Colorado Consumer Equity Protection Act

Coverage: The Colorado Consumer Equity Protection Act (the "Act") became effective January 1, 2003. The Act's coverage and thresholds are identical to the federal Section 32 standards except that the points and fees threshold is lowered from eight percent (8%) to six percent (6%) of the total loan amount.

• APR Test: The loan's APR at consummation will exceed by more than either 8% (for first liens) or 10% (for subordinate liens), the yield on Treasury securities having comparable periods of maturity on the 15th day of the month immediately preceding the month in which the application is received by the creditor).
• Points and Fees Test: The total points and fees payable by the consumer at or before loan closing will exceed the greater of six percent (6%) of the total loan amount, or a specified dollar amount that is subject to change annually. For a summary comparison of the federal Section 32 high cost provisions with those of the Act prepared by the Colorado Attorney Generals office, please click here (you will be able to access the Act from links embedded in the summary).

The Points and Fees Test: Points and fees are defined as follows:

	Prepaid Finance Charge - the total amount of prepaid finance charges
-	Prepaid Interest - to be deducted from prepaid finance charge
+	Other Mortgage Broker Compensation - the total amount of any non-prepaid finance charges paid to broker by borrower (does not include YSPs and other lender-paid compensation to broker)
+	Other Charges Paid to Creditor/Affiliate - the total amount of all Regulation Z Section 226.4(c)(7) charges not included as a part of the Prepaid Finance Charge if paid to the creditor or creditor affiliate
+	Optional Credit Insurance/Related Products Paid At or Before Closing - optional credit life/accident/health/loss of income/debt cancellation coverage costs, regardless of how named or paid (in cash or financed) and regardless if a single premium or initial payment
+/-	Creditor Requested Adjustments - the total amount of all customer requested overrides

Total Loan Amount: Defined in the Federal Reserve Board commentary to Section 32 to mean the following:

	Amount Financed - loan amount - prepaid finance charges
-	Other Charges Paid to Creditor/Affiliate and Financed - the total amount of all Regulation Z Section 226.4(c)(7) charges not included as a part of the Prepaid Finance Charge if paid to the creditor or creditor affiliate and financed
-	Optional Credit Insurance/Related Products Finance by Creditor - optional credit life/accident/health/loss of income/debt cancellation coverage costs if financed (i.e., excludes paid amounts
+/-	Creditor Requested Adjustments - the total amount of all customer requested overrides

Substantive Limitations: Covered Loans are subject to the following restrictions:

• No balloons with less than 10 year terms
• No call provision
• No negative amortization
• No default rate of interest
• Limitations on arbitration provisions
• No collection of advance payments
• Prepayment charges are permitted for full prepayments only made within the first 36 months in an amount not exceeding six (6) months' interest, so long as the refinance loan is made with a different lender; no prepays in connection with sales; lender must offer borrower a choice (see Notice Requirements below)
• No lending without due regard to repayment ability
• No refinancing permitted by the original lender, or assignee holding and/or servicing the loan within one (1) year unless the refinancing is in the borrower's interest
• No refinancing of certain low-rate loans
• Restrictions on home improvement contracts
• No financing of single premium credit insurance and related products
• No recommending or encouraging that borrower default on existing loan or other debt
• No charge for payoff statement/release
• Must report favorable and unfavorable payment history at least quarterly

Required disclosures:

Prepayment Penalty/Loan Product Choice: A covered loan may not include a prepayment penalty unless the borrower is offered a choice of a product without a prepayment penalty. This requirement is deemed fulfilled if the borrower receives and signs the following disclosure:

Loan Product Choice

I was provided with an offer to accept a product both with and without a prepayment penalty provision. I have chosen to accept the product ____ with / ____without a prepayment penalty.

Cautionary Notice: The following notice, or a substantially similar notice, must be given in writing to the borrower within a reasonable period of time after determining that the loan would result in a covered loan, but no later than the time by which the pre-consummation notices are required under HOEPA. A rebuttable presumption of delivery exists if signed acknowledgement of receipt from the borrower is obtained.

Consumer Caution

If you obtain this loan, the lender will have a mortgage in Colorado; this is a deed of trust on your home. You could lose your home, and any money you have put into it, if you do not meet your obligations under the loan. Mortgage loan rates and closing costs and fees vary based on many factors, including your particular credit and financial circumstances, your earnings history, the loan-to-value requested, and the type of property that will secure your loan. The loan rate and fees could vary based on which lender or broker you select.

You are not required to complete any loan agreement merely because you have received these disclosures or have signed a loan application. If you proceed with this mortgage loan, you should also remember that you may face serious financial risks if you use this loan to pay off credit card debts and other debts in connection with this transaction and then later incur significant new credit card charges or other debts. If you continue to accumulate debt after this loan is closed and then experience financial difficulties, you could lose your home and any equity you have in it if you do not meet your mortgage loan obligations.

Property taxes and homeowner's insurance are your responsibility. Not all lenders provide escrow services for these payments. You should ask your lender about these services.

Your payments on existing debts contribute to your credit ratings. You should not accept any advice to ignore your regular payments to your existing creditors.