MICHIGAN. GENERAL INFORMATION 1st Mortgage

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2 GENERAL INFORMATION 1st Mortgage ADDITIONAL LENDER FEES Allowed ADVERTISING Prohibited from misleading, false or deceptive advertising. May not advertise size of loan, security required for loan, rate of charge or other conditions of lending except with full intent of making loans at this rate and conditions to applications that meet the standards and qualifications prescribed by lender. May not state: Bank, Banker, Banc, Bancorp or other words or phrases implying person is a bank or affiliated with a bank or savings bank. However doesn t exclude Mortgage Bank or Mortgage Banker (MSA (52), subd (4); MCL a). APPRAISAL FEE Allowed (MSA (2), subd. (7)); MCL , subd. (7)) BROKER FEES Allowed CLOSING COST TO 3RD PARTIES Only reasonable, necessary, and actual expenses may be charged. (MSA (2) subd (7) & subd (7)) CREDIT REPORT FEE Allowed (MSA (2), subd. (7)); MCL , subd. (7)) DISCOUNT POINTS Not regulated LATE CHARGE FEE Allowed (Platt Part /00) No restrictions. However, customary to charge 4 or 5%. MAXIMUM APR No maximum (Platt Part /00) MAXIMUM INTEREST RATE No maximum (Platt Part /00) NOTICE TO INQUIRERS AND LOAN APPLICANTS The Notice to Inquirers and Loan Applicants must be posted in an open prominent area of the lender's main office, each branch office, or service center. The notice advises borrowers of their rights to apply for a loan and includes the current telephone number of the financial institutions bureau of the Michigan department of commerce. (MCL , Act 135 of 1977) ORIGINATION Allowed (MSA (2), subd. (7)); MCL , subd. (7))

3 GENERAL INFORMATION 1st Mortgage PREPAYMENT PENALTIES 1% of the amount prepaid in the 1st 3 years. (MSA 19.15(1c), subd. (2)c; MCL c, subd (2)c) After three years, no prepayment penalty may be charged. In Mortgage Bulletin (Nov. 6, 1999), Michigan limits on prepayment penalties are not preempted by DIDMCA but Michigan s prepayment limits are preempted by the Parity Act. Thus, the state limits on prepayment penalties apply to fixed rate amortizing loans but not to alternative mortgage loans. PROMISSORY NOTE Standard Fannie Mae/Freddie Mac state-specific First Mortgage Note. REBATE OF UNEARNED FINANCE CHARGES Not applicable RECORD RETENTION Three years from last payment or assignment (MSA (71); MCL ). SIGNATURES In the event a spouse is not going on the loan, that spouse would need to sign the Mortgage, Notice of Right to Cancel, Section 32, and Truth in Lending disclosure because of automatic homestead/dower rights that each spouse has. WET SETTLEMENT Not applicable

4 GENERAL PRACTICES 1st Mortgage MARITAL DESIGNATION Not usually present on the Security Instrument. NOTARY On each record that a notary public performs a notarial act and immediately near the notary public s signature, the notary public shall print, type, stamp, or otherwise imprint mechanically or electronically clearly and legibly and in a manner capable of photographic reproduction all of the following: (a) The name of the notary public exactly as it appears on his or her notary public certificate of appointment. (b) The statement: Notary public, State of Michigan, County of.. (c) The statement: My commission expires.. (d) The statement: Acting in the County of.. PROPERTY TAX DUE DATES Varies from city to city, generally due July 1, or December 1. RIGHTS AND INTERESTS Homestead Rights & Dower Curtesy TYPE OF CONVEYANCE Warranty Deed TYPE OF ENCUMBRANCE Mortgage

