Mississippi Code 1972 (2023) › Title 81 - BANKS AND FINANCIAL INSTITUTIONS (§§ 81-1-1 — 81-29-3) › Chapter 18 - MISSISSIPPI S.A.F.E. MORTGAGE ACT (§§ 81-18-1 — 81-18-63) › IN GENERAL (§§ 81-18-1 — 81-18-55) › Section 81-18-27 - Prohibited acts; licensed mortgage broker or mortgage lender to broker residential mortgage loan only to licensed mortgage brokers or mortgage lenders or exempt persons

(1)
No person required to be licensed under this chapter shall:
(a)
Directly or indirectly employ any scheme, device or artifice to defraud or mislead borrowers or lenders or to defraud any person.
(b)
Misrepresent to or conceal from an applicant for a mortgage loan or mortgagor, material facts, terms or conditions of a transaction to which the licensee is a party.
(c)
Fail to disburse funds in accordance with a written commitment or agreement to make a mortgage loan.
(d)
Fail to truthfully account for monies belonging to a party to a residential mortgage loan transaction.
(e)
Improperly refuse to issue a satisfaction of a mortgage loan.
(f)
Fail to account for or deliver to any person any personal property obtained in connection with a mortgage loan, such as money, funds, deposits, checks, drafts, mortgages or other documents or things of value that have come into the possession of the licensee and that are not the property of the licensee, or that the licensee is not by law or at equity entitled to retain.
(g)
Engage in any transaction, practice, or course of business that is not in good faith, or that operates a fraud upon any person in connection with the making of or purchase or sale of any mortgage loan, including the use of correction fluid on any document associated with the mortgage loan.
(h)
Engage in any fraudulent residential mortgage underwriting practices, which include, but are not limited to, making in any manner, any false or deceptive statement or representation including, with regard to the rates, points or other financing terms or conditions for a residential mortgage loan, or engage in bait and switch advertising.
(i)
Solicit or enter into a contract with a borrower that provides in substance that the person or individual subject to this chapter may earn a fee or commission through "best efforts" to obtain a loan even though no loan is actually obtained for the borrower.
(j)
Induce, require, or otherwise permit the applicant for a mortgage loan or mortgagor to sign a security deed, note, or other pertinent financial disclosure documents with any blank spaces to be filled in after it has been signed, except blank spaces relating to recording or other incidental information not available at the time of signing.
(k)
Make, directly or indirectly, any residential mortgage loan with the intent to foreclose on the borrower's property. For purposes of this paragraph, there is a presumption that a person has made a residential mortgage loan with the intent to foreclose on the borrower's property if any of the following circumstances are proven:
(i)
Lack of substantial benefit to the borrower;
(ii)
The probability that full payment of the loan cannot be made by the borrower;
(iii)
That the person has made a significant proportion of loans foreclosed under similar circumstances;
(iv)
That the person has provided an extension of credit or collected a mortgage debt by extortion;
(v)
That the person does business under a trade name that misrepresents or tends to misrepresent that the person is a bank, trust company, savings bank, savings and loan association, credit union, or insurance company.
(l)
Charge or collect any direct payment, compensation or advance fee from a borrower unless and until a loan is actually found, obtained and closed for that borrower, and in no event shall that direct payment, compensation or advance fee exceed seven and ninety-five one-hundredths percent (7.95%) of the original principal amount of the loan, and any such direct payments, compensation or advance fees shall be included in all annual percentage rate (APR) calculations if required under Regulation Z of the federal Truth in Lending Act (TILA). A direct payment, compensation or advance fee as defined in this section shall not include:
(i)
Any direct payment, compensation or advance fee collected by a licensed mortgage broker or mortgage lender to be paid to a nonrelated third party;
(ii)
Any indirect payment to a licensed mortgage broker or mortgage lender by a lender if those fees are not required to be disclosed under the Real Estate Settlement Procedures Act (RESPA);
(iii)
Any indirect payment or compensation by a lender to a licensee required to be disclosed by the licensee under RESPA, provided that the payment or compensation is disclosed to the borrower by the licensee on a good faith estimate of costs, is included in the APR if required under Regulation Z of TILA, and is made pursuant to a written agreement between the licensee and the borrower as may be required by Section
81-18-33
;
(iv)
A fee not to exceed one percent (1%) of the principal amount of a loan for construction, provided that a binding commitment for the loan has been obtained for the prospective borrower; or
(v)
An advance fee, known as a lock-in fee, collected by a licensee to be paid to a lender to lock in an interest rate and/or a certain number of points on a mortgage loan from the lender as provided in Section
81-18-28
.
