Opinion ID: 1306135
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Heading: Statutory Scheme at Issue.

Text: Iowa Code section 535.8(2)( a ) provides that [a] lender may collect certain fees. These include a loan processing fee, which does not exceed two percent of the loan principal. The term loan processing fee is not defined in the statute. The lender may also collect a commitment fee as agreed to in writing by the parties, without limitation as to the amount of the fee. The statute describes this fee as compensation to the lender solely for the use of money. The fee may be collected in addition to the loan processing fee. Finally, the lender may collect a closing fee as agreed to in writing by the parties, without limitation as to the amount of the fee. The closing fee may be collected in addition to the commitment fee, and/or the loan processing fee. Iowa Code section 535.8(2)( b ) permits a lender to collect in connection with a loan any of the following costs which are incurred by the lender in connection with the loan and which are disclosed to the borrower: (1) Credit reports. (2) Appraisal fees.... (3) Attorney's opinions. (4) Abstracting fees.... (5) County recorder's fees. (6) Inspection fees. (7) Mortgage guarantee insurance charge. (8) Surveying of property. (9) Termite inspection. (10) The cost of a title guaranty issued by the Iowa finance authority pursuant to chapter 16. .... Collection of any cost other than as expressly permitted by this lettered paragraph is prohibited. Iowa Code § 535.8(2)( b ) (emphasis added). Iowa Code chapter 535B applies to mortgage bankers and brokers. Mortgage banker and mortgage broker are both defined in the statute. See Iowa Code § 535B.1(4), (5). Generally, a mortgage banker is one who makes at least four residential mortgage loans per year in Iowa. Iowa Code § 535.1(4). A mortgage broker is one who arranges and negotiates at least four residential mortgage loans per year in Iowa. Iowa Code § 535.1(5). Both are required to obtain a license from the superintendent of the division of banking of the department of commerce and both may have such license suspended or revoked for violating, among other provisions of law, chapters 535 and 535A. See Iowa Code §§ 535B.4, 535B.7. Iowa Code chapter 535C applies to loan brokers. Iowa Code section 535C.2(4)( j ) specifically excludes from the definition of loan broker a mortgage broker or mortgage banker licensed or registered under chapter 535B. Pursuant to chapter 535C, a loan broker may collect a fee from a borrower after successfully procuring a loan in accordance with a written broker agreement between the broker and the borrower. See Iowa Code §§ 535C.2A (loan broker's fee may be assessed or collected from a borrower only after the successful procurement of a loan); .7 (loan brokerage agreement shall be in writing, signed by broker and borrower).