Title 26 — Banks and Other Financial Institutions.

For the purposes of this chapter, the term: (1) “Annual percentage rate” means the annual percentage rate for the mortgage loan calculated according to the provisions of the Truth in Lending Act, the regulations promulgated thereunder by the Board of Governors of the Federal Rese…

(a) Nothing in subchapter II of this chapter shall be construed to apply to loans made or purchased by the Federal National Mortgage Association, Federal Home Loan Corporation, or a bank, trust company, savings and loan association, or savings bank, that is regulated and supervis…

This subchapter shall only apply to a covered loan as defined in § 26-1151.01(7)(A).

(a) A lender shall not make a covered loan if the borrower, at the time that the covered loan is closed, cannot reasonably be expected to make the scheduled payments. For purposes of making this determination: (1) The lender’s consideration shall include the ability to make any p…

A lender shall not sell any individual or group credit life, accident, health, or unemployment insurance product on a prepaid single premium basis in conjunction with a covered loan. Credit insurance sold by a lender on a basis other than a prepaid single premium shall be accompa…

If a lender refinances a loan secured by the same residential real property to the same borrower which was made 18 months or less before the covered loan is made, the same lender shall not finance, directly or indirectly, any portion of the covered loan’s origination/discount poi…

A lender shall not recommend or encourage the borrower to default on an existing loan or other debt prior to and in connection with the closing or planned closing of a covered loan that refinances all or any portion of the existing loan or other debt.

(a) A lender shall not steer, counsel, or direct any prospective borrower to accept a loan product with a risk grade less favorable than the risk grade that the borrower would qualify for based on that lender’s then current underwriting guidelines, prudently applied, considering …

A lender or its servicer shall report a borrower’s favorable payment history and information to a nationally recognized credit-reporting agency at least once every 12 months. This section shall not prevent a lender or its servicer from agreeing with the borrower not to report pay…

(a) A lender shall not pay a contractor under a home improvement contract from the proceeds of a covered loan other than by an instrument payable to the borrower or jointly payable to the borrower and the contractor or, at the election of the borrower, through a third-party escro…

A lender shall not make a covered loan that includes a provision that increases the covered loan’s interest rate upon a default. This section shall not apply to an interest rate increase in adjustable rate covered loans based on a recognized adjustable rate mortgage index and con…

A lender shall not charge and retain fees paid by the borrower in making a covered loan which are: (1) For services that are not actually performed; (2) For loan discount points which are not bona fide discount points; or (3) In violation of the Real Estate Procedures Settlement …

(a) In making a covered loan, a lender shall send to the borrower a Red Flag Warning Disclosure Notice. (b) This notice shall be received by the borrower at least 3 business days prior to closing of the loan. (c) If the loan is originated with the assistance of a mortgage broker,…

A lender shall not include in a covered loan or collect or attempt to collect any prepayment premium, fee, or charge in violation of Chapter 33 of Title 28.

A lender shall not make a covered loan that provides for a scheduled payment that is more than twice as large as the average of earlier scheduled monthly payments unless the balloon payment becomes due and payable not less than 7 years after the date of the loan closing. This sec…

A lender shall not make a covered loan that includes a call provision that permits the lender, in its sole discretion, to accelerate the indebtedness; provided, that this prohibition shall not apply when repayment of the covered loan has been accelerated by a bona fide default or…

A lender shall not make a covered loan with a payment schedule with regular periodic payments that causes the principal balance to increase.

A lender shall not make a covered loan that includes terms under which any periodic payments required under the loan are paid in advance from loan proceeds.

A provision in a covered loan whereby a borrower waives in advance a violation of this chapter shall be void.

(a) A mandatory arbitration clause in a note, lien, instrument, or ancillary lien instrument or obligation that evidences or secures a covered loan that is oppressive, unfair, unconscionable, or in substantially in derogation of the rights of borrowers shall be void. (b) Arbitrat…

A lender shall inform a borrower of his or her right to obtain counseling in connection with a covered loan. A Red Flag Warning Disclosure Notice shall satisfy this requirement.

Upon initiation of a business relationship with a mortgage broker, a lender shall verify that each mortgage broker with whom it does business in connection with making a covered loan is licensed or otherwise authorized to do business in the District. After verifying that the brok…

(a) Within 14 days following the funding of a covered loan, a lender otherwise subject to the jurisdiction of the Mayor shall submit to the Mayor a loan package including copies of the following documents: (1) The settlement statement; (2) The FP-7 Form filed with the Recorder of…

The Mayor may create and maintain a public list of lenders and other settlement service providers, including real estate agents and appraisers, who have been found by a court to have engaged in a systematic pattern or practice of fraud or in operations in violation of the require…

The Mayor shall periodically publish or make available to lenders median family income for Washington, D.C. that may be relied upon by lenders for purposes of this chapter.

(a) The Mayor or any borrower under a covered loan may recover damages for a lender’s violation of § 26-1151.02 or subchapter II of this chapter. (b) Notwithstanding subsection (a) of this section, if the violation of § 26-1151.02 or subchapter II of this chapter was caused by th…

The Mayor may conduct examinations and investigations, and issue orders to enforce the provisions of this chapter, with respect to lenders over which it otherwise has jurisdiction. The Mayor may examine any relevant instrument, document, account, book, record, or file of a lender…

(a) If the Mayor determines that a person has violated this chapter, the Mayor may impose one or more of the following penalties: (1) A civil penalty imposed as follows: (A) $1,000 for the first violation; (B) For the second and each subsequent violation occurring within a 24-mon…

A decision of the Mayor under § 26-1153.03 shall be a final order for the purposes of subchapter I of Chapter 5 of Title 2, and shall be enforceable in a court of competent jurisdiction. The Mayor shall publish the final decisions, subject to redaction or modification to preserve…

(a) Any person who purchases or is otherwise assigned a covered loan shall be subject to all claims and defenses with respect to the covered loan that the borrower could assert against the originator of the covered loan, unless the purchaser or assignee demonstrates, by a prepond…

The Mayor shall promulgate rules in accordance with Chapter 5 of Title 2, to carry out the purposes of this chapter. The rules shall be promulgated within 90 days of May 7, 2002.

(a) Subchapters I through III of this chapter shall apply 60 days after the effective date of the regulations promulgated by the Mayor pursuant to this chapter. (b) The provisions of this chapter shall be interpreted and applied to the fullest extent practical in a manner consist…