209 CMR, § 42.12A - Prohibited Acts and Practices
(1) It is a
prohibited act or practice for a Licensee to make or broker a high cost
mortgage loan subject to
209 CMR
32.32: Requirements for High Cost
Mortgages, or a higher-priced mortgage loan subject to
209 CMR
32.35: Requirements for Higher Priced
Mortgage Loan s which have rates, fees, terms, or features that violate
the following provisions, as applicable:
(a)
the disclosure requirements of
209 CMR
32.32(3):
Disclosures;
(b)
the loan limitations set forth in
209 CMR
32.32(4):
Limitations or 32.35: Requirements for Higher Priced
Mortgage Loan s;
(c) the
prohibited acts and practices provisions of
209
CMR 32.34(1); or
(d) the unfair high cost loan practices
provisions of
209
CMR
32.34(2).
(2) It is a prohibited act or practice for a
person licensed as a mortgage lender to purchase or to make a high cost loan or
a higher-priced mortgage loan originated by a mortgage broker that violates the
provisions of
209 CMR
32.32: Requirements for High Cost
Mortgages, 32.34: Prohibited Acts or Practices in Connection
with High Cost Mortgages, 32.35: Requirements for Higher
Priced Mortgage Loan s, or 42.12A(1).
(3) It is a prohibited act or practice for a
mortgage broker to issue a mortgage loan rate lock commitment on its own behalf
or on behalf of a mortgage lender , or to imply to a consumer that it can lock a
rate on behalf of the consumer. Nothing in 209 CMR 42.12A shall be construed to
prohibit a mortgage broker from taking a rate lock commitment fee for
transmittal to a mortgage lender prior to the issuance by the mortgage lender
of a commitment or approval, provided that prior to the taking of a rate lock
commitment fee :
(a) the mortgage broker
provides the consumer with a mortgage loan rate lock commitment from the
mortgage lender which intends to make the loan, which conforms with the
requirements of
209 CMR
42.11A; and
(b) the rate lock commitment fee is made
payable by the consumer to the mortgage lender which intends to make the loan.
A mortgage broker may only take a rate lock commitment fee for transmittal to
the mortgage lender which intends to make the loan.
Nothing in 209 CMR 42.12A shall prohibit a
(4) It is a prohibited act or practice for a
mortgage broker to advertise any interest rate or loan term described in
12
CFR 1026.24(c) in any media
without the following statement: "We arrange but do not make loans." No
advertisement by a mortgage broker in any media shall contain language which
indicates or suggests that the mortgage broker will fund or approve a mortgage
loan or guarantee any rate.
(5) It
is a prohibited act or practice for a mortgage broker or mortgage lender to
have a consumer sign a blank or incomplete mortgage loan application or
mortgage loan documents.
(6) It is
a prohibited act or practice for a mortgage broker or mortgage lender to sign a
consumer's name to a mortgage loan application or mortgage loan documents on
behalf of a consumer.
(7) It is a
prohibited act or practice for a mortgage broker or mortgage lender to falsify
income or asset information on a mortgage loan application or mortgage loan
documents.
(8) It is a prohibited
act or practice for a mortgage broker or mortgage lender to make false promises
to influence, persuade or induce a consumer to sign a mortgage loan application
or mortgage loan documents.
(9) It
is a prohibited act or practice for a mortgage broker or mortgage lender to
pressure or coerce a consumer to sign a mortgage loan application or mortgage
loan documents by misrepresenting or omitting crucial information about the
terms of the mortgage.
(10) It is a
prohibited act or practice for a mortgage broker or mortgage lender to
discourage a consumer in a mortgage loan transaction from seeking or obtaining
independent legal counsel or legal advice.
(11) It is a prohibited act or practice for a
mortgage broker or mortgage lender to fail to make any disclosure, or fail to
provide any document, to a consumer required by and at the time specified by
any applicable state or federal law, regulation or directive.
(12) It is a prohibited act or practice for a
mortgage broker or mortgage lender to fail to disclose the type and number of
its license in an advertisement.
(13) It is a prohibited act or practice for a
mortgage broker or mortgage lender or an employee or a person associated with
and acting under the direction of a mortgage broker or a mortgage lender to
advertise residential mortgage loan services without naming the licensee and
disclosing the license number of the mortgage broker or mortgage lender under
whose license the individual is acting.
(14) It is a prohibited act or practice for a
mortgage broker or a mortgage lender to require a consumer to use the real
estate brokerage services of a particular entity, agent or broker.
(15) It is a prohibited act or practice for a
mortgage lender to contract with a consumer through the under-writing and
subsequent execution of mortgage loan closing documents and thereafter fail to
fund the mortgage loan .
(16) It is
a prohibited act or practice for a mortgage broker or a mortgage lender to
conduct business with an individual who should be licensed as a mortgage loan
originator under M.G.L. c. 255F, and who the mortgage broker or mortgage lender
knows or should know is an unlicensed mortgage loan originator .
(17) It is a prohibited act or practice for a
Licensee to fail to notify the Division through the NMLS , within five business
days after the termination of a relationship between the Licensee and a
mortgage loan originator , as described in
209 CMR
41.06(1).
(18) It is a prohibited act or practice for a
mortgage broker or a mortgage lender to engage in conduct prohibited under
209 CMR
41.10: Prohibited Acts and
Practices.
(19) A
violation of 209 CMR 42.12A shall constitute grounds for the issuance of a
cease and desist order under M.G.L. c. 255E, § 7; shall constitute grounds
for license suspension or revocation under M.G.L. c. 255E, § 6 and shall
constitute grounds for an administrative fine or penalty under M.G.L. c. 255E,
§ 11.
Notes
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