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Tennessee Code Title 45. Banks and Financial Institutions § 45-13-403

Current as of January 02, 2024 | Updated by Findlaw Staff

(a) A licensed mortgage lender or mortgage loan broker shall not make any payments to a contractor or home improvement contractor from proceeds of a mortgage loan for home improvement other than:

(1) In the form of an instrument that is payable to the borrower or jointly to the borrower and the contractor or home improvement contractor; or

(2) At the election of the borrower by a third-party escrow agent in accordance with terms established in a written agreement signed by the borrower, the licensee and the contractor or home improvement contractor prior to the date of payment.

(b) A licensed mortgage lender or mortgage loan broker shall not permit a contractor or home improvement contractor to be a cosigner or to act as a guarantor for a mortgage loan for home improvement.

(c) As used in this section, “mortgage loan for home improvement” means a consumer credit mortgage loan transaction involving property located within this state regardless of the amount of the loan.

(d) The commissioner is authorized to impose a civil penalty in an amount not to exceed twenty-five thousand dollars ($25,000) for each violation of this section after notice and opportunity for a hearing.

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Cite this article: FindLaw.com - Tennessee Code Title 45. Banks and Financial Institutions § 45-13-403 - last updated January 02, 2024 | https://codes.findlaw.com/tn/title-45-banks-and-financial-institutions/tn-code-sect-45-13-403/

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