§8-206-E. Special liability for violations of residential mortgage loan, higher-priced mortgage loan and high-rate, high-fee mortgage loan requirements
1. This section applies to any violation of section 8-206-A, 8-206-H, 8-206-I or 8-206-J in connection with the origination, brokering or servicing of a residential mortgage loan. This section does not apply to a purchaser or assignee of a residential mortgage loan except as permitted in section 8-206-H, subsection 2.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
2. Any person who has been found in violation of section 8-206-A, 8-206-H, 8-206-I or 8-206-J by a court may be liable to the borrower for the following:
A. Actual damages, including consequential and incidental damages. The borrower may not be required to demonstrate reliance in order to receive actual damages; [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
B. Statutory damages as follows:
(1) For violations described in section 8-206-H, statutory damages equal to 2 times the finance charge paid under the loan and forfeiture of the remaining interest under the loan; and
(2) For violations described in section 8-206-J, statutory damages in the amount of $5,000 per violation; [2009, c. 362, Pt. A, §11 (AMD).]
C. Punitive damages for violations of section 8-206-H or section 8-206-I, subsection 1, paragraph D when the violation was malicious or reckless; and [2009, c. 362, Pt. A, §11 (AMD).]
D. Costs, including reasonable attorney's fees. [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
[ 2009, c. 362, Pt. A, §11 (AMD) .]
3. A borrower may be granted injunctive, declaratory and other equitable relief the court determines appropriate in an action to enforce compliance with this section and sections 8-206-A, 8-206-H, 8-206-I and 8-206-J.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
4. The right of rescission granted under 15 United States Code, Chapter 41, Subchapter I, Part A for a violation of that law is available to a borrower acting only in an individual capacity by way of recoupment as a defense against a party foreclosing on a residential mortgage loan at any time during the term of the loan. Any recoupment claim asserted pursuant to this provision is limited to amounts required to reduce or extinguish the borrower’s liability under the residential mortgage loan plus amounts required to recover costs, including reasonable attorney’s fees. This section may not be construed to limit recoupment rights available to the borrower under any other law.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
5. The remedies provided in this section are not intended to be the exclusive remedies available to a borrower, nor must the borrower exhaust any administrative remedies provided under this section or any other applicable law before proceeding under this section.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
6. Any person who knowingly violates section 8-206-A or 8-206-H is guilty of a Class E crime.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
7. A creditor in a residential mortgage loan who, when acting in good faith, fails to comply with the provisions of section 8-206-A, 8-206-H, 8-206-I or 8-206-J is deemed not to have violated those sections if the creditor establishes that either:
A. Within 30 days of the loan closing and prior to receiving any notice of the compliance failure, the creditor has made appropriate restitution to the borrower and appropriate adjustments have been made to the loan; or [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
B. Within 60 days of the loan closing and prior to receiving any notice of the compliance failure, when the compliance failure was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid such errors, the borrower is notified of the compliance failure, appropriate restitution is made to the borrower and appropriate adjustments are made to the loan. Examples of a bona fide error include clerical, calculation, computer malfunction and programming and printing errors. An error of legal judgment with respect to a person’s obligations under this section is not a bona fide error. [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
[ 2009, c. 362, Pt. A, §11 (AMD) .]
8. The remedies provided in this section are cumulative.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
9. Notwithstanding any other provision of law, a residential mortgage loan agreement may not include any provision that waives any borrower’s remedies available at law or equity, whether acting individually or on behalf of others similarly situated, or the borrower's rights to civil discovery or appeal. Any such provision is unenforceable and void as a matter of law.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
10. Without regard to whether a borrower is acting individually or on behalf of others similarly situated, any provision of a residential mortgage loan agreement that allows a person to require a borrower to assert any claim or defense in a forum that is less convenient, more costly or more dilatory for the resolution of a dispute than a judicial forum established in this State where the borrower may otherwise properly bring a claim or defense or that limits in any way any claim or defense the borrower may have is unconscionable and void as a matter of law.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
11. It is a violation of section 8-206-A, 8-206-H, 8-206-I or 8-206-J for any person to attempt in bad faith to avoid the application of those sections by dividing any loan transaction into separate parts or structuring a residential mortgage loan transaction as an open-end loan for the purpose of evading the provisions of those sections when the loan would have been a high-rate, high-fee mortgage if the loan had been structured as a closed-end loan or by engaging in any other subterfuge with the intent of evading any provision of this section.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
SECTION HISTORY
RR 2007, c. 1, §5 (COR). 2007, c. 273, Pt. A, §§37, 41 (AFF). 2007, c. 273, Pt. A, §21 (NEW). 2009, c. 362, Pt. A, §11 (AMD).
