Kentucky Statutes 286.8-125 – Limitation on loan originator’s fee
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(1) It shall be unlawful for any licensee or person holding a claim of exemption to originate a loan secured by a mortgage on residential real property in Kentucky if the total net income generated by the licensee or person exceeds two thousand dollars ($2,000) or four percent (4%) of the total loan amount, whichever is greater.
(2) As used in this section, unless the context requires otherwise:
(a) “Total net income” means any and all fees, income, or compensation of any kind collected, received, or charged by the licensee or person holding a claim of exemption, or by an affiliate of the licensee or person holding a claim of exemption. “Total net income” includes but is not limited to origination fees, broker fees, lender fees and discount points if retained by the originating licensee or person as income, processing fees, administrative fees, document preparation fees, yield spread premiums, servicing release premiums, and financial counseling fees. “Total net income” does not include interest on the mortgage loan itself, or fees paid to compensate unaffiliated third parties; and
(b) “Total loan amount” means the amount financed in the mortgage loan less the total net income generated by the originating licensee or person, or the affiliate of the originating licensee or person.
Effective: April 24, 2008
History: Created 2008 Ky. Acts ch. 175, sec. 26, effective April 24, 2008.
(2) As used in this section, unless the context requires otherwise:
Terms Used In Kentucky Statutes 286.8-125
- Affiliate: means any person who directly or indirectly through one (1) or more intermediaries, controls, is controlled by, or is under common control with another person. See Kentucky Statutes 286.8-010
- Licensee: means a person to whom a license has been issued. See Kentucky Statutes 286.8-010
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage loan: means any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on residential real property or any loan primarily for personal, family, or household use that is secured by collateral that has a mortgage lien interest in residential real property. See Kentucky Statutes 286.8-010
- Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
- Originate: means to solicit, place, negotiate, offer to make, or broker a mortgage loan. See Kentucky Statutes 286.8-010
- Person: means a natural person, or any type or form of corporation, company, partnership, proprietorship, association, or other legal entity. See Kentucky Statutes 286.1-010
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- servicing: means :
(a) Receiving any scheduled periodic mortgage loan payments from a borrower, including amounts for escrow accounts or other fees or obligations related to the mortgage loan, and making or crediting the payments to the mortgage loan account, owner of the loan, or a third party assigned to receive said payments. See Kentucky Statutes 286.8-010
(a) “Total net income” means any and all fees, income, or compensation of any kind collected, received, or charged by the licensee or person holding a claim of exemption, or by an affiliate of the licensee or person holding a claim of exemption. “Total net income” includes but is not limited to origination fees, broker fees, lender fees and discount points if retained by the originating licensee or person as income, processing fees, administrative fees, document preparation fees, yield spread premiums, servicing release premiums, and financial counseling fees. “Total net income” does not include interest on the mortgage loan itself, or fees paid to compensate unaffiliated third parties; and
(b) “Total loan amount” means the amount financed in the mortgage loan less the total net income generated by the originating licensee or person, or the affiliate of the originating licensee or person.
Effective: April 24, 2008
History: Created 2008 Ky. Acts ch. 175, sec. 26, effective April 24, 2008.