GA Changes Registration Requirements and Bona Fide Discount Points Definition

Georgia recently amended its banking and finance code to, among other things, remove the registration requirement for certain mortgage brokers and lenders, and revise the definition of “bona fide discount points.” 

The new bona fide discount points definition becomes effective on June 1, 2024.  This clarifies the acceptable range for upfront fees paid by borrowers in exchange for a lower interest rate.  Under the new definition, the undiscounted interest rate must not exceed by more than one percent the average prime offer rate of a comparable transaction as published by the CFPB on the last day the discounted interest rate is set before consummation.

The majority of the bill becomes effective on July 1, 2024.  After that effective date, mortgage lenders and mortgage brokers that are wholly-owned subsidiaries of any bank holding company will no longer be required to register with the Department of Banking and Finance.  Additional amendments to this section include: (i) increasing the time to fourteen days that an exempt person not servicing, but purchasing or holding a closed loan, can hold the loans for securitization into a secondary market; and (2) adding an exemption from licensing for certain trusts that do not service, but purchase or hold closed loans for securitization or transfer into a secondary market.