TITLE 7 BANKING AND FINANCE

Section 1. Financial Institutions, 7-1-1 through 7-1-1021.

ARTICLE 13 LICENSING OF MORTGAGE LENDERS AND MORTGAGE BROKERS

7-1-1013. Prohibition of certain acts.

It shall be prohibited for any person transacting a mortgage business in or from this state, including any person required to be licensed or registered under this article and any person exempted from the licensing or registration requirements of this article under Code Section 7-1-1001, to:

Misrepresent the material facts, make false statements or promises, or submit false statements or documents likely to influence, persuade, or induce an applicant for a mortgage loan, a mortgagee, or a mortgagor to take a mortgage loan, or, through agents or otherwise, pursue a course of misrepresentation by use of fraudulent or unauthorized documents or other means to the department or anyone;
Misrepresent or conceal or cause another to misrepresent or conceal material factors, terms, or conditions of a transaction to which a mortgage lender or broker is a party, pertinent to an applicant or application for a mortgage loan or a mortgagor;
Fail to disburse funds in accordance with a written commitment or agreement to make a mortgage loan;
Improperly refuse to issue a satisfaction of a mortgage loan;
Fail to account for or deliver to any person any personal property obtained in connection with a mortgage loan such as money, funds, deposit, check, draft, mortgage, or other document or thing of value which has come into the possession of a licensee or registrant and which is not the property of the licensee or registrant, or which the mortgage lender or broker is not in law or at equity entitled to retain;
Engage in any transaction, practice, or course of business which is not in good faith or fair dealing, or which operates a fraud upon any person, in connection with the attempted or actual making of, purchase of, transfer of, or sale of any mortgage loan;
Engage in any fraudulent home mortgage underwriting practices;
Induce, require, or otherwise permit the applicant for a mortgage loan or mortgagor to sign a security deed, note, loan application, or other pertinent financial disclosure documents with any blank spaces to be filled in after it has been signed, except blank spaces relating to recording or other incidental information not available at the time of signing;
Make, directly or indirectly, any residential mortgage loan with the intent to foreclose on the borrower's property. For purposes of this paragraph, there shall be a presumption that a person has made a residential mortgage loan with the intent to foreclose on the borrower's property if the following circumstances can be demonstrated:
1. Lack of substantial benefit to the borrower;
2. Lack of probability of full payment of the loan by the borrower; and
3. A significant proportion of similarly foreclosed loans by such person;
Provide an extension of credit or collect a mortgage debt by extortionate means; or
Purposely withhold, delete, destroy, or alter information requested by an examiner of the department or make false statements or material misrepresentations to the department or the Nation-wide Multistate Licensing System and Registry or in connection with any investigation conducted by the department or another governmental agency.

(Code 1981, §7-1-1013, enacted by Ga. L. 1993, p. 543, § 1; Ga. L. 1996, p. 848, § 20; Ga. L. 1999, p. 674, § 38; Ga. L. 2000, p. 174, § 32; Ga. L. 2005, p. 826, § 35/SB 82; Ga. L. 2009, p. 252, § 1/HB 312; Ga. L. 2016, p. 390, § 6-1/HB 811.)

The 2016 amendment, effective July 1, 2016, substituted "Nation-wide Multistate Licensing System and Registry" for "Nationwide Mortgage Licensing System and Registry" in paragraph (11).

Code Commission notes.

- Pursuant to Code Section 28-9-5, in 1993, "paragraph" was substituted for "subsection" in paragraph (9).

JUDICIAL DECISIONS

Section does not apply to foreclosure proceedings.

- Plain language of O.C.G.A. § 7-1-1013 limits the statute's applicability to the actions taken to make, purchase, transfer, or sell mortgage loans. The Georgia Residential Mortgage Act, O.C.G.A. § 7-1-1000 et seq., is not applicable in foreclosure proceedings. Roylston v. Bank of Am., N.A., 290 Ga. App. 556, 660 S.E.2d 412 (2008).

Acts not covered by bond.

- Trial court erred in granting a purchaser summary judgment and in denying an insurer summary judgment in the purchaser's action to recover against a bond the insurer issued to a mortgage lender under the Georgia Residential Mortgage Act, O.C.G.A. § 7-1-1000 et seq., because the acts that gave rise to the judgment the purchaser obtained against the lender occurred before the bond was in effect, and the lender's failure to pay the judgment was not an act that authorized recovery against the bond; the bond did not contain a specific covenant extending liability to acts prior to the bond's execution. Hartford Fire Ins. Co. v. iFreedom Direct Corp., 312 Ga. App. 262, 718 S.E.2d 103 (2011), cert. denied, No. S12C0408, 2012 Ga. LEXIS 246 (Ga. 2012).

Act foreclosed a borrower's claim under the Fair Business Practices Act.

- Homeowner's Fair Business Practices Act (FBPA) claim against the homeowner's mortgage lender arising out of foreclosure of the homeowner's home failed because the Georgia Residential Mortgage Act, O.C.G.A. § 7-1-1000, et seq., specifically regulates misrepresentation by use of fraudulent or unauthorized documents or other means relating to mortgages, O.C.G.A. § 7-1-1013(1), precluding a claim under the FBPA, pursuant to O.C.G.A. § 10-1-396. Stewart v. SunTrust Mortg., Inc., 331 Ga. App. 635, 770 S.E.2d 892 (2015).