A BILL TO BE ENTITLED
AN ACT to conform the laws related to permissible interest rates for home loans secured by second and subsequent mortgages to the laws governing permissible interest rates for home loans secured by first mortgages.
The General Assembly of North Carolina enacts:
SECTION 1.  The catch line for G.S. 24‑1.1A reads as rewritten:
"§ 24‑1.1A.  Contract rates on home loans secured by mortgages or deeds of trust."
SECTION 2.  G.S. 24‑1.1A(a) reads as rewritten:
"(a)	Notwithstanding any other provision of this Chapter, but subject to the provisions of G.S. 24‑1.1E, parties to a home loan may contract in writing as follows:
(1)	Where the principal amount is ten thousand dollars ($10,000) or more the parties may contract for the payment of interest as agreed upon by the parties.
(2)	Where the principal amount is less than ten thousand dollars ($10,000) the parties may contract for the payment of interest as agreed upon by the parties, if the lender is one of the following:
a.	Approved as a mortgagee by the Secretary of Housing and Urban Development, the Federal Housing Administration, the Department of Veterans Affairs, a national mortgage association or any federal agency.
b.	A local or foreign bank, savings and loan association or service corporation wholly owned by one or more savings and loan associations and permitted by law to make home loans, credit union or insurance company.
c.	A State or federal agency.
d.	A mortgage banker who is a licensee or an exempt person as those terms are defined in G.S. 53-243.01.
(3)	Where the principal amount is less than ten thousand dollars ($10,000) and the lender is not a lender described in the preceding subdivision (2) the parties may contract for the payment of interest not in excess of sixteen percent (16%) per annum.
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SECTION 3.  G.S. 24‑1.1A(c2) is repealed.
SECTION 4.  G.S. 24‑1.1A(e) reads as rewritten:
"(e)	The term "home loan" shall mean a loan, other than an open‑end credit plan, where the principal amount is less than three hundred thousand dollars ($300,000) secured by a mortgage or deed of trust on real estate upon which there is located or there is to be located one or more single‑family dwellings or dwelling units."
SECTION 5.  G.S. 24‑1.1A(g)(1) reads as rewritten:
"(1)	A home loan will be subject to the deferral fee limitations set forth in subdivision (2) of this subsection if:
a.	The borrower is a natural person;
b.	The debt is incurred by the borrower primarily for personal, family, or household purposes; and
c.	The loan is secured by a mortgage or deed of trust on real estate upon which there is located or there is to be located a structure or structures designed principally for occupancy of from one to four families which is or will be occupied by the borrower as the borrower's principal dwelling."
SECTION 6.  G.S. 24‑1.4 is repealed.
SECTION 7.  This act becomes effective July 1, 2003, and applies to loans entered into on or after that date.