Chapter Definitions

  1. Law
  2. Tennessee Code
  3. Banks and Financial Institutions
  4. Tennessee Home Loan Protection Act
  5. Chapter Definitions

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As used in this chapter, unless the context otherwise requires:

  1. “Affiliate” means any company that controls, is controlled by, or is under common control with another company, as set forth in the federal Bank Holding Company Act of 1956 (12 U.S.C. § 1841 et seq.), and the regulations promulgated pursuant to that act;
  2. “Annual percentage rate” means the annual percentage rate for the loan calculated according to the federal Truth-in-Lending Act (15 U.S.C. § 1601 et seq.), and the regulations, including official staff commentary, promulgated pursuant to that act, by the board of governors of the federal reserve system;
  3. “Bona fide loan discount points” means loan discount points actually paid by the borrower to the lender for the purpose of reducing, and that in fact result in a bona fide reduction of, the interest rate applicable to the loan by a minimum of twenty-five (25) basis points per discount point;
  4. “Borrower” means a natural person obligated to pay a home loan, including a co-borrower;
  5. “Commissioner” means the commissioner of financial institutions;
  6. “Construction loan” means a loan for the initial construction of a borrower's principal dwelling on land owned by the borrower, with a maturity of less than eighteen (18) months, that only requires the payment of interest until the time that the entire unpaid balance is due and payable, or a fee in lieu of interest;
  7. “Department” means the department of financial institutions;
  8. “High-cost home loan” means a home loan in which the terms of the loan meet or exceed the rate threshold or the total points and fees threshold;
  9. “Home loan” means a loan in which:
    1. The principal amount of the loan does not exceed the lesser of the conforming loan size limit for a single-family dwelling as established by the federal national mortgage association, or three hundred fifty thousand dollars ($350,000);
    2. The debt is incurred primarily for personal, family, or household purposes;
    3. The loan is secured by a mortgage or deed of trust on real estate in this state, upon which there is located or there is to be located a structure:
      1. Designed principally for occupancy by one (1) to four (4) families; and
      2. That is or will be occupied by a borrower as the borrower's principal dwelling; and
    4. “Home loan” does not include:
      1. Any residential mortgage transaction as defined in 12 CFR 226.2(a)(24);
      2. An open-end credit loan as defined in section 12 CFR 226.2(a)(20), and as used in the official staff commentary of the board of governors of the federal reserve system, except as provided in § 45-20-106;
      3. A reverse mortgage transaction, as defined in title 47, chapter 30;
      4. A construction loan; and
      5. Any loan that is insured or guaranteed by, securitized for, or sold to a government agency, including the department of housing and urban development, the department of veteran affairs, the Tennessee housing development agency, or the United States department of agriculture;
  10. “Lender” means “lender” as defined in 24 CFR 3500.2. “Lender” also means a “mortgage loan broker” as defined in § 45-13-102;
  11. “Person” means any individual, corporation, partnership, trust, or any other business unit or legal entity, as the context may require;
    1. “Points and fees” means as defined in 12 CFR 226.32, and as used in the official staff commentary of the board of governors of the federal reserve system;
    2. “Points and fees” shall exclude up to and including two (2) bona fide loan discount points; and
    3. “Points and fees” shall not include charges for all items listed in 12 CFR 226.4(c)(7), as provided in 12 CFR 226.32(b)(1)(iii), where the charges are paid to an affiliate of the lender and the amount is reasonably consistent with amounts charged for comparable services by a party not affiliated with the lender at the time the loan is made; provided, however, that only the amount of the charge that exceeds the charge for comparable items shall be included within the term “points and fees”;
  13. “Principal loan amount” is the total amount of money paid to, received by, or credited to the account of the borrower on which interest is to be computed;
  14. “Rate threshold” means that the annual percentage rate of the loan at the time the loan is consummated is such that the loan is considered a mortgage pursuant to § 152 of the Home Ownership Equity Protection Act of 1994 (15 U.S.C. §  1602(aa)), and the regulations adopted pursuant to 15 U.S.C. § 1602(aa) by the federal reserve system, including 12 CFR 226.32, and as used in the official staff commentary of the board of governors of the federal reserve system;
  15. “Servicer” means any person who in the regular course of business assumes responsibility for servicing and accepting payments for a high-cost home loan;
  16. “Total loan amount” means the term as defined in 12 CFR 226.32 and as used in the official staff commentary of the board of governors of the federal reserve system; and
  17. “Total points and fees threshold” means the total points and fees payable by the borrower at or before the loan closing that exceed:
    1. The greater of five percent (5%) of the total loan amount or two thousand four hundred dollars ($2,400), if the total loan amount is more than thirty thousand dollars ($30,000); or
    2. Eight percent (8%) of the total loan amount, if the total loan amount is thirty thousand dollars ($30,000) or less.


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