Florida Statutes 494.007 – Commitment process
Current as of: 2023 | Check for updates
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(1) If a commitment is issued, the mortgage lender shall disclose in writing:
(a) The expiration date of the commitment;
Terms Used In Florida Statutes 494.007
- Borrower: means a person obligated to repay a mortgage loan and includes, but is not limited to, a coborrower or cosignor. See Florida Statutes 494.001
- commitment: means a statement by the lender setting forth the terms and conditions upon which the lender is willing to make a particular mortgage loan to a particular borrower. See Florida Statutes 494.001
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage lender: means a person making a mortgage loan or servicing a mortgage loan for others, or, for compensation or gain, directly or indirectly, selling or offering to sell a mortgage loan to a noninstitutional investor. See Florida Statutes 494.001
- writing: includes handwriting, printing, typewriting, and all other methods and means of forming letters and characters upon paper, stone, wood, or other materials. See Florida Statutes 1.01
(b) The mortgage amount, meaning the face amount of credit provided to the borrower or in the borrower’s behalf;
(c) If the interest rate or other terms are subject to change before expiration of the commitment:
1. The basis, index, or method, if any, which will be used to determine the rate at closing. Such basis, index, or method shall be established and disclosed with direct reference to the movement of an interest rate index or of a national or regional index that is available to and verifiable by the borrower and beyond the control of the lender; or
2. The following statement, in at least 10-point bold type: “The interest rate will be the rate established by the lender in its discretion as its prevailing rate   days before closing.”; and
(d) The time, if any, within which the commitment must be accepted by the borrower.
(2) The provisions of a commitment cannot be changed prior to expiration of the specified period within which the borrower must accept it. If any information necessary for an accurate disclosure required by subsection (1) is unknown to the mortgage lender at the time disclosure is required, the lender shall make the disclosure based upon the best information reasonably available to it and shall state that the disclosure is an estimate.
(3) A commitment fee is refundable if:
(a) The commitment is contingent upon approval by parties to whom the mortgage lender seeks to sell the loan.
(b) The loan purchaser’s requirements are not met due to circumstances beyond the borrower’s control.
(c) The borrower is willing but unable to comply with the loan purchaser’s requirements.