RALEIGH, N.C. (AP) — North Carolina's governor signed three bills Monday to help home foreclosure filings, including one that requires lenders to provide 45 days notice before a foreclosure is filed.
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Gov. Mike Easley signed a bill establishing the North Carolina Foreclosure Prevention Project, under which both homeowners and the state's bank commissioner must receive 45 days notice before a foreclosure is filed. The law also allows the bank commissioner to extend any foreclosure filing notice by 30 days.
The state would use that time to negotiate with the homeowner and mortgage holder on a loan interest rate and payments.
Easley said the law could help more than 25,000 families stay in their homes.
“The program is the first of its kind in the nation that makes sure homeowners and lenders avoid foreclosures, where everyone ends up a loser,” Easley said in a news release. “Our goal is to help bring borrowers and lenders together so that the family gets to keep their home and the bank does not lose money on the loan.”
When banks foreclose, they lose about 40 percent on the loan, Easley said.
Another bill eliminates rate spread premiums — also known as yield spread premiums — which go to mortgage brokers. Critics say these payments give brokers incentive to charge higher fees with no benefit to the consumer, while supporters say it's a legitimate way for borrowers to spread out mortgage broker fees over the life of a loan.
The third bill signed by Easley requires individuals and companies serving loans in North Carolina to register and make reports to the bank commissioner.