C.R.S.
Section 5-3.5-102
Protection of obligors
(1)
A covered loan is subject to the following limitations:(a)
Limitation on balloon payment.(b)
No call provision.(I)
Acceleration of repayment of the loan is justified:(A)
By default in which the obligor fails to meet the repayment terms of the agreement for any outstanding balance; or(B)
Pursuant to a due-on-sale provision;(II)
There is fraud or material misrepresentation by an obligor in connection with the loan;(III)
There is a provision permitting acceleration if the lender, in good faith, believes itself to be materially insecure or believes that the prospect of future payment has become materially impaired; or(IV)
There is any action or inaction by the obligor that adversely affects the lender’s security for the loan or any rights of the lender in such security.(c)
No negative amortization.(d)
No increased interest rate upon default.(e)
Limitations on mandatory arbitration clauses.(I)
Does not comply with rules set forth by a nationally recognized arbitration organization such as the American arbitration association;(II)
Does not require the arbitration proceeding to be conducted:(A)
Within the federal judicial district in which the subject property is located;(B)
In the city nearest the obligor’s residence where a federal district court is located; or(C)
At such other location as may be mutually agreed upon by the parties;(III)
Does not require the lender to contribute at least fifty percent of the amount of any filing fee; and(IV)
Does not require the lender to pay standard daily arbitration fees, both its own and those of the obligor, for at least the first day of arbitration.(f)
No advance payments.(g)
Limitations on prepayment fees.(I)
First thirty-six months only.(A)
After the third year of the loan;(B)
Pursuant to a refinance with the same lender; or(C)
That is partial.(II)
No prepayment fees for certain refinancing.(III)
Lender must offer choice.
Source:
Section 5-3.5-102 — Protection of obligors, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-05.pdf
(accessed Oct. 20, 2023).