.S.A. 16a-1-101 to 16a-9-102, and amendments thereto, as follows:
(1) Certain high loan-to-value first mortgage loans are subject to the
provisions of the uniform consumer credit code, other than its usury
provisions.
Examples of provisions of the uniform consumer credit code applicable to high
loan-to-value first mortgage loans include, but are not limited to: Limitations
on prepaid finance charges; mandatory appraisals; required disclosures;
restrictions on balloon payments and negative amortization; limitations on late
fees and collection costs; and mandatory default notices and cure rights.
(2) Certain high interest rate first mortgage loans are subject to certain
provisions of the uniform consumer credit code, including, without limitation,
provisions which impose restrictions on balloon payments and negative
amortization.
(3) If the parties to a first mortgage loan agree in writing to make the
transaction subject to the uniform consumer credit code, than all applicable
provisions of the uniform consumer credit code, including its usury provisions,
apply to the loan.
This subsection is for informational purposes only and does not limit or expand
the scope of the uniform consumer credit code.
(j) Subsections (c), (d) and (e) of this section do not apply to a first
mortgage loan if (1) the parties agree in writing to make the transaction
subject to the uniform consumer credit code, K.S.A. 16a-1-101 to 16a-9-102, and
amendments thereto, or (2) the loan is a high loan-to-value first mortgage loan
subject to any provision of the uniform consumer credit code. In the case of a
loan described in subparts (1) or (2) of the preceding sentence, the applicable
provisions of the uniform consumer credit code shall govern the loan in lieu of
subsections (c), (d) and (e) of this section.
History: L. 1969, ch. 112, § 36; L. 1973, ch. 85, § 132; L.
1975, ch. 125, § 1; L. 1978, ch. 72, § 1; L. 1980, ch. 75, § 1; L.
1980, ch. 76, § 2; L. 1981, ch. 88, § 1; L. 1982, ch. 89, § 1;
L. 1983, ch. 74, § 1;
L. 1999, ch. 107, § 5; July 1.
16-207.Contract rate; penalties
for prepayment of certain loans, recording fees; contracting for interest
in excess of limitation, penalties, attorney fees; loans excluded.
(a) Subject to the following provision, the parties to any bond, bill,
promissory note or other instrument of writing for the payment or
forbearance of money may stipulate therein for interest receivable upon
the amount of such bond, bill, note or other instrument of writing, at a
rate not to exceed 15% per annum unless otherwise
specifically authorized by law.
(b) The interest rate
limitation set forth in this subsection applies to all first mortgage loans
and contracts for deed to real estate, unless the parties agree in writing to
make the transaction subject to the uniform consumer credit code, K.S.A.
16a-1-101 to 16a-9-102, and amendments thereto. The interest rate limitation
set forth in this subsection does not apply to a second mortgage loan governed
by the uniform consumer credit code, K.S.A. 16a-1-101 to 16a-9-102, and
amendments thereto, unless the lender and the borrower agree in writing that
the interest rate for the loan is to be governed by this subsection. The
maximum rate of interest per annum for notes secured by real estate mortgages
and contracts for deed to real estate governed by this subsection shall be at
an amount equal to 1 1/2 percentage points above the yield of thirty-year
fixed rate conventional home mortgages committed for delivery within 61 to 90
days accepted under the federal home loan mortgage corporation's daily
offerings for sale on the last day on which commitments for such mortgages were
received in the preceding month unless otherwise specifically authorized by
law. Such interest rate shall be computed for each calendar month and be
effective on the first day thereof. The secretary of state shall publish notice
of such maximum interest rate not later than the second issue of the Kansas
register published each month.
(c) No penalty shall be assessed against any party for prepayment of any
home loan evidenced by a note secured by a real estate mortgage where such
prepayment is made more than six months after execution of such note.
(d) The lender may collect from the borrower: (1) The actual fees paid
a public official or agency of the state, or federal government, for filing,
recording or releasing any instrument relating to a loan subject to the
provisions of this section; and
(2) reasonable expenses incurred by the lender in connection with the
making, closing, disbursing, extending, readjusting or renewing of loans
subject to the provisions of this section.
