Cx3328 is provided pursuant to Mo. Ann. Stat. § 443.867, which requires a residential mortgage loan broker (including all retail mortgage lenders) to provide a loan brokerage disclosure statement and fee agreement with each borrower. Ibid. 443.867(2) specifically requires that:
“The mortgage loan brokerage disclosure statement and fee agreement shall disclose the amount and sources of the residential mortgage loan broker’s fees and all other compensation related to obtaining a residential mortgage loan on behalf of the borrower.”
In light of this obligation, the following edits are being made to Cx3328:
- The “Loan Fee” label is being changed to “Origination Fee” to more closely match the language in the fifth paragraph of the document.
- The field used for the “Origination Fee” is being changed to “Fee Section A Total Expense” (FI 82329).
- Paragraph 5 will dynamically change to accommodate borrower/seller or lender paid compensation:
- If the borrower or seller are paying the broker compensation, the paragraph will read: “Subject to applicable law, the Origination Fee is an obligation of yours and shall be paid at the time of the loan closing or out of loan proceeds. “
- If the Lender is paying the broker compensation, the paragraph will read: “Subject to applicable law, the Origination Fee shall be paid by your lender. In accordance with 12 CFR § 1026.36(d)(2), you are prohibited from paying us any direct compensation.”
- All references to a “commitment” will be deleted since a commitment is no longer required under Missouri law.
- Paragraph 6 of Cx3328 will be slightly modified to better reflect the flexibility that residential mortgage loan brokers have to retain third party fees should the loan fail to close due to borrower misrepresentation or borrower’s failure to provide necessary documentation.
These changes will take effect on December 4, 2015. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.