Rhode Island Origination Reference Guide
- Kacey Olson
Owned by Kacey Olson
Aug 30, 2017
7 min read
Loading data...
| Citation | Topic | Requirement |
| Reverse Mortgages / R.I. Gen. Laws §34-25.1-9(a) | 3-Day Right of Rescission Disclosure | A lender must inform each reverse mortgage applicant in writing of the 3-day right of rescission at the time of application. |
| Community Obligations and Banking Offenses / R.I. Gen. Laws §19-9-3 | Appraisal Fee Disclosure | A lender that accepts an application for a mortgage loan that requires the payment of an appraisal fee, must, prior to the payment of the appraisal fee, inform the applicant that, if the mortgage is not approved, the appraisal fee may not be refunded to the customer. |
| Community Obligations and Banking Offenses / R.I. Gen. Laws §19-9-32 | Arson Conviction Application Disclosure | A lender may require an applicant for a loan to disclose whether or not the applicant has been convicted of any degree of the crime of arson within 10 years prior to the date of application. The mortgage application form must indicate that the applicant's failure to disclose the existence of an arson conviction when requested is a misdemeanor punishable by up to 1 year imprisonment. |
| Home Loan Protection Act / R.I. Gen. Laws §34-25.2-6(g) | Consumer Caution and Home Ownership Counseling Notice | At the time it is determined that an applicant is obtaining a high-cost home loan, the applicant must be provided Form 5 HLPA. A lender may not make a high-cost home loan without first receiving the certification from a counselor with a HUD-approved third-party nonprofit organization that the borrower was counseled face-to-face by the counselor. |
| Reverse Mortgages / R.I. Gen. Laws §34-25.1-11(a) | Contact Information for Borrower Inquires | At the closing of the reverse mortgage loan, the lender must provide to the borrower contact information for the lender's (or its assignee's or servicing agent's, as the case may be) employees or agents who have been designated specifically to respond to inquiries concerning reverse mortgage loans. This information must be provided to the borrower at least annually, and whenever this contact information concerning the designated employees or agents changes. |
| Reverse Mortgages / R.I. Gen. Laws §34-25.1-9(a) | Counseling Disclosure | Lenders must deliver to all reverse mortgage loan applicants a statement, if available, prepared by the DEA on the advisability and availability of independent counseling and information services. |
| Community Obligations and Banking Offenses / R.I. Gen. Laws §19-9-10 | Disbursement of Loan Proceeds | Any lending institution providing a purchase money first mortgage loan on a property within Rhode Island containing less than 4 living units must make disbursement of the loan proceeds on or before the date upon which the conveyance and/or mortgage documents are to be recorded. The disbursement must be made to the agent responsible for settlement and must be in the form of cash, wired funds, government check, cashier's check, or other immediately available funds. If the disbursement is not as provided above, the lending institution may not charge interest for the first 30 days following the closing date. |
| Reverse Mortgages / R.I. Gen. Laws §34-25.1-10(a) | Disclosures Required by Federal Law | At least 3 business days before closing of the loan, all lenders (or their authorized representative who is then duly licensed by the Department as lender or as a loan broker) must meet in person with, and must provide in writing all of the following information to, each prospective reverse mortgage borrower: (1) all information that is required to be disclosed in connection with a reverse mortgage loan pursuant to TILA, Regulation Z, and the FHA HECM; and (2) all other information required to be disclosed by the Department. |
| Community Obligations and Banking Offenses / R.I. Gen. Laws §19-9-5 | Election of Owner's Policy of Title Insurance | Every lender that accepts an application for a mortgage loan and that engages a title attorney to search the title of the subject real estate must require the attorney to offer to the applicant, at the usual premium rate, an owner's policy title for the real estate. In the event the applicant does not wish to purchase this title insurance, then the applicant must have the right to reject the offer of title insurance, provided the rejection is in writing and signed. |
| Home Loan Protection Act / R.I. Banking Regulation 3, §5(A) | High-Cost Home Loan Disclosure | At the time it is determined that an applicant is obtaining a high-cost home loan, but in sufficient time as to enable the applicant to receive, prior to closing the loan, face-to-face counseling on the advisability of the transaction with a third-party nonprofit organization, the applicant must be provided Form 4 HLPA. |
| Home Loan Protection Act / R.I. Gen. Laws §34-25.2-6(g) | Home Ownership Counseling Certification | At the time it is determined that an applicant is obtaining a high-cost home loan, the applicant must be provided Form 5 HLPA. A lender may not make a high-cost home loan without first receiving the certification from a counselor with a HUD-approved third-party nonprofit organization that the borrower was counseled face-to-face by the counselor. |
| Secure and Fair Enforcement for Mortgage Licensing Act / R.I. Gen. Laws §19-14.10-21 | NMLS Unique Identifier | The name and the NMLS unique identifier of any person originating a residential mortgage loan must be clearly shown on all residential mortgage loan application forms, solicitations or advertisements, including business cards or websites, and any other documents as established by rule, regulation or order of the Department. |
