Ohio Administrative Code|Rule 1301:9-2-23 | Home equity and second mortgage loans.

                                                
(A) A "home equity loan or a second
		  mortgage loan" is a loan secured by the equity in a dwelling, and is made
		  for a purpose other than the purchase or refinancing of the dwelling,
		  regardless of the lien priority. A home equity loan may be one with lines of
		  equity credit which are either variable or fixed-rate. Home equity loans
		  qualify as consumer credit. Home equity and second mortgage loans shall be made
		  in accordance with disclosures required under the "Truth in Lending
		  Act," 82 Stat. 149 (1980), 15 U.S.C. 1606, as in effect on July 21,
		  2010.
(B) Adequate insurance on properties
		  securing home equity and second mortgage loans shall be in place and the
		  borrower shall furnish a copy of a fire and casualty policy in at least the
		  amount of any outstanding mortgage with a mortgage loss payable clause in favor
		  of the credit union.
(C) Credit unions engaging in equity
		  lending shall obtain a title search of the property securing home equity and
		  second mortgage loans for outstanding liens and must retain a copy in the
		  member's file. The title to the property securing a home equity or second
		  mortgage loan shall be in fee-simple absolute.
(D) The combined aggregate amount of
		  first mortgage and home equity or second mortgage loans shall not exceed one
		  hundred per cent of the appraised value of the property securing the loan. An
		  appraisal made by a certified or licensed independent appraiser who has
		  satisfied the requirements of Chapter 4763. of the Revised Code and applicable
		  rules or other comparable statute, shall be obtained for home equity or second
		  mortgage loans of four hundred thousand dollars or more, or for ninety-five per
		  cent of appraised value. Appraisals or a determination of the property value
		  for home equity or second mortgage loans which are less than four hundred
		  thousand dollars or less than ninety-five per cent of appraised value shall, as
		  a minimum, be made by qualified staff personnel and include a written report
		  documenting the comparable sales or based on other acceptable information and
		  documentation that accurately reflects the appraised value.
(E) A credit union may make home equity
		  or second mortgage loans secured by liens exceeding ninety-five per cent of the
		  appraised value, provided that the credit union files with the superintendent a
		  copy of the loan policy and information regarding the placement of proper
		  private mortgage insurance on the excess amount. The superintendent shall
		  notify the credit union not more than ten business days after the filing of the
		  request or policy whether it is denied, approved, or needs modification. If the
		  superintendent does not respond within ten business days after the filing of
		  the request or policy, it shall be deemed approved; unless, the superintendent
		  notifies the credit union in writing within ten business days of the credit
		  unions request being filed that additional documentation is required. If
		  additional documentation is required, the credit union shall have thirty days
		  to file the additional documentation with the superintendent. If the
		  superintendent does not respond within ten business days of receiving the
		  additional documentation the request shall be deemed approved. However, nothing
		  shall preclude a credit union from requesting a waiver in writing for the
		  requirement of private mortgage insurance when modifying an existing loan above
		  ninety five per cent loan to value. The superintendent shall approve or deny
		  the waiver within ten business days of receiving the request. If the
		  superintendent does not respond within ten business days of receiving the
		  waiver request it shall be deemed approved.
(F) The payment schedules for home equity and second mortgage
		  loans shall provide for monthly installments but no less than quarterly, that
		  include amortization of the principal and interest within terms of the loan
		  agreement, and in no case shall the term exceed forty years.
(G) If requested by a credit union, the superintendent may
		  approve a less restrictive real estate loan policy than provided by this rule.
		  The request shall be made in writing and include a copy of the proposed real
		  estate loan policy and a certified copy of the resolution of the board of
		  directors adopting the policy. The credit union shall substantiate that it has
		  the expertise, capital, management, and experience to implement the proposed
		  policy. The credit union shall file with the superintendent a copy of the loan
		  policy and information regarding the placement of proper private mortgage
		  insurance the excess amount. The superintendent shall notify the credit union
		  not more than ten business days after the filing of the request or policy
		  whether it is denied, approved, or needs modification. If the superintendent
		  does not respond within ten business days after the filing of the request or
		  policy, it shall be deemed approved; unless, the superintendent notifies the
		  credit union in writing within ten business days of the credit unions
		  request being filed that additional documentation is required. If additional
		  documentation is required, the credit union shall have thirty days to file the
		  additional documentation with the superintendent. If the superintendent does
		  not respond within ten business days of receipt of the additional
		  documentation, the request or policy shall be deemed approved.
(H) Nothing herein shall preclude the superintendent from
		  requiring a more restrictive real estate loan policy than provided by this
		  rule, as a matter of safety and soundness.


Last updated April 19, 2021 at 11:21 AM