§ 45-20-102 — Chapter definitions

As used in this chapter, unless the context otherwise requires: (1) "Affiliate" means any company that controls, is controlled by, or is under common control with another company, as set forth in the federal Bank Holding Company Act of 1956 ( 12 U.S.C. § 1841 et seq.), and the regulations promulgated pursuant to that act; (2) "Annual percentage rate" means the annual percentage rate for the loan calculated according to the federal Truth-in-Lending Act ( 15 U.S.C. § 1601 et seq.), and the regulations, including official staff commentary, promulgated pursuant to that act, by the board of governors of the federal reserve system; (3) "Bona fide loan discount points" means loan discount points actually paid by the borrower to the lender for the purpose of reducing, and that in fact result in a bona fide reduction of, the interest rate applicable to the loan by a minimum of twenty-five (25) basis points per discount point; (4) "Borrower" means a natural person obligated to pay a home loan, including a co-borrower; (5) "Commissioner" means the commissioner of financial institutions; (6) "Construction loan" means a loan for the initial construction of a borrower's principal dwelling on land owned by the borrower, with a maturity of less than eighteen (18) months, that only requires the payment of interest until the time that the entire unpaid balance is due and payable, or a fee in lieu of interest; (7) "Department" means the department of financial institutions; (8) "High-cost home loan" means a home loan in which the terms of the loan meet or exceed the rate threshold or the total points and fees threshold; (9) "Home loan" means a loan in which: (A) The principal amount of the loan does not exceed the lesser of the conforming loan size limit for a single-family dwelling as established by the federal national mortgage association, or three hundred fifty thousand dollars ($350,000); (B) The debt is incurred primarily for personal, family, or household purposes; (C) The loan is secured by a mortgage or deed of trust on real estate in this state, upon which there is located or there is to be located a structure: (i) Designed principally for occupancy by one (1) to four (4) families; and (ii) That is or will be occupied by a borrower as the borrower's principal dwelling; and (D) "Home loan" does not include: (i) Any residential mortgage transaction as defined in 12 CFR 226.2(a)(24) ; (ii) An open-end credit loan as defined in section 12 CFR 226.2(a)(20) , and as used in the official staff commentary of the board of governors of the federal reserve system, except as provided in § 45-20-106 ; (iii) A reverse mortgage transaction, as defined in title 47, chapter 30; (iv) A construction loan; and (v) Any loan that is insured or guaranteed by, securitized for, or sold to a government agency, including the department of housing and urban development, the department of veteran affairs, the Tennessee housing development agency, or the United States department of agriculture; (10) "Lender" means "lender" as defined in 24 CFR 3500.2 . "Lender" also means a "mortgage loan broker" as defined in § 45-13-102 ; (11) "Person" means any individual, corporation, partnership, trust, or any other business unit or legal entity, as the context may require; (12) (A) "Points and fees" means as defined in 12 CFR 226.32 , and as used in the official staff commentary of the board of governors of the federal reserve system; (B) "Points and fees" shall exclude up to and including two (2) bona fide loan discount points; and (C) "Points and fees" shall not include charges for all items listed in 12 CFR 226.4(c)(7) , as provided in 12 CFR 226.32(b)(1)(iii) , where the charges are paid to an affiliate of the lender and the amount is reasonably consistent with amounts charged for comparable services by a party not affiliated with the lender at the time the loan is made; provided, however, that only the amount of the charge that exceeds the charge for comparable items shall be included within the term "points and fees"; (13) "Principal loan amount" is the total amount of money paid to, received by, or credited to the account of the borrower on which interest is to be computed; (14) "Rate threshold" means that the annual percentage rate of the loan at the time the loan is consummated is such that the loan is considered a mortgage pursuant to § 152 of the Home Ownership Equity Protection Act of 1994 ( 15 U.S.C. § 1602(aa) ), and the regulations adopted pursuant to 15 U.S.C. § 1602(aa) by the federal reserve system, including 12 CFR 226.32 , and as used in the official staff commentary of the board of governors of the federal reserve system; (15) "Servicer" means any person who in the regular course of business assumes responsibility for servicing and accepting payments for a high-cost home loan; (16) "Total loan amount" means the term as defined in 12 CFR 226.32 and as used in the official staff commentary of the board of governors of the federal reserve system; and (17) "Total points and fees threshold" means the total points and fees payable by the borrower at or before the loan closing that exceed: (A) The greater of five percent (5%) of the total loan amount or two thousand four hundred dollars ($2,400), if the total loan amount is more than thirty thousand dollars ($30,000); or (B) Eight percent (8%) of the total loan amount, if the total loan amount is thirty thousand dollars ($30,000) or less.

Legislative History

Acts 2006, ch. 801, § 2.