There are two Louisiana licensing schemes related to mortgage lending:
-
- the Louisiana S.A.F.E. Residential Mortgage Lending Act (also known as the Louisiana Secure and Fair Enforcement of Mortgage Licensing Act of 2009); and
- the Louisiana Consumer Credit Law.
LSA-R.S. 9:3511(F) states:
“The Louisiana S.A.F.E. Residential Mortgage Lending Act, R.S. 6:1081, et seq., is the primary law governing residential mortgage loans as defined in the Louisiana S.A.F.E. Residential Mortgage Lending Act. A residential mortgage lender, broker, and a natural person who is a residential mortgage loan originator shall comply with the licensing provisions of the Louisiana S.A.F.E. Residential Mortgage Lending Act, R.S. 6:1081, et seq., unless otherwise exempt by the Act. Notwithstanding any other law to the contrary, parties to a consumer loan, as defined in this Part, which is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling as defined in 15 U.S.C. 1602(v), or on residential immovable property upon which is constructed or intended to be constructed a dwelling, whether or not such a loan includes any additional security interest in movable property, may agree by contract that such a loan shall be governed by the Louisiana Consumer Credit Law, provided the lenders, brokers, and originators are properly licensed under this Part and the Louisiana S.A.F.E. Residential Mortgage Lending Act or otherwise exempt under R.S. 6:1081 et seq.”
LSA-R.S. 9:3516(14) states:
“‘Consumer loan’ means a loan of money or its equivalent made by a supervised financial organization, a licensed lender, or lender in which the debtor is a consumer, and the loan is entered into primarily for personal, family, or household purposes and includes debts created by the use of a lender credit card, revolving loan account, or similar arrangement, as well as insurance premium financing.”
In re Williams, Bkrtcy.M.D.La.2005, 330 B.R. 534, a synopsis of the relevant Notes of Decisions states:
“Louisiana Residential Mortgage Lending Act (LRMLA), and its interest rate limits for residential mortgage loans, did not apply to mortgage securing borrowers’ loan, which was a second mortgage and also secured a loan made pursuant to Louisiana Consumer Credit Law, as evidenced in text of both note and mortgage.”
For Louisiana Second Mortgages and Louisiana HELOCs, a new field has been created for Louisiana License Type (FI 187699) with the following field options:
LA Residential Mortgage Lending Act
LA Consumer Credit Law
Not Selected
If a License Type is not set, the Louisiana License Type will default to “Not Selected,” and no additional language will print.
If LA Residential Mortgage Lending Act = Yes, the following language will print before the signature lines:
For Cx485 – LA Mortgage Second and Cx1356 – HELOC Mortgage – LA:
“This mortgage is subject to the Louisiana Residential Mortgage Lending Act.”
For Cx1050 – Fixed Rate Note Louisiana Second:
“This note is subject to the Louisiana Residential Mortgage Lending Act.”
For Cx21652 – HELOC Agreement:
“This agreement is subject to the Louisiana Residential Mortgage Lending Act.”
If LA Consumer Credit Law = Yes, the following language will print before the signature lines:
For Cx485 – LA Mortgage Second and Cx1356 – HELOC Mortgage – LA:
“This mortgage is subject to the Louisiana Consumer Credit Law.”
For Cx1050 – Fixed Rate Note Louisiana Second:
“This note is subject to the Louisiana Consumer Credit Law.”
For Cx21652 – HELOC Agreement:
“This agreement is subject to the Louisiana Consumer Credit Law.”
These changes are available for testing on Stage & Stage 2 servers and will take effect on March 26, 2024. If you have any questions or concerns, please contact Client Support at 1.800.497.3584.
COM-4306
DR-148945