Amendment SSA1-SB230

LRBs0317/1

MDK:lmk:ch

2005 - 2006 LEGISLATURE

SENATE SUBSTITUTE AMENDMENT 1, TO 2005 SENATE BILL 230

November 28, 2005 - Offered by Senator Stepp.

SB230-SSA1,1,3 An Act to repeal 138.056 (3) (a); to renumber 138.056 (3) (b); to amend 138.056 (3) (title); and to create 138.056 (3m) of the statutes; relating to: prepayment penalties on variable rate residential mortgage loans.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB230-SSA1, s. 1 Section 1. 138.056 (3) (title) of the statutes is amended to read:

SB230-SSA1,1,5 138.056 (3) (title) Fees and penalties prohibited.

SB230-SSA1, s. 2 Section 2. 138.056 (3) (a) of the statutes, as affected by 2003 Wisconsin Act 257, is repealed.

SB230-SSA1, s. 3 Section 3. 138.056 (3) (b) of the statutes is renumbered 138.056 (3).

SB230-SSA1, s. 4 Section 4. 138.056 (3m) of the statutes is created to read:

SB230-SSA1,2,2 138.056 (3m) Prepayment penalties. (a) Notwithstanding s. 138.052 (2) (a), and except as provided in s. 428.207, a lender may not include a prepayment penalty in a variable rate loan using an approved index unless all of the following are satisfied:

SB230-SSA1,2,5 1. The lender also makes variable rate loans without prepayment penalties and the lender provides the borrower with a written statement that the lender also makes variable rate loans without prepayment penalties.

SB230-SSA1,2,7 2. At the time of the offer of the variable rate loan, and the borrower acknowledges, in writing, receipt of the statement specified in subd. 1.

SB230-SSA1,2,9 3. The penalty is limited to prepayment that is made within 3 years of the date of the loan.

SB230-SSA1,2,11 4. The prepayment is not made in connection with the sale of a dwelling or mobile home securing the loan.

SB230-SSA1,2,14 (b) This subsection applies variable rate loans made, refinanced, renewed, extended, or modified on or after the effective date of this paragraph .... [revisor inserts date].

SB230-SSA1,2,15 (End)