GREATER CINCINNATI MORTGAGE BANKERS ASSOCIATION
CANONS OF ETHICS &
STANDARDS OF PRACTICE
PREAMBLE
WHEREAS, the purpose for which this Association was organized are:
To preserve and improve the mortgage banking correspondent system and to encourage its use in the making and servicing of mortgage loan investments;
To encourage among its members sound business practices and methods in the making, marketing and servicing of real estate mortgage loans;
To inform its members of changes in mortgage laws and pending legislation affecting the real estate mortgage business;
To sponsor meetings for the discussion of real estate mortgage problems; and
To cooperate with public and private agencies in the establishment of sound real estate appraisal practices; and
WHEREAS, the members of this Association shall observe and maintain the following standards of conduct in his/her dealings with the public and with other members:
| I. | No member shall engage in any unethical act or practice; |
| II. | It shall be deemed unethical for any member to make untrue or derogatory statements or remarks about another member to a prospective borrower; |
| III. | It shall be deemed unethical for any member to quote to a prospective borrower interest rates or other loan terms impossible or unlikely of realization with the intention of rejecting the loan terms applied for and making a subsequent counter offer; |
| IV. | The departure of advertising copy from a clear, simple and truthful statement of fact is contrary to sound business practice and is unethical. A member shall not advertise financing terms which do not represent the terms generally available through his/her efforts, unless the advertising copy expressly sets forth special qualifications pertinent to the financing terms advertised; |
| V. | Mortgage banking, in its relation to the public, stands in a unique position. Its foundation is integrity and its superstructure is judgment. While this Association cannot endow its members with judgment, it does demand absolute integrity of them. This integrity, among other things, requires members to value and analyze the real estate being offered as security in such a way as to afford maximum protection to clients who the member serves or to whom he/she sells; |
| VI. | Of the duties and obligations devolving upon a member, there is none greater than that of loyalty to his/her investor. He/she shall guard his/her client's investments more zealously than he/she does his/her own, and he/she must measure up to the confidence placed in him/her by serving above and beyond mere contractual obligations. He/she must preserve the integrity of the loan application and appraiser's report when submitting copies of same for consideration, and he/she must have ample reason for believing that such documents speak the truth; |
| VII. | In the selection and appraisal of property for loan purposes, the member must first take into consideration the requirements of his/her investor and be true to his/her trust. He/she must not consider alone its present day intrinsic value but, also, its adaptability, character, permanence, productivity and location, both present and future. No mere mathematical calculation will suffice, but every element of value shall be considered in order to ascertain its investment value to both the borrower and investor; |
| VIII. | Standards of compensation for the legitimate use of mortgage money are well established. The acceptance of a larger sum by a member in consideration of an abnormal advance is a practice fraught with grave dangers and brings the member into sharp conflict with the principles of this Association. The borrower suffers by being permitted to over borrow, and the investor is injured to the dishonor of our Association, therefore such transactions shall not be entered into; |
| IX. | No man can serve two masters; therefore, a member must act in dual capacity by adding his/her endorsement to a loan on property in which he/she has an undisclosed interest; |
| X. | A member shall hold inviolate information given him/her in confidence by his/her client. This canon shall not be constructed to prevent the use of the furnished data in the reasonable pursuit of the purposes for which such information was transmitted; |
| XI. | A member shall familiarize himself/herself with all aspects of the mortgage banking industry so that he/she may integrate properly the various interests and problems which confront him/her daily, including, but limited to, the following: a. Real estate appraising |
| XII. | All oral agreements shall be accorded the same sanctity given to written contracts, and no agreement or commitment made by a member shall be breached by evasion or equivocation; |
| XIII. | A member who has procured and accepted a commitment from an investor to purchase a loan originated by a member shall deliver such loan, as provided for in the commitment, unless delivery shall be prevented by reasons beyond the control of the member; |
| XIV. | A member shall maintain and deposit in special accounts separate and apart from personal or other business accounts all money received as trust or escrow funds; |
| XV. | A member shall use all efforts at his/her command to effect the proper servicing of the accounts entrusted to his/her care. The duty shall be performed with an awareness that a conscientious discharge of the obligations to both principal and debtor will result in increased respect of the community for the mortgage banking industry; |
| XVI. | Recognizing that the reliability of all members is brought into question when one member fails to carry out his/her responsibilities and, recognizing that a member obligated to represent his/her principal for the entire life of the loan, a member shall not enter into servicing contracts which do not provide adequate compensation in his/her judgment to cover the cost of his/her services over the entire period his/her contractual obligations; |
| XVII. | Recognizing that the correspondent system has proved itself to be inestimable value to borrowers and to principals, each member pledges himself/herself to so conduct his/her business activities as to further and promote the first listed purpose for which this Association was established; |
| XVIII. | Members shall act in conformity with applicable laws and regulations and shall corporate in every appropriate way with all governmental bodies in the interest of establishing and maintaining an efficient and fair framework for mortgage credit; |
| XIX. | Members shall act in a manner that recognizes that integrity and confidence are essential in the real estate lending and mortgage banking businesses; |
| XX. | Members shall not breach or avoid an agreement or commitment; |
| XXI. | Member shall encourage healthy competition in the real estate lending and mortgage banking businesses; |
| XXII. | Members shall conduct their business without regard to the race, color, sex, religion, marital status, national origin, or age of the persons with whom they deal; |
| XXIII. | Members shall preserve the integrity of all parts of a loan submission and appraisal report and make full disclosure of all pertinent facts including any interest they may have in the loan project or property; |
| XXIV. | Members shall consider a servicing contract to be an integral part of the mortgage banking correspondent system and shall, in good faith, comply with their obligation thereunder; |
| XXV | Member shall make all reasonable efforts to process loan applications and advise applicants of approval of disapproval promptly and to close and disburse in a timely manner; |
| XXVI. | Members shall use all efforts available in servicing investments entrusted to their care to effectively discharge their obligations to both investor and debtor; |
| XXVII. | Members shall cooperate with the Board of Governors and Officers of the Greater Cincinnati Mortgage Bankers Association in furnishing truthful and accurate information relative to any investigation of a possible violation of the Canons of Ethics and Standards of Practice; |
| XXVIII. | Violations of and complaints concerning these CANONS OF ETHICS shall be filed with the president of the Greater Cincinnati Mortgage Bankers Association with a copy to its Executive Secretary; |
| XXIX. | Each member of this Association shall comply with the By-Laws, as revised, of this Association. |