Ala. Code § 5-25-21(b)(3) & (b)(5) prohibit a licensee under the Mortgage Brokers Licensing Act from failing “to disburse funds in accordance with a written commitment to make a mortgage loan” and from collecting “any mortgage broker fees before a conditional commitment is obtained from the lender by the mortgage broker.”
Alabama law further defines a commitment as follows:
“COMMITMENT. A written statement by a lender that sets forth the terms and conditions upon which the lender is willing to make a particular mortgage loan to a particular borrower. A good faith estimate provided under the Federal Real Estate Settlement Procedures Act is not a commitment for the purposes of Act 2009-624.” (Ibid. § 5-25-2)
While these statutes do not require a loan commitment to be issued by a lender, one is necessary in order for licensees (brokers) to collect any fees.
For this reason, we will be providing a new “AL Commitment Agreement” (Cx17166). Due to the fact that lenders are not technically obliged to provide commitments, this document will be assignable to clients who wish to provide it (an “upon request” document). Once requested, it will print in Initial Disclosure packages when “Mortgage Loan Commitment” equals “Yes” in the ConformX software.
This document is available to be assigned immediately. If you have any questions or concerns about this change, please contact Client Support at 1.800.497.3584.
July 9, 2013