a)
Except as prohibited by federal statute or regulation, a licensee shall not
require a borrower to pay any fees or charges prior to the loan closing, except
charges to be incurred by the licensee on behalf of the borrower for services
from third parties necessary to process the application, such as for credit
reports and appraisals, and:
1) Loan Fees
A) Loan fees, such as origination or
commitment fees, including fees detailed in the Loan Brokerage Agreement, may
be charged prior to closing only if a licensee is able to demonstrate either
that:
i) The loan commitment is provided in
writing by the funding entity and accepted in writing by the borrower;
or
ii) The loan commitment provided
in writing is consistent with a Loan Brokerage Agreement provided to the
borrower pursuant to Section
1050.1010
of this Part and signed by the borrower.
B) The loan fee, including fees detailed in
the Loan Brokerage Agreement, collected prior to closing shall be deposited in
escrow by the licensee in accordance with the requirements of Section
1050.440 of this
Part.
C) If the loan commitment
provided by the funding entity pursuant to subsection (a)(1) is subject to any
condition or conditions, and any condition is not met due to an action or lack
of action on the part of the borrower, the licensee may retain the loan fee. In
all other cases, if the loan does not close as agreed by the licensee and the
borrower, the licensee shall refund the loan fee to the borrower.
D) A loan fee, including fees detailed in the
Loan Brokerage Agreement, may be collected by a licensee even if a loan does
not close if:
i) Either the fee was provided
for in the loan commitment accepted in writing by the borrower or the fee was
disclosed in the Loan Brokerage Agreement provided to a borrower pursuant to
Section
1050.1010
of this Part and signed by the borrower, and a loan commitment was obtained by
the licensee consistent with the Loan Brokerage Agreement; and
ii) The borrower withdraws the loan
application; or the borrower has made a material misrepresentation on the loan
application; or the borrower has failed to provide documentation necessary to
the processing or closing of the loan.
2) Rate-Lock Fee
A) A Rate-Lock Fee Agreement shall be in
writing and signed by both the licensee and prospective borrower and provided
to prospective borrowers regardless of whether a fee is collected or the
interest rate is locked or floating.
B) The Rate-Lock Fee Agreement shall state
all of the following:
i) The expiration date
of the Rate-Lock Fee Agreement;
ii)
The amount of the loan;
iii) The
maximum interest rate of the loan;
iv) The term of the loan;
v) The maximum discount (points) to be paid;
and
vi) That the interest rate is
locked or the interest rate is floating.
C) The licensee shall be able to demonstrate
to the Director that:
i) The licensee is able
to perform under the terms of the Rate-Lock Fee Agreement;
ii) Subject to verification, the information
submitted by the borrower indicates that the loan will be approved in
accordance with the Rate-Lock Fee Agreement; and
iii) The Rate-Lock Fee will be credited to
the borrower at closing.
D) The Rate-Lock Fee shall be deposited in
escrow by the licensee in accordance with the requirements of Section
1050.440 of this
Part.
E) A Rate-Lock fee may be
collected by a licensee even if a loan does not close if:
i) The fee was disclosed in the Rate-Lock Fee
Agreement provided to a borrower and signed by the borrower; and
ii) A Rate-Lock was obtained by the licensee
consistent with the Rate-Lock Fee Agreement and the borrower withdraws the loan
application; or the borrower has made a material misrepresentation on the loan
application; or the borrower has failed to provide documentation necessary to
the processing or closing of the loan.
3) Assumption Fee
A licensee may charge a borrower an Assumption Fee for a
Federal Housing Administration (FHA) or Department of Veterans Affairs (VA)
loan assumption that, by regulation, requires full credit approval prior to
closing, subject to the following requirements:
A) The applicant must qualify for the
extension of credit as required under:
i) The
terms and conditions of mortgages given on property in Illinois that are
insured by the Federal Housing Administration and dated on or after December
15, 1989 requiring prior credit approval of the Secretary of Housing and Urban
Development.
ii) The terms and
conditions of mortgages given on property located in Illinois that are
guaranteed by the U.S. Department of Veterans Affairs (VA) dated on or after
March 1, 1988 and requiring approval of VA or its authorized agent.
B) An Assumption Fee may be
collected by a licensee even if a loan does not close if:
i) The fee was disclosed in an Assumption Fee
Agreement provided to a borrower and signed by the borrower; and
ii) An Assumption Fee Agreement was obtained
by the licensee consistent with the Assumption Fee Agreement and the borrower
withdraws the loan application; or the borrower has made a material
misrepresentation on the loan application; or the borrower has failed to
provide documentation necessary to the processing or closing of the
loan.