Sen. Craven files bill in North Carolina Senate on lien loan fee limits

A new bill filed by State Sen. David W. Craven Jr. seeks to align lender fees on junior lien loans with federal qualified mortgage standards, according to the North Carolina State Senate.

The bill, filed as SB 675 on March 25 during the 2025 regular session, was formally listed with the short title: ‘Second Mortgage Fee Alignment Act.’

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill aims to amend current legislation regarding the fees or discounts that lenders can charge on second or junior lien real estate loans in order to align with federal qualified mortgage standards. Specifically, it permits lenders to charge up to 2% in fees for loans secured by a second or junior lien on real property. However, the total points and fees charged to the borrower must not exceed the lesser of the amounts specified in 12 C.F.R. § 1026.43(e)(3) or 3% of the total loan amount. These fees are fully earned at loan origination and not considered a prepayment penalty. The act becomes effective upon enactment and applies to loans made on or after that date.

Of the three sponsors of this bill, Brad Overcash proposed the most bills (29) during the 2025 regular session.

Bills in North Carolina follow a multi-step process before becoming law. A lawmaker starts by filing a bill, which is assigned to a committee for review. The bill must be read three times in each chamber. If one chamber changes the bill after the other passes it, both must agree on the final version. Once both chambers approve the same bill, it goes to the governor, who has 10 days (or 30 if the legislature is not in session) to sign, veto, or let it become law without a signature.

You can read more about the bills and other measures here.

Craven graduated from the University of North Carolina Charlotte in 2012 with a BA.

Craven, a Republican, was elected to the North Carolina State Senate in 2023 to represent the state’s 29th Senate district, replacing previous state senator Steven Jarvis.