§ 206.43 - Information to borrower.

§ 206.43 Information to mortgagorborrower.

(a) Disclosure of costs of obtaining mortgage. The mortgagee must shall ensure that the mortgagor borrower has received full disclosure of all costs of obtaining the mortgage. The mortgagee must shall ask the mortgagor borrower about any costs or other obligations that the mortgagor borrower has incurred to obtain the mortgage, as defined by the SecretaryCommissioner, in addition to providing the Good Faith Estimate any disclosures required by § 3500.7 of this title. law. The mortgagee must shall clearly state to the mortgagor borrower which charges are required to obtain the mortgage and which are not required to obtain the mortgage.

(b) Lump sum disbursement.

(1) If the mortgagor borrower requests that at least 25% 25 percent of the principal limit amount (after deducting amounts excluded in the following sentence) be disbursed at closing to the mortgagor borrower (or as otherwise permitted by § 206.2925), the mortgagee must make sufficient inquiry at closing to confirm that the mortgagor borrower will not use any part of the amount disbursed for payments to or on behalf of an estate planning service firm, with an explanation of § 206.32 as necessary or appropriate.

(2) This paragraph does not apply to any part of the principal limit used for the following:

(i) Initial MIP under § 206.105(a) or fees and charges allowed under § 206.31(a) paid by the mortgagee from mortgage proceeds instead of by the mortgagor borrower in cash; and

(ii) Amounts set aside under in accordance with § 206.4719(f) for repairs , under § 206.205(f)47, for property charges under § 206.205, or for servicing charges under § 206.207(b).

[64 FR 2988, Jan. 19, 1999]