Section 42.12A - Prohibited Acts and Practices(1) It is a prohibited act or practice for a Licensee to make or broker a high cost mortgage loan subject to 209 CMR 32.32: Requirements for High Cost Mortgages, or a higher-priced mortgage loan subject to 209 CMR 32.35: Requirements for Higher Priced Mortgage Loans which have rates, fees, terms, or features that violate the following provisions, as applicable:(a) the disclosure requirements of 209 CMR 32.32(3): Disclosures;(b) the loan limitations set forth in 209 CMR 32.32(4): Limitations or 32.35: Requirements for Higher Priced Mortgage Loans;(c) the prohibited acts and practices provisions of 209 CMR 32.34(1); or(d) the unfair high cost loan practices provisions of 209 CMR 32.34(2).(2) It is a prohibited act or practice for a person licensed as a mortgage lender to purchase or to make a high cost loan or a higher-priced mortgage loan originated by a mortgage broker that violates the provisions of 209 CMR 32.32: Requirements for High Cost Mortgages, 32.34: Prohibited Acts or Practices in Connection with High Cost Mortgages, 32.35: Requirements for Higher Priced Mortgage Loans, or 42.12A(1).(3) It is a prohibited act or practice for a mortgage broker to issue a mortgage loan rate lock commitment on its own behalf or on behalf of a mortgage lender, or to imply to a consumer that it can lock a rate on behalf of the consumer. Nothing in 209 CMR 42.12A shall be construed to prohibit a mortgage broker from taking a rate lock commitment fee for transmittal to a mortgage lender prior to the issuance by the mortgage lender of a commitment or approval, provided that prior to the taking of a rate lock commitment fee:(a) the mortgage broker provides the consumer with a mortgage loan rate lock commitment from the mortgage lender which intends to make the loan, which conforms with the requirements of 209 CMR 42.11A; and(b) the rate lock commitment fee is made payable by the consumer to the mortgage lender which intends to make the loan. A mortgage broker may only take a rate lock commitment fee for transmittal to the mortgage lender which intends to make the loan. Nothing in 209 CMR 42.12A shall prohibit a mortgage broker from negotiating the terms or conditions of a mortgage loan, including the interest rate, on behalf of a consumer. A mortgage broker may also use such forms or other evidence as desired to allow a consumer to indicate a preference to enter into a mortgage rate lock commitment with a mortgage lender. However, any such forms or evidence must clearly and conspicuously contain the following statement: "This is a request, not a commitment, to lock your interest rate with a mortgage lender."
(4) It is a prohibited act or practice for a mortgage broker to advertise any interest rate or loan term described in 12 CFR 1026.24(c) in any media without the following statement: "We arrange but do not make loans." No advertisement by a mortgage broker in any media shall contain language which indicates or suggests that the mortgage broker will fund or approve a mortgage loan or guarantee any rate.(5) It is a prohibited act or practice for a mortgage broker or mortgage lender to have a consumer sign a blank or incomplete mortgage loan application or mortgage loan documents.(6) It is a prohibited act or practice for a mortgage broker or mortgage lender to sign a consumer's name to a mortgage loan application or mortgage loan documents on behalf of a consumer.(7) It is a prohibited act or practice for a mortgage broker or mortgage lender to falsify income or asset information on a mortgage loan application or mortgage loan documents.(8) It is a prohibited act or practice for a mortgage broker or mortgage lender to make false promises to influence, persuade or induce a consumer to sign a mortgage loan application or mortgage loan documents.(9) It is a prohibited act or practice for a mortgage broker or mortgage lender to pressure or coerce a consumer to sign a mortgage loan application or mortgage loan documents by misrepresenting or omitting crucial information about the terms of the mortgage.(10) It is a prohibited act or practice for a mortgage broker or mortgage lender to discourage a consumer in a mortgage loan transaction from seeking or obtaining independent legal counsel or legal advice.(11) It is a prohibited act or practice for a mortgage broker or mortgage lender to fail to make any disclosure, or fail to provide any document, to a consumer required by and at the time specified by any applicable state or federal law, regulation or directive.(12) It is a prohibited act or practice for a mortgage broker or mortgage lender to fail to disclose the type and number of its license in an advertisement.(13) It is a prohibited act or practice for a mortgage broker or mortgage lender or an employee or a person associated with and acting under the direction of a mortgage broker or a mortgage lender to advertise residential mortgage loan services without naming the licensee and disclosing the license number of the mortgage broker or mortgage lender under whose license the individual is acting.(14) It is a prohibited act or practice for a mortgage broker or a mortgage lender to require a consumer to use the real estate brokerage services of a particular entity, agent or broker.(15) It is a prohibited act or practice for a mortgage lender to contract with a consumer through the under-writing and subsequent execution of mortgage loan closing documents and thereafter fail to fund the mortgage loan.(16) It is a prohibited act or practice for a mortgage broker or a mortgage lender to conduct business with an individual who should be licensed as a mortgage loan originator under M.G.L. c. 255F, and who the mortgage broker or mortgage lender knows or should know is an unlicensed mortgage loan originator.(17) It is a prohibited act or practice for a Licensee to fail to notify the Division through the NMLS, within five business days after the termination of a relationship between the Licensee and a mortgage loan originator, as described in 209 CMR 41.06(1).(18) It is a prohibited act or practice for a mortgage broker or a mortgage lender to engage in conduct prohibited under 209 CMR 41.10: Prohibited Acts and Practices.(19) A violation of 209 CMR 42.12A shall constitute grounds for the issuance of a cease and desist order under M.G.L. c. 255E, § 7; shall constitute grounds for license suspension or revocation under M.G.L. c. 255E, § 6 and shall constitute grounds for an administrative fine or penalty under M.G.L. c. 255E, § 11.Amended by Mass Register Issue 1320, eff. 8/26/2016.Amended by Mass Register Issue 1470, eff. 5/27/2022.