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Home Foreclosures: 7.8 Civil RICO

The federal Racketeer Influenced and Corrupt Organizations Act (RICO)186 provides powerful civil remedies, including attorney fees and treble damages, to victims subjected to a broadly defined range of “racketeering activity” or to the collection of an “unlawful debt,” which is defined as any usurious debt bearing interest of at least twice the “enforceable rate.”187

Home Foreclosures: 7.9 SAFE Act Licensing

Under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act),194 individual loan originators (those involved in processing loan applications) must register with the National Mortgage Licensing System and Registry (NMLSR) and be state-licensed.195 Those employed by a depository institution (such as a bank or credit union) or an entity regulated by a federal banking agency must register with the NMLSR, but are not required to be state-licensed.

Home Foreclosures: 7.10 State High-Cost Mortgage Statutes

State anti-predatory lending laws also can be powerful tools for challenging unfair lending practices and defending against foreclosure. The scope and content of these state laws varies widely.203 Some like HOEPA provide a private right of action for borrowers, while other limit enforcement to government agencies. Some permit double or treble damages, while others limit relief to compensatory damages.

Mortgage Servicing and Loan Modifications: 3.2.2 Applicability to Servicers

The servicing requirements of RESPA apply to “servicers.”48 A servicer is defined as the “person”49 responsible for the servicing of the loan, which can be the maker or holder of the loan if such entity also services the loan.50 The term “servicing” is defined as “receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan, including amounts for escrow accounts . . .

Mortgage Servicing and Loan Modifications: FLORIDA

Fla. Stat. § 501.137

Scope: Lenders whose loans are secured by real property in state, who hold escrow funds for payment of taxes or insurance premiums.

Exclusions: None specified.

Transfer Notice Requirements: None specified.

Borrower Inquiries: Not specified.

Escrow Requirements:

Restrictions: None specified.

Mortgage Servicing and Loan Modifications: GEORGIA

Ga. Code Ann. §§ 7-1-1000 through 7-1-1002, 7-6a-1 through 7-6a-13

Scope: Not specified.

Exclusions: None specified.

Transfer Notice Requirements: None specified.

Borrower Inquiries: Not specified.

Escrow Requirements:

Restrictions: None specified.

Mortgage Servicing and Loan Modifications: HAWAII

Haw. Rev. Stat. §§ 454M-1 through 454M-6 (effective July 1, 2010)

Scope: Mortgage servicers, defined as persons responsible for receiving any scheduled periodic payments on residential mortgage loans, including amounts for escrow accounts under RESPA, and for making other payments; includes making payments to borrowers on reverse mortgages. § 454M-1.

Mortgage Servicing and Loan Modifications: IDAHO

Idaho Code §§ 26-2802 through 26-2809, repealed by S.L. 2020, ch. 100, § 2, eff. July 1, 2020

Scope: Not specified.

Exclusions: None.

Borrower Inquiries: Not specified.

Handling of funds: None specified.

Interest: None specified.

Additional Requirements: None specified.

Mortgage Servicing and Loan Modifications: ILLINOIS

205 Ill. Comp. Stat. 5/48.2 (Illinois Banking Act); 205 Ill. Comp. Stat. 635/1 through 635/7 (Residential Mortgage License Act); 765 Ill. Comp. Stat. 910/1 through 910/15 (Mortgage Escrow Account Act); 765 Ill. Comp. Stat. 915/1 (Mortgage Tax Escrow Act)

Scope:

Illinois Banking Act: Residential mortgages.

Mortgage Servicing and Loan Modifications: INDIANA

Ind. Code §§ 24-4.4-1-101 through 24-4.4-3-115 (First Lien Mortgage Lending Act); Ind. Code §§ 24-4.5-1-101 through 24-4.5-3-408 (Consumer Credit Code); Ind. Code §§ 24-9-4-1 through 24-9-4-12

Scope:

Mortgage Servicing and Loan Modifications: KANSAS

Kan. Stat. Ann. §§ 58-2337 through 58-2341; Kan. Stat. Ann. §§ 9-2201 through 9-2220 (Kansas Mortgage Business Act)

Scope:

Kan. Stat. Ann. § 58-2337: Loans secured by real estate on which is located, or will be located pursuant to a home loan, a dwelling or dwellings for not more than four families.

