The Florida Senate

494.00792  Required disclosures for high-cost home loans.--

(1)  In addition to other disclosures required by law and in conspicuous type:

(a)  Notice to borrower.--A lender making a high-cost home loan shall provide a notice to a borrower in substantially the following form:

If you obtain this high-cost home loan, the lender will have a mortgage on your home. You could lose your home and any money you have put into it if you do not meet your obligations under the loan.

Mortgage loan rates and closing costs and fees vary based on many factors, including your particular credit and financial circumstances, your employment history, the loan-to-value requested, and the type of property that will secure your loan. The loan rate and fees could also vary based upon which lender or broker you select. As a borrower, you should shop around and compare loan rates and fees.

You should also consider consulting a qualified independent credit counselor or other experienced financial adviser regarding the rates, fees, and provisions of this mortgage loan before you proceed. You should contact the United States Department of Housing and Urban Development for a list of credit counselors available in your area.

You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application.

Borrowing for the purpose of debt consolidation can be an appropriate financial management tool. However, if you continue to incur significant new credit card charges or other debts after this high-cost home loan is closed and then experience financial difficulties, you could lose your home and any equity you have in it if you do not meet your mortgage loan obligations.

Remember that property taxes and homeowners' insurance are your responsibility. Not all lenders provide escrow services for these payments. You should ask your lender about these services.

Also, your payments on existing debts contribute to your credit rating. You should not accept any advice to ignore your regular payments to your existing creditors.

(b)  Annual percentage rate.--A lender making a high-cost home loan shall disclose:

1.  In the case of a fixed mortgage, the annual percentage rate and the amount of the regular monthly payment.

2.  In the case of any other credit transaction, the annual percentage rate, the amount of the regular monthly payment and the amount of any balloon payment permitted under this section, a statement that the interest rate and monthly payment may increase, and the amount of the maximum monthly payment based upon the maximum interest rate allowed pursuant to law.

(c)  Notice to purchasers and assignees.--All high-cost home loans shall contain the following notice:

Notice: This is a mortgage subject to the provisions of the Florida Fair Lending Act. Purchasers and assignees of this mortgage could be liable for all claims and defenses with respect to the mortgage which the borrower could assert against the creditor.

(2)  TIMING OF DISCLOSURE.--

(a)  The disclosure required by this subsection shall be given not less than 3 business days prior to the consummation of the high-cost home loan.

(b)  New disclosures are required when, after disclosure is made, the lender making the high-cost home loan changes the terms of the extension of credit, including if such changes make the original disclosures inaccurate, unless new disclosures are provided that meet the requirements of this section.

(c)  A lender may provide new disclosures pursuant to paragraph (b) by telephone, if:

1.  The change is initiated by the borrower.

2.  At the consummation of the high-cost home loan:

a.  The lender provides the disclosures in writing to the borrower.

b.  The lender and the borrower certify in writing that the new disclosures were provided by telephone no later than 3 days prior to the consummation of the high-cost home loan.

(d)  A creditor must disclose to any high-cost home loan borrower the rights of the borrower to rescind the high-cost home loan within 3 business days pursuant to 15 U.S.C. s. 1635(a) and shall provide appropriate forms for the borrower to exercise his or her right to rescission. The notice, forms, and provisions thereof must be in accordance with the requirements of 15 U.S.C. s. 1635(a).

History.--s. 4, ch. 2002-57.