The Arizona-version of our standard advanced fee agreement is formatted to comply with the following provisions of Arizona law:
“A mortgage broker shall not accept any monies or documents in connection with an application for a mortgage loan in an amount of two hundred thousand dollars or less, except as provided in this section and pursuant to a written agreement. The parties shall sign the written agreement and the agreement shall contain terms pertaining to the disposition of the monies and documents, whether the loan is finally consummated or not, the term for which the agreement is to remain in force before return of the monies and documents for nonperformance can be required and an itemized list of all estimated costs to the borrower of obtaining the mortgage loan including all costs charged by third parties. . . . All documents provided by the borrower or at the expense of the borrower to the mortgage broker, including any appraisals, are the property of the borrower and shall, at the borrower’s request, be returned to the borrower or transferred to any person designated by the borrower without further expense to the borrower if the loan is not consummated, provided that any such document is not prohibited by law from being transferred or returned.” (Ariz. Rev. Stat. Ann. § 6-906[C])
“If a mortgage banker requires an advance or fee to be paid in connection with an application for a mortgage banking loan or mortgage loan, there shall be a written agreement. The parties shall sign the written agreement, and the agreement shall contain terms pertaining to the payment of the fee or disposition of the advance or fee, whether the loan is finally consummated or not, and the term for which the agreement is to remain in force before return of the advance or fee for nonperformance can be required. . . . If the loan is declined by or on behalf of the lender or cancelled by the applicant, all documents provided by or at the expense of the applicant, including any appraisal, are the property of the applicant. At the applicant’s discretion, said documents shall be returned or transferred to any financial institution or enterprise so designated without additional consideration except for fees for which the applicant has previously contracted, provided that any such document is not prohibited by law from being transferred or returned.” (Ibid. § 6-946[C])
While Cx2783 does contain a provision stipulating that the borrower may, upon his request, have all documents returned to him, it does not stipulate that he can request to have them transferred to another entity. We are, therefore, revising the last paragraph of the document to state the following:
“Unless prohibited by law, you are entitled to the return of all documents provided by you (or at your expense) to the Lender, or to have them transferred to a person designated by you (free of charge), upon your request, if your application for a mortgage loan is declined by or on behalf of the Lender or canceled by you.”
We will also be updating the citations on the document to more closely match Blue Book standards, as well as to reference Ibid. § 6-909(k), which simply requires the mortgage broker to receive or disburse monies in accordance with Ibid. § 6-906(C).
This change will take effect on October 9, 2014. If you have any questions or concerns about this change, please contact Client Support at 1.800.397.3584.
October 2, 2014
DR 157611