LRB-0303/1
JJL:skg:km
1995 - 1996 LEGISLATURE
March 29, 1995 - Introduced by Representatives Grobschmidt, R. Potter, Baldwin,
Bock, F. Lasee, Notestein, Plombon, Robson and R. Young, cosponsored by
Senator Plewa. Referred to Committee on Financial Institutions.
AB267,1,2
1An Act to create 138.052 (3p) of the statutes;
relating to: residential mortgage
2loan disclosures relating to mortgage insurance.
Analysis by the Legislative Reference Bureau
Under this bill, if a lender requires a borrower to obtain mortgage insurance as
a condition for granting a residential mortgage loan (generally, a loan to purchase
a one-family to 4-family dwelling that is used by the buyer as a principal residence),
the lender must disclose in writing the cost of the mortgage insurance, how the
mortgage insurance may be waived and any other relevant term relating to the
mortgage insurance.
Current law does not require written disclosures of terms relating to mortgage
insurance. Mortgage insurance is used to protect the lender from loss if the lender
is required to foreclose on the mortgage and is often required as a loan condition if
the borrower has limited equity in the purchased property.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB267, s. 1
3Section
1. 138.052 (3p) of the statutes is created to read:
AB267,1,74
138.052
(3p) If a lender requires a borrower to obtain mortgage insurance as
5a condition for a loan, the lender shall, before closing the loan, disclose to the
6borrower all significant terms and conditions relating to the mortgage insurance.
7The disclosures shall be in writing and shall include all of the following:
AB267,2,2
1(a) The amount of the periodic payment for mortgage insurance and the total
2amounts paid for mortgage insurance over the term of the loan.
AB267,2,33
(b) When mortgage insurance may be waived and the procedure for doing so.
AB267,2,54
(c) Any limits or conditions on the refundability of any prepaid amounts paid
5for mortgage insurance.
AB267,2,8
7(1) This act first applies to loans entered into, renewed, extended or modified
8on the effective date of this subsection.
AB267,2,11
10(1)
This act takes effect on the first day of the 3rd month beginning after
11publication.
