Code of Maine Rules
02 - DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
029 - BUREAU OF FINANCIAL INSTITUTIONS
Chapter 119 - ALTERNATIVE MORTGAGE TRANSACTIONS

SUMMARY: In 1985, the Office of Consumer Credit Regulation first promulgated Chapter ("Rule") 250, regulating the making of closed-end, first-lien alternative mortgage transactions by mortgage banking companies. Amendments to federal Regulation Z, effective October 1, 1988 provided an opportunity to redraft Rule 250 so as to increase consistency not only with Regulation Z, but also with Bureau of Banking's Rules 19 and 21 (which regulate similar activities by banks), while retaining important consumer protections.

In 1981, the Bureau of Banking promulgated Regulation 19 which both authorized and regulated the making of adjustable rate mortgages by Maine financial institutions and their affiliates. In 1983, the Bureau promulgated Regulation 21, which both authorized and regulated the making of partially amortized loans (balloon mortgages). These rules contained various borrower protections and disclosure requirements. Regulation #19 was amended in 1984 and again in 1988 to allow financial institutions greater flexibility in selling mortgages to the secondary market and to effect consistency between the Bureau's disclosure requirements and those mandated by Regulation Z, thus assuring an adequate supply of funds for home mortgages. There have been no changes to Regulation 21 since its original promulgation.

This joint rule is the product of efforts by the Office of Consumer Credit Regulation and the Bureau of Banking to combine OCCR Rule 250 and Bureau of Banking Chapter 119 (Regulation 19) and Chapter 121 (Regulation 21) into one regulation identified as OCCR Rule 250 and Bureau of Banking Chapter 119 (Regulation 19). At the same time, this rule repeals Bureau of Banking Chapter 121(Regulation 21). This 1996 Joint Rule is being promulgated to permit creditors and financial institutions to offer certain loan products in Maine which have achieved general acceptance on the national secondary market, and to foster a more efficient approach to the regulation of alternative mortgage transactions.

AUTHORITY: 9-A M.R.S.A. §6-104(1) (E) ;

9-A M.R.S.A. §9-302(1) .

9-B M.R.S.A. §111;

9-B M.R.S.A. §215 ;

9-B M.R.S.A. §241;

9-B M.R.S.A. §532; and

9-B M.R.S.A. §732.