An Act To Conform State MOligage Laws with Federal Laws II
Maine Legislature, Session 124, LD 1439
Committee Amendment CA_C_S223 (Senate)
Amends: 9-A MRSA §8

COMMITTEE AMENDMENT" C-" to S.P. 523, L.D. 1439, Bill, "An Act To 
Conform State MOligage Laws with Federal Laws" 
II 
Amend the bill by striking out all of Part A and inseliing the following: 
'PART A 
Sec. A-I. 9-A MRSA §8-103, sub-§l-A, GjfQ-l is enacted to read: 
Q-l. "Higher-priced mOligage loan" means eIther: 
(I) A residential mortgage loim that is a "nontraditioilal mOligage" as defined in 
paragraph T; or . 
(2) A "rate spread home loan" as defined in paragraph V. 
Sec. A-2. 9-A MRSA §8-103, sub-§l-A,~, as enacted by PL 2007, c. 273, Pt. 
A, §4 and affected by §§37 and 41, is amended to read: 
V. 
"Rate spread home loan" means any loan for which the rate spread must be 
reported under the Home Mortgage Disclosure Act of 1975, Regulation C except that, 
beginning October I, 2009, "rate spread home loan" has the same meaning as set 
forth for "higher-priced mOligage loans" in 12 Code of Federal Regulations, Section 
203.4(a)(12); and 226.35(a). In addition, "rate spread home loan" means any loan 
that meets the criteria of a high-rate, high-fee mortgage. 
Sec. A-3. 9-A MRS A §8-103, sub-§l-A, ~B, as amended by PL 2007, c. 471, 
§7 and affected by § 18, is repealed. 
Sec. A-4. 9-A MRSA §8-206-D, sub-§l, ~, as amended by PL 2007, c. 471, 
§ II and affected by § 18, is fllliher amended to read: 
B. A creditor may not knowingly or intentionally engage in the act or practice of 
flipping a residential mortgage loan when making a subprime higher-priced mortgage 
loan, The administrator shall adopt rules defining with reasonable specificity the 
Page I - 124LROS\6(04)-1 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" 0, to S.P. 523, L.D. 1439 
requirements for compliance with this paragraph. Rules adopted pursuant to this 
paragraph are routine technical rules pursuant to Title 5, chapter 375, subchapter 2-A. 
Sec. A-5. 9-A MRSA §8-206-D, sub-§l, f{fG, as repealed and replaced by PL 
2007, c. 471, § 12 and affected by § 18, is amended to read: 
G. A creditor may not extend a slIbprime higher-priced mortgage loan to a borrower 
unless a reasonable creditor would believe at the time the loan is made that the 
borrower will be able to make the scheduled payments associated with the loan. 
(1) 
The determination of a borrower's reasonable ability to repay a 
slIbprime higher-priced mOligage loan must be documented or otherwise 
evidenced in writing and must include, without limitation, a consideration of the 
following: 
(a) The borrower's income; 
(b) The borrower's credit histOlY; 
(c) 
The borrower's current obligations, including other secured and 
unsecured debts; 
(d) The borrower's emp loyment status; 
(e) 
The debt-to-income ratio of the borrower's monthly gross income, 
including the borrower's total monthly housing-related payments including 
all principal, interest, taxes and insurance; and 
(f) 
The borrower's other available financial resources, excluding the 
borrower's equity in the principal dwelling that secures or would secure the 
suborime higher-priced mOligage loan. 
(2) 
The evaluation of the borrower's reasonable ability to repay the 
sliborime higher-priced mOligage loan must include: 
(a) 
The monthly payment amounts based on, at a mllllmum, the fully 
indexed rate, assuming a fully alnortizing payment schedule; 
(b) The verification of income by: 
(i) Review of a borrower's tax returns, payroll receipts or records of 
accoimts fi'om a borrower's financial institution, or reasonable 3rd-paJiy 
verification of those returns, receipts or records; 
(ii) 
Review of reasonable alternatives to the bOiTower's tax returns, 
payroll receipts or records of accounts from a borrower's financial 
institution, including, but not limited to, statements from investment 
advisors, broker-dealers and others in a fiduciaIY relationship with the 
borrower as long as the reasonable alternatives reflect the bon'ower's 
actual income and not estimated, projected, anticipated or a range of 
earnings for a borrower's type or class of employment; and 
COMMITTEE AMENDMENT 
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COMMITTEE AIVIENDMENT "~,, to S.P. 523, L.D. 1439 
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(c) 
For products that permit negative amortization, a repayment analysis 
based upon the initial loan amount plus any balance increase that may accrue 
from the negative amortization provision. 
