§ 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.