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 38.7 - Prohibited conduct

Current through Register Vol. 46, No. 28, July 10, 2024
(a) No
				mortgage broker, mortgage banker or exempt organization, as is applicable to
				each entity, shall:
(1) misrepresent or
				conceal material loan terms, or make false promises to induce an applicant to
				apply for a mortgage loan. For purposes of this Part, a material term shall
				mean any item required to be disclosed pursuant to this Part which is likely to
				influence, persuade or induce an applicant for a mortgage loan to take
				particular action;
(2) conduct
				business with an entity which it knows or should know is an unregistered
				mortgage broker or an unlicensed mortgage banker;
(3) fail to display a copy of a license or a
				certificate of registration. Licenses and certificates shall be prominently
				displayed in every public business office frequented by mortgage loan
				applicants;
(4) fail to provide any
				of the disclosures in the manner and at the times required by this
				Part;
(5) fail to make good faith
				efforts to issue commitments and effect closing in a timely manner;
(6) fail to disclose additional settlement
				costs or items necessary to close a loan in a reasonable and timely
				manner;
(7) disburse the mortgage
				loan proceeds in any form other than, as applicable, direct deposit to
				customer's account, wire, bank or certified check, or attorney's check drawn on
				a trust account. Any entity may apply to the superintendent for a waiver of the
				requirements of this provision by demonstrating, in a letter application, that
				it has or shall adopt any other method of disbursement of loan proceeds which
				shall satisfy the purposes of this paragraph;
(8) fail to disburse funds in accordance with
				a commitment to make a mortgage loan which is accepted by the
				applicant;
(9) accept any fees at
				closing which were not disclosed in accordance with this Part;
(10) accept attorney's fees at closing in
				excess of the fees that have been or will be remitted to its
				attorneys;
(11) refuse to permit
				the borrower to be represented by the attorney of his choice;
(12) unreasonably refuse to issue or
				unreasonably delay the issuance of a satisfaction of mortgage after the
				mortgage has been fully satisfied;
(13) impose a charge on a mortgagor for
				establishing or maintaining an escrow account or for waiving the establishment
				or maintenance of an escrow account, provided however, that nothing herein
				shall prohibit a mortgage banker or exempt organization from imposing a
				one-time charge to pay the actual cost of an independent tax reporting service,
				provided such cost is disclosed prior to or at commitment;
(14) include any provision in the mortgage
				brokerage agreement that is intended to limit or prevent a consumer from
				submitting an application(s) to obtain a mortgage loan through another mortgage
				broker(s) or mortgage banker(s) or exempt organization(s) or impose a fee on
				the applicant should he/she do so;
(15) accept a good faith deposit or any other
				deposit to induce the lender to process the loan, whether or not the deposit is
				refundable; or
(16) enter into an
				employment agreement or otherwise engage any employee or independent contractor
				who has an employment or independent contractor relationship with any other
				mortgage banker, mortgage broker or exempt organization, except with the
				written approval of the superintendent.