S.D. Admin. R. 20:69:08:11

Current through Register Vol. 51, page 67, December 16, 2024

Section 20:69:08:11 - Contents of mortgage loan disclosure statement

When a real estate broker arranges a loan for a borrower, the following mortgage loan disclosure statement shall be prepared by the broker and the borrower:

(1) Summary of loan terms:

(a) Principal amount of loan;

(b) Estimated deductions from principal amount:

(i) Costs and expenses;

(ii)Brokerage commission;

(iii) Liens and other amounts to be paid on authorization of borrower;

(c) Estimated cash payable to borrower;

(2) General information concerning loans:

(a) The amount of principal and interest payable, the interest rate, the number of payments and whether they are monthly or quarterly, and whether there is a final or balloon payment to pay off the loan in full. If there is a balloon payment, the following cautionary instructions shall be printed in bold type on the contract: CAUTION TO BORROWER: IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT WHEN DUE, IT MAY BE NECESSARY FOR YOU TO OBTAIN A NEW LOAN AGAINST YOUR PROPERTY FOR THIS PURPOSE AND YOU MAY BE REQUIRED AGAIN TO PAY COMMISSION AND EXPENSES FOR ARRANGING THE LOAN. KEEP THIS IN MIND IN DECIDING UPON THE AMOUNT AND TERMS OF THE LOAN THAT YOU OBTAIN AT THIS TIME;

(b) Other information necessary, including the land description, types of instruments to be executed, and type of lien that will be against the property if the instruments are executed;

(c) Any prepayment penalty and full disclosure of its terms;

(d) Whether credit life or credit disability will be required of the borrower as a condition of making the loan;

(3) Deductions from loan proceeds:

(a) Estimated costs and expenses to be paid by the borrower out of the principal amount of the loan including appraisal fees, escrow fees, abstract or title insurance fees, notary fees, attorney fees, recording fees, credit investigation fees, and other costs and expenses;

(b) An estimate of the liens and other amounts to be paid out of the principal amount of the loan, on authorization of the borrower, including fire or other property insurance premiums, credit life or disability insurance premiums, beneficiary statement fees, reconveyance or similar fees, liens against property securing the loan, or other fees.

S.D. Admin. R. 20:69:08:11

4 SDR 71, effective 4/30/1978; 12 SDR 151, 12 SDR 155, effective 7/1/1986; 15 SDR 100, effective 1/10/1989; transferred from

General Authority: SDCL 36-21A-89(8).

Law Implemented: SDCL 36-21A-30, 36-21A-47.