§8-206-E. Special liability for violations of residential mortgage loan, higher-priced mortgage loan and high-rate, high-fee mortgage loan requirements
1. This section applies to any violation of section 8-206-A, 8-206-H, 8-206-I or 8-206-J in connection with the origination, brokering or servicing of a residential mortgage loan. This section does not apply to a purchaser or assignee of a residential mortgage loan except as permitted in section 8-206-H, subsection 2.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
2. Any person who has been found in violation of section 8-206-A, 8-206-H, 8-206-I or 8-206-J by a court may be liable to the borrower for the following:
A. Actual damages, including consequential and incidental damages. The borrower may not be required to demonstrate reliance in order to receive actual damages; [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
B. Statutory damages as follows:
(1) For violations described in section 8-206-H, statutory damages equal to 2 times the finance charge paid under the loan and forfeiture of the remaining interest under the loan; and
(2) For violations described in section 8-206-J, statutory damages in the amount of $5,000 per violation; [2009, c. 362, Pt. A, §11 (AMD).]
C. Punitive damages for violations of section 8-206-H or section 8-206-I, subsection 1, paragraph D when the violation was malicious or reckless; and [2009, c. 362, Pt. A, §11 (AMD).]
D. Costs, including reasonable attorney's fees. [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
[ 2009, c. 362, Pt. A, §11 (AMD) .]
3. A borrower may be granted injunctive, declaratory and other equitable relief the court determines appropriate in an action to enforce compliance with this section and sections 8-206-A, 8-206-H, 8-206-I and 8-206-J.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
4. The right of rescission granted under 15 United States Code, Chapter 41, Subchapter I, Part A for a violation of that law is available to a borrower acting only in an individual capacity by way of recoupment as a defense against a party foreclosing on a residential mortgage loan at any time during the term of the loan. Any recoupment claim asserted pursuant to this provision is limited to amounts required to reduce or extinguish the borrower’s liability under the residential mortgage loan plus amounts required to recover costs, including reasonable attorney’s fees. This section may not be construed to limit recoupment rights available to the borrower under any other law.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
5. The remedies provided in this section are not intended to be the exclusive remedies available to a borrower, nor must the borrower exhaust any administrative remedies provided under this section or any other applicable law before proceeding under this section.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
6. Any person who knowingly violates section 8-206-A or 8-206-H is guilty of a Class E crime.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
7. A creditor in a residential mortgage loan who, when acting in good faith, fails to comply with the provisions of section 8-206-A, 8-206-H, 8-206-I or 8-206-J is deemed not to have violated those sections if the creditor establishes that either:
A. Within 30 days of the loan closing and prior to receiving any notice of the compliance failure, the creditor has made appropriate restitution to the borrower and appropriate adjustments have been made to the loan; or [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
B. Within 60 days of the loan closing and prior to receiving any notice of the compliance failure, when the compliance failure was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid such errors, the borrower is notified of the compliance failure, appropriate restitution is made to the borrower and appropriate adjustments are made to the loan. Examples of a bona fide error include clerical, calculation, computer malfunction and programming and printing errors. An error of legal judgment with respect to a person’s obligations under this section is not a bona fide error. [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
[ 2009, c. 362, Pt. A, §11 (AMD) .]
8. The remedies provided in this section are cumulative.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
9. Notwithstanding any other provision of law, a residential mortgage loan agreement may not include any provision that waives any borrower’s remedies available at law or equity, whether acting individually or on behalf of others similarly situated, or the borrower's rights to civil discovery or appeal. Any such provision is unenforceable and void as a matter of law.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
10. Without regard to whether a borrower is acting individually or on behalf of others similarly situated, any provision of a residential mortgage loan agreement that allows a person to require a borrower to assert any claim or defense in a forum that is less convenient, more costly or more dilatory for the resolution of a dispute than a judicial forum established in this State where the borrower may otherwise properly bring a claim or defense or that limits in any way any claim or defense the borrower may have is unconscionable and void as a matter of law.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
11. It is a violation of section 8-206-A, 8-206-H, 8-206-I or 8-206-J for any person to attempt in bad faith to avoid the application of those sections by dividing any loan transaction into separate parts or structuring a residential mortgage loan transaction as an open-end loan for the purpose of evading the provisions of those sections when the loan would have been a high-rate, high-fee mortgage if the loan had been structured as a closed-end loan or by engaging in any other subterfuge with the intent of evading any provision of this section.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
SECTION HISTORY
RR 2007, c. 1, §5 (COR). 2007, c. 273, Pt. A, §§37, 41 (AFF). 2007, c. 273, Pt. A, §21 (NEW). 2009, c. 362, Pt. A, §11 (AMD).
