Mortgage Law To Take Effect

Sat., June 29, 1996

From Staff And Wire Reports

Idaho home buyers will get new protection from unscrupulous mortgage lenders Monday, when the Residential Mortgage Practices Act takes effect.

The law, which gives state authorities oversight of mortgage companies and brokers for the first time, prohibits the imposition of fees not allowed by statute, or fees not disclosed fully to the borrower.

Nor can lenders delay the processing of applications to increase interest or other costs, or pay appraisers to alter their appraisals.

Marilyn Scanlan, Securities Bureau chief in the Department of Revenue, said 16 percent of the consumer complaints to the department involved mortgage problems, but there was no evidence of widespread fraud.

Lenders and brokers must obtain a license by Aug. 31. Failure to do so will be a felony.

Consumers will be able to get license information by calling 1-208-332-8004.

CEOs taking stock

In an encouraging development for small investors, chief executive officers of Fortune 500 companies are increasing the amount of stock they own outright in their companies, according to a study by consulting firm Towers Perrin.

On average, Fortune 500 CEOs own eight times their annual base salary in their companies’ stock, up from five times two years ago. Stung by the abuses of stock options plans, which appear to link executive incentives with shareholder interests but often do not, many companies are requiring top executives to buy shares outright and put their wealth at risk, just as it is for average shareholders.

“For example, if a CEO owns five times his or her base salary in company stock and the stock price drops 20 percent in one year, that effectively wipes out the CEO’s base salary for that year,” said Paula Todd, head of the Towers Perrin executive compensation research team.

Towers Perrin says the best-performing companies among the Fortune 500 have the highest level of CEO share ownership.

, DataTimes

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Mortgage Law To Take Effect

Jesse Tinsley

Jim Meehan

Molly Quinn

Rob Curley

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