(a) A covered person may not refinance a mortgage loan within 12 months after the date the mortgage loan is closed unless the refinancing is beneficial to the borrower.

Terms Used In Alaska Statutes 06.60.350

  • Amortization: Paying off a loan by regular installments.
  • borrower: means an individual who receives a mortgage loan. See Alaska Statutes 06.60.990
  • department: means the Department of Commerce, Community, and Economic Development. See Alaska Statutes 06.60.990
  • Fixed Rate: Having a "fixed" rate means that the APR doesn't change based on fluctuations of some external rate (such as the "Prime Rate"). In other words, a fixed rate is a rate that is not a variable rate. A fixed APR can change over time, in several circumstances:
    • You are late making a payment or commit some other default, triggering an increase to a penalty rate
    • The bank changes the terms of your account and you do not reject the change.
    • The rate expires (if the rate was fixed for only a certain period of time).
  • Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • mortgage loan: means a residential mortgage loan. See Alaska Statutes 06.60.990
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
  • person: includes a corporation, company, partnership, firm, association, organization, business trust, or society, as well as a natural person. See Alaska Statutes 01.10.060
(b) The factors to be considered when determining if refinancing is beneficial to the borrower under this section may include whether

(1) the borrower’s new monthly payment is lower than the total of all monthly obligations being refinanced, after taking into account the costs and fees of the refinancing;
(2) the amortization period of the new mortgage loan is different from the amortization period of the mortgage loan being refinanced;
(3) the borrower receives cash in excess of the costs and fees of the refinancing;
(4) the rate of interest of the borrower’s promissory note is reduced;
(5) the mortgage loan changes from an adjustable rate loan to a fixed rate loan; in a determination under this paragraph, the department may take into account costs and fees;
(6) the refinancing is necessary to respond to a bona fide personal need or an order of a court of competent jurisdiction;
(7) the original term of the mortgage loan being refinanced is two years or less; and
(8) the refinancing is being made to prevent a foreclosure on an existing mortgage loan.
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