05/13/2019 01:30 PM Senate LABOR & COMMERCE

           HB 104-MORTGAGE LOAN ORIGINATOR LICENSING                                                                        
                                                                                                                                
5:27:28 PM                                                                                                                    
CHAIR  REINBOLD announced  the consideration  of HB  104, CS  FOR                                                               
HOUSE BILL NO.  104(L&C) am, "An Act relating  to exemptions from                                                               
mortgage lender,  mortgage broker,  and mortgage  loan originator                                                               
licensing requirements; and providing for an effective date."                                                                   
                                                                                                                                
5:27:55 PM                                                                                                                    
REPRESENTATIVE TAMMIE  WILSON, Alaska State  Legislature, Juneau,                                                               
paraphrased from the sponsor statement for CSHB 104(L&C)AM:                                                                     
                                                                                                                                
     The current Alaska SAFE Act  allows a seller to finance                                                                    
     his or  her residence.  If a person  had more  than one                                                                    
     residence (a  second home for example)  they could sell                                                                    
     and finance  it themselves  without a license  under AS                                                                    
     06.60.015(b)(3). If the second home  had been rented it                                                                    
     would be  considered an income property  and the seller                                                                    
     would be  required to have  a mortgage  loan originator                                                                    
     license in order to seller-finance it.                                                                                     
                                                                                                                                
     CSHB104(L&C) would allow a  person to seller-finance up                                                                    
     to 5  of their  own properties which  are secured  by a                                                                    
     dwelling, whether they are an income property or not.                                                                      
                                                                                                                                
     Interior and more rural  community property owners have                                                                    
     parcels  with trailers  or cabins  on  them; some  with                                                                    
     water  and  electric,  some  without.  These  types  of                                                                    
     properties  are   historically  difficult   to  finance                                                                    
     through  the  traditional  mortgage  process  and  many                                                                    
     times  lenders require  more money  down, shorter  loan                                                                    
     terms, higher  interest rates, and in  some cases, will                                                                    
     not finance them at all.                                                                                                   
                                                                                                                                
     Those  wishing to  take on  the responsibility  of home                                                                    
     ownership  and establish  roots  in  the community  may                                                                    
     find, for many reasons, that  they do not qualify for a                                                                    
     traditional mortgage. Seller  financing is another tool                                                                    
     that can be  utilized to make it affordable  for one to                                                                    
     realize their dream of having  a place they can finally                                                                    
     call their home.                                                                                                           
                                                                                                                                
     Seller financing  is a reasonable and  practical option                                                                    
     for both sellers and buyers of these type properties.                                                                      
                                                                                                                                
     CSHB 104 would  give more opportunity for  the dream of                                                                    
     home  ownership  to  those   who  might  not  otherwise                                                                    
     realize it  and would  relieve the financial  burden of                                                                    
     bona fide  non-profit organizations  assisting Alaskans                                                                    
     in making their dream come true.                                                                                           
                                                                                                                                
5:29:02 PM                                                                                                                    
SENATOR  COSTELLO  asked  if  there  were  any  issues  with  the                                                               
retroactivity  clause. She  asked  for  further clarification  on                                                               
whether there was  a timeframe and if this  allowed for financing                                                               
up to five homes per year.                                                                                                      
                                                                                                                                
5:29:26 PM                                                                                                                    
REPRESENTATIVE  WILSON agreed  the  program allowed  a person  to                                                               
seller-finance  up to  five homes  per year  under the  bill. She                                                               
stated that an  amendment was adopted on the House  floor to make                                                               
it retroactive. She clarified that  many people in Alaska thought                                                               
it was possible for sellers to finance properties.                                                                              
                                                                                                                                
5:30:08 PM                                                                                                                    
SENATOR BISHOP  reviewed the fiscal  note from the  Department of                                                               
Commerce,  Community and  Economic  Development (DCCED),  Banking                                                               
and Securities for HB 104.                                                                                                      
                                                                                                                                
5:30:36 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
5:31:07 PM                                                                                                                    
CHAIR REINBOLD called the committee back to order.                                                                              
                                                                                                                                
SENATOR  BISHOP continued.  The Office  of Management  and Budget                                                               
component number 2808. He read the bill analysis:                                                                               
                                                                                                                                
     This bill  will allow a natural  person, estate, trust,                                                                    
     corporation,  or  another   entity  to  self-finance  a                                                                    
     mortgage loan  on five or fewer  residential properties                                                                    
     owned  by  the seller  during  a  12-month period.  The                                                                    
     mortgage  loan  must  have an  interest  rate  that  is                                                                    
     fixed,  payments   that  do  not  result   in  negative                                                                    
     amortization, and  cannot impose a  prepayment penalty.                                                                    
     The  seller   determines  that  the  purchaser   has  a                                                                    
     reasonable  ability  to  repay  the  loan.  The  seller                                                                    
     cannot  have constructed  the dwelling  or  acted as  a                                                                    
     contractor for  the construction  of the  dwelling that                                                                    
     secures the  loan. The bill  does not require  a change                                                                    
     to regulations. The Division  of Banking and Securities                                                                    
     does  not  anticipate  any  fiscal  impacts  from  this                                                                    
     legislation.                                                                                                               
                                                                                                                                
SENATOR BISHOP said the fiscal note was a zero-fiscal note.                                                                     
                                                                                                                                
5:32:21 PM                                                                                                                    
CHAIR REINBOLD removed her objection.  She reaffirmed that public                                                               
testimony was closed on HB  104. She remarked that she previously                                                               
held  the bill  to allow  Senator  Bishop to  participate in  the                                                               
hearing since Fairbanks  residents expressed significant interest                                                               
in the bill.                                                                                                                    
                                                                                                                                
5:33:16 PM                                                                                                                    
SENATOR COSTELLO  moved to report  CSHB 104(L&C) AM,  version 31-                                                               
LS0257\S.A.  from committee  with individual  recommendations and                                                               
attached fiscal note.                                                                                                           
                                                                                                                                
There being no objection, the motion carried.                                                                                   
                                                                                                                                
5:33:32 PM                                                                                                                    
At ease.