2009 North Carolina Code
Chapter 45 - Mortgages and Deeds of Trust.
§ 45-101. (For expiration date, see note) Definitions.

§ 45‑101.  (For expiration date, see note) Definitions.

The following definitions apply throughout this Article:

(1)        Act as a mortgage servicer. – To engage, whether for compensation or gain from another or on its own behalf, in the business of receiving any scheduled periodic payments from a borrower pursuant to the terms of any mortgage loan, including amounts for escrow accounts, and making the payments of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the mortgage loan, the mortgage servicing loan documents, or servicing contract.

(1a)      Annual percentage rate. – Defined in G.S. 24‑1.1F.

(1b)      Home loan. – A loan that has all of the following characteristics:

a.         The loan is not (i) an equity line of credit as defined in G.S. 24‑9, (ii) a construction loan as defined in G.S. 24‑10, (iii) a reverse mortgage transaction, or (iv) a bridge loan with a term of 12 months or less, such as a loan to purchase a new dwelling where the borrower plans to sell a current dwelling within 12 months.

b.         The borrower is a natural person.

c.         The debt is incurred by the borrower primarily for personal, family, or household purposes.

d.         The principal amount of the loan does not exceed the conforming loan size limit for a single‑family dwelling as established from time to time by Fannie Mae.

e.         The loan is secured by (i) a security interest in a manufactured home, as defined in G.S. 143‑145, in the State which is or will be occupied by the borrower as the borrower's principal dwelling, (ii) a mortgage or deed of trust on real property in the State upon which there is located an existing structure designed principally for occupancy of from one to four families that is or will be occupied by the borrower as the borrower's principal dwelling, or (iii) a mortgage or deed of trust on real property in the State upon which there is to be constructed using the loan proceeds a structure or structures designed principally for occupancy of from one to four families which, when completed, will be occupied by the borrower as the borrower's principal dwelling.

f.          A purpose of the loan is to (i) purchase the dwelling, (ii) construct, repair, rehabilitate, remodel, or improve the dwelling or the real property on which it is located, (iii) satisfy and replace an existing obligation secured by the same real property, or (iv) consolidate existing consumer debts into a new home loan.

(2)        Mortgage lender. – A person engaged in the business of making mortgage loans for compensation or gain.

(3)        Mortgage servicer. – A person who directly or indirectly acts as a mortgage servicer as that term is defined in subdivision (1) of this section or who otherwise meets the definition of the term "servicer" in the Real Estate Settlement Procedures Act, 12 U.S.C. § 2605(i), with respect to mortgage loans.

(3a)      Rate spread home loan. – A home loan in which all the following apply:

a.         The difference between the annual percentage rate for the loan and the yield on U.S. Treasury securities having comparable periods of maturity is either equal to or greater than (i) three percentage points (3%), if the loan is secured by a first lien mortgage or deed of trust, or (ii) five percentage points (5%), if the loan is secured by a subordinate lien mortgage or deed of trust. Without regard to whether the loan is subject to or reportable under the provisions of the Home Mortgage Disclosure Act (12 U.S.C. § 2801, et seq.) (HMDA), the difference between the annual percentage rate and the yield on Treasury securities having comparable periods of maturity shall be determined using the same procedures and calculation methods applicable to loans that are subject to the reporting requirements of HMDA, as those procedures and calculation methods are amended from time to time, provided that the yield on Treasury securities shall be determined as of the fifteenth day of the month prior to the application for the loan.

b.         The difference between the annual percentage rate for the loan and the conventional mortgage rate is either equal to or greater than (i) one and three‑fourths percentage points (1.75%), if the loan is secured by a first lien mortgage or deed of trust, or (ii) three and three‑fourths percentage points (3.75%), if the loan is secured by a subordinate lien mortgage or deed of trust. For purposes of this calculation, the "conventional mortgage rate" means the most recent daily contract interest rate on commitments for fixed‑rate first mortgages published by the Board of Governors of the Federal Reserve System in its Statistical Release H.15, or any publication that may supersede it, during the week preceding the week in which the interest rate for the loan is set.

(4)        Subprime loan. – A loan, originated on or after January 1, 2005, but before December 31, 2007, that meets the definition of a rate spread home loan under this Article. A mortgage servicer may rely on a chart reflecting the appropriate interest rate triggers for rate spread home loans for each day of the period covered by this Article provided by the Commissioner of Banks for the purposes of determining if a loan is a subprime loan covered by this Article. The Commissioner shall provide the chart at least 60 days prior to the effective date of this act.  (2008‑226, s. 1; 2009‑457, s. 3.)