KRS 286.8-120: Fees and charges in addition to interest -- Letters of commitment --

Failure to fulfill terms constitutes default.

(1) Every mortgage loan company may require borrowers to pay all necessary and

reasonable expenses incurred in connection with the mak ing, closing, disbursing,

extending, readjusting, or renewing of loans. Without limiting the generality of the

foregoing, such expenses may include appraisal, attorneys' fees, abstract, recording

and registration fees, title examination, title insurance, m ortgage insurance, credit

report, survey, drawing of papers, origination fees, loan closing costs, and taxes or

charges imposed upon or in connection with the making and reporting of any

mortgage.

(2) Every mortgage loan company also may require the borrow ers to pay the cost of all

other necessary and incidental services rendered by the mortgage loan company or

by others in connection with loans in reasonable amounts. Without limiting the

generality of the foregoing, such costs may include the cost of servi ces of

inspectors, engineers, and architects.

(3) Such initial charges as described in subsections (1) and (2) of this section may be

collected by the mortgage loan company from the borrower and paid to any person

rendering such services, or paid directly by the borrower.

(4) In lieu of such initial charges to cover such expenses and costs as described in

subsections (1) and (2) of this section, a mortgage loan company may make a

reasonable charge, part or all of which may be retained by the mortgage loan

company which renders such service, or part or all of which may be paid to others

who render such services.

(5) The fees and charges authorized by this section shall be in addition to interest

authorized by law, and shall not be deemed to be a part of the i nterest collected or

agreed to be paid on such loans within the meaning of any law of this

Commonwealth which limits the rate of interest which may be exacted in any

transaction.

(6) No person shall receive any fee or other compensation of any kind in conn ection

with procuring any loan, except for services actually rendered as above provided,

and in no event shall a mortgage loan company or mortgage loan broker require the

payment of a fee greater than one hundred dollars ($100) as a condition to

submitting a loan application unless the commissioner shall otherwise prescribe by

rule.

(7) All "letters of commitment," or any other contracts or agreements between

prospective borrowers and a mortgage loan company or a loan broker, where the

borrowers employ serv ices, for a fee or commission, to obtain a loan commitment

or funding from a lending institution shall indicate the terms and conditions thereof,

including a full and detailed description of the services the broker or company

undertakes to perform, a specific statement of the circumstances in which the broker

or company will be entitled to obtain or retain consideration and the period that

such agreement shall remain in effect.

(8) Failure on the part of any party, with the exception of the borrower, to ful fill the

terms of any loan commitment, letter of commitment, agreement, or contract for the

loan of money within the time and on such terms specified therein, or the failure to

make a bona fide effort to secure a loan after receiving a fee for such service , shall

constitute default by the mortgage loan company and any other person so in default;

and any person damaged by such default may sue at law or equity for damages,

reasonable attorneys' fees and interest at the legal rate of interest under KRS

360.010. Every cause of action for damages under this subsection survives the death

of any person who might have been a plaintiff or defendant. No person may sue

under this subsection more than five (5) years after any act constituting default.