Pursuant to our yearly audit of state-specific disclosures, we will be making the following changes:
ME Balloon Addendum to Loan Application (Cx3394)
This document is provided pursuant to the provisions of Me. Rev. Stat. Ann. tit. 9-A, § 3-308, which stipulates that certain disclosures concerning a balloon payment must be provided “with respect to a consumer credit transaction having a schedule of payments requiring more than one payment of principal other than one pursuant to open-end credit.”
While a “consumer credit transaction” is defined to include a wide variety of loans (see Ibid. § 1-301[12]), Ibid. § 1-202(8) specifically exempts “a loan made by a creditor secured by a first mortgage on real estate” from a good portion of the provisions of the Maine Consumer Credit Code, including Ibid. § 3-308.
Due to this exclusion, as well as the exclusion applicable to open-end credit, we will be adding the following print conditions to Cx3394:
- Lien Position = Second Lien
- HELOC = No
ME Disclosure to Consumer (Cx3764)
This document is provided pursuant to the provisions of Me. Rev. Stat. Ann. tit. 9-A, § 10-303 and Code Me. R. 02-030, ch. 350, § 4(C) & (E). The former provision requires a loan broker to “provide the consumer with written disclosure[s] of material consumer protections.” The latter provision also requires a credit services organization to provide the same disclosures.
A “loan broker” and “credit services organization” are both defined similarly as:
“. . . any person who, with respect to the extension of consumer credit by others, provides or offers to provide, in return for the separate payment by the consumer of money or other valuable consideration, any of the following services: (b) Arranging for or obtaining an extension of credit for a consumer . . .” (see Me. Rev. Stat. Ann. tit. 9-A, § 10-102[1] and Code Me. R. 02-030, ch. 350, § 2[A][1]; emphasis added)
These definitions indicate that the above referenced disclosure provisions only apply to entities acting within a mortgage loan brokerage capacity – particularly when coupled with the fact that, generally, a “supervised financial organization” and a “supervised lender” (two of the main types of mortgage lenders in Maine) are exempt from the definitions of “loan broker” and “credit services organization” (see Me. Rev. Stat. Ann. tit. 9-A, § 10-102[1][B][1] & [2] and Code Me. R. 02-030, ch. 350, § 2[A][2][a] & [b]).
Due to this, we will be adding the following print condition to Cx3764:
- Lender is a Broker? = Yes
Effective Date
These changes will take effect on February 4, 2017. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
DR 218024