South Carolina Code 40-58-78. Mortgage broker fee agreement requirements; penalty for violations; unintentional violations
(1) the mortgage broker or loan originator is acting as the agent of the borrower in providing brokerage services to the borrower;
Terms Used In South Carolina Code 40-58-78
- Borrower: means a natural person in whose dwelling a security interest is or is intended to be retained or acquired if that person's ownership interest in the dwelling is or is to be subject to the security interest. See South Carolina Code 40-58-20
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Loan originator: means a natural person who, in exchange for compensation or gain or in the expectation of compensation or gain as an employee of a licensed mortgage lender, solicits, negotiates, accepts, or offers to accept applications for mortgage loans, including electronic applications, or includes direct contact with, or informing mortgage loan applicants of, the rates, terms, disclosures, and other aspects of the mortgage loan. See South Carolina Code 40-58-20
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgage broker: means a person who acts as a mortgage broker, as that term is defined in item (1). See South Carolina Code 40-58-20
- Person: means a natural person, partnership, limited liability company, limited partnership, corporation, association, or other group engaged in joint business activities, however organized. See South Carolina Code 40-58-20
(2) when acting as agent for the borrower, it owes to that borrower a duty of utmost care, honesty, and loyalty in the transaction, including the duty of full disclosure of all material facts. If the mortgage broker or loan originator is authorized to act as an agent for any other person, the mortgage broker fee agreement must contain a statement of that fact and identification of that person;
(3) a detailed description of the services the mortgage broker or loan originator agrees to perform for the borrower, and a good faith estimate of any fees the mortgage broker or loan originator will receive for those services, whether paid by the borrower, the institutional lender, or both; and
(4) a clear and conspicuous statement of the conditions under which the borrower is obligated to pay for the services rendered under the agreement.
(B) If a mortgage broker or loan originator violates the provisions of subsection (A), the borrower may recover from the mortgage broker or loan originator charged with the violation:
(1) a penalty in an amount determined by the court of not less than one thousand five hundred dollars and not more than seven thousand five hundred dollars for each loan transaction;
(2) fees paid by the borrower to the mortgage broker or loan originator for services rendered by the agreement; and
(3) actual costs, including attorney’s fees, for enforcing the borrower’s rights under the agreement.
(C) A mortgage broker or loan originator charged with the violation must not be held liable in an action brought under this section for a violation if the mortgage broker or loan originator charged with the violation shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid the error.