§ 34-25.2-5 - Prohibited acts and practices regarding home loans.
SECTION 34-25.2-5
§ 34-25.2-5 Prohibited acts and practicesregarding home loans. – A home loan shall be subject to the following prohibited acts and practices.
(a) No creditor making a home loan shall finance, directly orindirectly, any credit life, credit disability, credit unemployment or creditproperty insurance, or any other life or health insurance, or any paymentsdirectly or indirectly for any debt cancellation or suspension agreement orcontract, except that insurance premiums or debt cancellation or suspensionfees calculated and paid in full on a monthly basis shall not be consideredfinanced by the creditor.
(b) No creditor shall knowingly or intentionally engage inthe unfair act or practice of flipping a home loan. "Flipping a home loan" isthe making of a home loan to a borrower that refinances an existing home loanthat was consummated within the prior sixty (60) months when the new loan doesnot have reasonable, tangible net benefit in accordance with subsection34-25.2-4(q), to the borrower considering all of the circumstances, including,but not limited to, the terms of both the new and refinanced loans, the cost ofthe new loan, and the borrower's circumstances.
(c) No creditor shall recommend or encourage default on anexisting loan or other debt prior to and in connection the closing or plannedclosing of a home loan that refinances all or any portion of such existing loanor debt.
(d) No home loan may contain a provision that permits thecreditor, in its sole discretion, to accelerate the indebtedness. Thisprovision does not prohibit acceleration of the loan in good faith due to theborrower's failure to abide by the material terms of the loan.
(e) No home loan may contain a provision that allows a partyto require a borrower to assert any claim or defense in a forum that is lessconvenient, more, costly, or more dilatory for the resolution of a dispute thana judicial forum established in this state where the borrower may otherwiseproperly bring a claim or defense or limits in any way claim or defense theborrower may have.