State of New York Banking Department
General General Regulations
of the Banking Board
Part 38
Sections 38.1 to 38.3
Sections 38.4 to 38.13
§ 38.4 Commitment disclosures and procedures.
(a) Disclosure requirements for mortgage loans for acquisition of a dwelling and for all other mortgage loans for which a commitment fee or points are paid to the lender. At time of commitment, and in any case prior to the acceptance of a commitment fee or any points, each mortgage banker and exempt organization making a mortgage loan shall disclose in writing or by electronic transmission to each applicant for a mortgage loan the fees to be paid in connection with the commitment and the terms and conditions under which such fees may be refundable. Each mortgage banker and exempt organization shall also disclose the items listed below in the written or electronically transmitted commitment:
(1) Terms and conditions of the mortgage loan.
(i) identification of entity making commitment;
(ii) identification of borrower(s);
(iii) identification of property securing loan;
(iv) principal amount of the loan;
(v) term of the loan;
(vi) initial interest rate;
(vii) initial monthly payment of principal and interest;
(viii) a statement that a balloon payment will be required (if applicable);
(ix) if the loan is an adjustable rate loan, in addition to the foregoing, the lender shall disclose the frequency of change, the index, the margin, and any relevant caps;
(x) a statement that private mortgage insurance will be required (if applicable) and the conditions under which such insurance would no longer be required;
(xi) a statement that flood insurance may be required if the property is in a flood zone;
(xii) a statement that negative amortization may apply (if applicable);
(xiii) whether and under what conditions the mortgage is assumable;
(xiv) a statement that funds are to be escrowed (if applicable);
(xv) total points to be accepted directly or indirectly by or on behalf of the mortgage banker or exempt organization at or prior to closing;
(xvi) the mortgage banker or exempt organization shall separately identify the points, including premium pricing, payable by the lender to a mortgage broker or a mortgage banker or exempt organization when acting in a mortgage brokerage capacity and briefly explain the basis for the premium pricing payment. Upon receipt of a copy of the separate fee agreement between the broker and the applicant, which fee agreement may be in writing or electronically transmitted, the lender is required to disclose any fees or points to be paid by the applicant directly to the mortgage broker;
(xvii) if applicable, the mortgage banker or exempt organization shall separately identify any premiums or bonuses to be paid to the mortgage broker by the lender and the basis of the mortgage broker's eligibility to receive premiums or bonuses; and
(xviii) if applicable, the amount of, or formula for calculating, the pre-payment penalty and terms of the pre-payment penalty.
(2) Terms and conditions of the commitment. (i) time during which the commitment is irrevocable and may be accepted by the borrower, which time shall not be less than seven calendar days from the date of commitment or date of mailing, whichever is later;
(ii) amount of fees and charges payable at time of commitment including points or other discounts, origination fees or add-ons, however denominated by the mortgage banker or exempt organization; and
(iii) expiration date of the commitment, which must be a reasonable time for a consumer to arrange for a closing date.
(3) Mandatory disclaimer. The following disclosure which shall be no less conspicuous than any other disclosure, made pursuant to this section, shall be included: "IF YOU SIGN THIS COMMITMENT, AND YOU DO NOT CLOSE THIS LOAN IN ACCORDANCE WITH THE DESCRIBED TERMS, YOU MAY LOSE SOME OR ALL OF THE FEES OR CHARGES YOU HAVE PAID."
(4) Conditions precedent to closing. Either as part of the commitment or on a separate form given in conjunction with the commitment.
(i) a list of those items relating to the real property which must be produced prior to closing, including but not limited to the following items (if applicable):
(a) title report and insurance;
(b) property survey;
(c) copy of certificate of occupancy for use;
(d) satisfactory final inspection (if new construction);
(e) evidence of appropriate hazard insurance;
(f) evidence of flood insurance as appropriate;
(g) master policy insurance certificate (if applicable in the case of condominiums);
(h) termite inspection report;
(i) radon test report;
(j) well water test report; and
(k) septic inspection report.
(ii) a list of those items relating to the cooperative housing unit which must be produced prior to closing, including but not limited to the following items (if applicable):
(a) proprietary lease;
(b) recognition agreement;
(c) pledge of shares of stock;
(d) warranty and representation that no outstanding claims against the proprietary lease or stock will exist at closing; and
(e) copy of certificate of occupancy and title policy for the entire building if conversion has occurred within the last six months.
