2013 KS S.B. 129 (NS) was approved by Governor Sam Brownback (R) on April 16, 2013. This bill repealed (inter alia) Kan. Stat. Ann. § 12-207(b), which stipulated the following (parts in bold are applicable to this announcement):
“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 1½ percentage points above the yield of thirty-year fixed rate conventional home mortgage 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.”
This provision allowed for first lien mortgages, not already subject to the Kansas Uniform Consumer Credit Code (UCCC), to be subjected to it in writing. It also allowed for second lien mortgages subject to the UCCC to, instead, be subject to the interest rate limitations of Kan. Stat. Ann. § 16-207, if agreed to in writing.
For the former of these options, DocuTech has been providing a KS UCCC Addendum (Cx4448). Although this option is no longer provided for in Subsection (b) of Section 16-207, it is further provided for in renumbered Clauses (h)(3) and (i)(1) of this Section, as well as Kan. Stat. Ann. § 16a-1-109 and Kan. Admin. Regs. § 75-6-1.
Due to this, we will continue to provide Cx4448, which prints in Closings, for first lien loans, when the field “Subject to Kansas Uniform Consumer Credit Code” equals “Yes.” The citations in Cx4448 will, however, be revised to reflect changes made to Kansas’ law by Senate Bill 129.
For the latter of the two options (concerning subjecting the interest rate of second lien mortgages to Section 16-207), we were in the process of creating an addendum for it. However, since this option is no longer provided for, we will discontinue the addendum’s creation.
This change will take effect on May 21, 2013. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.
May 14, 2013
DR 135747