SB186 - Kentucky: Banks and Financial Institutions, Loans and Credit

Create new sections of Subtitle 2 of KRS Chapter 286 to provide that, with regard to residential mortgage loans in a principal loan amount of under $200,000 and a loss ratio of greater than 80 percent, it shall be unlawful not to verify and document the borrower's income and financial resources and not to verify the borrower's reasonable ability to repay; require an escrow account for taxes and insurance on these loans; specify the method to determine reasonable ability to repay for loans with a variable interest rate; establish criteria which, if met, the borrower shall be presumed to have a reasonable ability to repay; declare it is unlawful to make a residential mortgage loan product that has a higher interest rate, higher points and fees, or other unfavorable terms if the borrower's credit score indicates the borrower may qualify for a residential mortgage loan product that has a lower interest rate, lower points and fees, or more favorable terms, unless there is a corresponding tangible [...]

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