§ 595-a. Regulation of mortgage brokers, mortgage bankers and exempt
organizations. 1. Establishment of grounds to impose a fine or penalty.
In addition to such other rules, regulations and policies as the
superintendent of financial services may prescribe to effectuate the
purposes of this article, the superintendent of financial services shall
promulgate regulations and policies governing the establishment of
grounds to impose a fine or penalty with respect to the activities of a
mortgage banker, mortgage broker or exempt organization. Such regulation
shall encompass the following:

(a) The misrepresentation of material facts or the making of false
promises likely to influence, persuade, or induce an applicant for a
mortgage loan or mortgagor to take a mortgage loan, or pursuing a course
of misrepresentation or false promises through agents or otherwise;

(b) The misrepresentation, or concealment of any material factors,
terms or conditions of a transaction to which he is a party, including
the receipt of payment from a third party, pertinent to an applicant for
a mortgage loan or a mortgagor;

(c) The failure to disburse funds in accordance with a written
commitment or agreement to make a mortgage loan;

(d) The failure to account for or deliver to any person any personal
property obtained in connection with a mortgage loan such as money,
fund, deposit, check, draft, mortgage, or other document, or thing of
value, which has come into his hands, and which is not his property, or
which he is not in law or equity entitled to retain;

(e) The improper refusal to issue a satisfaction of mortgage;

(f) Engaging in any transaction, practice, or course of business which
operates a fraud upon any person in connection with the purchase or sale
of any mortgage loan;

(g) Violation of section six-j of this chapter; and

(h) Making a mortgage loan, or indirectly or directly providing for
the making of a mortgage loan, to an equity purchaser, as defined in
section two hundred sixty-five-a of the real property law, if the
mortgage banker, mortgage broker or exempt organization had knowledge
that the equity purchaser was not complying with the provisions of
section two hundred sixty-five-a of the real property law with respect
to such transaction.

2. Restrictions on advertising. In addition to such other rules,
regulations and policies as the superintendent of financial services may
promulgate to effectuate the purposes of this article, the
superintendent of financial services shall prescribe regulations
governing the advertising of mortgage loans, including, without
limitation, the following requirements:

(a) All advertisements by a mortgage broker, mortgage banker or exempt
organization shall contain the name and an office address of such
entity, which in the case of licensees and registrants shall conform to
a name and address on record with the department of financial services;

(b) No licensed mortgage broker or mortgage banker shall advertise its
services in any media, whether print or electronic, without the words
"registered mortgage broker" or "licensed mortgage banker" or similar
words therein;

(c) No mortgage broker, mortgage banker or exempt organization shall
advertise information concerning mortgage loans, including rates,
margins, discounts, points, fees, commissions or other material
information, including material limitations on such loans, unless such
entity is able to make such mortgage loans available to a reasonable
number of qualified applicants;

(d) All advertisements by mortgage brokers must include language
indicating that such brokers may not make loans; and

(e) The term "advertisement" shall not include promotional material
containing fifteen words or less which does not contain references to
specific rates, points, discounts, fees, material loan factors, etc.,
such as imprinted pencils, pens or balloons.

3. Required disclosures. In addition to such other rules, regulations
and policies as the superintendent of financial services may promulgate
to effectuate the purposes of this article, the superintendent of
financial services shall promulgate regulations governing the disclosure
required to be made to applicants for a mortgage loan, including,
without limitation, the following requirements:

(a) Each mortgage broker, mortgage banker and exempt organization
shall provide to each applicant for a mortgage loan at or before the
time of application a disclosure of the fees payable at the time of
application and the conditions under which such fees may be refundable,
and such other disclosures as shall be required by the superintendent of
financial services;

(b) Each mortgage banker and exempt organization shall make available
to each applicant for a mortgage loan at or before the time a commitment
to make a mortgage loan is given a written disclosure, the fees to be
paid in connection with the commitment and the loan, or the manner in
which such fees shall be determined and the conditions under which such
fees may be refundable, and such other disclosures as may be required by
the superintendent of financial services; and

(c) In each lock-in agreement it shall issue, every mortgage banker
and exempt organization shall include a list of all documents typically
required to be produced and conditions typically required to be
satisfied for closing of a mortgage loan based on information provided
by the applicant. In each commitment it shall issue, every mortgage
banker and exempt organization shall include a list of all documents
foreseeably required to be produced and conditions foreseeably required
to be satisfied for closing of a mortgage loan based on information
provided by the applicant. In addition, no later than twelve business
days prior to the expiration of any lock-in period or commitment period,
a mortgage banker or exempt organization shall mail to each applicant
for a mortgage loan a notice indicating the date of such expiration
together with a request that the applicant contact the lender
immediately to discuss the conditions precedent to the closing of such
loan; and

(d) Each mortgage broker, mortgage banker and exempt organization
shall provide such other disclosure as the superintendent of financial
services shall determine by regulation are appropriate to carry out the
purposes of this article.

4. Restrictions on tying. (a) No mortgage banker, mortgage broker or
exempt organization shall, as a condition for the approval of a mortgage
loan, require the use of a particular title insurance company, title
insurance agency or title insurance agent or, for any other type of
insurance, require the use of a particular insurer, agent or broker.

(b) A bank, trust company, savings bank, savings and loan association
or national bank which operates in compliance with the provisions of
paragraph (e) of subdivision seven of section twelve-a of this chapter
and paragraph two of subdivision (a) of section two thousand five
hundred two of the insurance law shall be deemed to be in compliance
with this subdivision.

5. No licensee or registrant engaging in any activities constituting
the business of a distressed property consultant, as described in
section two hundred sixty-five-b of the real property law, shall charge
for or accept payment for real property consulting services as defined
in such section before the full completion of such services.