(iii) a list of foreseeable conditions and documents that will be required for closing of a mortgage loan. This list shall include, but need not be limited to, those property related items listed in this paragraph, as applicable, and any other specific property related documents and conditions and underwriting documents and conditions which the lender knows or reasonably should know, based upon the information contained in the applicant's file maintained by the lender at the time the commitment is issued, will be required. Underwriting documents refers only to those documents which the borrower must submit to the lender. The lender does not have to include specific title exceptions in the list. Documents that only require a borrower's signature need not be included in the list of foreseeable documents and conditions.
(b) Disclosure requirements for all residential mortgage loan transactions in which the proceeds of the mortgage loan will not be used to finance the acquisition of the dwelling and no commitment fee or points are paid to the lender prior to closing. A mortgage banker or exempt organization making a mortgage loan, the proceeds of which are not used to finance the acquisition of the dwelling securing the mortgage loan shall not be required to make such loan in accordance with section 38.3 of this Part and this section with the exception of the disclosure requirements contained in sections 38.3(b)(2)(vi), and 38.3(d) at application and subparagraphs (a)(1)(xvi) and (xviii) of this section upon loan approval provided the mortgage banker or exempt organization does not accept any fees prior to closing other than an application fee, property appraisal fee and credit report fee.
(c) Procedures for mortgage loans for the acquisition of a dwelling and for all other mortgage loans for which a commitment fee or points are paid to the lender.
(1) Every mortgage banker and exempt organization shall provide each applicant with a written or electronically transmitted commitment which incorporates the items listed in paragraphs (a)(1), (2), (3) and (4) of this section. All commitments must be signed by the mortgage banker or exempt organization. All commitment agreements must be signed by the mortgage banker or exempt organization and the applicant. Such signatures may be hand- written or digital to the extent such digital signatures are recognized as binding under New York State law.
(2) With regard to written commitments, every mortgage banker and exempt organization shall provide each applicant with a duplicate hard-copy original of the signed commitment agreement.
(3) With regard to electronic commitments, within three business days of receipt of a commitment agreement, a hard-copy of such commitment agreement shall be mailed to each applicant who indicates that he or she does not have the computer capacity to down-load and print such commitment agreement. The mortgage banker or exempt organization shall keep a copy of the digitally signed commitment agreement. Furthermore, in those instances in which a hard-copy of the commitment agreement is not mailed to the applicant, the mortgage banker or exempt organization must be able to demonstrate that information was obtained as to the applicant's computer capacity to down-load and print such commitment agreement.
(4) No commitment given by a mortgage banker or exempt organization may contain any clause which conditions the commitment on the mortgage banker or exempt organization obtaining necessary funding or financing. This requirement shall not be deemed to be violated if the commitment discloses that the commitment is only for a particular loan product with a particular denominated third-party purchaser or investor, and discloses that the commitment is subject to the review and prior approval of that third-party purchaser or investor. No mortgage banker or exempt organization shall make a commitment for such a loan product unless the third-party purchaser or investor has committed to purchase such mortgage loan products from the mortgage banker or exempt organization. If such approval is not obtained the mortgage banker or exempt organization shall refund any points or commitment fees previously collected from the consumer.
(5) No points, however denominated by the mortgage banker or exempt organization, may be required by the mortgage banker or exempt organization as a condition for closing a mortgage loan if they have not previously been disclosed pursuant to this Part.
(6) Any additional settlement costs, documents or other items required to close the loan which are found to be necessary after the commitment has been issued must be disclosed in writing or electronically transmitted to the applicant in a reasonable and timely manner.
(7) All commitment fees accepted pursuant to this Part must be refundable in full if the property appraisal report is not favorable for the product for which the commitment was issued.
(8) A commitment fee and any points taken by a mortgage banker or exempt organization prior to closing must be refunded in full if an applicant who has provided complete and correct credit information as required by the application form is rejected as not creditworthy.
(d) Notice of expiration. The notice of expiration of the commitment period required by section 595-a(3)(c) of the Banking Law must be a separate document and must be mailed or electronically transmitted to each individual applicant and, in any joint application, either to a notice recipient, if one has been designated as such by the applicants or, if none, then to all the applicants not less than 12 business days nor more than 20 business days prior to the expiration of the commitment period. This notice need not be given if the expiration of the commitment period is less than 12 days from the date the commitment is accepted, provided that the lender complies with the requirements of subparagraphs (a)(2)(i) and (iii) of this section. This notice may refer to both the expiration of the commitment period and the lock-in period provided that the notice is timely with regard to the expiration of each.
