Why does this law repeat provisions already covered under the NC Predatory Lending Law, like the prepayment penalty prohibition?
Many brokers and lenders have continued to place prepayment penalties on NC home loans of $150,000 or less, even though the NC Predatory Lending Law clearly prohibits it. They add these penalties to loans covered by AMPTA (loans that have balloon payments or adjustable interest rates (ARMs) and are therefore covered under the Alternative Mortgage Transaction Parity Act). These brokers and lenders claim that AMPTA, a federal law, preempts state law, an issue of continuing legal dispute. The prepayment penalty prohibition included in this new law applies only to brokered loans, and should not be subject to preemption since regulating brokers is a state function.
