Section 26-C1116. MORTGAGE LOAN APPLICATION AND APPROVAL PROCESS

 

1116.1Each application for a proposed mortgage loan must be signed and dated by each borrower on each page of the mortgage loan application and shall contain, or have attached to the application, at a minimum, the following information:

 

(a)The name, social security number, address, telephone number, and source of income of each borrower;

 

(b)The address and legal description, if available, of the real property that is being secured by the loan;

 

(c)The principal amount of the loan requested;

 

(d)The current income and current debt of each borrower as provided by each borrower;

 

(e)The current assets and current liabilities of each borrower as provided by each borrower;

 

(f)Disclosure as to whether the loan will refinance a prior loan secured by the same real property;

 

(g)If the loan will refinance a prior loan secured by the same real property, the purpose of the refinancing, and the amount of the loan that is being refinanced; and

 

(h)The unique identifier of the mortgage loan originator.

 

1116.2The following additional information shall be included in, or attached to, a mortgage loan application if available at the time of the application:

 

(a)The cost of the mortgage loan, including the annual percentage rate, interest rate, broker compensation, lender compensation, and finance charge;

 

(b)The date of maturity of the proposed loan;

 

(c)Disclosure as to whether the interest rate is fixed or variable;

 

(d)For proposed loans with a proposed variable rate of interest, disclosure of the index used for adjustments, limits on adjustments, and the adjustment period;

 

(e)Disclosure as to whether the loan may result in a balloon payment; and

 

(f)Non-conventional mortgage disclosure requirements as prescribed by the Act.

 

1116.3If a mortgage loan application is approved and executed without the  information in sections 1116.1 and 1116.2, the mortgage loan application shall be voidable by the borrower(s) prior to the loan closing and any fees submitted by the borrower(s) in connection with the application shall be returned to the borrower(s) in the event the borrower(s) voids the mortgage loan application.

 

1116.4The current income, current debt, currents assets, current liabilities, employment, and other sources of revenue of each borrower shall be verified and documented in order to determine the borrower’s ability to repay a loan secured by a residential lien instrument.

 

1116.5A licensee shall demonstrate the preparation and use of an analysis of the borrower’s ability to repay the loan and such analysis shall be retained in the loan file.  The licensee shall act in good faith in the best interest of the borrower.

 

1116.6A borrower may withdraw a mortgage loan application at anytime, with no penalty or fee, except for any reasonable application fee, prior to signing a financing agreement or written commitment.

 

source

Final Rulemaking published at 56 DCR 4356, 4369-4370 (June 5, 2009); as amended by Final Rulemaking published at 56 DCR 7457, 7459 (September 11, 2009).