Introduced
by
To clarify that mortgage loan contracts which contain “nonrecourse loan provisions” cannot be made into a recourse loan by a “post closing solvency covenant" or other device. Practically all residential mortgages are “non-recourse” loans, meaning that although the lender can take back a delinquent borrower’s home, he can’t go after other property or income of the borrower.
Referred to the Committee on Commerce
Clarify mortgage loan contract “nonrecourse” provision rules to clarify that mortgage loan contracts which contain “nonrecourse loan provisions” cannot be made into a recourse loan by a “post closing solvency covenant" or other device. Practically all residential mortgages are “non-recourse” loans, meaning that although the lender can take back a delinquent borrower’s home, he can’t go after other property or income of the borrower.
Reported without amendment
Without amendment and with the recommendation that the bill pass.
Motion
by
The motion passed by voice vote
Referred to the Committee on Banking and Financial Services
