70D-3-402 - Prohibited acts. - Utah Statutes

70D-3-402. Prohibited acts.
(1) An individual transacting the business of a loan originator in this state may not:
(a) violate or not comply with:
(i) this chapter;
(ii) an order of the commissioner under this chapter;
(iii) a rule made by the commissioner under this chapter;
(iv) Title 70C, Utah Consumer Credit Code, if subject to that title; or
(v) Chapter 2, Mortgage Lending and Servicing Act, if subject to that chapter;
(b) engage in an act that is performed to:
(i) evade this chapter; or
(ii) assist another person to evade this chapter;
(c) do any of the following to induce a lender to extend credit as part of a residentialmortgage loan transaction:
(i) make a false statement or representation;
(ii) cause a false document to be generated; or
(iii) knowingly permit false information to be submitted by a person in a transaction;
(d) fail to respond within the required time period to:
(i) a notice or complaint of the commissioner; or
(ii) a request for information from the commissioner;
(e) make a false representation to the commissioner, including in a licensure application;
(f) engage in the business of a loan originator with respect to a residential mortgage loantransaction if the individual also acts in any of the following capacities with respect to the sameresidential mortgage loan transaction:
(i) appraiser;
(ii) escrow agent;
(iii) real estate agent;
(iv) general contractor; or
(v) title insurance agent;
(g) engage in an act or omission in transacting the business of a loan originator thatconstitutes dishonesty, fraud, or misrepresentation;
(h) engage in false or misleading advertising;
(i) (i) fail to account for monies received in connection with a residential mortgage loan;
(ii) use monies for a different purpose than the purpose for which the monies arereceived; or
(iii) subject to Subsection (3), retain monies paid for services if the services are notperformed;
(j) fail, within 90 calendar days of a request from a borrower who has paid for anappraisal, to give a copy of an appraisal ordered and used for a residential mortgage loan to theborrower;
(k) recommend or encourage default, delinquency, or continuation of an existing defaultor delinquency, by a mortgage applicant on an existing indebtedness before the closing of aresidential mortgage loan that will refinance all or part of the indebtedness; or
(l) pay or offer to pay an individual who does not hold a license under this chapter forservices that require the individual to hold a license under this chapter.
(2) (a) An individual engaging solely in loan processor or underwriter activities, may not

represent to the public that the individual can or will perform any act of a loan originator.
(b) A representation prohibited under this Subsection (2) includes an advertisement orother means of communicating or providing information including the use of:
(i) a business card;
(ii) stationery;
(iii) a brochure;
(iv) a sign;
(v) a rate list; or
(vi) another promotional item.
(3) Notwithstanding Subsection (1)(i)(iii), if a licensee complies with Section70D-2-305, the licensee may charge a reasonable cancellation fee for services completed tooriginate a residential mortgage loan if the residential mortgage loan is not closed.

Enacted by Chapter 72, 2009 General Session