TITLE XXXV BANKS AND BANKING; LOAN ASSOCIATIONS; CREDIT UNIONS
CHAPTER 397-A LICENSING OF NONDEPOSITORY MORTGAGE BANKERS, BROKERS, AND SERVICERS
Section 397-A:14
397-A:14 Lending Practices. –
I. Any first mortgage loan, other than a reverse mortgage, made under the provisions of this chapter shall provide for the computation of interest on a simple interest basis.
II. Interest may be computed either on a 360-day basis with each month containing 30 days, or on a 365-day basis with each month containing the actual number of calendar days in that particular month. Unless otherwise provided in the note, loan payments shall be applied on the scheduled payment date or on the date received.
III. For loans where the payment is applied on the date received, the licensee shall provide to the borrower, at the time the loan application is taken, a separate written disclosure which explains how the payments will be applied.
IV. No person subject to this chapter shall:
(a) Obtain property by fraud or misrepresentation;
(b) Solicit or enter into a contract with a borrower that provides that the person subject to this chapter may earn a fee or commission through "best efforts" to obtain a loan even though no loan is actually obtained for the borrower;
(c) Solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting;
(d) Conduct any business covered by this chapter without holding a valid license as required under this chapter, or assist or aid and abet any person in the conduct of business under this or any other chapter without a valid license as required under this chapter;
(e) Fail to make disclosures as required by this chapter and any other applicable state or federal law including rules and regulations thereunder;
(f) Fail to comply with this chapter or rules or orders promulgated under this chapter, or fail to comply with any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under this chapter;
(g) Make, in any manner, any false or deceptive statement or representation with regard to the rates, points, or other financing terms or conditions for a residential mortgage loan, or engage in bait and switch advertising;
(h) Negligently make any false statement or knowingly and willfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the Nationwide Multistate Licensing System and Registry or in connection with any investigation conducted by the commissioner or another governmental agency;
(i) Make any payment, threat, or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan, or make any payment, threat, or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property;
(j) Collect, charge, attempt to collect or charge, or use or propose any agreement purporting to collect or charge any fee prohibited by this chapter;
(k) Cause or require a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer;
(l) Fail to truthfully account for monies belonging to a party to a residential mortgage loan transaction;
(m) Collect an advance fee for a loan modification;
(n) Engage in unfair, deceptive, unethical, or fraudulent business practices;
(o) Instruct, solicit, propose, or cause a person to sign another's signature on any document without legal authority; or
(p) Solicit, accept, or execute any contract or other document related to any transaction that contains any blanks to be filled in after signing or initialing the contract or other document, except for forms authorizing the verification of application information or as otherwise expressly provided in this chapter.
V. Licensees shall ensure that the Nationwide Multistate License System and Registry unique identifier of any person originating a residential mortgage loan shall be clearly shown on the residential mortgage loan application, note, security instrument and any other documents as may be established by rule, regulation, or order of the commissioner.
Source. 2016, 289:1, eff. Aug. 20, 2016. 2018, 196:5, 14, eff. Aug. 7, 2018. 2019, 36:15, eff. May 15, 2019.