Kansas Origination Reference Guide
- Kacey Olson
Owned by Kacey Olson
| Citation | Topic | Requirement |
| Mortgage Business Act / Kan. Stat. Ann. §9-2212(c) | Delay of Closing for Purposes of Increasing Interest, Costs, Fees or Charges | A person required to be licensed or registered under the KMBA may not, without the prior written approval of the Bank Commissioner, directly or indirectly delay closing of a mortgage loan for the purpose of increasing interest, costs, fees or charges payable by the borrower. |
| Kan. Admin. Regs. §17-24-1 | Disclosure of Governing Authority | Must be provided prior to the time a mortgage business enters into any contract for the provision of services or receives any compensation or promise of compensation for a mortgage loan. |
Dual Capacity Disclosure | MBA - Must be provide in order to receive compensation both for mortgage business services and for real estate broker or agent services in connection with the sale of the real estate which secures the mortgage transaction. UCCC - A person required to be licensed or registered under the UCCC may not directly or indirectly receive compensation for making a residential mortgage loan where the licensee or registrant has otherwise acted as a real estate broker or agent in connection with the sale of the real estate which secures the mortgage transaction unless the person required to be licensed or registered has provided written disclosure to the person from whom compensation is collected that the person is receiving compensation both for making the loan and for real estate broker or agent services. | |
| Loan Brokers Act / Kan. Stat. Ann. §50-1006(d) | Estimated Truth-in-Lending Disclosure Document | A loan broker must deliver to any person who proposes to become obligated for a loan an estimated disclosure document if the lender would be required to deliver to the person a disclosure document under the federal Truth-in-Lending Act (TILA) for the transaction. The estimated disclosure document must be delivered or placed in the mail to the person not later than 3 business days after the person enters into an agreement with the loan broker whichever occurs first. The estimated disclosure document must contain all of the information and be in the form required by the Truth in Lending Act and regulations under the act. However, the annual percentage rate, finance charge, total of payments and other matters required under the Truth in Lending Act shall be adjusted to reflect the amount of all fees and charges of the loan broker that the creditor could exclude from an estimated disclosure document. The estimated disclosure document must state at the top in at least 10 point type: "The following is an estimated disclosure document showing your loan transaction as if the fees and charges you are scheduled to pay us were charged to you directly by the creditor." After the estimated disclosure document is delivered to any person, the loan broker shall deliver to the person an additional statement re-disclosing all items if the actual annual percentage rate will vary from the annual percentage rate contained in the original estimated disclosure by more than 0.125%. Any required additional disclosure document shall be delivered or placed in the mail before consummation of the loan or after three days from when the information that requires re-disclosure becomes available, whichever occurs first. |
Loan Brokerage Agreement | At least seven days before the time any person signs a contract for the services of a loan broker, or seven days before the loan broker receives any consideration upon the contract, whichever occurs first, the loan broker must provide to the contracting person a written disclosure document. To be enforceable, every contract for the services of a loan broker must be in writing and signed by all contracting parties. The borrowing party must be provided a copy of the signed contract at the time it is signed. | |
| Uniform Consumer Credit Code / Kan. Stat. Ann. §16a-3-308a(2) | Negative Amortization or Balloon Payment | A loan may not provide for the negative amortization of principal or a balloon payment. A loan payment is not a balloon payment if the amount of the payment is less than twice the amount of any other payment. The above restrictions apply to a consumer loan which is secured by a first mortgage or a second mortgage on the consumer's principal residence and with respect to which: (1) the loan-to-value ratio exceeds 100% at the time the loan is made; or (2) the annual percentage rate exceeds the “code mortgage rate” which is 12%. This restriction does not apply to: (1) a loan pursuant to open-end credit; (2) a purchase money loan incurred to acquire or construct the consumer's principal residence; or (3) a reverse mortgage transaction. |
