With its recent passage of the Home Ownership and Protection Act, the Kentucky General Assembly redefined the lender/borrower relationship and provided home owners with certain protections in the event of default. Below are a few highlights:
• The Act creates the Kentucky Homeownership Protection Center. Developed through the Kentucky Housing Corporation, the Center is a source for information on public services available to homeowners in default or in danger of default on their loans. The Center will provide phone numbers and information on where homeowners can find help.
• Every mortgage loan provider after January 2009 must have an agent for service of process located in Kentucky.
• Duties of the mortgage broker are now outlined in KRS § 286.8-270. These include good faith and fair dealing, acting in the borrower’s best interest instead of another party’s, and providing a written accounting of all monies.
• The creation of the Kentucky Residential Mortgage Fraud Act which sets out a criminal cause of action against those who intend to defraud a borrower. Intent to defraud or deceive is the only element needed to be proven for a cause of action under this section. In addition, a mortgage lending fraud prosecution account is created for the purposes of prosecuting these actions vigorously.
• Licenses of mortgage brokers and related entities may be suspended, limited or restricted by emergency order if the broker is operating in an unsafe manner to the general public, or has insufficient funds to keep it lending safely to the public.
• In addition to these amendments, the Act also sets out stricter requirements for lenders of high-cost home loans.« Back to news