In this subtitle the following words have the meanings indicated. “Borrower” means an individual who obtains a loan or advance of money. “Commissioner” means the Commissioner of Financial Regulation. “Finder’s fee” means any compensation or commission directly or indirectly imposed by a broker and paid by or on behalf of the borrower for the broker’s services in procuring, arranging, or otherwise assisting a borrower in obtaining a loan or advance of money. “Lender” means a person defined as a mortgage lender under § 11–501(j)(1)(ii) of the Financial Institutions Article. “Mortgage broker” means a person defined as a mortgage lender under § 11–501(j)(1)(i) of the Financial Institutions Article. “Person” includes an individual, corporation, business trust, statutory trust, estate, trust, partnership, association, two or more persons having a joint or common interest, or any other legal or commercial entity.

This subtitle does not apply to any loan: Described in § 12–103(e) of this title; or Made by motor vehicle or recreational vehicle dealers in connection with the sale of their vehicles.

A mortgage broker may not be a director, officer, or employee of any lender where he places a loan.

A mortgage broker may charge a finder’s fee not in excess of 8 percent of the amount of the loan or advance. In addition to a finder’s fee, a mortgage broker may charge a borrower for the actual cost of: Any appraisal, credit report, condominium document, or subordination agreement document obtained by the mortgage broker at the written request of the borrower; and Any other good or service, as specified in regulations adopted by the Commissioner, that is required to complete a loan application process and that, at the written request of the borrower, is paid by the mortgage broker to a third–party provider of the good or service. A mortgage broker obtaining a mortgage loan with respect to the same property more than once within a 24–month period may charge a finder’s fee if the fee is not in excess of 8% of the initial loan amount when combined with the finder’s fee charged on the initial loan and on any other finder’s fee collected during that 24–month period. The provisions of this section do not apply to: The charging of fees and charges otherwise permitted under this title; or Attorney’s fees unless the attorney is functioning as a mortgage broker. A mortgage broker may not charge a finder’s fee in any transaction in which the mortgage broker or an owner, part owner, partner, director, officer, or employee of the mortgage broker is the lender or an owner, part owner, partner, director, officer, or employee of the lender.

A mortgage broker may not receive any fee in the form of a note, mortgage, or other evidence of indebtedness. Payment of the finder’s fee to the mortgage broker out of the proceeds of the loan is not considered as interest to the lender if the finder’s fee is not in excess of that permitted by this subtitle. If the finder’s fee is paid from the proceeds of the loan, the lender shall comply with the disclosure provisions of § 12–106 of this title or the federal Truth in Lending Act and in addition shall advise the borrower, in writing, of the borrower’s right to a refund of the finder’s fee upon the exercise of any right of rescission of the loan. A finder’s fee may not be charged unless it is pursuant to a written agreement between the mortgage broker and the borrower which is separate and distinct from any other document. The terms of the proposed agreement shall: Be disclosed to the borrower before the mortgage broker undertakes to assist the borrower in obtaining a loan or advance of money; Specify the amount of the finder’s fee; and Contain a representation by the mortgage broker that the mortgage broker is acting as a mortgage broker and not as a lender in the transaction. A copy of the agreement, dated and signed by the mortgage broker and the borrower, shall be provided to the borrower within 10 business days after the date the loan application is completed.

A borrower is entitled to a refund of any finder’s fee paid to a mortgage broker if: The loan transaction is not made to the borrower; or The borrower exercises his right to rescind the loan transaction under the federal Truth in Lending Act or any similar federal or State law.

Any mortgage broker who violates any provision of this subtitle shall forfeit to the borrower the greater of: Three times the amount of the finder’s fee collected; or The sum of $500.

A licensed real estate broker, insurer, salesman, attorney-at-law, or agent thereof who arranges or procures a mortgage may not collect a finder’s fee if, in addition to acting as broker under this subtitle, he is also acting as a real estate broker, insurer, salesman, attorney-at-law, or agent thereof in connection with the subject property or transaction.

The provisions of this subtitle may not be used to circumvent the provisions of § 12–108 of this title.