The bill amends existing Iowa law regarding closing costs for debts secured by interests in land. It allows creditors, specifically mortgage bankers, to charge closing costs as long as they are bona fide, reasonable, and not intended to circumvent existing regulations. Notably, if the points and fees charged by all lenders do not exceed specified federal limits, the loan will not be subject to certain state regulations. This change aims to provide clarity and flexibility in the lending process while ensuring consumer protection.

Additionally, the bill introduces new provisions that permit creditors to charge discount points aimed at reducing the interest rate or time-price differential of the loan, as well as points that are mutually agreed upon by the creditor and borrower to secure a specific interest rate. These insertions are designed to enhance the options available to borrowers and lenders in structuring loans while maintaining compliance with regulatory standards.

Statutes affected:
Introduced: 537.2501, 535.8