Georgia Fair Lending Act Resources
The Georgia Fair Lending Act (GAFLA) was originally signed into law on April 22, 2002, became effective on October 1, 2002, and was subsequently amended on March 7, 2003 and April 23, 2024. This law has a significant impact on Georgia residential mortgage lending and brokering activities.
Previously, the Georgia Fair Lending Act provided that bona fide discount points can’t exceed by more than one percent the required net yield for a 90 day commitment published by Freddie Mac and Fannie Mae. Freddie stopped publishing the required net yields in 2013 and Fannie stopped publishing the required net yields on June 3, 2024. The Georgia Fair Lending Act has been amended to align with federal law and replaces the required net yield published by Freddie Mac and Fannie Mae with the average prime offer rate as published by the Consumer Financial Protection Bureau (CFPB).
Specifically, the new standard to determine whether discount points are “bona fide” is determined by looking at the average prime offer rate as published by the CFPB. The change will become effective June 1, 2024.
Georgia Fair Lending Act - Title 7, Chapter 6A - Access to the entire Georgia Code is provided by LexisNexis from the Georgia General Assembly's website. Go to the Official Code of Georgia (O.C.G.A.).
IMPORTANT INFORMATION FOR BROKERS:
The Department is aware that many mortgage brokers rely on lenders to make the determination if their residential mortgage loans have points and fees of 5% or more, as calculated under GAFLA. This is a very risky practice, as mortgage brokers are held equally responsible for any violations that may be committed. Also, some lenders such as banks, trust companies, and their subsidiaries are exempt from the provisions of GAFLA and are not required to perform the calculations. Penalties for violation of GAFLA subjects the creditor, which includes mortgage brokers who failed to conduct appropriate due diligence, to actual damages, including consequential, incidental, and punitive damages; statutory damages of twice the interest paid and forfeiture of all future interest; costs and reasonable attorney fees; equitable claims, including injunctions; class actions; special rescission rights of up to 5 years after consummation; enforcement proceedings from the Attorney General, the Department of Banking and Finance, and Department of Insurance; and criminal prosecution.
In addition to conforming to GAFLA, you must ensure that you are in compliance with Department Rule 80-11-2.02(1)(l), which states, in part, that you must maintain, “[a] n indication of whether each loan has points and fees of 5% or more, as calculated under the Georgia Fair Lending Act.” As an example, you may decide to have this indication or “indicator” located in each loan file or you may choose to display it on your Mortgage Loan Transaction Journal.
Do not put your business at risk of incurring any of the penalties mentioned by relying on others. Perform the GAFLA calculations yourself!
OTHER RESOURCES:
Fannie Mae RNYs for Bona Fide Discount Points (7-6A-2(4)) - Fannie Mae required net yields (RNYs) for 30- and 15-year fixed-rate mortgages (FRMs) and 7-year balloon mortgages with Actual/Actual (A/A) remittance are available to the public by month for the last 12 months. Important notice: Effective June 3, 2024, Fannie Mae will no longer publish Required Net Yield (RNY) information on their website. Fannie Mae approved lenders may contact the Fannie Mae Cash Commitment Window at 1-800-752-1080 for pricing information. Additional yield and price information is available on eCommitting.
Freddie Mac RNYs for Bona Fide Discount Points (7-6A-2(4)) - Important notice: As of January 25, 2013, Freddie Mac no longer publishes Required Net Yield (RNY) information on their website. This includes current RNY, trend line, and historical RNY. If you are a Freddie Mac Seller/Servicer and need this information, please contact 800-FREDDIE.
FRB Treasury Yields (Constant Maturities) for High Cost Home Loan APR triggers (weekly release) - The Federal Reserve (FRB) does not publish the current Treasury yields each day - there is normally a one day lag if you use the daily update publication. The FRB's H.15 Weekly Release will give you the rates for each business day of the week. The Weekly Release is posted each Monday after 4p.m. and indicates the rates/yields for the previous week.
HUD Approved Counseling Agencies in Georgia - This link will take you to HUD's list of approved counseling agencies in Georgia.