(m)
Pay to any person not licensed under the provisions of this chapter any commission, bonus or fee in connection with arranging for or originating a mortgage loan for a borrower, except that a licensed loan originator may be paid a bonus, commission, or fee by his or her licensed employer.
(n)
Refuse to provide the loan payoff within three (3) business days of an oral or written request from a borrower or third party. Proof of authorization of the borrower shall be submitted for a third-party request. The payoff statement must be an understandable and accurate statement of the total amount that is required to pay off the mortgage loan as of a specified date. No borrower shall be charged a fee for being informed or receiving a payoff statement or for being provided with a release upon full payment, provided that the licensed mortgage lender may charge a reasonable fee for providing a payoff statement after five (5) or more requests in any calendar year.
(o)
Knowingly withhold, extract, remove, mutilate, destroy or conceal any books, records, computer records or other information which are required by law to be disclosed.
(p)
Negligently make any false statement or knowingly and willfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the Nationwide Mortgage Licensing System and Registry or in connection with any investigation conducted by the commissioner or another governmental agency.
(q)
Fail to comply with this chapter or rules or regulations promulgated under this chapter, or fail to comply with any other state or federal law, including the rules and regulations under that law, applicable to any business authorized or conducted under this chapter.
(r)
Conduct any business covered by this chapter without holding a valid license as required under this chapter, or assist or aid and abet any person in the conduct of business under this chapter without a valid license as required under this chapter.
(s)
Make any payment, threat or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan, or make any payment threat or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property.
(t)
Solicit, advertise or enter into a contract for specific interest rates, points or other financing terms unless the terms are actually available at the time of soliciting, advertising or contracting.
(u)
Fail to make disclosures as required by this chapter and any other applicable state or federal law including regulations under that law.
(v)
Cause or require a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer.
(w)
Sign a consumer's name to a mortgage loan application or mortgage loan documents on behalf of a consumer.
(x)
Knowingly falsify income or asset information on a mortgage loan application or mortgage loan documents.
(y)
Discourage a consumer in a mortgage loan transaction from seeking or obtaining independent legal counsel or legal advice.
(2)
A licensed mortgage broker or mortgage lender shall only broker a residential mortgage loan to a mortgage broker or mortgage lender licensed under this chapter or to a person exempt from licensure under the provisions of this chapter.
(3)
No nonbanking entity may use any sign or handwritten or printed paper indicating that it is a bank, savings bank, trust company or place of banking. No entity may use the word "bank," "savings bank," "banking," "banker" or "trust company," or the equivalent or plural of any of these words, in connection with any business other than that of banking. This subsection does not prohibit a person from acting in a trust capacity.
(4)
No person shall use the name or logo of any banking entity in connection with the sale, offering for sale, or advertising of any financial product or service without the express written consent of the banking entity.
(5)
No unlicensed Mississippi location of a Mississippi licensed mortgage broker or mortgage lender may advertise mortgage services if the unlicensed location is more than fifty (50) miles from a licensed Mississippi location.
Laws, 2000, ch. 579, § 14; reenacted and amended, Laws, 2002, ch. 500, § 15; reenacted and amended, Laws, 2004, ch. 364, § 15; Laws, 2006, ch. 451, § 1; reenacted and amended, Laws, 2007, ch. 581, § 15; Laws, 2009, ch. 544, § 15; reenacted without change, Laws, 2010, ch. 462, § 16; reenacted without change, Laws, 2012, ch. 571, § 15, eff. 7/1/2012.
Reenacted without change by Laws, 2020, ch. 310, SB 2427,§ 16, eff. 7/1/2020.
Reenacted and amended by Laws, 2016, ch. 360, SB 2504, 16, eff. 7/1/2016.