| Reverse Mortgages / R.I. Gen. Laws §34-25.1-13 | Notarized Certification | All lenders must require any person who executes reverse mortgage loan documents as attorney-in-fact for another to deliver at the closing a written, notarized certification that: (1) the power of attorney is then in full force and effect and has not been revoked or otherwise terminated; and (2) the attorney-in-fact acknowledges his or her fiduciary obligations to the principal pursuant to the power of attorney with respect to the reverse mortgage loan. |
| Mortgages of Real Property / R.I. Gen. Laws §34-23-6 | Notice Regarding Nonrefundability of Loan Fees | Brokerage fees, loan fees, points, finders' fees, origination fees, or any similar charges imposed on a mortgage loan on real estate containing not more than 4 dwelling units are not subject to any refund in the event the underlying loan contract is prepaid in full, provided that the loan originator, broker or lender, no later than 3 business days after the application is received, gives a notice regarding nonrefundability of loan fees to the loan applicant in writing. |
| Interest and Usury / R.I. Gen. Laws §6-26-2(c) | Optional Insurance Disclosure | Premiums for insurance providing loss of income or involuntary unemployment coverage are not included in the calculation of interest if: (1) the coverage is not a factor in the approval by the lender of the extension of credit; and (2) the borrower gives specific written indication that: (A) the cost of the coverage has been conspicuously disclosed to the borrower; (B) the borrower realizes that the coverage is not a condition for the extension of credit; and (C) the borrower voluntarily desires the coverage. |
| Mortgages of Real Property / R.I. Gen. Laws §34-23-5 | Prepayment Penalty Disclosure | A lender making a loan secured by a mortgage on real estate containing no more than 4 dwelling units must provide in the mortgage note that the loan may be prepaid in full at any time after 1 year from the making of the loan without penalty. During the first year, the penalty or other charges for prepayment may not exceed 2% of the balance due at the date of the payoff. Alternatively, a lender making a nonpurchase money loan secured by a mortgage on real estate containing no more than 4-dwelling units may impose a prepayment penalty notwithstanding the above restrictions, if: (1) the terms, conditions and amount of the prepayment penalty or other similar charges are prominently and conspicuously disclosed in writing to the borrower; (2) the borrower agrees and consents to be bound by these terms and conditions; (3) no prepayment penalty is imposed for any prepayment occurring more than 60 months after the date of the loan; and(4)the lender makes available a similar mortgage product that complies with the prepayment penalty limitations. |
| Home Loan Protection Act / R.I. Banking Regulation 3, §5(A) | Prohibited Acts and Practices Disclosure Regarding All Home Loans | An applicant for a home loan must be provided Form 1 HLPA within 3 business days of application. Verification of the date of submission to the Applicant and a fully executed copy of Form 1 HLPA must be maintained in each loan file. “Home loan” means a loan, including an open-end credit plan, other than a reverse mortgage transaction, where the loan is secured by: (1) a mortgage or deed of trust on real estate in Rhode Island upon which there is located or there is to be located a structure or structures designed principally for occupancy of from 1-to 4 families which is or will be occupied by a borrower as the borrower's principal dwelling; or (2) a security interest on a manufactured home which is or will be occupied by a borrower as the borrower's principal dwelling (R.I. Gen. Laws §34-25.2-4(m)). |
| Home Loan Protection Act / R.I. Banking Regulation 3, §5(A) | Prohibited Acts and Practices Regarding High-Cost Home Loans | An applicant for a home loan must be provided Form 2 HLPA within 3 business days of application. Verification of the date of submission to the Applicant and a fully executed copy of Form 2 HLPA must be maintained in each loan file. |
| Unfair Competition and Practices / R.I. Gen. Laws §27-29-4(9) | Right to Choose Insurance Provider | If a lender requires a borrower to obtain property insurance, the borrower must have free choice of insurance producer and insurer through or by which the insurance is to be placed or written, subject only to the right of the lender to: (1) require evidence to be produced at a reasonable time prior to commencement or renewal of risk, that insurance providing reasonable coverage has been obtained in an amount equal to the amount required by the lender; (2) require insurance in an insurer authorized to do business and having a licensed resident insurance producer in Rhode Island; and (3) refuse to accept insurance in a particular insurer on reasonable grounds related to solvency. |
| Community Obligations and Banking Offenses / R.I. Gen. Laws §19-9-6(a) | Right to Choose Title Attorney or Title Insurance Company | A lender that accepts an application for a mortgage loan and requires that a title attorney search the title of the subject real estate, or requires a policy of title insurance, must permit the applicant to select a qualified title attorney or title insurance company of the applicant's own choice to search the title of the real estate and to furnish title insurance. |
| Home Loan Protection Act / R.I. Banking Regulation 3, §5(A) | Tangible Net Benefit | All applicants who refinance a previous home loan that was consummated within the prior 60 months must be provided with Form 3 HLPA. |