§ 38.5 Prevailing rate.
(a) Disclosures. A licensee or exempt organization may issue a "prevailing rate" commitment only in compliance with this section. Prior to acceptance of a commitment fee, points or other discounts, the licensee or exempt organization must issue a commitment which discloses the following:
(1) All disclosures required by section 38.4(a) of this Part excluding information concerning the initial interest rate, and the initial monthly payment of principal and interest.(2) (i) Index and margin. The index and margin, if any, upon which the rate for that mortgage loan will be based. The index must be independently verifiable by the borrower and identification of a source for such verification shall be provided. The commitment must also disclose any points or other discounts; or
(ii) Base rate and deviation. A base rate and the maximum interest rate at which the loan may close. The interest rate at closing may never exceed one percentage point above the base rate. The interest rate may be adjusted downward at any time. For example, if the commitment sets a base rate of 9.5 percent, the rate may float no higher than 10.5 percent. A mortgage banker or exempt organization which offers prevailing rate commitments in accordance with this paragraph shall make available for inspection a list which identifies specific products and the rate at which such products are available on any day ("rate sheet"). Such rate sheet shall be maintained for two years.(b) Procedures. (1) In connection with a prevailing rate commitment for which a commitment fee is accepted prior to closing, a lender may offer a lower initial or introductory rate to a borrower as long as the index and any margin or the description for the adjusted rate is provided in accordance with this section.
(2) A licensee or exempt organization may issue a commitment which specifies that a rate will be determined at or prior to the closing date without disclosing the index and margin or base rate and deviation as provided above, only if no commitment fee, origination fee, points or other discounts are accepted prior to the fixing of the rate. A prevailing rate offered pursuant to this section must be reasonably related to market conditions at the time of the fixing of the rate.
(3) Nothing contained herein shall relieve the licensee or exempt organization from disclosing in the commitment any other item required by section 38.4(a) of this Part, including fees, points or other discounts or settlement costs.
§ 38.6 Lock-in agreements (guaranteed rate).
A mortgage banker or exempt organization may take points or lock-in fee prior to the issuance of a commitment only in compliance with this section.
(a) Required disclosures and notices. Prior to taking of any points or a lock-in fee, a mortgage banker or exempt organization must provide the applicant with a lock-in agreement signed and dated by the entity and the applicant which incorporates the following information:
(1) Each of the following:
(i) identification of property, principal amount and term of loan, initial interest rate and points, commitment fees and lock-in fees;
(ii) the lock-in agreement shall become binding on both the applicant and the mortgage banker or exempt organization when signed by both;
(iii) the time by which the lock-in fee must be paid to the mortgage banker or exempt organization, provided that such fee may not be taken prior to the time that the lock-in agreement becomes binding on both the applicant and the mortgage banker or exempt organization;
(iv) whether fixed or variable, and if a variable rate, the index and margin, or the method, by which an interest rate change for the mortgage loan will be calculated;
(v) balloon payment (if applicable);
(vi) initial monthly payment of principal and interest;
(vii) whether funds are to be escrowed (if applicable); and
(viii) whether private mortgage insurance is required (if applicable) and the conditions under which such insurance would no longer be required.
(2) The length of the lock-in period, which must be a time period within which the lender can reasonably expect to close the loan given the prevailing market conditions at time of lock- in; and the consequence of failing to close the loan within the lock-in period. The lock-in period shall commence at the time that the lock-in agreement is binding on the applicant and the mortgage banker or exempt organization as set forth in this section. This shall not prevent the parties from locking-in a rate that was in effect before the lock-in agreement became binding on both parties, provided that such rate shall not be higher than the rate that would otherwise be locked-in in the lock-in agreement.
(3) A notice printed indicating that if the applicant provides incomplete or incorrect credit information, he may forfeit some or all of his lock-in fee. If the lock-in agreement is typewritten, this notice shall be entirely in upper case letters and underlined. This notice shall be no less conspicuous than any other disclosure made pursuant to this section.
(4) Whether the lock-in fee is refundable, and the terms and conditions necessary to obtain the refund.
(5) The amount of the application fee, and provide a good faith estimate of the credit report fee and property appraisal fee, provided such fees have not been previously disclosed to the applicant.
