§ 24‑10.2. Consumerprotections in certain home loans.
(a) For purposes ofthis section, the term "consumer home loan" means a loan, includingan open‑end credit plan but excluding a reverse mortgage transaction, inwhich (i) the borrower is a natural person, (ii) the debt is incurred by theborrower primarily for personal, family, or household purposes, and (iii) theloan is secured by a mortgage or deed of trust upon real estate upon whichthere is located or there is to be located a structure or structures designedprincipally for occupancy of from one to four families which is or will beoccupied by the borrower as the borrower's principal dwelling.
(b) Notwithstanding theprovisions of G.S. 58‑57‑35(b), it shall be unlawful for any lenderin a consumer home loan to finance, directly or indirectly, any credit life,disability, or unemployment insurance, or any other life or health insurancepremiums; provided, that insurance premiums calculated and paid on a monthlybasis shall not be considered financed by the lender.
(c) No lender mayknowingly or intentionally engage in the unfair act or practice of"flipping" a consumer home loan. "Flipping" a consumer loanis the making of a consumer home loan to a borrower which refinances anexisting consumer home loan when the new loan does not have reasonable,tangible net benefit to the borrower considering all of the circumstances,including the terms of both the new and refinanced loans, the cost of the newloan, and the borrower's circumstances. This provision shall apply regardlessof whether the interest rate, points, fees, and charges paid or payable by theborrower in connection with the refinancing exceed those thresholds specifiedin G.S. 24‑1.1E(a)(6).
(d) No lender shallrecommend or encourage default on an existing loan or other debt prior to andin connection with the closing or planned closing of a consumer home loan thatrefinances all or any portion of such existing loan or debt.
(e) The making of aconsumer home loan which violates the provisions of this section is herebydeclared usurious in violation of the provisions of this Chapter and unlawfulas an unfair or deceptive act or practice in or affecting commerce in violationof the provisions of G.S. 75‑1.1. The Attorney General, the Commissioner ofBanks, or any party to a consumer home loan may enforce the provisions of thissection. Any person seeking damages or penalties under the provisions of thissection may recover damages under either this Chapter or Chapter 75, but notboth.
(f) In any suitinstituted by a borrower who alleges that the defendant violated this section,the presiding judge may, in the judge's discretion, allow reasonable attorneys'fees to the attorney representing the prevailing party, such attorneys' fees tobe taxed as a part of the court costs and payable by the losing party, upon afinding by the presiding judge that:
(1) The party chargedwith the violation has willfully engaged in the act or practice, and there wasunwarranted refusal by such party to fully resolve the matter which constitutesthe basis of such suit; or
(2) The partyinstituting the action knew, or should have known, that the action wasfrivolous and malicious.
(g) This sectionestablishes specific consumer protections in consumer home loans in addition toother consumer protections that may be otherwise available by law.
(h) A mortgage brokerwho brokers a consumer home loan that violates the provisions of this sectionshall be jointly and severally liable with the lender. (1999‑332, s. 5; 2003‑401,s. 4; 2007‑352, s. 5.)
§ 24‑10.2. Consumerprotections in certain home loans.
(a) For purposes ofthis section, the term "consumer home loan" means a loan, includingan open‑end credit plan but excluding a reverse mortgage transaction, inwhich (i) the borrower is a natural person, (ii) the debt is incurred by theborrower primarily for personal, family, or household purposes, and (iii) theloan is secured by a mortgage or deed of trust upon real estate upon whichthere is located or there is to be located a structure or structures designedprincipally for occupancy of from one to four families which is or will beoccupied by the borrower as the borrower's principal dwelling.
(b) Notwithstanding theprovisions of G.S. 58‑57‑35(b), it shall be unlawful for any lenderin a consumer home loan to finance, directly or indirectly, any credit life,disability, or unemployment insurance, or any other life or health insurancepremiums; provided, that insurance premiums calculated and paid on a monthlybasis shall not be considered financed by the lender.
(c) No lender mayknowingly or intentionally engage in the unfair act or practice of"flipping" a consumer home loan. "Flipping" a consumer loanis the making of a consumer home loan to a borrower which refinances anexisting consumer home loan when the new loan does not have reasonable,tangible net benefit to the borrower considering all of the circumstances,including the terms of both the new and refinanced loans, the cost of the newloan, and the borrower's circumstances. This provision shall apply regardlessof whether the interest rate, points, fees, and charges paid or payable by theborrower in connection with the refinancing exceed those thresholds specifiedin G.S. 24‑1.1E(a)(6).
