Kentucky Statutes 286.8-220 – Prohibited acts
Current as of: 2024 | Check for updates
|
Other versions
(1) No person shall make or cause to be made, in any document filed with the commissioner, a governmental agency, the Nationwide Multistate Licensing System and Registry, or in any proceeding under this subtitle, any statement that is, at the time and in light of the circumstances under which it is made, false or misleading in any material respect, including an omission of a material fact.
(2) No person shall, in connection with a transaction involving the mortgage lending process, or in connection with the operation of a mortgage loan business or the management or servicing of mortgage loans, directly or indirectly:
(a) Employ a device, scheme, or artifice to defraud;
(b) Engage in any act, practice, or course of business that operates or would operate as a fraud or deceit upon any person;
(c) Fail to disburse funds in accordance with a loan commitment;
(d) Delay closing of any mortgage loan for the purpose of increasing interest, costs, fees, or charges payable by the borrower;
(e) Upon receipt of a customer’s written request, delay beyond five (5) business days the issuance of a written loan payoff amount or to delay beyond ten (10) business days the issuance of a payment history;
(f) Charge a fee for the issuance of an initial written loan payoff amount or payment history for each calendar quarter as set out in paragraph (e) of this subsection;
(g) Obtain property by fraud or misrepresentation;
(h) Fail to make disclosures as required by this subtitle or any other applicable state or federal law, including regulations thereunder; or
(i) Fail to comply with state or federal laws, including the rules and regulations thereunder, that are applicable to transacting business in Kentucky.
(3) Unless exempted by KRS § 286.8-020(1), no person shall transact business in
Kentucky unless it complies with the provisions of this subtitle.
(4) No person shall use prescreened trigger lead information derived from a consumer report to solicit a consumer who has applied for a mortgage loan with another mortgage loan company or mortgage loan broker, when the person:
(a) Fails to state in the initial solicitation that the person is not affiliated with the mortgage loan company or mortgage loan broker with which the consumer initially applied;
(b) Fails in the initial solicitation to conform to state and federal law relating to prescreened solicitations using consumer reports, including the requirement to make a firm offer of credit to the consumer;
(c) Uses information regarding consumers who have opted out of the prescreened offers of credit or who have placed their contact information on the state or federal do-not-call registry; or
(d) Solicits a consumer with an offer of certain rates, terms, and costs with the
knowledge that the rates, terms, or costs will be subsequently changed to the detriment of the consumer.
Effective: July 14, 2022
History: Amended 2022 Ky. Acts ch. 125, sec. 10, effective July 14, 2022. — Amended
2010 Ky. Acts ch. 24, sec. 787, effective July 15, 2010. — Amended 2009 Ky. Acts ch. 104, sec. 14, effective June 25, 2009. — Amended 2008 Ky. Acts ch. 175, sec. 15, effective April 24, 2008. — Amended 2006 Ky. Acts ch. 218, sec. 6, effective July
12, 2006. — Amended 2001 Ky. Acts ch. 98, sec. 3, effective June 21, 2001. — Amended 1998 Ky. Acts ch. 197, sec. 15, effective July 15, 1998. — Amended 1994
Ky. Acts ch. 377, sec. 3, effective July 15, 1994. — Amended 1986 Ky. Acts ch. 461, sec. 19, effective July 15, 1986. — Created 1980 Ky. Acts ch. 365, sec. 23, effective July 15, 1980.
Formerly codified as KRS § 294.220.
Legislative Research Commission Note (7/12/2006). This section was amended in
2006 Ky. Acts ch. 218. In that same session, 2006 Ky. Acts ch. 247, sec. 38, required that all sections of KRS Chapters 287, 288, 290, 291, 294, 366, 366A, and 368 be renumbered as sections of a single KRS chapter entitled the “Kentucky Financial Services Code.” Therefore, the Statute Reviser, acting under KRS § 7.136(1), has changed the number of this section and codified it as a section of KRS Chapter 286. In addition, KRS references have been adjusted to conform with the renumbering.
Legislative Research Commission Note. As of January 1, 1989, KRS ch. 271A. becomes KRS ch. 271B. Therefore, the reference in subdivision (3)(a) of this section to KRS ch. 271A has been changed to KRS ch. 271B.
(2) No person shall, in connection with a transaction involving the mortgage lending process, or in connection with the operation of a mortgage loan business or the management or servicing of mortgage loans, directly or indirectly:
Terms Used In Kentucky Statutes 286.8-220
- Borrower: means any person that seeks, applies for, or obtains a mortgage loan. See Kentucky Statutes 286.8-010
- Commissioner: means the commissioner of the Department of Financial
Institutions. See Kentucky Statutes 286.1-010 - Company: may extend and be applied to any corporation, company, person, partnership, joint stock company, or association. See Kentucky Statutes 446.010
- Federal: refers to the United States. See Kentucky Statutes 446.010
- Fraud: Intentional deception resulting in injury to another.