(6) A list of all property-related documents typically required to be produced by the applicant and property-related conditions typically required to be satisfied by the applicant for closing of a mortgage loan based on the information provided by the applicant as well as any other information the lender knows or reasonably should know at the time a lock-in agreement is issued and a lock-in fee is paid to the lender, provided a commitment has not yet been issued. This list shall include, but need not be limited to, the items set forth in section 38.4(a)(4) of this Part, but need not include underwriting documents and conditions or specific title exceptions. The disclosures required by this paragraph need not be contained in the lock-in agreement, but may be provided in a separate form referenced in the lock-in agreement and clearly labelled as "Conditions To Be Satisfied for Closing".
(b) Lock-in procedures.
(1) A lock-in fee including any points taken by the lender prior to commitment must be refundable in full if the property appraisal report is not favorable for the product locked in.
(2) A lock-in fee including any points taken by the lender prior to closing must be refunded in full if an applicant who provided complete and correct credit information as required by an application form is rejected as not creditworthy.
(3) The lock-in agreement shall be binding on both the applicant and the lender when such agreement is signed by the applicant and the lender. This requirement shall be disclosed to the applicant as set forth in this section.
Top of Page
Frequently asked Questions
An overview of buying a home.
RESPA and choosing a lender
Banking Regulations Secs. 38.1 et seq.
(4) The notice of expiration of the lock-in period required by section 595-a(3)(c) of the Banking Law must be a separate document and must be mailed or electronically transmitted to each individual applicant and, in any joint application, either to a notice recipient, if one has been designated as such by the applicants or, if none, then to all the applicants not less than 12 business days nor more than 20 business days prior to the expiration of the lock-in period provided such expiration is more than 12 business days from the date the rate is locked irrespective of whether a lock-in fee is paid to the lender. This notice may refer to both the expiration of the commitment period and the lock-in period provided that the notice is timely with regard to the expiration of each.
(5) Both the applicant's signature and the signature of the lender may be hand-written or digital to the extent such digital signatures are recognized as binding under New York State law.
(6) With regard to written lock-in agreements, a duplicate or facsimile copy of the lock-in agreement signed by both the applicant and the lender shall be promptly provided to the applicant.
(7) With regard to electronic lock-in agreements, within three business days of the electronic transmission of a lock-in agreement signed by the lender, a hard-copy of such lock-in agreement shall be mailed to each applicant who indicates that he or she does not have the computer capacity to down-load and print such agreement. Furthermore, in those instances in which a hard copy of the lock-in agreement is not mailed to the applicant, then the lender must be able to demonstrate that information was obtained as to the applicant's computer capacity to down-load and print such agreement.
(8) With regard to electronic notices of expiration, within three business days of the electronic transmission of a notice of expiration, a hard-copy of such notice shall be mailed to the applicant who indicates that he or she does not have the computer capacity to down-load and print such notice. Furthermore, in those instances in which a hard copy of the notice is not mailed to the applicant, then the mortgage banker or exempt organization must be able to demonstrate that information was obtained as to the applicant's computer capacity to down- load and print such notice.
(c) Mortgage brokers, mortgage bankers or exempt organizations acting in a mortgage brokerage capacity. Nothing herein shall be construed to prohibit a mortgage broker, mortgage bankers or exempt organizations acting in a mortgage brokerage capacity from taking a lock-in fee for transmittal to a mortgage banker or exempt organization prior to the issuance by the mortgage banker or exempt organization of a commitment, provided that prior to the taking of a lock-in fee:
(1) the mortgage broker, mortgage bankers or exempt organizations acting in a mortgage brokerage capacity provides the consumer with a lock-in agreement, signed by mortgage banker or exempt organization which intends to make the loan, which conforms with the requirements of this section; and
(2) the lock-in fee is made payable by the applicant to the mortgage banker or an exempt organization which intends to make the loan. A mortgage broker may only take a lock-in fee for transmittal to the mortgage banker or exempt organization which intends to make the loan.
§ 38.7 Prohibited conduct.
(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; or
(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.
(b) In addition, non-compliance with the following shall also constitute prohibited conduct:
(1) only one application fee and only one processing fee, if any, can be taken in any residential mortgage loan transaction irrespective of whether one or more than one mortgage broker, mortgage banker or exempt organization is involved in the transaction; and
(2) an undertaking of accountability for each independent contractor must be filed with the superintendent by the employer in such form as may be prescribed within ten days of commencement of employment. In addition, notification of the termination of any independent contractor shall be made to the superintendent within 10 days of such termination.
§ 38.8 Administrative actions and penalties.
