This model language establishes safeguards to ensure that holders of second mortgages provide proper notice and documentation before initiating a foreclosure, preventing unfair foreclosure of long-dormant second mortgages as well as older second mortgages taken as home equity lines of credit. Part (A) creates a statutory definition for the term “abandonment,” linked to specific conduct of holders of dormant second mortgage debt. Part (B) applies this definition to create limitations on both judicial and non-judicial foreclosures.
Model Statute
Model Consumer Credit Act (1973) (325 pages) builds on NCLCs 1970 National Consumer Act (NCA). It is also a response to the inadequacies of the Uniform Consumer Credit Code drafted by the National Commissioners on Uniform State Laws (now the Uniform Laws Commission). While covering many of the same topics as the NCA, it has more extensive treatment of assignee attempts to cut off liability, door-to-door sales, credit card errors, credit reporting, and injunctions and class actions.
National Consumer Act (1970) is a 156-page comprehensive model law covering many aspects of consumer protection. The NCA’s consumer credit provisions limit interest rates, late and other charges, and provide prepayment rights. It more generally establishes requirements as to disclosures and writings in consumer transactions and limits credit terms and creditor rights, such as restrictions on balloon payments, assignment of earnings, confession of judgments, holder-in-due-course status, attorney fees, and security interests.
Model Refund Anticipation Loan Act (2008) prohibits refund anticipation loan (RAL) and refund anticipation check (RAC) add-on fees charged by tax preparers (bank rate exportation does not apply to the tax preparers). Also included are registration and bonding requirements, and restriction of registration to preparers whose primary business is tax preparation. The Model Act also prohibits debt collection abuses and prevents referrals to check cashers.
Model Individual Tax Preparer Regulation Act (Rev. 2013) establishes a state Board of Individual Tax Preparers, sets out the board’s powers, and requirements for tax preparers concerning registration, bonding, periodic registration renewal, and enforcement powers,. The model law sets out disclosure requirements to consumers, prohibited practices for tax preparers, and private remedies for consumers.
Model Law: Safer Cars at the Point of Sale (2018) required motor vehicle dealers, before offering for sale any used vehicle, must perform an inquiry of a NMVTIS data provider on a vehicle and a copy of any applicable report must be provided to the consumer prior to a sale’s consummation. A special disclosure is required on the vehicle if the report indicates prior wreck damage.
Model Transparent and Consistent Pricing of Motor Vehicle Add-Ons Act (2018) requires dealers to establish prices in advance for add-ons or some method for determining prices. Dealers must submit prices for their add-ons to the state attorney general, and the prices are posted online. Dealers must also post the available add-ons and their non-negotiable prices on each car offered for sale.
Model Consumer Amendments to Uniform Commercial Code Article 9 (2016) provides model language to amend the Uniform Commercial Code Article 9 to the extent it regulates consumer repossessions. States generally recognize that the UCC Art. 9 does not sufficiently consider the unique aspects of repossessions of motor vehicles, household goods, or manufactured homes, either through stand-alone legislation or variations to Article 9.
NCLC’s Model Manufactured Home Community Stability and Preservation Act (2023) sets forth model language to give residents of manufactured home communities an opportunity to purchase their communities. It requires the community owner to give the residents—and a state agency, the local housing authority, and the local licensing or health and safety enforcement agency—advance notice of any prospective sale of the community. The notice must include the price, terms, and conditions that the community owner has provisionally accepted or is prepared to accept.
Mediation Program for Distressed Homeowners: Judicial Foreclosure States (2022) creates a mediation process as an initial step in a judicial foreclosure. Detailed information is specified for the complaint in a judicial foreclosure. The court clerk on receiving the complaint initiates the mediation process requiring the parties to come to mediation with specified information. No fees can be assessed, the complaint need not be answered, and the judicial proceeding is frozen until the mediator issues a report.