5 BROKER INFORMATION 1st Mortgage ADVERTISING Licensed mortgage lenders, brokers, or servicers may not, directly or indirectly, make a deceptive, misleading or false advertisement regarding mortgage loans or the availability of mortgage loans. They may not advertise any size of loan, rate of charge, security required for a loan, or other lending condition except with the full intent of making loans at those rates, or lower rates, and under those conditions, to mortgage loan applicants who meet the qualifications or standards prescribed by the lender, broker, or servicer. [MCL a] BROKER FEES Allowed LATE CHARGE FEE Allowed (Platt Part /00) NOTICE TO INQUIRERS AND LOAN APPLICANTS No restrictions. However, customary to charge 4 or 5%. The Notice to Inquirers and Loan Applicants must be posted in an open prominent area of the lender's main office, each branch office, or service center. The notice advises borrowers of their rights to apply for a loan and includes the current telephone number of the financial institutions bureau of the Michigan department of commerce. [MCL , Act 135 of 1977]. PREPAYMENT PENALTIES 1% of the amount prepaid in the 1st 3 years. (MSA 19.15(1c), subd. (2)c; MCL c, subd (2)c) After three years, no prepayment penalty may be charged. In Mortgage Bulletin (Nov. 6, 1999), Michigan limits on prepayment penalties are not preempted by DIDMCA but Michigan s prepayment limits are preempted by the Parity Act. Thus, the state limits on prepayment penalties apply to fixed rate amortizing loans but not to alternative mortgage loans. RECORD RETENTION Under the Mortgage Brokers, Lenders and Servicers Licensing Act, a licensee or registrant must keep the mortgage loan documents available until the mortgage is transferred or assigned, or 3 years after the date the mortgage is closed. [MCL ]

6 GENERAL INFORMATION 2nd Mortgage ADDITIONAL LENDER FEES Everything must be included in 5% Processing Fee ADVERTISING Prohibits licensee from willing or knowing making false, misleading or deceptive advertisements about secondary mortgage loans or their availability. (Mich. Comp. Laws Ann (1). Licensee may not advertise any aspect of a loan (including size, security required, or rate of charge), unless it intends to make loans at the advertised or lower rates and at the stated conditions of qualified applicants. (Mich. Comp. Laws Ann (2). APPRAISAL FEE Allowed (MCLA (1)) BROKER FEES Allowed (MCLA (1); c(2)(a)) CLOSING COST TO 3RD PARTIES Broker fees must be included in the 5%. Only reasonable, necessary, and actual expenses may be charged. (MCLA (1)) CREDIT REPORT FEE Allowed (MCLA (1)) DISCOUNT POINTS Not regulated. LATE CHARGE FEE Not to exceed the greater of $15.00 or 5% & 10 days (MCLA (1)(d) & ) MAXIMUM APR 25% (Credit Reform Act) MAXIMUM INTEREST RATE 25% (Credit Reform Act) NOTICE TO INQUIRERS AND LOAN APPLICANTS ORIGINATION Not regulated The Notice to Inquirers and Loan Applicants must be posted in an open prominent area of the lender s main office, each branch office, or service center. The notice advises borrowers of their rights to apply for a loan and includes the current telephone number of the financial institutions bureau of the Michigan department of commerce. [MCL , Act 135 of 1977] PREPAYMENT PENALTIES 1% of the amount prepaid in the 1st 3 years (MCLA c(2)(c)) PROCESSING FEE 5% (MCLA (1)) A processing fee is the only lender fee that can be charged; borrower may pay discount points in addition to processing fee to reduce the interest rate. Get copy of rate sheet to verify discount points.

7 GENERAL INFORMATION 2nd Mortgage PROMISSORY NOTE Standard Fannie Mae/Freddie Mac state-specific Second Mortgage Note (revised 1/80). REBATE OF UNEARNED FINANCE CHARGES Not applicable. RECORD RETENTION Two years from transfer date or 2 years from date loan closed (MCLA (1) and (2)). SIGNATURES In the event a spouse is not going on the loan, that spouse would need to sign the Mortgage, Notice of Right to Cancel, Section 32, and Truth in Lending disclosure because of automatic homestead/dower rights that each spouse has. WET SETTLEMENT Not applicable.

