PURPOSE: This rule establishes general practices and
guidelines for residential mortgage loan brokers with regard to what advance
fees may be collected and placement of said fees. This rule also sets forth
guidelines for the collection and disbursement of rate-lock
fees.
(1) A
broker shall not
require a borrower to pay any fees or charges prior to the loan closing, except
for:
(A) The actual and necessary charges of
third parties needed to process the application, which shall be administered
pursuant to this rule; and
(B) A
rate-lock fee, provided that the written rate-lock fee agreement signed by both
the borrower and the proposed lender includes the following terms:
1. The expiration date of the fee
agreement;
2. The amount of the
loan;
3. The maximum interest rate
and maximum discount (points);
4.
The term of the loan;
5. The lender
is able to perform under the terms of the fee agreement; and
6. Subject to verification, the information
submitted by the borrower indicates that the loan will be approved in
accordance with the fee agreement.
(2) Refunds on Failure to Close. The
rate-lock fee must be refunded if the loan does not close in accordance with
the fee agreement, except that the fee may be retained upon the lender's
ability to demonstrate to the director any of the following reasons: the
borrower withdrew the loan application; made a material misrepresentation on
the loan application; or failed to provide documentation necessary to the
processing or closing of the loan, such documents having been timely requested.
When the fee is to be retained, the lender shall send a written notice to the
borrower stating the reason for retaining the fee.
(3) Brokers Failure to Close. If a
residential mortgage loan is not closed through no fault of the applicant, all
the charges shall be refunded to the borrower, except to the extent such
charges were incurred in good faith by the lender on behalf of the borrower for
third-party services.
(4) Nothing
in these rules shall be construed as to allow a broker, that is not a lender,
to charge a fee for a rate-lock agreement or otherwise enter into a rate-lock
agreement.
(5) Escrow. Brokers, not
subject to the Department of Housing and Urban development escrow regulations,
who receive funds that are to be used for actual and necessary third-party
expenses needed to process the application shall place said funds with one (1)
of the following no later than five (5) days after receipt:
(A) A title insurer, title agency, or title
agent not affiliated with a title agency that is authorized to act as an
escrow, security, settlement, or closing agent pursuant to Chapter 381,
RSMo;
(B) An unaffiliated
depository institution as defined in section 443.703.1(5), RSMo, or first-tier
subsidiary or service corporation thereof that is acting as an escrow agent as
defined by section 443.703.1(9), RSMo; or
(C) A licensed attorney.
Notes
20 CSR
1140-30.280
AUTHORITY: sections
443.865,
443.869,
and
443.887,
RSMo Supp. 2009.* Emergency rule filed April 5, 2010 , effective April 18,
2010, expired Jan. 26, 2011. Original rule filed April 15, 2010, effective Nov.
30, 2010.
*Original authority: 443.865, RSMo 1994, amended 1995,
2009; 443.869, RSMo 1994, amended 1995, 2001, 2009; and 443.887, RSMo 1994,
amended 1995, 2001, 2009.
