.10 Closing.

A. Disbursement of Loan Proceeds.

(1) A licensee shall disburse all loan proceeds in a timely manner as provided in the loan documents.

(2) Disbursement of all loan proceeds to a third-party closing agent is deemed compliance with this section.

B. A licensee may not collect a separate settlement fee in a loan when closing is conducted by:

(1) The lender;

(2) A subsidiary of the lender;

(3) A sister corporation of the lender;

(4) An owner or part owner of the lender;

(5) A partner of the lender; or

(6) A director, officer, or employee of the lender.

C. Duties on Failure to Close.

(1) If a loan transaction is not closed, the licensee shall, upon written request by the applicant, return to the applicant:

(a) All original documents and other materials which were supplied to the licensee by the borrower; and

(b) If paid for by the borrower, a copy of the appraisal report.

(2) Section C(1)(b) of this regulation does not apply to any portion of an appraisal report which any federal law or regulation prohibits the licensee from releasing to the applicant.

(3) The licensee may retain copies of all documents returned to the borrower.

(4) This section does not apply to a written application for a loan.