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S1406.......................................by COMMERCE AND HUMAN RESOURCES
MORTGAGE GUARANTY INSURANCE - Amends existing law to revise the definition
of authorized real property security for mortgage guaranty insurance
purposes.
02/08 Senate intro - 1st rdg - to printing
02/11 Rpt prt - to Com/HuRes
02/15 Rpt out - rec d/p - to 2nd rdg
02/18 2nd rdg - to 3rd rdg
02/21 3rd rdg - PASSED - 30-0-5
AYES -- Andreason, Boatright, Branch(Bartlett), Brandt, Bunderson,
Burtenshaw, Cameron, Darrington, Davis, Deide, Dunklin, Geddes,
Hawkins, Hill, Ingram, Ipsen, Keough, King-Barrutia, Little, Lodge,
Noh, Richardson, Risch(Risch), Schroeder, Sims, Sorensen, Stegner,
Stennett, Thorne, Wheeler
NAYS -- None
Absent and excused -- Frasure, Goedde, Marley, Sandy, Williams
Floor Sponsor - Stegner
Title apvd - to House
02/22 House intro - 1st rdg - to Bus
03/06 Rpt out - rec d/p - to 2nd rdg
03/07 2nd rdg - to 3rd rdg
03/08 3rd rdg - PASSED - 55-0-15
AYES -- Barraclough, Bedke, Bell, Bieter, Black, Block, Boe, Bolz,
Bradford, Bruneel, Callister, Campbell, Collins, Crow, Cuddy, Deal,
Denney, Ellis, Ellsworth, Eskridge, Field(13), Gagner, Hadley,
Hammond, Henbest, Jaquet, Kellogg(Duncan), Kunz, Lake, Langford,
Loertscher, Mader, Martinez, McKague, Meyer, Montgomery, Mortensen,
Moyle, Pearce, Pischner, Pomeroy, Ridinger, Robison, Sali, Schaefer,
Shepherd, Smith(33), Smith(23), Smylie, Stevenson, Stone, Tilman,
Trail, Wheeler, Mr. Speaker
NAYS -- None
Absent and excused -- Aikele, Barrett, Clark, Field(20), Gould,
Harwood, Higgins, Hornbeck, Jones, Kendell, Raybould, Roberts,
Sellman, Wood, Young
Floor Sponsor - Gagner
Title apvd - to Senate
03/11 To enrol
03/12 Rpt enrol - Pres signed - Sp signed
03/13 To Governor
03/26 Governor signed
Session Law Chapter 300
Effective: 07/01/02
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE SENATE
SENATE BILL NO. 1406
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO MORTGAGE GUARANTY INSURANCE; AMENDING SECTION 41-2651, IDAHO CODE,
3 TO REVISE THE DEFINITION OF "AUTHORIZED REAL PROPERTY SECURITY."
4 Be It Enacted by the Legislature of the State of Idaho:
5 SECTION 1. That Section 41-2651, Idaho Code, be, and the same is hereby
6 amended to read as follows:
7 41-2651. DEFINITIONS. In this chapter unless context or subject matter
8 otherwise requires:
9 (1) "Mortgage guaranty insurance" means:
10 (a) Insurance against financial loss by reason of nonpayment of princi-
11 pal, interest and other sums agreed to be paid under the terms of any note
12 or bond or other evidence of indebtedness secured by a mortgage, deed of
13 trust, or other instrument constituting a lien or charge on real property,
14 provided the improvement on such real property is a residential building
15 or buildings designed for occupancy by not more than four (4) families, or
16 a condominium unit.
17 (b) Insurance against financial loss by reason of nonpayment of princi-
18 pal, interest and other sums agreed to be paid under the terms of any note
19 or bond or other evidence of indebtedness secured by a mortgage, deed of
20 trust, or other instrument constituting a lien or charge on real property,
21 provided the improvement on such real property is a building or buildings
22 designed for occupancy by five (5) or more families or designed to be
23 occupied for industrial or commercial purposes.
24 (c) Insurance against financial loss by reason of nonpayment of rent and
25 other sums agreed to be paid under the terms of a written lease for the
26 possession, use or occupancy of real property, provided the improvement on
27 such real property is a building or buildings designed to be occupied for
28 industrial or commercial purposes.
29 (2) "Authorized real property security" for the purposes of paragraphs
30 (a) and (b) of subsection (1) of this section means an amortized note, bond or
31 other evidence of indebtedness, not exceeding one hundred three percent
32 (1003%) of the fair market value of the real estate, secured by a mortgage,
33 deed of trust, or other instrument constituting a first lien or charge on real
34 property with any percentage in excess of one hundred percent (100%) being
35 used to finance fees and closing costs on such indebtedness; provided:
36 (a) The real property loan secured in such manner is one which a bank,
37 savings and loan association, or an insurance company, which is supervised
38 and regulated by a department of this state or an agency of the federal
39 government, is authorized to make.
40 (b) The improvement on such real property is a building or buildings
41 designed for occupancy as specified by paragraphs (a) and (b) of subsec-
42 tion (1) of this section.
43 (c) The lien on such real property may be subject and subordinate to the
2
1 following:
2 (i) The lien of any public bond, assessment, or tax, when no
3 installment, call or payment of or under such bond, assessment or tax
4 is delinquent.
5 (ii) Outstanding mineral, oil or timber rights, rights-of-way, ease-
6 ments or rights-of-way of support, sewer rights, building restric-
7 tions or other restrictions or covenants, conditions or regulations
8 of use, or outstanding leases upon such real property under which
9 rents or profits are reserved to the owner thereof.
10 (3) "Contingency reserve" means an additional premium reserve established
11 for the protection of policyholders against the effect of adverse economic
12 cycles or losses.
13 (4) "Policyholders' surplus" means the aggregate of paid-in capital
14 stock, surplus and contingency reserve.
STATEMENT OF PURPOSE
RS 11948
This proposed legislation amends Idaho Code 41-2651(2) of the
Idaho Mortgage Guarantee Insurance Act. The proposed language
modifies the definition of "authorized real property security" by
increasing the "LTV" percentage from 100 to 103. (LTV is the
ratio of the original principal balance of a loan to the property
value at origination.) This allows mortgage insurance companies
to issue private mortgage guarantee insurance for up to 103
percent of the value of the property at the time of loan
origination.
FISCAL IMPACT
There is no fiscal impact to the General Fund.
Contact
Name: Steven J. Tobiason, Kane & Tobiason, LLP
Phone: 342-4545 / 867-6123 cell
STATEMENT OF PURPOSE/FISCAL NOTE S 1406