| Uniform Consumer Credit Code / Kan. Stat. Ann. §16a-3-207 | Notice for High Loan-to-Value Mortgages | For any consumer loan secured by a first mortgage or a second mortgage on the consumer's principal residence, other than one made by a supervised financial organization, a lender must obtain the appraised value of the real estate to be encumbered prior to making the loan. The appraisal must be retained by the lender and preserved in accordance with the recordkeeping requirements of the UCCC. If, based upon the appraisal, the loan-to-value ratio of the loan exceeds 100%, then the lender must deliver the consumer: (1) a free copy of the appraisal; and (2) a written notice regarding high loan-to-value mortgages and the availability of consumer credit counseling (the Bank Commissioner may adopt rules and regulations regarding the form of the notice to be delivered to the consumer and the names, addresses and telephone numbers of selected consumer credit counseling providers). The notice must be given to the consumer not less than 3 days before the loan is made. The notice must be retained by the lender and preserved in accordance with the recordkeeping requirements of the UCCC. If, within 3 days after receiving the notice, the consumer elects not to enter into the loan transaction, then the lender must promptly refund to the consumer any application fees or other amounts paid by the consumer to the lender. However, the lender is not required to refund any bona fide out-of-pocket costs incurred by the lender before the consumer elected not to enter into the loan transaction, provided that the costs were paid or are payable to a person or persons not related to the lender. A bona fide appraisal fee paid or payable to a person related to the lender is not required to be refunded to the consumer. |
| Uniform Consumer Credit Code / Kan. Stat. Ann. §16a-3-202 | Notice to Consumer | Any written agreement for a closed-end consumer credit transaction which requires or provides for the signature of the consumer must contain a clear, conspicuous, and printed notice to the consumer stating: (1) that the consumer should not sign the agreement before reading it; and (2) that the consumer is entitled to a copy of the agreement; and (3) that the consumer is entitled to prepay the unpaid balance at any time without penalty. The following notice complies with the above requirements if it is clearly and conspicuously printed: NOTICE TO CONSUMER: (1) Do not sign this agreement before you read it. (2) You are entitled to a copy of this agreement. (3) You may prepay the unpaid balance at any time without penalty. |
| Uniform Consumer Credit Code / Kan. Stat. Ann. §16a-2-501(2) | Optional Insurance Disclosure | In connection with a mortgage loan, a lender may make an additional charge for consumer credit insurance providing life, accident and health, or loss of employment coverage, if: (1) the insurance coverage is not a factor in the approval by the lender of the extension of credit, and this fact is clearly disclosed in writing to the borrower; and (2) in order to obtain the insurance in connection with the extension of credit, the borrower gives specific affirmative written indication of the borrower's desire to do so after receiving a written disclosure of the cost of the insurance. |
| Mortgage Business Act / Kan. Stat. Ann. §9-2214 | Original Documents | All original documents provided to the licensee by the borrower or at the expense of the borrower, including any appraisals, are the property of the borrower and at the borrower's request, must be returned to the borrower without further expense if the loan is not consummated. |
| Uniform Consumer Credit Code / Kan. Stat. Ann. §16a-2-310(h) | Recordation of Mortgage if Funds are Unavailable for Disbursement | A person required to be licensed or registered under the UCCC may not directly or indirectly record a mortgage if moneys are not available for immediate disbursal to the mortgagor unless, before that recording, the person required to be licensed or registered informs the mortgagor in writing of a definite date by which payment must be made and obtains the mortgagor's written permission for the delay. |
| Uniform Consumer Credit Code / Kan. Stat. Ann. §16a-4-109 | Right to Choose Insurance Provider | If a lender requires insurance, the borrower has the option of providing the required insurance through an existing policy of insurance owned or controlled by the borrower, or through a policy to be obtained and paid for by the borrower, but the lender may for reasonable cause decline the insurance provided by the borrower. The lender must provide the borrower with a written notice on the loan agreement or other instrument fully informing the borrower of the option authorized by this section. |
| Loan Brokers Act / Kan. Stat. Ann. §50-1006(b) | Written Disclosure Statement | At least 7 days before the time any person signs a contract for the services of a loan broker, or 7 days before the loan broker receives any consideration upon the contract, whichever occurs first, the loan broker must provide to the contracting person a written disclosure document that meets the requirements of Kan. Stat. Ann. §50-1006(b). In addition, the disclosure document must contain a cover sheet that is entitled “DISCLOSURES REQUIRED BY KANSAS LAW” in at least 10-point boldface capital letters. Nothing except the title and the following required statement (in at least 10-point type under the title) may appear on the cover sheet: The Kansas Securities Commissioner has not reviewed and does not approve, recommend, endorse or sponsor any loan brokerage contract. The information contained in this disclosure has not been verified by the Commissioner. If you have any questions see an attorney before you sign a contract or agreement. |