2006 Utah Code - 61-2c-301 — Prohibited conduct -- Violations of the chapter.
(1) An individual or entity transacting the business of residential mortgage loans in this state may not:
(a) give or receive compensation or anything of value in exchange for a referral of residential mortgage loan business;
(b) charge a fee in connection with a residential mortgage loan transaction:
(i) that is excessive; or
(ii) if the individual or entity does not comply with Section 70D-1-6;
(c) give or receive compensation or anything of value in exchange for a referral of settlement or loan closing services related to a residential mortgage loan transaction;
(d) do any of the following to induce a lender to extend credit as part of a residential mortgage loan transaction:
(i) make a false statement or representation;
(ii) cause false documents to be generated; or
(iii) knowingly permit false information to be submitted by any party;
(e) give or receive compensation or anything of value, or withhold or threaten to withhold payment of an appraiser fee, to influence the independent judgment of an appraiser in reaching a value conclusion in a residential mortgage loan transaction, except that it is not a violation of this section for a licensee to withhold payment because of a bona fide dispute regarding a failure of the appraiser to comply with the licensing law or the Uniform Standards of Professional Appraisal Practice;
(f) violate or not comply with:
(i) this chapter;
(ii) an order of the commission or division; or
(iii) a rule made by the division;
(g) fail to respond within the required time period to:
(i) a notice or complaint of the division; or
(ii) a request for information from the division;
(h) make false representations to the division, including in a licensure statement;
(i) for any residential mortgage loan transaction beginning on or after January 1, 2004, engage in the business of residential mortgage loans with respect to the transaction if the individual or entity also acts in any of the following capacities with respect to the same residential mortgage loan transaction:
(i) appraiser;
(ii) escrow agent;
(iii) real estate agent;
(iv) general contractor; or
(v) title insurance agent;
(j) order a title insurance report or hold a title insurance policy unless the individual or entity provides to the title insurer a copy of a valid, current license under this chapter;
(k) engage in unprofessional conduct as defined by rule;
(l) engage in an act or omission in transacting the business of residential mortgage loans that constitutes dishonesty, fraud, or misrepresentation;
(m) engage in false or misleading advertising;
(n) (i) fail to account for all funds received in connection with a residential mortgage
loan;
(ii) use funds for a different purpose from the purpose for which the funds were received;
or
(iii) except as provided in Subsection (4), retain funds paid for services if the services
were not actually performed;
(o) fail, within 90 calendar days of a request from a borrower who has paid for an
appraisal, to give a copy of an appraisal ordered and used for a transaction to the borrower;
(p) engage in an act that is performed to:
(i) evade this chapter; or
(ii) assist another person to evade this chapter;
(q) recommend or encourage default or delinquency, or continuation of an existing
default or delinquency, by a mortgage applicant on an existing indebtedness prior to the closing
of a residential mortgage loan that will refinance all or part of the indebtedness;
(r) in the case of a control person of an entity, fail to exercise reasonable supervision over
the activities of:
(i) the individuals engaged in the business of residential mortgage loans on behalf of the
entity; or
(ii) any unlicensed staff;
(s) on or after May 1, 2006, in the case of the principal lending manager of an entity or a
branch office of an entity, fail to exercise reasonable supervision over the activities of the
mortgage officers who are licensed with the principal lending manager; or
(t) pay or offer to pay an individual who does not hold a license under this chapter for
work that requires the individual to hold a license under this chapter.
(2) Whether or not the crime is related to the business of residential mortgage loans, it is
a violation of this chapter for a licensee, a control person of a licensee, or a person who is a
certified education provider to do any of the following with respect to a criminal offense which
involves moral turpitude:
(a) be convicted;
(b) plead guilty or nolo contendere;
(c) enter a plea in abeyance; or
(d) be subjected to a criminal disposition similar to the ones described in Subsections
(2)(a) through (c).
(3) A principal lending manager does not violate Subsection (1)(s) if:
(a) in contravention of the principal lending manager's written policies and instructions,
an affiliated licensee of the principal lending manager violates a provision of:
(i) this chapter; or
(ii) rules made by the division under this chapter;
(b) the principal lending manager established and followed reasonable procedures to
ensure that affiliated licensees receive adequate supervision;
(c) upon learning of a violation by an affiliated licensee, the principal lending manager
attempted to prevent or mitigate the damage;
(d) the principal lending manager did not participate in or ratify the violation by an
affiliated licensee; and
(e) the principal lending manager did not attempt to avoid learning of the violation.
(4) Notwithstanding Subsection (1)(n)(iii), a licensee may, upon compliance with Section
70D-1-6, charge a reasonable cancellation fee for work done originating a mortgage if the
mortgage is not closed.
Amended by Chapter 199, 2005 General Session
