1.1    .................... moves to amend H. F. No. 1004, the first committee engrossment,
1.2as follows:
1.3Page 1, after line 5, insert:

1.4    "Section 1. Minnesota Statutes 2006, section 58.02, is amended by adding a subdivision
1.5to read:
1.6    Subd. 27. Investment grade. When used in reference to residential mortgage loans,
1.7"investment grade" refers to a system of categorizing residential mortgage loans in which
1.8the pricing or terms are distinguished by interest rate or discount points or both charged to
1.9the borrower, which vary according to the degree of perceived risk of default based on
1.10factors such as the borrower's credit, including credit score and credit patterns, income and
1.11employment history, debt ratio, loan-to-value ratio, and prior bankruptcy or foreclosure.

1.12    Sec. 2. Minnesota Statutes 2006, section 58.02, is amended by adding a subdivision to
1.13read:
1.14    Subd. 28. Prime loan. "Prime loan" means a residential mortgage loan that is
1.15of the highest investment grade and which is commonly designated by an alphabetical
1.16character of "A."

1.17    Sec. 3. Minnesota Statutes 2006, section 58.02, is amended by adding a subdivision to
1.18read:
1.19    Subd. 29. Subprime loan. "Subprime loan" means a residential mortgage loan
1.20that is of less than the highest investment grade, and which is commonly designated by
1.21an alphabetical character of "A-" to "D."

1.22    Sec. 4. Minnesota Statutes 2006, section 58.02, is amended by adding a subdivision to
1.23read:
1.24    Subd. 30. Fully indexed rate. "Fully indexed rate" equals the index rate prevailing
1.25at the time a residential mortgage loan is originated, plus the margin that will apply after
1.26the expiration of an introductory interest rate."
2.1Page 3, line 8, strike the period and insert a semicolon
2.2Page 3, strike lines 9 to 16
2.3Page 3, delete lines 34 to 36
2.4Page 4, delete lines 1 and 2 and insert "real estate taxes, homeowner's insurance, and
2.5private mortgage insurance if it is required in connection with the loan. For loans in which
2.6the interest rate may vary, the reasonable ability to pay must be calculated based on a rate
2.7that is fully indexed according to the terms of the loan and a repayment schedule"
2.8Page 4, line 11, after "not" insert "have a reasonable, tangible net"
2.9Page 4, line 14, delete "and life"
2.10Page 4, line 17, delete "and" and after "(iii)" insert "the new loan is a subprime
2.11loan; and (iv)"
2.12Page 4, line 21, delete the third "the"
2.13Page 4, delete lines 22 and 23
2.14Page 4, line 24, delete everything before the semicolon and insert "a rate that is fully
2.15indexed according to the terms of the loan and a repayment schedule which achieves
2.16full amortization over the life of the loan"
2.17Page 4, line 29, delete "whenever" and after "the" insert "first time a" and after
2.18"originator" insert "orally" and delete everything after "borrower"
2.19Page 4, line 30, delete "writing,"
2.20Page 4, line 31, before the comma, insert "which does not include an amount for
2.21payment of property taxes and hazard insurance"
2.22Page 4, line 33, delete "escrow" and before the period, insert "for property taxes
2.23and hazard insurance. This same oral disclosure must be made each time the residential
2.24mortgage originator orally informs the borrower of a different anticipated or actual
2.25periodic payment amount change from the amount previously disclosed"
2.26Page 4, line 36, delete everything after "account" and insert "; or"
2.27Page 5, delete lines 1 and 2