(a) False, Misleading or Deceptive Practices. The following
conduct by a mortgage company or its sponsored originator constitutes
fraudulent and dishonest dealings for purposes of Tex. Fin. Code §156.303(a)(3):
(1) knowingly misrepresenting the mortgage company's
or its sponsored originator's relationship to a mortgage applicant
or any other party to an actual or proposed residential mortgage loan
transaction;
(2) knowingly misrepresenting or understating any cost,
fee, interest rate, or other expense in connection with a mortgage
applicant's applying for or obtaining a residential mortgage loan;
(3) knowingly overstating, inflating, altering, amending,
or disparaging any source or potential source of residential mortgage
loan funds in a manner which disregards the truth or makes any knowing
and material misstatement or omission;
(4) knowingly participating in or permitting the submission
of false or misleading information of a material nature to any person
in connection with a decision by that person whether or not to make
or acquire a residential mortgage loan;
(5) as provided for by the Real Estate Settlement Procedures
Act and Regulation X, brokering, arranging, or making a residential
mortgage loan in which the mortgage company retains fees or receives
other compensation for services which are not actually performed or
where the fees or other compensation received bear no reasonable relationship
to the value of services actually performed;
(6) recommending or encouraging default or delinquency
or continuation of an existing default or delinquency by a mortgage
applicant on any existing indebtedness prior to closing a residential
mortgage loan which refinances all or a portion of such existing indebtedness;
(7) altering any document produced or issued by the
Department, unless otherwise permitted by statute or a rule of the
Department; or
(8) engaging in any other practice which the Commissioner,
by published interpretation, has determined to be false, misleading,
or deceptive.
(b) Improper Dealings. The following conduct by a mortgage
company or its sponsored originator constitutes improper dealings
for purposes of Tex. Fin. Code §156.303(a)(3):
(1) acting negligently in performing an act for which
a person is required under Finance Code, Chapter 156 to hold a license;
(2) violating any provision of a local, State of Texas,
or federal, constitution, statute, rule, ordinance, regulation, or
final court decision that governs the same activity, transaction,
or subject matter that is governed by the provisions of Finance Code,
Chapter 156 or this chapter including, but not limited to, the following:
(A) Real Estate Settlement Procedures Act (12 U.S.C. §2601 et seq. );
(B) Regulation X (12 C.F.R. §1024 et seq. );
(C) Consumer Credit Protection Act, Truth in Lending
Act (15 U.S.C. §1601 et seq. );
(D) Regulation Z (12 C.F.R. §1026 et seq. );
(E) Equal Credit Opportunity Act (15 U.S.C. §1691 et seq. );
(F) Regulation B; (12 C.F.R. §1002 et seq. ); and
(G) Texas Constitution, Article XVI, §50;
(3) representing to a mortgage applicant that a charge
or fee which is payable to the mortgage company or its sponsored originator
is a "discount point" or otherwise confers a financial benefit
on the mortgage applicant unless the loan closes and:
(A) the mortgage company is the lender in the transaction.
For purposes of this paragraph, the mortgage company is deemed to
be the lender if the mortgage company or sponsored originator, is
the payee as evidenced on the face of the note or other written evidence
of indebtedness; or
(B) the mortgage company is not the lender, but demonstrates
by clear and convincing evidence that the lender has charged or collected
discount point(s) or other fees which the mortgage company actually
paid to the lender on behalf of the mortgage applicant, to buy down
the interest rate on a residential mortgage loan; and
(4) failing to accurately respond within a reasonable
time period to reasonable questions from a mortgage applicant concerning
the scope and nature of the mortgage company's services and any costs.
(c) Related Transactions. A mortgage company engages
in fraudulent and deceptive dealings for purposes of Tex. Fin. Code §156.303(a)(3)
when, in connection with the origination of a residential mortgage
loan:
(1) the mortgage company or sponsored originator offers
other goods or services to a consumer in a separate but related transaction
and the mortgage company or sponsored originator engages in a false
misleading or deceptive practice in the related transaction; or
(2) the mortgage company or sponsored originator affiliates
with another person that provides goods or services to a consumer
in a separate but related transaction, and the affiliated person performs
false, misleading or deceptive acts, and the mortgage company or sponsored
originator to the mortgage transaction knew or should have known of
the false, misleading or deceptive acts of the affiliated person and
failed to take appropriate steps to prevent or limit such false, misleading
or deceptive acts.
(d) Sharing or Splitting Origination Fees with the
Mortgage Applicant. A mortgage company and its sponsored originator
must not offer or agree to share or split any residential mortgage
loan origination fees with a mortgage applicant, rebate all or part
of an origination fee to a mortgage applicant, reduce their established
compensation to benefit a mortgage applicant, or otherwise provide
money, a cash equivalent, or anything of value to a mortgage applicant
in connection with providing mortgage loan origination services unless
otherwise allowable as provided by Regulation X. A sponsored originator
acting in the dual capacity of an originator and real estate broker
or sales agent licensed under Occupations Code, Chapter 1101 may rebate
their fees legitimately earned and derived from their real estate
brokerage or sales agent services to the extent allowable under applicable
law governing real estate brokers or sales agents; provided, the payment
or other transfer described herein occurs as a part of closing and
is properly reflected in the closing disclosure for the transaction.
If a payment or other transfer described herein by a mortgage company
or sponsored originator acting in the dual capacity of an originator
and real estate broker or sales agent occurs after closing, a rebuttable
presumption exists that the payment or transfer is derived from the
sponsored originator's fees for mortgage origination services, and
constitutes an improper sharing or splitting of fees with the mortgage
applicant. The rebuttable presumption created by this subsection may
only be overcome by clear and convincing evidence established by the
mortgage company or sponsored originator that the payment or transfer
is instead derived from fees for real estate brokerage or sales agent
services. A violation of this subsection (d) is deemed to constitute
improper dealings for purposes of Tex. Fin. Code §156.303(a)(3).
|