North Dakota Code 13-12-15 – Advance fees prohibited – Exception
A residential mortgage lender may not take any type of fee in advance before the funding of the loan, unless the residential mortgage lender is licensed under this chapter. A residential mortgage lender licensed under this chapter may accept an advance expense deposit which may not exceed the residential mortgage lender’s good-faith estimate of the actual cost of any appraisal or credit reports performed by an independent appraiser or independent credit reporting agency and required by the originating lender for the evaluation of the potential borrower’s loan application. Any expense deposit that exceeds the actual cost of any appraisal or credit report must be promptly refunded to the borrower or credited to the borrower’s account at the time of the loan closing. A residential mortgage lender may also charge a fee in advance to lock an interest rate.
Terms Used In North Dakota Code 13-12-15
- Appraisal: A determination of property value.
- Credit report: A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. Source: OCC
- 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.