- 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
- Mortgage loan broker: means any person who for compensation or gain, or in the expectation of compensation or other gain, received directly or indirectly, serves as an agent for any borrower in an attempt to obtain a mortgage loan, or holds oneself out as being able to do so. See Kentucky Statutes 286.8-010
- Mortgage loan company: means any person who directly or indirectly:
(a) Makes, purchases, or sells mortgage loans, or holds oneself out as being able to do so. 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
- 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 - State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Statute: A law passed by a legislature.
- transacting business in Kentucky: means to participate in any meaningful way in the mortgage lending process, including the servicing of mortgage loans, with respect to any residential real property located in Kentucky. See Kentucky Statutes 286.8-010
(a) Employ a device, scheme, or artifice to defraud;
(b) Engage in any act, practice, or course of business that operates or would operate as a fraud or deceit upon any person;
(c) Fail to disburse funds in accordance with a loan commitment;
(d) Delay closing of any mortgage loan for the purpose of increasing interest, costs, fees, or charges payable by the borrower;
(e) Upon receipt of a customer’s written request, delay beyond five (5) business days the issuance of a written loan payoff amount or to delay beyond ten (10) business days the issuance of a payment history;
(f) Charge a fee for the issuance of an initial written loan payoff amount or payment history for each calendar quarter as set out in paragraph (e) of this subsection;
(g) Obtain property by fraud or misrepresentation;
(h) Fail to make disclosures as required by this subtitle or any other applicable state or federal law, including regulations thereunder; or
(i) Fail to comply with state or federal laws, including the rules and regulations thereunder, that are applicable to transacting business in Kentucky.
(3) Unless exempted by KRS § 286.8-020(1), no person shall transact business in
Kentucky unless it complies with the provisions of this subtitle.
(4) No person shall use prescreened trigger lead information derived from a consumer report to solicit a consumer who has applied for a mortgage loan with another mortgage loan company or mortgage loan broker, when the person:
(a) Fails to state in the initial solicitation that the person is not affiliated with the mortgage loan company or mortgage loan broker with which the consumer initially applied;
(b) Fails in the initial solicitation to conform to state and federal law relating to prescreened solicitations using consumer reports, including the requirement to make a firm offer of credit to the consumer;
(c) Uses information regarding consumers who have opted out of the prescreened offers of credit or who have placed their contact information on the state or federal do-not-call registry; or
(d) Solicits a consumer with an offer of certain rates, terms, and costs with the
knowledge that the rates, terms, or costs will be subsequently changed to the detriment of the consumer.
Effective: July 14, 2022
History: Amended 2022 Ky. Acts ch. 125, sec. 10, effective July 14, 2022. — Amended
2010 Ky. Acts ch. 24, sec. 787, effective July 15, 2010. — Amended 2009 Ky. Acts ch. 104, sec. 14, effective June 25, 2009. — Amended 2008 Ky. Acts ch. 175, sec. 15, effective April 24, 2008. — Amended 2006 Ky. Acts ch. 218, sec. 6, effective July
12, 2006. — Amended 2001 Ky. Acts ch. 98, sec. 3, effective June 21, 2001. — Amended 1998 Ky. Acts ch. 197, sec. 15, effective July 15, 1998. — Amended 1994
Ky. Acts ch. 377, sec. 3, effective July 15, 1994. — Amended 1986 Ky. Acts ch. 461, sec. 19, effective July 15, 1986. — Created 1980 Ky. Acts ch. 365, sec. 23, effective July 15, 1980.
Formerly codified as KRS § 294.220.
Legislative Research Commission Note (7/12/2006). This section was amended in
2006 Ky. Acts ch. 218. In that same session, 2006 Ky. Acts ch. 247, sec. 38, required that all sections of KRS Chapters 287, 288, 290, 291, 294, 366, 366A, and 368 be renumbered as sections of a single KRS chapter entitled the “Kentucky Financial Services Code.” Therefore, the Statute Reviser, acting under KRS § 7.136(1), has changed the number of this section and codified it as a section of KRS Chapter 286. In addition, KRS references have been adjusted to conform with the renumbering.
Legislative Research Commission Note. As of January 1, 1989, KRS ch. 271A. becomes KRS ch. 271B. Therefore, the reference in subdivision (3)(a) of this section to KRS ch. 271A has been changed to KRS ch. 271B.