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Subcommittee narrows bridge-loan definition; Rocket Mortgage supports amendment
Summary
The subcommittee amended S787 to shorten the defined maturity of bridge loans from 18 to 12 months, permit one three-month extension of a balloon payment, and add consumer protections; Rocket Mortgage told members its client supports the amendment.
The Banking & Insurance Subcommittee adopted an amendment to S787 that narrows the statutory definition and adds consumer protections for bridge loans.
Chair summarized the amendment, which changes the maturity threshold from 18 months to 12 months, replaces wording to state loans are permitted "to facilitate" bridge lending, allows borrower prepayment without penalty, and permits a single three-month extension of a balloon payment if monthly installments continue under the original loan agreement.
Sunny Harmon, representing Rocket Mortgage, told the panel regulators and industry had met and worked out the amendment, adding that her client supports the changes. Committee member Mr Williams asked whether applicants would need a high credit score; Harmon said Rocket Mortgage typically considers applicants with about a 740 FICO score for bridge loans.
The subcommittee voted to adopt the amendment and then approved the bill as amended to send to the full committee.
