Policy Name: Legislation Regulating Home Loan Rates Secured by First Mortgages

Date: Enacted 1973; last revised 2014

Code Location: Section A of Article 1.1. of Chapter 24 of North Carolina General Statutes: Contract rates on home loans secured by first mortgages or first deeds of trust. (N.C. G.S. §24-1.1A.)

 Summary:

N.C. G.S. §24-1.1.A. provides protections for homeowners by setting limits on interest payments for first-lien mortgages, establishing provisions for amortization schedules and payment deferrals on home loans, and outlining the types of fees lenders may charge. The legislature preserved these provisions under the 1999 North Carolina Predatory Lending Law and added new provisions related to certain mortgage terms and practices.

This section also establishes the “Commissioner’s Rate,” or the maximum allowable interest rate on home loans. The North Carolina Commissioner of Banks announces this interest rate monthly on the basis of the noncompetitive rate for U.S. Treasury bills.