00HOUSE CS FOR CS FOR SENATE BILL NO. 221(FIN)                                                                          
01 "An Act relating to negatively amortizing loans secured by owner-occupied real                                          
02 property originated under a program approved or sponsored by the state or                                               
03 federal government, including congressionally chartered national corporations."                                         
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                               
05    * Section 1.  AS 45.45.010(f) is amended to read:                                                                  
06  (f)  A bank, credit union, savings and loan institution, pension fund, insurance                                      
07 company ,  or mortgage company may not require or accept any percent of ownership                                     
08 or profits above its interest rate.  This subsection does not apply to a loan if the                                    
09 principal amount of the loan is $1,000,000 or more and the term of the loan is five                                     
10 years or more , or to a negatively amortizing loan secured by owner-occupied real                                      
11 property originated under a program approved or sponsored by                                                            
12   (1)  the federal government, including congressionally chartered                                                     
13 national corporations; or                                                                                               
14   (2)  the state if                                                                                                    

01   (A)  the real property that secures the loan is not subject to                                                      
02 forced sale provided the owner has not violated the terms of the loan                                                   
03 agreement including terms regarding                                                                                     
04   (i)  payment of property taxes;                                                                                    
05   (ii)  payment of hazard or fire insurance premiums;                                                                
06   (iii)  keeping the property in reasonable repair;                                                                  
07   (iv)  not vacating the property for a period longer                                                                
08 than 12 months;                                                                                                         
09   (B)  the owner may not be evicted from the real property                                                            
10 that secures the loan unless a term of the loan agreement regarding a                                                   
11 matter listed in (A)(i) - (iv) of this paragraph has been violated;                                                     
12   (C)  neither the estate nor any heir of the former owner may                                                        
13 be compelled to pay a deficiency judgment related to the loan; and                                                      
14   (D)  the estate or an heir of the former owner has a right of                                                       
15 first refusal and may either pay off the loan balance in full, if the former                                            
16 owner had equity in the property, or pay a sum not to exceed 95 percent                                                 
17 of the value of the property at the time of exercise of the right of first                                              
18 refusal as determined by an independent real estate appraiser licensed                                                  
19 under AS 08.87 .