Mortgage Broker Issues

Thursday, October 30, 2003
Banking Bulletin #26

This bulletin clarifies some issues that surfaced as the mortgage broker business adjusted to the changes in the national lending market, including: (1) the form of mortgage broker agreement that a mortgage broker may use in Vermont; (2) requiring the signature of both the mortgage broker and prospective borrower on the agreement; (3) requiring the disclosure in the mortgage broker agreement of all money that will be paid to the mortgage broker, including both borrower paid fees and the lender's so-called yield-spread-premium; (4) the requirement that loans be placed only with Vermont lenders licensed or with lenders specifically exempt from Vermont's licensed lender statute; (5) prohibition on providing a rate lock, extending a rate lock, or accepting discount points or any other funds from a borrower for the purpose of buying down a rate of interest on a residential mortgage loan; (6) a prohibition on accepting and keeping escrow waiver fees or any other fees that are associated with the terms and conditions of a loan and typically are charged by the lender on a residential mortgage loan; (7) a requirement that mortgage brokers obtain prior Department approval for each individual that will act as an authorized mortgage broker under the license.

BUL-B-26.pdf13.29 KB