40-23-114. Disclosure of mortgage broker fees.

(a) Within three (3) business days of a borrower signing a completed mortgage loan application and before the borrower provides any consideration to the licensee, the licensee shall execute and deliver to the borrower a mortgage brokerage agreement. The mortgage brokerage agreement shall be in writing, signed and dated by both the borrower and the authorized representative of the licensed mortgage broker whose services to the borrower constitute mortgage brokering and shall contain the following information:

(i) That the mortgage broker cannot make mortgage loans or issue loan commitments in the mortgage broker's name;

(ii) That the mortgage broker cannot guarantee acceptance into any particular mortgage loan program or promise any specific mortgage loan terms or conditions;

(iii) A good faith estimate of the fees to be collected, including a credit report fee, property appraisal fee or any other third party fee;

(iv) The terms and conditions for obtaining a refund of any fees or arranging for the transfer of third party service work products to another mortgage lender or mortgage broker, if any. The amount of any fees collected in excess of the actual cost shall be returned within sixty (60) days after rejection, withdrawal of an application or closing of the loan.

(b) The mortgage brokerage agreement shall be the only agreement between the borrower and licensee with respect to a single mortgage loan transaction, except that the licensed mortgage broker shall also provide to the borrower disclosure statements necessary to comply with the federal Truth-in-Lending Act and its associated regulations, the federal Real Estate Settlement Procedures Act and its associated regulations, and any other applicable federal and state requirements.

(c) A licensed mortgage broker shall not require a borrower to pay any fees or charges prior to the mortgage loan closing, except charges actually incurred by the licensed mortgage broker on behalf of the borrower for services from third parties necessary to process the mortgage loan application, such as credit reports and appraisals.

(d) A mortgage broker shall not receive any fee that inures to the benefit of the mortgage broker, either directly or indirectly if it exceeds the fee disclosed on the most recent good faith estimate unless:

(i) The need to charge the higher fee was not reasonably foreseeable at the time the good faith estimate was written; and

(ii) The mortgage broker has provided to the borrower, no less than three (3) business days prior to the signing of the mortgage loan closing documents, a new good faith estimate of settlement costs, a clear written explanation of the increase in the fee and the reason for charging a fee that exceeds that which was previously disclosed.

(e) If the fee was originally disclosed as a percentage of the mortgage loan amount, and the dollar amount of the fee increases because the mortgage loan amount increases, but the fee as a percentage of the mortgage loan amount does not change, then no redisclosure shall be required unless the fee increased by more than one thousand dollars ($1,000.00).

(f) Any fees charged under the authority of this section shall be reasonable and customary as to the type and the amount of the fee charged.