H*4795(Rat #0433, Act #0355 of 1996)  General Bill, By Gamble
 A Bill to amend Section 37-10-102, as amended, Code of Laws of South Carolina,
 1976, relating to attorney's fees and other charges on mortgage loans for
 personal, family, or household purposes, so as to provide that the creditor
 must ascertain prior to the borrower's closing attorney preference and
 insurance agent preference, to provide for the manner in which creditors may
 comply with this preference requirement, and to permit the creditor to require
 the attorney and insurance agent so chosen to comply with reasonable closing
 procedures.-amended title

   03/21/96  House  Introduced and read first time HJ-6
   03/21/96  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-7
   04/24/96  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-4
   05/01/96  House  Amended HJ-17
   05/01/96  House  Read second time HJ-17
   05/02/96  House  Read third time and sent to Senate HJ-8
   05/02/96  Senate Introduced and read first time SJ-42
   05/02/96  Senate Referred to Committee on Banking and Insurance SJ-42
   05/09/96  Senate Recalled from Committee on Banking and Insurance SJ-28
   05/15/96  Senate Read second time SJ-25
   05/15/96  Senate Ordered to third reading with notice of
                     amendments SJ-25
   05/16/96  Senate Read third time and enrolled SJ-33
   05/23/96         Ratified R 433
   05/30/96         Became law without Governor's signature
   05/30/96         Effective date 05/30/96
   05/30/96         See act for exception to or explanation of
                     effective date
   06/06/96         Copies available
   06/06/96         Act No. 355

AN ACT TO AMEND SECTION 37-10-102, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO ATTORNEY'S FEES AND OTHER CHARGES ON MORTGAGE LOANS FOR PERSONAL, FAMILY, OR HOUSEHOLD PURPOSES, SO AS TO PROVIDE THAT THE CREDITOR MUST ASCERTAIN PRIOR TO THE BORROWER'S CLOSING ATTORNEY PREFERENCE AND INSURANCE AGENT PREFERENCE, TO PROVIDE FOR THE MANNER IN WHICH CREDITORS MAY COMPLY WITH THIS PREFERENCE REQUIREMENT, AND TO PERMIT THE CREDITOR TO REQUIRE THE ATTORNEY AND INSURANCE AGENT SO CHOSEN TO COMPLY WITH REASONABLE CLOSING PROCEDURES.

Be it enacted by the General Assembly of the State of South Carolina:

Attorney and insurance agent preferences

SECTION 1. Section 37-10-102(a) of the 1976 Code is amended to read:

"(a) The creditor must ascertain prior to closing the preference of the borrower as to the legal counsel that is employed to represent the debtor in all matters of the transaction relating to the closing of the transaction and except in the case of a loan on property that is subject to the South Carolina Horizontal Property Act (Section 27-31-10 et seq.) the insurance agent to furnish required hazard and flood property insurance in connection with the mortgage and comply with such preference.

The creditor may comply with this section by:

(1) including the preference information on or with the credit application so that this information shall be provided on a form substantially similar to a form distributed by the administrator; or

(2) providing written notice to the borrower of the preference information with the notice being delivered or mailed no later than three business days after the application is received or prepared. If a creditor uses a preference notice form substantially similar to a form distributed by the administrator, the form is in compliance with this section.

The creditor may require the attorney or agent to provide reasonable security to the creditor by way of mortgage title insurance in a company acceptable to the creditor and to comply with reasonable closing procedures. If title insurance is made a condition of the loan at any point during the negotiations, it must remain a condition all the time thereafter regardless of which attorney ultimately closes the transaction. Any legal fees other than for examination and certification of the title, the preparation of all required documents, and the closing of the transaction required or incurred by the creditor in connection with the transaction is the responsibility of the creditor regardless of which party pays for the title work, document preparation, and closing."

Time effective

SECTION 2. This act takes effect upon approval by the Governor. However, nothing in this act shall affect any cause of action, right, or remedy accruing prior to the effective date of this act. Any such cause of action, right, or remedy accruing prior to the effective date of this act shall be governed by the law applicable at the time the cause of action, right, or remedy accrued.

Became law without the signature of the Governor -- 5/30/96.