KRS 286.8-125: Limitation on total net income of loan originator -- Definitions for

section.

(1) (a) Except as provided in paragraph (b) of this subsection, it shall be unlawful for

any licensee or person holding a claim of exemption to originate a loan

secured by a mortgage on residential real property in Kentucky if the total net

income generated by the licensee or person exceeds the greater of the

following:

1. Two thousand dollars ($2,000); or

2. Four percent (4%) of the total loan amount.

(b) Paragraph (a) of this subsection shall not apply to a loan for which the total

points and fees on the loan do not exceed the threshold set forth in 12 C.F.R.

sec. 1026.43(e)(3), as amended.

(2) As used in this section, unless the context requires otherwise:

(a) "Total loan amount" means the amount financed in the mortgage loan less the

total net income generated by the:

1. Originating licensee or person; or

2. Affiliate of the originating licensee or person; and

(b) "Total net income":

1. Means any and all fees, income, or compensation of any kind collected,

received, or charged by:

a. The licensee or person holding a claim of exemption; or

b. An affiliate of the licensee or person holding a claim of

exemption;

2. Includes but is not limite d to origination fees, broker fees, lender fees

and discount points if retained by the originating licensee or person as

income, processing fees, administrative fees, document preparation fees,

yield spread premiums, servicing release premiums, and financi al

counseling fees; and

3. Does not include:

a. Interest on the mortgage loan itself; or

b. Fees paid to compensate unaffiliated third parties.