2023 New York Laws › BNK - Banking › Article 12-D - Licensed Mortgage Bankers › 595-A - Regulation of Mortgage Brokers, Mortgage Bankers and Exempt Organizations.

§ 595-a.  Regulation  of mortgage brokers, mortgage bankers and exempt
organizations. 1. Establishment of grounds to impose a fine or  penalty.
In  addition  to  such  other  rules,  regulations  and  policies as the
superintendent of financial services may  prescribe  to  effectuate  the
purposes of this article, the superintendent of financial services shall
promulgate  regulations  and  policies  governing  the  establishment of
grounds to impose a fine or penalty with respect to the activities of  a
mortgage banker, mortgage broker or exempt organization. Such regulation
shall encompass the following:
(a)  The  misrepresentation  of  material facts or the making of false
promises likely to influence, persuade, or induce  an  applicant  for  a
mortgage loan or mortgagor to take a mortgage loan, or pursuing a course
of misrepresentation or false promises through agents or otherwise;
(b)  The  misrepresentation,  or  concealment of any material factors,
terms or conditions of a transaction to which he is a  party,  including
the receipt of payment from a third party, pertinent to an applicant for
a mortgage loan or a mortgagor;
(c)  The  failure  to  disburse  funds  in  accordance  with a written
commitment or agreement to make a mortgage loan;
(d) The failure to account for or deliver to any person  any  personal
property  obtained  in  connection  with  a mortgage loan such as money,
fund, deposit, check, draft, mortgage, or other document,  or  thing  of
value,  which has come into his hands, and which is not his property, or
which he is not in law or equity entitled to retain;
(e) The improper refusal to issue a satisfaction of mortgage;
(f) Engaging in any transaction, practice, or course of business which
operates a fraud upon any person in connection with the purchase or sale
of any mortgage loan;
(g) Violation of section six-j of this chapter; and
(h) Making a mortgage loan, or indirectly or  directly  providing  for
the  making  of  a  mortgage loan, to an equity purchaser, as defined in
section two hundred sixty-five-a  of  the  real  property  law,  if  the
mortgage  banker,  mortgage  broker or exempt organization had knowledge
that the equity purchaser was  not  complying  with  the  provisions  of
section  two  hundred sixty-five-a of the real property law with respect
to such transaction.
2. Restrictions on advertising.  In  addition  to  such  other  rules,
regulations and policies as the superintendent of financial services may
promulgate   to   effectuate   the   purposes   of   this  article,  the
superintendent  of  financial  services  shall   prescribe   regulations
governing   the   advertising  of  mortgage  loans,  including,  without
limitation, the following requirements:
(a) All advertisements by a mortgage broker, mortgage banker or exempt
organization shall contain the  name  and  an  office  address  of  such
entity,  which in the case of licensees and registrants shall conform to
a name and address on record with the department of financial services;
(b) No licensed mortgage broker or mortgage banker shall advertise its
services in any media, whether print or electronic,  without  the  words
"registered  mortgage  broker"  or "licensed mortgage banker" or similar
words therein;
(c) No mortgage broker, mortgage banker or exempt  organization  shall
advertise   information  concerning  mortgage  loans,  including  rates,
margins,  discounts,  points,  fees,  commissions  or   other   material
information,  including  material limitations on such loans, unless such
entity is able to make such mortgage loans  available  to  a  reasonable
number of qualified applicants;
(d)  All  advertisements  by  mortgage  brokers  must include language
indicating that such brokers may not make loans; and
(e) The term "advertisement" shall not  include  promotional  material
containing  fifteen  words  or less which does not contain references to
specific rates, points, discounts, fees, material  loan  factors,  etc.,
such as imprinted pencils, pens or balloons.
3.  Required disclosures. In addition to such other rules, regulations
and policies as the superintendent of financial services may  promulgate
to  effectuate  the  purposes  of  this  article,  the superintendent of
financial services shall promulgate regulations governing the disclosure
required to be made  to  applicants  for  a  mortgage  loan,  including,
without limitation, the following requirements:
(a)  Each  mortgage  broker,  mortgage  banker and exempt organization
shall provide to each applicant for a mortgage loan  at  or  before  the
time  of  application  a  disclosure  of the fees payable at the time of
application and the conditions under which such fees may be  refundable,
and such other disclosures as shall be required by the superintendent of
financial services;
(b)  Each mortgage banker and exempt organization shall make available
to each applicant for a mortgage loan at or before the time a commitment
to make a mortgage loan is given a written disclosure, the  fees  to  be
paid  in  connection  with the commitment and the loan, or the manner in
which such fees shall be determined and the conditions under which  such
fees may be refundable, and such other disclosures as may be required by
the superintendent of financial services; and
(c)  In  each  lock-in agreement it shall issue, every mortgage banker
and exempt organization shall include a list of all documents  typically
required  to  be  produced  and  conditions  typically  required  to  be
satisfied for closing of a mortgage loan based on  information  provided
by  the  applicant.  In  each  commitment it shall issue, every mortgage
banker and exempt organization shall include a  list  of  all  documents
foreseeably  required to be produced and conditions foreseeably required
to be satisfied for closing of a  mortgage  loan  based  on  information
provided  by  the  applicant. In addition, no later than twelve business
days prior to the expiration of any lock-in period or commitment period,
a mortgage banker or exempt organization shall mail  to  each  applicant
for  a  mortgage  loan  a  notice indicating the date of such expiration
together  with  a  request  that  the  applicant  contact   the   lender
immediately  to  discuss the conditions precedent to the closing of such
loan; and
(d) Each mortgage broker,  mortgage  banker  and  exempt  organization
shall  provide  such other disclosure as the superintendent of financial
services shall determine by regulation are appropriate to carry out  the
purposes of this article.
4.  Restrictions  on tying. (a) No mortgage banker, mortgage broker or
exempt organization shall, as a condition for the approval of a mortgage
loan, require the use of a particular  title  insurance  company,  title
insurance  agency  or  title  insurance  agent or, for any other type of
insurance, require the use of a particular insurer, agent or broker.
(b) A bank, trust company, savings bank, savings and loan  association
or  national  bank  which  operates in compliance with the provisions of
paragraph (e) of subdivision seven of section twelve-a of  this  chapter
and  paragraph  two  of  subdivision  (a)  of  section two thousand five
hundred two of the insurance law shall be deemed  to  be  in  compliance
with this subdivision.
5.  No  licensee or registrant engaging in any activities constituting
the business of  a  distressed  property  consultant,  as  described  in
section  two hundred sixty-five-b of the real property law, shall charge
for or accept payment for real property consulting services  as  defined
in such section before the full completion of such services.