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F I S C A L I M P A C T R E P O R T
SPONSOR Cervantes
DATE TYPED 3/4/05
HB 994
SHORT TITLE Home Loan Protection Act Definitions
SB
ANALYST Kehoe
APPROPRIATION
Appropriation Contained Estimated Additional Impact Recurring
or Non-Rec
Fund
Affected
FY05
FY06
FY05
FY06
NFI
N/A
N/A
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
New Mexico Mortgage Finance Authority (MFA)
SUMMARY
Synopsis of Bill
House Bill 994 revises certain definitions and amends certain provisions within the Home Loan
Protection Act.
Significant Issues
House Bill 994 revises the definition of “bridge loan” to mean: 1) a loan with a term not exceed-
ing eighteen months made to a borrower pending the sale of the borrower’s principal dwelling;
or 2) a temporary loan made to a borrower and secured by the borrower’s principal dwelling
pending the borrower’s obtaining permanent financing for that principal dwelling. Current law
defines a “bridge loan” to mean a loan for the initial construction of a borrower’s principal
dwelling on land owned by the borrower with a maturity of less than eighteen months that only
requires the payment of interest until the entire unpaid balance is due and payable. The revision
merely clarifies the distinction between a “bridge loan” and a “construction loan.”
It appears all the proposed revisions are technical clean-up and are consistent with the definitions
and terms of the federal Truth in Lending Act.