(d) No lender shallrecommend or encourage default on an existing loan or other debt prior to andin connection with the closing or planned closing of a consumer home loan thatrefinances all or any portion of such existing loan or debt.
(e) The making of aconsumer home loan which violates the provisions of this section is herebydeclared usurious in violation of the provisions of this Chapter and unlawfulas an unfair or deceptive act or practice in or affecting commerce in violationof the provisions of G.S. 75‑1.1. The Attorney General, the Commissioner ofBanks, or any party to a consumer home loan may enforce the provisions of thissection. Any person seeking damages or penalties under the provisions of thissection may recover damages under either this Chapter or Chapter 75, but notboth.
(f) In any suitinstituted by a borrower who alleges that the defendant violated this section,the presiding judge may, in the judge's discretion, allow reasonable attorneys'fees to the attorney representing the prevailing party, such attorneys' fees tobe taxed as a part of the court costs and payable by the losing party, upon afinding by the presiding judge that:
(1) The party chargedwith the violation has willfully engaged in the act or practice, and there wasunwarranted refusal by such party to fully resolve the matter which constitutesthe basis of such suit; or
(2) The partyinstituting the action knew, or should have known, that the action wasfrivolous and malicious.
(g) This sectionestablishes specific consumer protections in consumer home loans in addition toother consumer protections that may be otherwise available by law.
(h) A mortgage brokerwho brokers a consumer home loan that violates the provisions of this sectionshall be jointly and severally liable with the lender. (1999‑332, s. 5; 2003‑401,s. 4; 2007‑352, s. 5.)
§ 24‑10.2. Consumerprotections in certain home loans.
(a) For purposes ofthis section, the term "consumer home loan" means a loan, includingan open‑end credit plan but excluding a reverse mortgage transaction, inwhich (i) the borrower is a natural person, (ii) the debt is incurred by theborrower primarily for personal, family, or household purposes, and (iii) theloan is secured by a mortgage or deed of trust upon real estate upon whichthere is located or there is to be located a structure or structures designedprincipally for occupancy of from one to four families which is or will beoccupied by the borrower as the borrower's principal dwelling.
(b) Notwithstanding theprovisions of G.S. 58‑57‑35(b), it shall be unlawful for any lenderin a consumer home loan to finance, directly or indirectly, any credit life,disability, or unemployment insurance, or any other life or health insurancepremiums; provided, that insurance premiums calculated and paid on a monthlybasis shall not be considered financed by the lender.
(c) No lender mayknowingly or intentionally engage in the unfair act or practice of"flipping" a consumer home loan. "Flipping" a consumer loanis the making of a consumer home loan to a borrower which refinances anexisting consumer home loan when the new loan does not have reasonable,tangible net benefit to the borrower considering all of the circumstances,including the terms of both the new and refinanced loans, the cost of the newloan, and the borrower's circumstances. This provision shall apply regardlessof whether the interest rate, points, fees, and charges paid or payable by theborrower in connection with the refinancing exceed those thresholds specifiedin G.S. 24‑1.1E(a)(6).
(d) No lender shallrecommend or encourage default on an existing loan or other debt prior to andin connection with the closing or planned closing of a consumer home loan thatrefinances all or any portion of such existing loan or debt.
(e) The making of aconsumer home loan which violates the provisions of this section is herebydeclared usurious in violation of the provisions of this Chapter and unlawfulas an unfair or deceptive act or practice in or affecting commerce in violationof the provisions of G.S. 75‑1.1. The Attorney General, the Commissioner ofBanks, or any party to a consumer home loan may enforce the provisions of thissection. Any person seeking damages or penalties under the provisions of thissection may recover damages under either this Chapter or Chapter 75, but notboth.
(f) In any suitinstituted by a borrower who alleges that the defendant violated this section,the presiding judge may, in the judge's discretion, allow reasonable attorneys'fees to the attorney representing the prevailing party, such attorneys' fees tobe taxed as a part of the court costs and payable by the losing party, upon afinding by the presiding judge that:
(1) The party chargedwith the violation has willfully engaged in the act or practice, and there wasunwarranted refusal by such party to fully resolve the matter which constitutesthe basis of such suit; or
(2) The partyinstituting the action knew, or should have known, that the action wasfrivolous and malicious.
(g) This sectionestablishes specific consumer protections in consumer home loans in addition toother consumer protections that may be otherwise available by law.
(h) A mortgage brokerwho brokers a consumer home loan that violates the provisions of this sectionshall be jointly and severally liable with the lender. (1999‑332, s. 5; 2003‑401,s. 4; 2007‑352, s. 5.)
