1. It is an unfair lending practice for a lender to:

(a) Require a borrower, as a condition of obtaining or maintaining a home loan secured by home property, to provide property insurance on improvements to home property in an amount that exceeds the reasonable replacement value of the improvements.

(b) Knowingly or intentionally make a home loan, other than a reverse mortgage, to a borrower, including, without limitation, a low-document home loan, no-document home loan or stated-document home loan, without determining, using any commercially reasonable means or mechanism, that the borrower has the ability to repay the home loan.

(c) Finance a prepayment fee or penalty in connection with the refinancing by the original borrower of a home loan owned by the lender or an affiliate of the lender.

(d) Finance, directly or indirectly in connection with a home loan, any credit insurance.

2. As used in this section:

(a) “Credit insurance” has the meaning ascribed to it in NRS 690A.015.

(b) “Low-document home loan” means a home loan:

(1) Whose terms allow a borrower to establish his or her ability to repay the home loan by providing only limited verification of his or her income and other assets; or

(2) Which is evidenced only by a deed transferring some or all of the interest of the borrower in the home property to the creditor.

(c) “No-document home loan” means a home loan whose terms allow a borrower to establish his or her ability to repay the home loan without providing any verification of his or her income and other assets.

(d) “Prepayment fee or penalty” means any fee or penalty imposed by a lender if a borrower repays the balance of a loan or otherwise makes a payment on a loan before the regularly scheduled time for repayment.

(e) “Stated-document home loan” means a home loan whose terms allow a borrower to establish his or her ability to repay the home loan by providing only his or her own statement of verification of his or her income and other assets.

(Added to NRS by 2003, 2890; A 2007, 2846)