(e) Any person so contracting for a greater rate of interest than
that authorized by this section shall forfeit all interest so contracted
for in excess of the amount authorized under this section; and in
addition thereto shall forfeit a sum of money, to be deducted from the
amount due for principal and lawful interest, equal to the amount of
interest contracted for in excess of the amount authorized by this
section and such amounts may be set up as a defense or counterclaim in
any action to enforce the collection of such obligation and the borrower
shall also recover a reasonable attorney fee.
(f) The interest rates prescribed in subsections (a)
and (b) of this section
shall not apply to a business or agricultural loan. For the purpose of
this section unless a loan is made primarily for personal, family or household
purposes, the loan shall be considered a business or agricultural loan.
For the purpose of this subsection, a business or agricultural loan shall
include credit sales and notes secured by contracts for deed to real
estate.
(g) Loans made by a qualified plan, as defined in section
401 of the internal revenue code, to an individual participant in such plan
or to a member of the family of such individual participant, are not subject
to the interest
rates prescribed in subsections (a) and (b) of this section.
(h) The interest rates prescribed in subsections (a) and (b) of this
section
shall not apply to a note secured by a real
estate mortgage or a contract
for deed to real estate where the note or contract for deed permits adjustment
of the interest rate, the term of the loan or the amortization schedule.
(i) A first mortgage loan incurred for personal, family or household
purposes may be subject to certain provisions of the uniform consumer credit
code, K.S.A. 16a-1-101 to 16a-9-102, and amendments thereto, as follows:
(1) Certain high loan-to-value first mortgage loans are subject to the
provisions of the uniform consumer credit code, other than its usury
provisions.
Examples of provisions of the uniform consumer credit code applicable to high
loan-to-value first mortgage loans include, but are not limited to: Limitations
on prepaid finance charges; mandatory appraisals; required disclosures;
restrictions on balloon payments and negative amortization; limitations on late
fees and collection costs; and mandatory default notices and cure rights.
(2) Certain high interest rate first mortgage loans are subject to certain
provisions of the uniform consumer credit code, including, without limitation,
provisions which impose restrictions on balloon payments and negative
amortization.
(3) If the parties to a first mortgage loan agree in writing to make the
transaction subject to the uniform consumer credit code, than all applicable
provisions of the uniform consumer credit code, including its usury provisions,
apply to the loan.
This subsection is for informational purposes only and does not limit or expand
the scope of the uniform consumer credit code.
(j) Subsections (c), (d) and (e) of this section do not apply to a first
mortgage loan if (1) the parties agree in writing to make the transaction
subject to the uniform consumer credit code, K.S.A. 16a-1-101 to 16a-9-102, and
amendments thereto, or (2) the loan is a high loan-to-value first mortgage loan
subject to any provision of the uniform consumer credit code. In the case of a
loan described in subparts (1) or (2) of the preceding sentence, the applicable
provisions of the uniform consumer credit code shall govern the loan in lieu of
subsections (c), (d) and (e) of this section.
History: L. 1969, ch. 112, § 36; L. 1973, ch. 85, § 132; L.
1975, ch. 125, § 1; L. 1978, ch. 72, § 1; L. 1980, ch. 75, § 1; L.
1980, ch. 76, § 2; L. 1981, ch. 88, § 1; L. 1982, ch. 89, § 1;
L. 1983, ch. 74, § 1;
L. 1999, ch. 107, § 5; July 1.
16-207.Contract rate; penalties
for prepayment of certain loans, recording fees; contracting for interest
in excess of limitation, penalties, attorney fees; loans excluded.
(a) Subject to the following provision, the parties to any bond, bill,
promissory note or other instrument of writing for the payment or
forbearance of money may stipulate therein for interest receivable upon
the amount of such bond, bill, note or other instrument of writing, at a
rate not to exceed 15% per annum unless otherwise
specifically authorized by law.
(b) The interest rate
limitation set forth in this subsection applies to all first mortgage loans
and contracts for deed to real estate, unless the parties agree in writing to
make the transaction subject to the uniform consumer credit code, K.S.A.
16a-1-101 to 16a-9-102, and amendments thereto. The interest rate limitation
set forth in this subsection does not apply to a second mortgage loan governed
by the uniform consumer credit code, K.S.A. 16a-1-101 to 16a-9-102, and
amendments thereto, unless the lender and the borrower agree in writing that
the interest rate for the loan is to be governed by this subsection. The
maximum rate of interest per annum for notes secured by real estate mortgages
and contracts for deed to real estate governed by this subsection shall be at
an amount equal to 1 1/2 percentage points above the yield of thirty-year
fixed rate conventional home mortgages committed for delivery within 61 to 90
days accepted under the federal home loan mortgage corporation's daily
offerings for sale on the last day on which commitments for such mortgages were
received in the preceding month unless otherwise specifically authorized by
law. Such interest rate shall be computed for each calendar month and be
effective on the first day thereof. The secretary of state shall publish notice
of such maximum interest rate not later than the second issue of the Kansas
register published each month.
