Prior to May 5, 2011, Mont. Code Ann. §32-9-124(3) required a loan originator who worked for a mortgage broker to provide a “Mortgage Loan Origination Disclosure,” with statutorily required language, to a borrower before providing to him any residential mortgage services.
However, due to changes made by the Federal Reserve Board to Regulation Z (12 CFR §§226.1 et seq.), which now prohibits a loan originator from receiving dual compensation from both the borrower and the lender, the Montana government was compelled to modify the Disclosure, since it contained language that could mislead a borrower into believing that his transaction contained dual compensation.
2011 Montana Laws Ch. 317 (H.B. 90), §23 substantially amended Mont. Code Ann. §32-9-124(3) by striking the statutory language and allowing the Department of Administration (acting through the Division of Banking and Financial Institutions) the discretion of adopting the language of the Disclosure. It also now requires the Disclosure to be given within three business days after the loan originator has taken a loan application.
The Division adopted new language on July 5, 2011 (see MAR Notice No. 2-59-456 [07/14/2011]; available online at http://banking.mt.gov/mortgage.mcpx, under “Administrative Rule Notices”), which is required to be used beginning October 1, 2011, and the Division has published a new model form (also available at http://banking.mt.gov/mortgage.mcpx, under “Forms”) which can be used to comply with Montana’s disclosure requirements.
Continuing with its policy to adopt the format and language of model forms, DocuTech will be changing its “MT Mortgage Loan Origination Disclosure” (Cx2776) to match the new model form. This change will take effect October 1, 2011.
September 27, 2011