Mortgage Servicing and Loan Modifications: KENTUCKY

Ky. Rev. Stat. Ann. §§ 286.8-010 through 286.8-990 (West). See also Ky. Rev. Stat. Ann. § 360.100 (West) (High-Cost Home Loans)

Scope: Mortgage loan companies, defined to include any person servicing mortgage loans. § 286.8-010(20).

Mortgage Servicing and Loan Modifications: MAINE

Me. Stat. tit. 9-A, § 2-310 (Supervised Lenders); Me. Stat. tit. 9-A, §§ 9-304 through 9-305-A (First-Lien Mortgages); Me. Stat. tit. 9-B, § 429 (Financial Institutions; Escrow Accounts); Me. Stat. tit. 14, § 6113 (Mortgage Servicer Duty of Good Faith)

Scope:

Supervised Lenders: Consumer loans with finance charges that exceed 12.25% per year, secured by mortgage on real estate.

Mortgage Servicing and Loan Modifications: ARIZONA

Ariz. Rev. Stat. Ann. § 6-946 (Mortgage Bankers); Ariz. Rev. Stat. Ann. § 33-747

Scope: Mortgage bankers, defined as persons who for compensation, directly or indirectly make or negotiate, or offer to make or negotiate, mortgage loans or mortgage banking loans. § 6-941.

Mortgage Servicing and Loan Modifications: CALIFORNIA

Cal. Civ. Code §§ 2937, 2954 through 2954.8 (West)

Scope: Transfer requirements apply to transferor of servicing of mortgage or deed of trust secured by real property located in state containing one to four residential units. § 2937. Escrow requirements apply to lenders or purchasers (and their agents) of obligations secured by real property containing a single-family, owner-occupied dwelling. § 2954. Provisions of § 2954.2 apply to mortgagees of real property containing a one to four family residence.

Mortgage Servicing and Loan Modifications: DELAWARE

Del. Code Ann. tit. 5, §§ 2302(8), 2303, 2313(c)

Scope: Not specified.

Exclusions: None specified.

Transfer Notice Requirements: None specified.

Borrower Inquiries: Not specified.

Escrow Requirements:

Restrictions: None specified.

Recordkeeping and notice: None specified.

Mortgage Servicing and Loan Modifications: DISTRICT OF COLUMBIA

D.C. Code § 26-1115

Scope: Mortgage lenders, defined as persons who make loans, primarily for personal, family, or household use, secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling, or who service mortgage loans for others by receiving payments from borrowers for distribution. § 26-1101.

Mortgage Servicing and Loan Modifications: MARYLAND

Md. Code Ann., Com. Law §§ 12-109 through 12-109.2, 12-1026 (West) (Escrow); Md. Code Ann., Com. Law § 13-316 (West) (Mortgage Servicing)

Scope: Mortgage, deed of trust, or lien secured by one to four family residential real estate located in state.

Exclusions: Escrow provisions in § 12-109 and § 12-1026 do not apply if loan purchased by out-of-state lender through Freddie Mac, Fannie Mae, or Ginnie Mae.

Mortgage Servicing and Loan Modifications: MICHIGAN

Mich. Comp. Laws §§ 445.1651 through 445.1684 (Mortgage Lenders, Brokers and Servicers Licensing Act); Mich. Comp. Laws § 565.161 (Escrow Statements) to 565.164 (Escrow Adjustments)

Scope:

Mortgage Lenders, Brokers and Servicers Licensing Act: Persons who make or offer to make, or service or offer to service, a loan secured by a first mortgage on real property located in state used, or improved to be used, as dwelling for four or fewer families. § 445.1651a.