This 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 these costs 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 provisions of Iowa Code section 535.8 regarding fees and charges.

Additionally, the bill introduces new provisions that permit creditors to charge for 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 regulatory standards.

Statutes affected:
Introduced: 537.2501, 535.8