An Act To Conform State Mortgage Laws with Federal Laws
Maine Legislature, Session 124, LD 1439
Committee Amendment CA_A-SA_D_S289 (Senate)

SENATE AMENDMENT ~ 
"to COMMITTEE AMENDMENT "A" to S.P. 523, 
L.D. 1439, Bill, "An Act To Conform State Mortgage Laws with Federal Laws" 
Amend the amendment on page 2 by striking out alI of paragraph A (page 2, lines 10 
to 28 in amendment) and inserting the following: 
'A. A creditor may not extend a higher-priced mortgage to a consumer based on the 
value of the consumer's collateral without regard to the consumer's repayment ability 
as of consummation, including the consumer's current and reasonably expected 
income, employment, assets other than the collateral, credit history, debt-to-income 
ratio, current obligations and mortgage-related obligations. 
(1) For purposes of this paragraph, mortgage-related obligations are expected 
property taxes, premiums for mortgage-related insurance required by the creditor 
as set forth in paragraph C and similar expenses. 
(2) Under this paragraph, a creditor must verify the consumer's repayment ability 
as follows. 
(a) A creditor must verify amounts of income or assets that it relies on to 
determine repayment ability, including expected income or assets, by the 
consumer's federal Internal Revenue Service Form W-2, tax returns, payroll 
receipts, financial institution records or other 3rd-party documents that 
provide reasonably reliable evidence of the consumer's income or assets. 
(b) A creditor must verify the consumer's current obligations. 
(3) A creditor is presumed to have complied with this paragraph with respect to a 
transaction if the creditor: 
Ca) Verifies the consumer's repayment ability as provided in subparagraphs 
(1) and (2); 
Cb) Determines the consumer's repayment ability using the largest payment 
of principal and 
interest scheduled in the first 7 years following 
consummation and taking into account current obligations and mortgage-
related obligations; and 
Page I -124LR0516(09)-1 
SENATE AMENDMENT 
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SENATE AMENDMENT 1" t~ COMMITTEE AMENDMENT "An ~o S.P. 523, L.D. 1439 
ec) Assesses the consumer's repayment ability taking into account at least 
one of the following: 
Ci) The ratio of total debt obligations to income; and 
(ii) The income the consumer will have after paying debt obligations. 
(4) 
Notwithstanding subparagraph (3), no presumption of compliance IS 
available for a transaction for which: 
(a) The regular periodic payments for the first 7 years would cause the 
principal balance to increase; or 
(b) 
The term of the loan is less than 7 years and the regular periodic 
payments when aggregated do not fully amortize the outstanding principal 
balance. 
(5) This paragraph does not apply to a temporary or so-called "bridge" loan with 
a term of 12 months or less, such as a loan to purchase a new dwelling when the 
consumer plans to sell a current dwelling within 12 months.' 
SUMMARY 
This amendment restores the provIsIon that establishes the presumption of 
compliance if a creditor satisfies certain conditions relating to verification of a consumer's 
repayment ability that Committee Amendment "A" removed. 
SPONSORED~~ 
(Senator BOWMAN) 
COUNTY: York 
SENATE AMENDMENT 
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