This bill amends existing Iowa law regarding closing costs associated with 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 total points and fees charged by all lenders do not exceed the limits set by federal regulations (12 C.F.R. 1026.43(e)(3)), the loan will not be subject to certain state provisions regarding fees and charges.

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 changes are intended to provide more flexibility in the structuring of loans while ensuring compliance with both state and federal regulations.

Statutes affected:
Introduced: 537.2501, 535.8