Section 595-A. Regulation of mortgage brokers, mortgage bankers and exempt organizations

1. Establishment of grounds to impose a fine or  penalty.  In addition to such other rules, regulations and policies as the banking
  board  may  prescribe  to  effectuate  the purposes of this article, the
  banking board shall promulgate regulations and  policies  governing  the
  establishment of grounds to impose a fine or penalty with respect to the
  activities of a mortgage banker, mortgage broker or exempt organization.
  Such regulation shall encompass the following:
    (a)  The  misrepresentation  of  material facts or the making of false
  promises likely to influence, persuade, or induce  an  applicant  for  a
  mortgage loan or mortgagor to take a mortgage loan, or pursuing a course
  of misrepresentation or false promises through agents or otherwise;
    (b)  The  misrepresentation,  or  concealment of any material factors,
  terms or conditions of a transaction to which he is a  party,  including
  the receipt of payment from a third party, pertinent to an applicant for
  a mortgage loan or a mortgagor;
    (c)  The  failure  to  disburse  funds  in  accordance  with a written
  commitment or agreement to make a mortgage loan;
    (d) The failure to account for or deliver to any person  any  personal
  property  obtained  in  connection  with  a mortgage loan such as money,
  fund, deposit, check, draft, mortgage, or other document,  or  thing  of
  value,  which has come into his hands, and which is not his property, or
  which he is not in law or equity entitled to retain;
    (e) The improper refusal to issue a satisfaction of mortgage;
    (f) Engaging in any transaction, practice, or course of business which
  operates a fraud upon any person in connection with the purchase or sale
  of any mortgage loan;
    (g) Violation of section six-j of this chapter; and
    (h) Making a mortgage loan, or indirectly or  directly  providing  for
  the  making  of  a  mortgage loan, to an equity purchaser, as defined in
  section two hundred sixty-five-a  of  the  real  property  law,  if  the
  mortgage  banker,  mortgage  broker or exempt organization had knowledge
  that the equity purchaser was  not  complying  with  the  provisions  of
  section  two  hundred sixty-five-a of the real property law with respect
  to such transaction.
    2. Restrictions on advertising.  In  addition  to  such  other  rules,
  regulations  and  policies  as  the  banking  board  may  promulgate  to
  effectuate the  purposes  of  this  article,  the  banking  board  shall
  prescribe  regulations  governing  the  advertising  of  mortgage loans,
  including, without limitation, the following requirements:
    (a) All advertisements by a mortgage broker, mortgage banker or exempt
  organization shall contain the  name  and  an  office  address  of  such
  entity,  which in the case of licensees and registrants shall conform to
  a name and address on record with the banking department;
    (b) No licensed mortgage broker or mortgage banker shall advertise its
  services in any media, whether print or electronic,  without  the  words
  "registered  mortgage  broker"  or "licensed mortgage banker" or similar
  words therein;
    (c) No mortgage broker, mortgage banker or exempt  organization  shall
  advertise   information  concerning  mortgage  loans,  including  rates,
  margins,  discounts,  points,  fees,  commissions  or   other   material
  information,  including  material limitations on such loans, unless such
  entity is able to make such mortgage loans  available  to  a  reasonable
  number of qualified applicants;
    (d)  All  advertisements  by  mortgage  brokers  must include language
  indicating that such brokers may not make loans; and
    (e) The term "advertisement" shall not  include  promotional  material
  containing  fifteen  words  or less which does not contain references to

  specific rates, points, discounts, fees, material  loan  factors,  etc.,
  such as imprinted pencils, pens or balloons.
    3.  Required disclosures. In addition to such other rules, regulations
  and policies as the banking  board  may  promulgate  to  effectuate  the
  purposes of this article, the banking board shall promulgate regulations
  governing  the  disclosure  required  to  be  made  to  applicants for a
  mortgage   loan,   including,   without   limitation,   the    following
  requirements:
    (a)  Each  mortgage  broker,  mortgage  banker and exempt organization
  shall provide to each applicant for a mortgage loan  at  or  before  the
  time  of  application  a  disclosure  of the fees payable at the time of
  application and the conditions under which such fees may be  refundable,
  and such other disclosures as shall be required by the banking board;
    (b)  Each mortgage banker and exempt organization shall make available
  to each applicant for a mortgage loan at or before the time a commitment
  to make a mortgage loan is given a written disclosure, the  fees  to  be
  paid  in  connection  with the commitment and the loan, or the manner in
  which such fees shall be determined and the conditions under which  such
  fees may be refundable, and such other disclosures as may be required by
  the banking board; and
    (c)  In  each  lock-in agreement it shall issue, every mortgage banker
  and exempt organization shall include a list of all documents  typically
  required  to  be  produced  and  conditions  typically  required  to  be
  satisfied for closing of a mortgage loan based on  information  provided
  by  the  applicant.  In  each  commitment it shall issue, every mortgage
  banker and exempt organization shall include a  list  of  all  documents
  foreseeably  required to be produced and conditions foreseeably required
  to be satisfied for closing of a  mortgage  loan  based  on  information
  provided  by  the  applicant. In addition, no later than twelve business
  days prior to the expiration of any lock-in period or commitment period,
  a mortgage banker or exempt organization shall mail  to  each  applicant
  for  a  mortgage  loan  a  notice indicating the date of such expiration
  together  with  a  request  that  the  applicant  contact   the   lender
  immediately  to  discuss the conditions precedent to the closing of such
  loan; and
    (d) Each mortgage broker,  mortgage  banker  and  exempt  organization
  shall provide such other disclosure as the banking board shall determine
  by regulation are appropriate to carry out the purposes of this article.
    4.  Restrictions  on tying. (a) No mortgage banker, mortgage broker or
  exempt organization shall, as a condition for the approval of a mortgage
  loan, require the use of a particular  title  insurance  company,  title
  insurance  agency  or  title  insurance  agent or, for any other type of
  insurance, require the use of a particular insurer, agent or broker.
    (b) A bank, trust company, savings bank, savings and loan  association
  or  national  bank  which  operates in compliance with the provisions of
  paragraph (e) of subdivision seven of section twelve-a of  this  chapter
  and  paragraph  two  of  subdivision  (a)  of  section two thousand five
  hundred two of the insurance law shall be deemed  to  be  in  compliance
  with this subdivision.