(3) The administrator may adopt, amend and repeal routine technical rules in 
accordance with Title 5, chapter 375, subchapter 2-A defining with reasonable 
specificity the requirements set forth in subparagraphs (1) and (2). In adopting 
rules under this subparagraph, the administrator shall give due consideration and 
weight to the following federal regulations and guidelines, as amended from time 
to time: 
(a) Final Interagency Guidance on Nontraditional Mortgage Product Risks; 
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(b) Credit Risk Management Guidance for Home Equity Lending; 
(c) Expanded Guidance for Subprime Lending Programs; and 
(d) Interagency Guidance on Subprime Lending.' 
Amend the bill in Part B in section I in Article 13 in § I 3-1 02 in subsection 1 by 
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striking out all of paragraph A (page 15, lines 1 and 2 in L.D.) and inserting the 
following: 
'A. The receipt, collection, distribution and analysis of information common for the 
processing, underwriting or modification of a residential mortgage loan; and' 
Amend the bill in Part B in section I in Article 13 in § 13-103 in subsection 2 by 
inserting after paragraph D the following: 
'E. An employee of a nonprofit organization exempt from taxation under the United 
States Internal Revenue Code, Section 50Iec)e3) and engaged in the financing of 
housing for low-income people under a program designed specifically for that 
purpose, to the extent exempted by the administrator by rule, advisory ruling or 
interpretation, after taking into consideration any rule, advisOlY ruling or 
interpretation issued by the United States Depat1ment of Housing and Urban 
Development. 
F. 
A retail seller of a manufactured home to the extent determined by any rule, 
advisory ruling or interpretation issued by the United States Depat1ment of Housing 
and Urban Development.' 
Amend the bill in Pat1 B in section 1 in Article 13 in § 13-104 in subsection 4 in 
paragraph B by striking out all of subparagraph (1) (page 18, lines 27 and 28 in L.D.) and 
inserting the following: 
'e I) An independent credit report from a consumer repOliing agency described in 
the federal Fair Credit Reporting Act, Section 603ep) except that information on a 
credit report may not be used as the sole basis for the denial of a mortgage loan 
originator license pursuant to section 13-105; and' 
Amend the bill in Part B in section 1 in Article 13 in § 13-1 05 in subsection 2 by 
striking out all of the first indented paragraph (page 19, lines 3 and 4 in L.D.) and 
inserting the following: 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT ,,~, to S.P. 523, L.D. 1439 
'2. No felony conviction. 
Except if the administrator determines that a conviction 
as described in paragraph A does not affect the applicant's demonstration of good 
character and fitness under subsection 3, the applicant has not been convicted of, or 
pleaded guilty or nolo contendere to, a felony in a domestic, foreign or mil italY court:' 
Amend the bill in Part B in section I in Article 13 in § 13-116 by striking out all of 
subsections 13 and 14 (page 28, lines 29 to 33 in L.D.) and inselting the following: 
'13. Excessive insurance. Cause or require a borrower to obtain property insurance 
coverage in an amount that exceeds the replacement cost of the improvements as' 
established by the propelty insurer; 
14. 
Account. 
Fail to truthfully account for money belonging to a palty to a 
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residential mOitgage loan transaction; or 
15. Good faith and fair dealing. Fail to comply with the duties of good faith and 
fair dealing as required in section 10-303-A.' 
SUMMARY 
IS 
This amendment strikes Palt A of the bill and retains only those provisions relating to 
conforming defined terms in Maine law with federal law. 
This amendment makes changes to Part B of the bill to provide for an exemption 
froin licensing as a mortgage loan originator for nonprofit organizations engaged in 
financing hOllsing for low-income persons and for retail sellers of manufactured homes to 
the extent determined by the federal Departmerit of Housing and Urban Development. 
The amendment clarifies the requirements for licensing related to an applicant's criminal 
history and credit history. The amendment also includes a provision making the duties of 
good faith and fair dealing apply to mortgage loan originators. 
COMMITTEE AMENDMENT 
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