2016 New Hampshire Revised Statutes
Title XXXV - BANKS AND BANKING; LOAN ASSOCIATIONS; CREDIT UNIONS
Chapter 397-A - LICENSING OF NONDEPOSITORY MORTGAGE BANKERS, BROKERS, AND SERVICERS
Section 397-A:16-a - Lender's and Borrower's Rights; Second Mortgage Debt.
I. The allowable rate of interest computed on the unpaid balance that any person may directly or indirectly charge, take, or receive for a second mortgage loan secured by property which is occupied in whole or in part at the time said loan is made as a home by any obligor on the mortgage debt or by any person granting or releasing any interest under said mortgage shall be the rate agreed upon in the note between borrower and lender, and following the sixth month of any period in which a loan has been in continuous default, not more than 1 1/2 percent per month on any unpaid balances.
II. Notwithstanding any other provision of this chapter, the charges which may be collected on any second mortgage loan made under this chapter for the period beginning 6 months after the originally scheduled final installment date of a loan other than an open-end loan, or for the period beginning 6 months after the final due date of an open-end loan as established by the term applicable to the loan from time to time in accordance with the open-end note or loan agreement and ending with date of payment of the loan in full shall not exceed 18 percent per annum simple interest on the balances outstanding from time to time during said period. If the loan is an open-end loan the borrower's privilege for further loans shall not be reinstated by the licensee where the rate has been reduced under the preceding sentence unless the borrower executes a new open-end loan agreement.
III. The borrower shall have the right to anticipate his or her second mortgage debt in whole or in part upon payment of any prepayment penalty agreed upon between borrower and licensee, provided, however, that any penalty shall be clearly set forth in the loan documents; except that there shall be no penalty charged for prepayment of a second mortgage home loan after the loan has been in existence for 5 years. When an open-end loan agreement providing for advances from time to time by the licensee exists between the borrower and the licensee, monthly loan payments shall be selected by the borrower as stated in the note or open-end agreement.
IV. Unless otherwise provided in the note, second mortgage loan payments shall be applied on the scheduled payment dates. Except where the borrower agrees in writing to a different application of his payments, in cases where partial payments are made, the interest shall be calculated to the time of payments, and such payment shall first be applied to interest, and the balance thereafter remaining, if any, shall be applied to principal. In addition to the interest permitted under this section, the lender may contract for and receive any additional other charge, as defined by RSA 358-K:1, XIII, as may be agreed upon by the lender and the borrower.
V. A licensee may retain any security interest in real property on an open-end loan until the open-end account is terminated, provided that if there is no outstanding balance in the account and there is no commitment by the licensee to make advances, the licensee shall within 10 days following written demand by the borrower deliver to the borrower a release of the mortgage or a request for reconveyance of the deed of trust on the real property taken as security.
VI. The repayment provisions of any second mortgage loan shall be clearly set forth in the loan documentation and finance charges shall be clearly disclosed in accordance with RSA 399-B. Nothing in this chapter shall be deemed to limit any type of mortgage or repayment plan.
VII. For second mortgage loans where the payment is applied on the date received, the licensee shall provide to the borrower, at the time of application for the loan, a separate written disclosure which explains how the payments will be applied.
VIII. Upon payment in full of the outstanding principal, interest, and other charges due on a second mortgage loan, the holder shall plainly mark the note or a copy thereof with the words "PAID IN FULL'' or "CANCELLED'' and release or provide the borrower evidence to release any mortgage or security instrument no longer securing any indebtedness to the holder. If the original is retained by the lender, the original shall be returned within a reasonable period of time upon the written request of the borrower.
IX. If any note secured by a second mortgage, in the case of loans other than open-end loans, does not among its provisions clearly indicate the principal sums, the rate of interest, the period of the loan and the periodic due dates, if any, of principal and interest or, in the case of open-end loans, if the note does not among its provisions clearly indicate the maximum amount of credit available, the rate of interest, the selected payment, or its manner of determination, and the related period or periods of repayment and the monthly or periodic due dates, then the lender shall have no right to collect interest.
X. If the borrower on a second mortgage loan or his or her authorized representative requests, in writing, the lender to furnish him or her with a copy of the note, the lender shall, within 15 days after receipt of said request, send by certified mail a true copy of said note to the person requesting the same at the address specified in such request. At least 15 days prior to the commencement of any foreclosure proceedings the lender shall send to the borrower by certified mail a statement of his or her intention to foreclose which shall specify the amount of principal, interest and other indebtedness, if any, owing and accruing under the note and mortgage. Failure of the lender to comply with the provisions of this section shall suspend his or her rights until such time as he or she complies with the provisions of this section.
XI. Upon payment of any money by the borrower on a second mortgage loan, the lender shall at the request of the borrower give him or her a receipt stating the date of payment, the amount paid, the amount applicable to interest on the loan and the amount applicable to the principal. Such receipt shall be signed by the lender or the lender's duly authorized representative. If a lender refuses, on written demand sent by certified mail, to give such receipt, the lender shall forfeit all interest on the principal sum.
XII. Any second mortgage loan made in violation of paragraphs I-VIII by any person shall be discharged upon payment or tender by the debtor or any person succeeding to his or her interest in such real estate of the principal sum actually borrowed. Any agreement whereby the borrower waives the benefits of paragraphs I-VIII or releases any rights he or she may have acquired by virtue thereof shall be deemed against public policy and void.
Source. 2016, 289:1, eff. Aug. 20, 2016.
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