§8-206-E. Special liability for violations of residential mortgage loan, higher-priced mortgage loan and high-rate, high-fee mortgage loan requirements
1. This section applies to any violation of section 8-206-A, 8-206-H, 8-206-I or 8-206-J in connection with the origination, brokering or servicing of a residential mortgage loan. This section does not apply to a purchaser or assignee of a residential mortgage loan except as permitted in section 8-206-H, subsection 2.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
2. Any person who has been found in violation of section 8-206-A, 8-206-H, 8-206-I or 8-206-J by a court may be liable to the borrower for the following:
A. Actual damages, including consequential and incidental damages. The borrower may not be required to demonstrate reliance in order to receive actual damages; [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
B. Statutory damages as follows:
(1) For violations described in section 8-206-H, statutory damages equal to 2 times the finance charge paid under the loan and forfeiture of the remaining interest under the loan; and
(2) For violations described in section 8-206-J, statutory damages in the amount of $5,000 per violation; [2009, c. 362, Pt. A, §11 (AMD).]
C. Punitive damages for violations of section 8-206-H or section 8-206-I, subsection 1, paragraph D when the violation was malicious or reckless; and [2009, c. 362, Pt. A, §11 (AMD).]
D. Costs, including reasonable attorney's fees. [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
[ 2009, c. 362, Pt. A, §11 (AMD) .]
3. A borrower may be granted injunctive, declaratory and other equitable relief the court determines appropriate in an action to enforce compliance with this section and sections 8-206-A, 8-206-H, 8-206-I and 8-206-J.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
4. The right of rescission granted under 15 United States Code, Chapter 41, Subchapter I, Part A for a violation of that law is available to a borrower acting only in an individual capacity by way of recoupment as a defense against a party foreclosing on a residential mortgage loan at any time during the term of the loan. Any recoupment claim asserted pursuant to this provision is limited to amounts required to reduce or extinguish the borrower’s liability under the residential mortgage loan plus amounts required to recover costs, including reasonable attorney’s fees. This section may not be construed to limit recoupment rights available to the borrower under any other law.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
5. The remedies provided in this section are not intended to be the exclusive remedies available to a borrower, nor must the borrower exhaust any administrative remedies provided under this section or any other applicable law before proceeding under this section.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
6. Any person who knowingly violates section 8-206-A or 8-206-H is guilty of a Class E crime.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
7. A creditor in a residential mortgage loan who, when acting in good faith, fails to comply with the provisions of section 8-206-A, 8-206-H, 8-206-I or 8-206-J is deemed not to have violated those sections if the creditor establishes that either:
A. Within 30 days of the loan closing and prior to receiving any notice of the compliance failure, the creditor has made appropriate restitution to the borrower and appropriate adjustments have been made to the loan; or [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
B. Within 60 days of the loan closing and prior to receiving any notice of the compliance failure, when the compliance failure was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid such errors, the borrower is notified of the compliance failure, appropriate restitution is made to the borrower and appropriate adjustments are made to the loan. Examples of a bona fide error include clerical, calculation, computer malfunction and programming and printing errors. An error of legal judgment with respect to a person’s obligations under this section is not a bona fide error. [2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW).]
[ 2009, c. 362, Pt. A, §11 (AMD) .]
8. The remedies provided in this section are cumulative.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
9. Notwithstanding any other provision of law, a residential mortgage loan agreement may not include any provision that waives any borrower’s remedies available at law or equity, whether acting individually or on behalf of others similarly situated, or the borrower's rights to civil discovery or appeal. Any such provision is unenforceable and void as a matter of law.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
10. Without regard to whether a borrower is acting individually or on behalf of others similarly situated, any provision of a residential mortgage loan agreement that allows a person to require a borrower to assert any claim or defense in a forum that is less convenient, more costly or more dilatory for the resolution of a dispute than a judicial forum established in this State where the borrower may otherwise properly bring a claim or defense or that limits in any way any claim or defense the borrower may have is unconscionable and void as a matter of law.
[ 2007, c. 273, Pt. A, §§37, 41 (AFF); 2007, c. 273, Pt. A, §21 (NEW) .]
11. It is a violation of section 8-206-A, 8-206-H, 8-206-I or 8-206-J for any person to attempt in bad faith to avoid the application of those sections by dividing any loan transaction into separate parts or structuring a residential mortgage loan transaction as an open-end loan for the purpose of evading the provisions of those sections when the loan would have been a high-rate, high-fee mortgage if the loan had been structured as a closed-end loan or by engaging in any other subterfuge with the intent of evading any provision of this section.
[ 2009, c. 362, Pt. A, §11 (AMD) .]
SECTION HISTORY
RR 2007, c. 1, §5 (COR). 2007, c. 273, Pt. A, §§37, 41 (AFF). 2007, c. 273, Pt. A, §21 (NEW). 2009, c. 362, Pt. A, §11 (AMD).