8 GENERAL PRACTICES 2nd Mortgage MARITAL DESIGNATION Not usually present on the Security Instrument. NOTARY On each record that a notary public performs a notarial act and immediately near the notary public s signature, the notary public shall print, type, stamp, or otherwise imprint mechanically or electronically clearly and legibly and in a manner capable of photographic reproduction all of the following: (a) The name of the notary public exactly as it appears on his or her notary public certificate of appointment. (b) The statement: Notary public, State of Michigan, County of.. (c) The statement: My commission expires.. (d) The statement: Acting in the County of.. PROPERTY TAX DUE DATES Varies from city to city, generally due July 1, or December 1. RIGHTS AND INTERESTS Homestead Rights & Dower/Curtesy TYPE OF CONVEYANCE Warranty Deed TYPE OF ENCUMBRANCE Mortgage

9 BROKER INFORMATION 2nd Mortgage ADVERTISING Licensed mortgage lenders, brokers, or servicers may not, directly or indirectly, make a deceptive, misleading or false advertisement regarding mortgage loans or the availability of mortgage loans. They may not advertise any size of loan, rate of charge, security required for a loan, or other lending condition except with the full intent of making loans at those rates, or lower rates, and under those conditions, to mortgage loan applicants who meet the qualifications or standards prescribed by the lender, broker, or servicer. [MCL a] BROKER FEES Allowed (MCLA (1); c(2)(a)) Broker fees must be included in the 5%. LATE CHARGE FEE Not to exceed the greater of $15.00 or 5% & 10 days (MCLA (1)(d) & ) NOTICE TO INQUIRERS AND LOAN APPLICANTS The Notice to Inquirers and Loan Applicants must be posted in an open prominent area of the lender's main office, each branch office, or service center. The notice advises borrowers of their rights to apply for a loan and includes the current telephone number of the financial institutions bureau of the Michigan department of commerce. [MCL , Act 135 of 1977]. PREPAYMENT PENALTIES 1% of the amount prepaid in the 1st 3 years (MCLA c(2)(c)) RECORD RETENTION Under the Mortgage Brokers, Lenders and Servicers Licensing Act, a licensee or registrant must keep the mortgage loan documents available until the mortgage is transferred or assigned, or 3 years after the date the mortgage is closed. [MCL ]

10 BORROWER'S BILL OF RIGHTS DISCLOSURE CONSUMER CAUTION AND HOME OWNERSHIP COUNSELING NOTICE LOAN APPROVAL CRITERIA NOTICE MICHIGAN EARLY DISCLOSURES This disclosure is required pursuant to House Bill 6121 (Public Act 660 of 2002), also known as the Consumer Mortgage Protection Act. The disclosure must be given at the time of application for a mortgage loan. The act provides a definition of a mortgage loan. CLICK HERE FOR SAMPLE. This disclosure is required pursuant to House Bill 6121 (Public Act 660 of 2002), also known as the Consumer Mortgage Protection Act. This disclosure must be given, along with a list of the nearest available HUD-approved credit counseling agencies, at the time of application for a mortgage loan. The act provides a definition of a mortgage loan. CLICK HERE FOR SAMPLE. The Loan Approval Criteria Notice must state in general terms the criteria the lender uses in reviewing the application package for loan approval or denial. It must include a statement that anyone may apply for a loan and is entitled to receive a written response. All credit granting institutions must comply with this requirement. A credit granting institution is a savings and loan association, bank, credit union or any other lender doing business in Michigan. The pamphlet or document must be available where loan applications or loan inquiries are routinely received by the lender and where the public may obtain a copy without the aid of an employee of the lender. A copy must be filed with the Commissioner of the Financial Institutions Bureau of Michigan, Department of Commerce. [MCL (9-10)] LOCK-IN AGREEMENT A lender that assesses or accepts an interest rate lock-in fee must issue a written lock in agreement specifying the terms and conditions of the guarantee. The terms and conditions of the lock-in agreement must not extend beyond the expiration of the lock-in period unless extended in writing by all the parties. [MCL (2); MSA (73)(2)] Provider Both Lender Lender Lender Lien Position Both Both Both Both

11 PROPERTY TRANSFER AFFIDAVIT MICHIGAN LATE DISCLOSURES Must be filed when there is a transfer of real property, buildings on leased land, leasehold improvements, or leasehold estates. This form must be received by the local assessor within 45 days of the date of transfer of property or incur a penalty. [MCL a(10)]. CLICK HERE FOR SAMPLE. Provider Lender Lien Position 1st