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286.8-110 Rates -- Mortgage required as evidence of real estate loan -Delinquency charges -- Attorneys' fees -- Charges made part of note -Limits on prepayment penalties.
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Mortgage loan companies are prohibited from making loans and mortgage loan
brokers are prohibited from brokering loans in violation of KRS 360.100 and
are prohibited from making or brokering such loans at a rate or rates in excess
of those provided by KRS 360.010 and 360.025 or other applicable usury
statutes.
Every real estate loan shall be secured by a mortgage or other instrument
constituting a lien upon the real estate securing the loan, according to any
lawful or well-recognized practice that is best suited to the transaction. Any
such instrument, constituting a lien, is herein termed a "mortgage." All such
mortgages shall be recorded in accordance with the law of this Commonwealth.
Delinquency charges may be made for each installment more than ten (10)
days in arrears, and only one (1) delinquency charge shall be made on any one
(1) installment. No delinquency charge shall be made unless disclosed as
required under subsection (2) of this section. In addition to such delinquency
charges, attorneys' fees not exceeding fifteen percent (15%) of the unpaid
balance shall be taxed as costs and court costs may be collected, provided that
the note is referred to an attorney not a salaried employee of the holder for
collection.
Any charges to be assessed against the borrower in the event a loan is paid
prior to maturity shall be prominently displayed and made part of the note and
the loan closing statement regarding the method of computation of any rebate.
No prepayment penalty shall be assessed against the borrower following the
third anniversary date of the mortgage or sixty (60) days prior to the date of the
first interest rate reset, whichever is less. No prepayment penalty shall exceed
three percent (3%) for the first year, two percent (2%) for the second year, and
one percent (1%) for the third year of the outstanding balance of the loan; but
in no event shall a prepayment penalty be assessed against a borrower
refinancing with the mortgage loan company that funded the mortgage.
Effective:April 24, 2008
History: Amended 2008 Ky. Acts ch. 175, sec. 11, effective April 24, 2008. -Amended 1998 Ky. Acts ch. 197, sec. 11, effective July 15, 1998. -- Amended
1986 Ky. Acts ch. 461, sec. 13, effective July 15, 1986. -- Created 1980 Ky. Acts
ch. 365, sec. 12, effective July 15, 1980.
Formerly codified as KRS 294.110.
Legislative Research Commission Note (7/12/2006). In accordance with 2006
Ky. Acts ch. 247, secs. 38 and 39, this statute has been renumbered as a
section of the Kentucky Financial Services Code, KRS Chapter 286.
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