32-9-125. Trust accounts -- bona fide third-party fees. (1) Every mortgage broker and mortgage lender doing business in this state shall:
     (a) maintain a trust account at a federally insured financial institution, and the trust account funds may not be commingled with any other funds of the mortgage broker or mortgage lender;
     (b) deposit into the trust account any bona fide third-party fee that the mortgage broker or mortgage lender receives; and
     (c) pay third-party fees to a bona fide third party from the trust account unless the borrower, the seller, or another person involved in the transaction pays the bona fide third party directly.
     (2) A mortgage broker or mortgage lender may not charge or receive, directly or indirectly, fees for assisting a borrower in obtaining a mortgage until all of the services that the mortgage broker or mortgage lender has agreed to perform for the borrower are completed. A mortgage broker or mortgage lender may not charge a residential loan application fee in excess of the amount allowed by federal law. Prior to completion of services, the fees provided for in subsection (3) incurred by a bona fide third party in assisting the borrower to obtain a mortgage must be paid.
     (3) The following fees must be paid by the borrower, the seller, or another person involved in the transaction directly to the bona fide third party providing the services or must be paid by the borrower, the seller, or another person involved in the transaction to the mortgage broker or mortgage lender for payment of services performed by the bona fide third party:
     (a) credit report fees;
     (b) notary fees;
     (c) title search, appraisal, or survey fees;
     (d) rate-lock fees not exceeding 3% of the mortgage loan amount; and
     (e) fees paid directly by the borrower, the seller, or another person involved in the transaction to a state or federal government agency or instrumentality for purposes of processing a mortgage application relating to a government-sponsored or guaranteed mortgage program.
     (4) The department shall by rule define the meaning of "another person involved in the transaction".

     History: En. Sec. 17, Ch. 516, L. 2003; amd. Sec. 12, Ch. 498, L. 2007; amd. Sec. 26, Ch. 321, L. 2009.