LRBs0207/4
MDK:lmk:rs
2005 - 2006 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO 2005 ASSEMBLY BILL 456
October 11, 2005 - Offered by Representative Hundertmark.
AB456-ASA1,1,3
1An Act to repeal 138.056 (3) (a);
to renumber 138.056 (3) (b);
to amend 138.056
2(3) (title); and
to create 138.056 (3m) of the statutes;
relating to: prepayment
3penalties on variable rate residential mortgage loans.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB456-ASA1, s. 1
4Section
1. 138.056 (3) (title) of the statutes is amended to read:
AB456-ASA1,1,55
138.056
(3) (title)
Fees and penalties prohibited.
AB456-ASA1, s. 3
8Section
3. 138.056 (3) (b) of the statutes is renumbered 138.056 (3).
AB456-ASA1,2,210
138.056
(3m) Prepayment penalties. (a) Notwithstanding s. 138.052 (2) (a),
11and except as provided in s. 428.207, a lender may not include a prepayment penalty
1in a variable rate loan using an approved index unless all of the following are
2satisfied:
AB456-ASA1,2,53
1. The lender also makes variable rate loans without prepayment penalties and
4the lender provides the borrower with a written statement that the lender also makes
5variable rate loans without prepayment penalties.
AB456-ASA1,2,76
2. At the time of the offer of the variable rate loan, and the borrower
7acknowledges, in writing, receipt of the statement specified in subd. 1.
AB456-ASA1,2,98
3. The penalty is limited to prepayment that is made within 3 years of the date
9of the loan.
AB456-ASA1,2,1110
4. The prepayment is not made in connection with the sale of a dwelling or
11mobile home securing the loan.
AB456-ASA1,2,1412
(b) This subsection applies variable rate loans made, refinanced, renewed,
13extended, or modified on or after the effective date of this paragraph .... [revisor
14inserts date].