(a) Disciplinary action. Banking Law, sections 595 and 595-a provide that a mortgage broker, mortgage banker or exempt organization may be subject to disciplinary action by the Banking Department for violations of article 12-D, the regulations promulgated thereunder, or violations of State or Federal law indicating that the entity is unfit to engage in the business of brokering or making mortgage loans in this State. Disciplinary action may include:
(1) temporary or permanent deletion from the mortgage broker roll;
(2) suspension or revocation of a license to engage in the business of mortgage banking; and
(3) fines assessed by the Banking Department, which shall be limited to $5,000 per violation, $100,000 per proceeding.
(b) Grounds for disciplinary action. A registrant, licensee or exempt organization may be subject to such disciplinary action as may be determined appropriate by the Superintendent of Banks after notice and hearing on the following grounds:
(1) fraud or bribery in securing a registration or license;
(2) the making of any false statement in an application for registration, licensing or exemption, which false statement would have been grounds for rejection of the application;
(3) the making of any false statement on any form or document requested by the superintendent for examination or review pursuant to Banking Law, article 12-D, Superintendent's Regulations Part 410, Supervisory Policy and Procedure G111 or Part 39 of this Title;
(4) a pattern of conduct indicating incompetence or untrustworthiness;
(5) violation of the disclosure requirements or prohibitions contained in sections 38.2-38.7 of this Part;
(6) conviction of any crime which would have a bearing on the fitness or ability of a registrant or licensee to conduct its business; and
(7) failure to perform its duties and responsibilities in an honest, fair and reasonable manner.
(c) Administrative hearings shall be conducted in accordance with Supervisory Policy and Procedure G111 of this Title.
§ 38.9 Limitation on excess insurance and required disclosures.
(a) Limitation on excess insurance. No mortgage banker or exempt organization shall require any mortgagor, in connection with the granting of a mortgage loan, to obtain a hazard insurance policy in excess of the replacement cost of the improvements on the property as a condition for the granting of such mortgage loan.
(b) Required disclosures. Each mortgage banker and exempt organization that requires mortgagors to obtain and/or maintain hazard insurance as a condition to granting any mortgage loan shall at the time of commitment, or if no written commitment will be issued, then at the time of application, furnish in writing or by electronic transmission to each mortgagor:
(1) a statement that hazard insurance will be required; and
(2) a statement that the mortgage banker or exempt organization cannot require the mortgagor to obtain or maintain a policy in excess of the replacement cost of the improvements on the property securing the loan.
The disclosures required by this section may be incorporated into the application or commitment or into one or more forms required by State or Federal law or in a separate form. Furthermore, the disclosures required by this section are in addition to any other disclosures required by this Part. Within three business days of any electronic transmission of this disclosure, a hard copy of such disclosure shall be mailed to each mortgagor who indicates that he or she does not have the computer capacity to down-load and print such disclosure. Furthermore, in those instances in which a hard copy of the disclosure is not mailed to the mortgagor, the mortgage banker or exempt organization must be able to demonstrate that information was obtained as to the mortgagor's computer capacity to down-load and print such disclosure.
§ 38.10 Notification requirement.
Every mortgage banker, mortgage broker and exempt organization shall notify the Mortgage Banking Division of the Banking Department in writing of any administrative, civil or criminal proceeding initiated by any domestic governmental department or agency, the Federal Home Loan Mortgage Corporation, or the Federal National Mortgage Agency, within 20 days of its commencement, provided such proceeding pertains to residential mortgage lending.
§ 38.11 Requirements for full service and loan solicitation branches.
In addition to such applications and investigation fees as may be required under Banking Law article 12-C to establish any branches, with respect to any full service branch, as defined in section 38.1 of this Part, a particular person shall be designated as being responsible for the operation thereof. In addition, full service branch stationery shall include the address and telephone number of the branch or the main office at the licensee's or registrant's option and must use the name of the licensee or registrant. The foregoing requirements shall not apply to mortgage brokers or mortgage bankers having more than 10 offices in New York State.
§ 38.12 Dual agency transaction disclosures.
The dual role performed by the mortgage broker, or a mortgage banker or an exempt entity acting as a mortgage broker, in those instances when the mortgage broker is also the real estate broker in the same residential real estate transaction, must be disclosed at the first substantive contact between the mortgage broker and the buyer/borrower. In addition, any regular business relationship that the mortgage broker maintains with any lender to which he/she presents loan applications, if he/she intends to utilize three or fewer lenders, must also be disclosed at the first substantive contact between the mortgage broker and the buyer/borrower. The appropriate disclosure form and acknowledgment set forth hereunder must be provided to and signed by the buyer/borrower and the seller before services as a mortgage broker may be rendered. The disclosures required by this section may be in writing or via electronic transmission and the required signatures may be hand-written or digital to the extent such signatures are recognized as binding under New York State law. A hard or electronic copy of the disclosure form and signed acknowledgment must be maintained by the mortgage broker for at least three years.