(c) No penalty shall be assessed against any party for prepayment of any
home loan evidenced by a note secured by a real estate mortgage where such
prepayment is made more than six months after execution of such note.
(d) The lender may collect from the borrower: (1) The actual fees paid
a public official or agency of the state, or federal government, for filing,
recording or releasing any instrument relating to a loan subject to the
provisions of this section; and
(2) reasonable expenses incurred by the lender in connection with the
making, closing, disbursing, extending, readjusting or renewing of loans
subject to the provisions of this section.
(e) Any person so contracting for a greater rate of interest than
that authorized by this section shall forfeit all interest so contracted
for in excess of the amount authorized under this section; and in
addition thereto shall forfeit a sum of money, to be deducted from the
amount due for principal and lawful interest, equal to the amount of
interest contracted for in excess of the amount authorized by this
section and such amounts may be set up as a defense or counterclaim in
any action to enforce the collection of such obligation and the borrower
shall also recover a reasonable attorney fee.
(f) The interest rates prescribed in subsections (a)
and (b) of this section
shall not apply to a business or agricultural loan. For the purpose of
this section unless a loan is made primarily for personal, family or household
purposes, the loan shall be considered a business or agricultural loan.
For the purpose of this subsection, a business or agricultural loan shall
include credit sales and notes secured by contracts for deed to real
estate.
(g) Loans made by a qualified plan, as defined in section
401 of the internal revenue code, to an individual participant in such plan
or to a member of the family of such individual participant, are not subject
to the interest
rates prescribed in subsections (a) and (b) of this section.
(h) The interest rates prescribed in subsections (a) and (b) of this
section
shall not apply to a note secured by a real
estate mortgage or a contract
for deed to real estate where the note or contract for deed permits adjustment
of the interest rate, the term of the loan or the amortization schedule.
(i) A first mortgage loan incurred for personal, family or household
purposes may be subject to certain provisions of the uniform consumer credit
code, K.S.A. 16a-1-101 to 16a-9-102, and amendments thereto, as follows:
(1) Certain high loan-to-value first mortgage loans are subject to the
provisions of the uniform consumer credit code, other than its usury
provisions.
Examples of provisions of the uniform consumer credit code applicable to high
loan-to-value first mortgage loans include, but are not limited to: Limitations
on prepaid finance charges; mandatory appraisals; required disclosures;
restrictions on balloon payments and negative amortization; limitations on late
fees and collection costs; and mandatory default notices and cure rights.
(2) Certain high interest rate first mortgage loans are subject to certain
provisions of the uniform consumer credit code, including, without limitation,
provisions which impose restrictions on balloon payments and negative
amortization.
(3) If the parties to a first mortgage loan agree in writing to make the
transaction subject to the uniform consumer credit code, than all applicable
provisions of the uniform consumer credit code, including its usury provisions,
apply to the loan.
This subsection is for informational purposes only and does not limit or expand
the scope of the uniform consumer credit code.
(j) Subsections (c), (d) and (e) of this section do not apply to a first
mortgage loan if (1) the parties agree in writing to make the transaction
subject to the uniform consumer credit code, K.S.A. 16a-1-101 to 16a-9-102, and
amendments thereto, or (2) the loan is a high loan-to-value first mortgage loan
subject to any provision of the uniform consumer credit code. In the case of a
loan described in subparts (1) or (2) of the preceding sentence, the applicable
provisions of the uniform consumer credit code shall govern the loan in lieu of
subsections (c), (d) and (e) of this section.
History: L. 1969, ch. 112, § 36; L. 1973, ch. 85, § 132; L.
1975, ch. 125, § 1; L. 1978, ch. 72, § 1; L. 1980, ch. 75, § 1; L.
1980, ch. 76, § 2; L. 1981, ch. 88, § 1; L. 1982, ch. 89, § 1;
L. 1983, ch. 74, § 1;
L. 1999, ch. 107, § 5; July 1.