New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter I - GENERAL REGULATIONS OF THE SUPERINTENDENT › Part 38 - Definitions Of Terms; Advertising; Application And Commitment Disclosures And Procedures; Improper Conduct Under Article 12-d › Section 38.3 - Application disclosures and procedures

Current through Register Vol. 46, No. 28, July 10, 2024
Article 12-D requires and authorizes the superintendent to
				  promulgate regulations governing the disclosures which must be given and the
				  procedures which must be followed at the time an application is taken. No
				  mortgage broker, mortgage banker or exempt organization may take an
				  application, application fee, credit report fee or property appraisal fee prior
				  to making the disclosures set forth in this section. Each entity shall also
				  comply with the procedures set forth in this section regarding the processing
				  of applications. An application may be taken in writing, over the telephone or
				  electronically transmitted. A written application, irrespective of how it is
				  transmitted, should contain the following statement: "It is a crime to
				  intentionally falsify information on this application." For oral applications,
				  the mortgage broker, mortgage banker or exempt organization must make this
				  statement to the borrower(s).
(a)
Mortgage broker application disclosures and procedures.
(1) Disclosures. Prior to taking an
				application or collecting an application fee, credit report fee or property
				appraisal fee, every mortgage broker shall disclose to the applicant in writing
				or via electronic media:
(i) that such
				mortgage broker may not make mortgage loans or commitments;
(ii) that such mortgage broker cannot
				guarantee acceptance into any particular loan program, nor can that mortgage
				broker promise any specific loan terms or conditions;
(iii) whether the mortgage broker places
				loans primarily with any three or fewer lenders, and if so, the name(s) of such
				lender(s);
(iv) a statement to the
				effect that the rate, points, fees, and other terms quoted at commitment by or
				on behalf of the lender encompass the consideration to be received by the
				mortgage broker from a lender for its services. In addition, the statement
				shall disclose the specific maximum amount of such consideration to be
				received;
(v) the amount of the
				application fee, and the registrant's good faith estimate of the credit report
				fee, property appraisal fee, processing fee, if any, and the terms and
				conditions for obtaining a refund of such fees if any;
(vi) the specific services which will be
				provided or performed for the application fee and/or the processing
				fee;
(vii)
(a) the maximum consideration, including
				premium pricing, fees and points, payable by the lender to the mortgage
				broker;
(b) the maximum of any fees
				or points to be paid by the applicant directly to the mortgage broker;
				and
(c) the combined total
				consideration set forth in clauses (
a
) and
				(
b
) of this subparagraph.
(viii) if applicable, any premiums or bonuses
				to be paid to the mortgage broker by the lender and/or the basis of its
				eligibility to receive premiums or bonuses;
(ix) if applicable, a description of the
				consumer protections and lender disclosures which are lost when the loan is
				placed with a private investor that is neither an exempt organization nor
				licensed pursuant to article 12-D of the Banking Law. This disclosure shall
				include a notice that the requirement that the term of a balloon mortgage be at
				least three years does not necessarily apply to a loan placed with a private
				investor. This disclosure shall be no less conspicuous than any other
				disclosures made pursuant to this section;
(x) if applicable, the fact that fees are
				being divided between more than one mortgage broker and/or mortgage banker
				and/or exempt organization acting as a mortgage broker and the dollar amount or
				the percentage, of if not known, a good faith estimate thereof, of the fee to
				be received by each mortgage broker, mortgage banker or exempt
				organization;
(xi) the fact that
				certain mortgage loan products impose a pre-payment penalty on the borrower and
				the amount of, or the formula for calculating, the pre-payment penalty, if any,
				and the terms of the pre-payment penalty, if any, will be disclosed to the
				borrower as soon as they are known, but no later than the issuance of the
				commitment (if any), for the loan product chosen by the borrower;
(xii) with regard to written applications, a
				toll free telephone number of a person in a management position with the
				mortgage broker who may be contacted about problems with the application or if
				there is no toll free telephone number, then the circumstances under which a
				collect call will be accepted. With respect to electronic applications, the
				disclosure shall include the electronic mail address of the mortgage
				broker.