32-9-124. Prohibitions -- required disclosure. (1) A mortgage broker or loan originator may not do any of the following:
     (a) retain original documents owned by the borrower and submitted in connection with the loan application;
     (b) directly or indirectly employ any scheme to defraud or mislead a borrower, a lender, or any other person;
     (c) make any misrepresentation or deceptive statement in connection with a residential mortgage loan, including but not limited to interest rates, points, costs at closing, or other financing terms or conditions;
     (d) fail to pay a bona fide third party later than 30 days after recording of the loan closing documents or 90 days after completion of the bona fide third-party service, whichever is earlier, unless otherwise agreed by the parties;
     (e) accept any fees or compensation at closing that were not disclosed as required by state or federal law;
     (f) accept any fees or compensation in excess of those allowed by state or federal law; or
     (g) sign a borrower's application or related documents on behalf of or in lieu of another mortgage broker or loan originator.
     (2) Prior to providing mortgage broker services to a borrower, the licensee, in addition to other disclosures required by this part, subsection (3) of this section, and other state and federal laws, shall provide to the borrower at the time of application a written disclosure containing substantially the following language, which must be signed by the borrower:
     "MORTGAGE LOAN ORIGINATION DISCLOSURE
     (Name of licensee) is a licensed mortgage broker in Montana authorized to provide mortgage brokerage services to you in connection with your real estate loan. Lenders whose loan products we distribute generally provide their loan products to us at a wholesale rate. The rate you pay may be higher.
     SECTION 1. NATURE OF RELATIONSHIP. In connection with this mortgage loan:
     (1) (name of licensee) is acting as an independent contractor and not as your agent;
     (2) (name of licensee) enters into separate independent contractor agreements with various lenders; and
     (3) while (name of licensee) seeks to assist you in meeting your financial needs, (name of licensee) does not distribute products of all lenders or investors in the market and cannot guarantee the lowest price or best terms available.
     SECTION 2. OUR COMPENSATION.
     (1) The retail price (name of licensee) offers you, including the interest rate, total points, and fees, will include (name of licensee's) compensation.
     (2) In some cases, (name of licensee) may be paid all of (name of licensee's) compensation by either you or the lender.
     (3) Alternatively, (name of licensee) may be paid a portion of (name of licensee's) compensation by both you and the lender. For example, in some cases, if you would rather pay a lower interest rate, you may pay more money in upfront points and fees. Also, in some cases, if you would rather pay less money up front, you may be able to pay some or all of our compensation indirectly through a higher interest rate, in which case (name of licensee) will be paid directly by the lender.
     (4) (Name of licensee) may also be paid by the lender based on the value of the mortgage loan or related servicing rights in the market place or based on other services, goods, or facilities performed or provided by (name of licensee) to the lender.
     By signing below, you acknowledge that you have received a copy of this disclosure."
     (3) The disclosure must include the address of the department's division of banking and financial institutions, the division's phone number and website, and a statement informing borrowers that the division can provide information about whether a mortgage broker or loan originator is licensed as well as other legally available information.

     History: En. Sec. 16, Ch. 516, L. 2003; amd. Sec. 11, Ch. 498, L. 2007.