HB 1339 – AS INTRODUCED
2008 SESSION
10/03
HOUSE BILL 1339
AN ACT establishing an optional mortgage loan payment program for payment of property taxes and municipal charges of qualifying elderly homeowners.
SPONSORS: Rep. D. Smith, Hills 22; Rep. French, Merr 5; Rep. Gould, Rock 5; Rep. Rosenwald, Hills 22; Rep. Reagan, Rock 1; Sen. Kenney, Dist 3; Sen. Gallus, Dist 1; Sen. Janeway, Dist 7; Sen. Sgambati, Dist 4; Sen. Clegg, Dist 14
COMMITTEE: Municipal and County Government
This bill allows municipalities to adopt a program for the payment for qualifying elderly homeowner taxes and charges for municipal services by a loan program secured by a mortgage of the residence.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
08-2078
10/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT establishing an optional mortgage loan payment program for payment of property taxes and municipal charges of qualifying elderly homeowners.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Subdivision; Mortgage Loan Payment Program. Amend RSA 31 by inserting after section 131 the following new subdivision:
31:132 Mortgage Loan Payment Program.
I. The legislative body of any town or city, by ordinance adopted in accordance with paragraph II, may authorize the municipality’s tax collector or other appropriate municipal official to accept payment by qualified persons of property taxes billed under RSA 76 including late payment and interest under RSA 76:13, redemption payments under RSA 80:32 or RSA 80:69, or charges for utility services assessed under the authority in RSA 38:22, by the method provided in this section. The municipality shall take a first mortgage note in lieu of cash payment for any payments due which may be assessed against mortgaged property. Only those charges against the specific mortgaged property are eligible. All payments due shall be authorized to be made on the due date of the bill or charge as an advance against the mortgage loan.
II. A town or city may adopt the provisions of this subdivision as follows:
(a) In a town, other than a town that has adopted a charter pursuant to RSA 49-D, the question shall be placed on the warrant of a special or annual town meeting, by the governing body or by petition pursuant to RSA 39:3.
(b) In a city or town that has adopted a charter pursuant to RSA 49-C or RSA 49-D, the legislative body may consider and act upon the question in accordance with its normal procedures for passage of ordinances. In the alternative, the legislative body of such municipality may vote to place the question on the official ballot for any regular municipal election.
III. An eligible property owner shall be a resident who meets the following criteria:
(a) The owner is at least 65 years of age. The qualifying individual shall have occupied the mortgaged property as his or her primary residence for at least 5 years prior to the execution of this mortgage. The term “owner” shall include only those applicants who have title to the property individually or jointly or in common with the person’s spouse.
(b) The net annual property taxes on the residence must be greater than 10 percent of the property owner’s adjusted gross income as evidenced by his or her most recent federal tax return. A copy of the owner’s tax return shall be submitted each year to verify qualification in the program, and to maintain annual payments under the program. All documents submitted with an application, or as may be requested by municipal officials, shall be considered confidential, handled so as to protect the privacy of the individual, and not used for any purpose other than the specific purposes for which the information was originally obtained. All documents and copies of such documents submitted by the applicant shall be returned to the applicant after a decision is made.
IV. Eligible property shall be a single family owner-occupied residence, being the principal residence of the mortgagor, free and clear of any other mortgages or liens; except those existing mortgages or liens which may be subordinated to the mortgage under this program. Any person entering into this program shall not be granted the elderly exemption in RSA 72:39-a and RSA 72:39-b or the tax deferral for the elderly under RSA 72:38-a.
V. The municipality shall obtain standardized documents to include the following:
(a) Note. The note dollar amount shall be for no more than 50 percent of the assessed value of the property being mortgaged. The interest rate shall be no more than the 10-year Treasury note rate plus one percent as quoted by the Wall Street Journal on the first business day of the local fiscal year; and all balances shall be adjusted to that rate each year. The note shall be a revolving credit extension, providing for future advances, and voluntary pay downs. The note shall be due and payable in 15 years. However, the mortgage may not be assumed and the note shall be paid in full upon conveyance of the property.
(b) Mortgage. The mortgage shall be a first mortgage, and shall be worded so as to secure all current and future dollars advanced under the note. The mortgage may not be subordinated to any other mortgage. Additional liens may be placed on the property without being a condition of default.
(c) Borrowers authorization. The property owner shall execute an authorization for the municipality to make advances.
(d) Rescission. The property shall be permitted a 5-day period for rescission. All documents must be executed and the rescission time period passed before any funds may be advanced.
(e) Recording. The municipality shall engage an attorney to record the appropriate documents, and submit a letter on his or her letterhead asserting the recorded mortgage is a first lien on the property.
(f) Insurance. Insurance shall be maintained on the mortgaged property naming the town or city as loss payee. Evidence of said insurance shall be provided annually.
(g) Fees. For initial documentation and recording of the transaction, the municipality may assess a fee of up to $500. Each year thereafter a fee of up to $200 may be charged as a servicing fee. Both the origination fee and the servicing fee must be paid by the owners in a manner other than charging against the note.
VI. A municipality adopting this section is authorized to enter into necessary agreements with financial institutions and to borrow against the class of accounts receivable.
2 Effective Date. This act shall take effect 60 days after its passage.