13-B.__A creditor may not recommend or encourage default or further default by a borrower on an existing loan or other debt prior to the closing of a high-rate, high-fee mortgage that refinances all or any portion of the existing loan or debt.

13-C.__Beginning January 1, 2004, a lender that makes a high-rate, high-fee mortgage to a borrower and offers the borrower the option to purchase an individual or group credit life, accident, health, disability or unemployment insurance product on a prepaid single premium basis must also offer the borrower the option of purchasing that insurance product on a monthly premium basis.

If a borrower purchases from a lender an individual or group credit life, accident, health, disability or unemployment insurance product, that borrower has the right to cancel the insurance product at any time and receive a refund of any unearned premiums paid.__Notice of the right to cancel must be sent by mail to the borrower by the lender no later than 30 days after consummation.__The notice must also disclose the type of insurance product purchased, the cost of the product and the procedure for canceling the product.

Sec. 7. 9-A MRSA §8-206-A, sub-§§16-A, 16-B and 18 are enacted to read:

16-A.__The lender and any assignee of the lender have the obligation, jointly and severally, to refund or credit the borrower for any default charges, prepayment penalties or prepaid finance charges collected in excess of the limits set forth in this article.

16-B.__A high-rate, high-fee mortgage may not include a call provision that permits the lender, in its sole discretion, to accelerate the indebtedness.__This subsection does not apply when repayment of the loan is accelerated by a bona fide default, pursuant to a due-on-sale clause provision or pursuant to another provision of the loan agreement unrelated to the payment schedule, including, but not limited to, bankruptcy or receivership.

18.__A political subdivision of this State is prohibited from enacting, issuing and enforcing ordinances, resolutions, rules, regulations, orders, requests for proposals or requests for bids pertaining to the financial lending activities of a person who: