524.905 Loans on real property. 1. Rules for loans. A state bank may make permanent loans, construction loans, or combined construction and permanent loans, secured by liens on real property, asauthorized by rules adopted by the superintendent under chapter 17A. The rules shallinclude provisions as necessary to ensure the safety and soundness of these loans, and toensure full and fair disclosure to borrowers of the effects of provisions in agreements forthese 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 ofequal periodic installments of interest plus principal over a fixed term, provisions imposingpenalties for the borrower’s noncompliance with requirements of a loan agreement, orprovisions allowing or requiring a borrower to choose from alternative courses of action atany time during the effectiveness of a loan agreement. 2. Protective payments — escrow accounts. A bank may include in the loan documents signed by the borrower a provision requiring the borrower to pay the bank each monthin addition to interest and principal under the note an amount equal unts. A bank may include in the loan documents signed by the borrower a provision requiring the borrower to pay the bank each monthin addition to interest and principal under the note an amount equal to one-twelfth ofthe estimated annual real estate taxes, special assessments, hazard insurance premium,mortgage insurance premium, or any other payment agreed to by the borrower and thebank in order to better secure the loan. The bank shall be deemed to be acting in a fiduciarycapacity with respect to these funds. A bank receiving funds in escrow pursuant to an escrowagreement executed in connection with a loan as defined in section 535.8, subsection 1, maypay interest to the borrower on those funds. A bank which maintains an escrow accountin connection with any loan authorized by this section, whether or not the mortgage hasbeen assigned to a third person, shall each year deliver to the mortgagor a written annualaccounting of all transactions made with respect to the loan and escrow account. 3. Escrow reports. 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. e loan and escrow account. 3. Escrow reports. 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. Thestate bank shall be deemed to be acting in a fiduciary capacity with respect to these funds. Astate bank which maintains such an escrow account relating to a mortgage, whether or notthe mortgage has been assigned to a third person, shall deliver to the mortgagor a writtensummary of all transactions made with respect to the loan and escrow accounts during eachescrow account computation year as defined in 12 C.F.R. §1024.17. The summary shall bedelivered or mailed not later than thirty days following the escrow account computation yearto which disclosure relates and shall include the information required for annual escrowaccount statements under 12 C.F.R. §1024.17. 4. Marketability reports. 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 realproperty, the unmarketability of the title to real property, or the invalidity or unenforceabilityof liens or encumbrances upon real property, defects in or liens or encumbrances on the title of realproperty, the unmarketability of the title to real property, or the invalidity or unenforceabilityof liens or encumbrances upon real property, the bank shall provide a copy of the report oropinion to the mortgagor and the mortgagor’s attorney. [C97, §1850; S13, §1850; C24, 27, 31, §9183, 9185, 9186; C35, §9183, 9183-g1, 9185, 9186; C39, §9183, 9183.1, 9185, 9186; C46, 50, 54, 58, 62, 66, §526.25, 526.26, 526.30, 526.31; C71,73, 75, 77, 79, S79, §524.905; C81, §524.905, 535B.1 – 535B.14; 81 Acts, ch 173, §5, ch 174, §1,7; 82 Acts, ch 1253, §2, 43] 83 Acts, ch 124, §16; 2022 Acts, ch 1062, §89Referred to in §524.904, 524.907, 524.1602, 535B.11, 536A.20Termination of installment contract, foreclosure of mortgage, or repossession of property during military service; application for relief respecting obligation or liability incurred prior to military service; §29A.102, 29A.103, 29A.104, 29A.105 Sat Dec 23 01:18:05 2023 Iowa Code 2024, Section 524.905 (24, 0)
Iowa Legal Code