THE FOLLOWING DISCLOSURE AND ACKNOWLEDGMENT APPLY TO THOSE TRANSACTIONS IN WHICH THE REAL ESTATE BROKER REPRESENTING THE SELLER AND THE MORTGAGE BROKER REPRESENTING THE BUYER/BORROWER ARE THE SAME PERSON OR ENTITY.
DISCLOSURE REGARDING DUAL AGENCY ROLE IN RESIDENTIAL REAL ESTATE TRANSACTIONS
I must explain what dual agency means to you.
DUAL AGENCY
1. As a real estate licensee in the pending transaction (Name of Real Estate Broker) represents the seller in the sale of the residential real property and as such the primary responsibility is to the seller.
2. As a mortgage broker (Name of Mortgage Broker) represents the buyer/borrower in the acquisition of the mortgage loan and as such the primary responsibility is to the buyer/borrower.
YOUR RIGHTS UNDER DUAL AGENCY
1. I may represent you only with the knowledge and informed consent of each of you.
2. By consenting to Dual Agency you are giving up your right to undivided loyalty. You should carefully consider the possible consequences of a Dual Agency relationship before agreeing to such representation.
3. Since I am not a legal expert or an attorney you may wish to consult one before signing this form.
4. You the buyer may retain the services of a real estate broker or mortgage broker who will represent only you in the transaction.
5. You the seller may, subject to any existing contract of sale and/or any real estate agreement which you have already signed, retain the services of a real estate broker who will represent only you in the transaction.
I place mortgage loan applications with three or fewer mortgage lenders.
I place mortgage loan applications with more than three mortgage lenders.
ACKNOWLEDGMENT OF PROSPECTIVE BUYER AND SELLER TO DUAL AGENCY
(1) I have received and read this disclosure notice.
(2) I understand that as a real estate/mortgage broker you may be representing the interests of the seller in the sale of the residential real property and the buyer in the acquisition of the mortgage loan and that you will be unable to offer the full range of fiduciary duties to each of us.
(3) I understand that subject to the terms of any existing contract of sale and/or any real estate agreement which I may have already signed I the seller may engage my own broker as a real estate broker who will not act as a mortgage broker for any potential buyer/borrower in this transaction; or that I as a buyer/borrower may engage my own broker as a mortgage broker and/or my own broker as a real estate broker who will not act as a real estate broker for the seller in this transaction.
I understand that you as a mortgage broker will ordinarily place mortgage loan applications with three or fewer mortgage lenders.
I understand that you as a mortgage broker will ordinarily place mortgage loan applications with more than three mortgage lenders.
DATED: SELLER: DATED: BUYER:
§ 38.13 FHA mortgage loan correspondents.
(a) For purposes of implementing section 590(5-a) of the New York Banking Law, all of the applicable requirements of this Part which pertain to mortgage bankers and exempt organizations shall also apply to any registered mortgage broker when acting as an FHA mortgage loan correspondent as approved by the superintendent. In all other instances, the mortgage broker shall remain subject to the requirements of this Part applicable to mortgage brokers.
(b) Notwithstanding any provision of this Part to the contrary, any registered mortgage broker, approved by the superintendent to act as an FHA mortgage loan correspondent, shall be permitted to advertise that it is an approved FHA mortgage loan correspondent authorized to make FHA insured mortgage loans. Such registered mortgage broker may display a notice that it is approved to make FHA insured mortgage loans.
(c) To the extent not prohibited by Federal law, where the requirement promulgated by the Secretary of Housing and Urban Development with regard to acting as an FHA mortgage loan correspondent differ from those of this Part, the FHA mortgage loan correspondent must comply with the requirement which provides greater consumer protection.
(d) No FHA mortgage loan correspondent may accept an application, application fee, credit report fee or property appraisal fee prior to making the following disclosure or one to like effect:
I am an approved FHA Mortgage Loan Correspondent. Your loan will be underwritten by my FHA approved sponsor. You will be notified of the name of the sponsor simultaneously with the issuance of an interest rate lock-in agreement or commitment to fund, whichever comes first. If the sponsor approves the FHA insured mortgage loan, I will make the mortgage loan to you.