Iowa Code 524.905 – Loans on real property
A state bank may make permanent loans, construction loans, or combined construction and permanent loans, secured by liens on real property, as authorized by rules adopted by the superintendent under chapter 17A. The rules shall include provisions as necessary to ensure the safety and soundness of these loans, and to ensure full and fair disclosure to borrowers of the effects of provisions in agreements for these loans, including provisions permitting change or adjustment of any terms of a loan, provisions permitting, requiring, or prohibiting repayment of a loan on a basis other than of equal periodic installments of interest plus principal over a fixed term, provisions imposing penalties for the borrower‘s noncompliance with requirements of a loan agreement, or provisions allowing or requiring a borrower to choose from alternative courses of action at any time during the effectiveness of a loan agreement.
Terms Used In Iowa Code 524.905
- Account: means any account with a state bank and includes a demand, time or savings deposit account or any account for the payment of money to a state bank. See Iowa Code 524.103
- Bank: means a corporation organized under this chapter, a national bank, a federal savings association, or an out-of-state bank. See Iowa Code 524.103
- Borrower: means a person named as a borrower or debtor in a loan or extension of credit, or any other person, including a drawer, endorser, or guarantor, deemed to be a borrower under section 524. See Iowa Code 524.103
- Escrow: Money given to a third party to be held for payment until certain conditions are met.
- Fiduciary: means an executor, administrator, guardian, conservator, receiver, trustee, or one acting in a similar capacity. See Iowa Code 524.103
- Fiduciary: A trustee, executor, or administrator.
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- month: means a calendar month, and the word "year" and the abbreviation "A. See Iowa Code 4.1
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
- Person: means as defined in section 4. See Iowa Code 524.103
- property: includes personal and real property. See Iowa Code 4.1
- real property: include lands, tenements, hereditaments, and all rights thereto and interests therein, equitable as well as legal. See Iowa Code 4.1
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- state: when applied to the different parts of the United States, includes the District of Columbia and the territories, and the words "United States" may include the said district and territories. See Iowa Code 4.1
- State bank: means any bank incorporated pursuant to the provisions of this chapter after January 1, 1970, and any "state bank" incorporated pursuant to the laws of this state and doing business as such on January 1, 1970, or a bank organized as a mutual corporation under this chapter. See Iowa Code 524.103
- Superintendent: means the superintendent of banking of this state. See Iowa Code 524.103
- year: means twelve consecutive months. See Iowa Code 4.1
A bank may include in the loan documents signed by the borrower a provision requiring the borrower to pay the bank each month in addition to interest and principal under the note an amount equal to one-twelfth of the estimated annual real estate taxes, special assessments, hazard insurance premium, mortgage insurance premium, or any other payment agreed to by the borrower and the bank in order to better secure the loan. The bank shall be deemed to be acting in a fiduciary capacity with respect to these funds. A bank receiving funds in escrow pursuant to an escrow agreement executed in connection with a loan as defined in section 535.8, subsection 1, may pay interest to the borrower on those funds. A bank which maintains an escrow account in connection with any loan authorized by this section, whether or not the mortgage has been assigned to a third person, shall each year deliver to the mortgagor a written annual accounting of all transactions made with respect to the loan and escrow account.
A state bank may act as an escrow agent with respect to real property, and may receive funds and make disbursements from escrowed funds in that capacity. The state bank shall be deemed to be acting in a fiduciary capacity with respect to these funds. A state bank which maintains such an escrow account relating to a mortgage, whether or not the mortgage has been assigned to a third person, shall deliver to the mortgagor a written summary of all transactions made with respect to the loan and escrow accounts during each escrow account computation year as defined in 12 C.F.R. §1024.17. The summary shall be delivered or mailed not later than thirty days following the escrow account computation year to which disclosure relates and shall include the information required for annual escrow account statements under 12 C.F.R. §1024.17.
If the bank obtains a report or opinion by an attorney or from another mortgage lender relating to defects in or liens or encumbrances on the title of real property, the unmarketability of the title to real property, or the invalidity or unenforceability of liens or encumbrances upon real property, the bank shall provide a copy of the report or opinion to the mortgagor and the mortgagor’s attorney.