The members of the California Association
of Mortgage Brokers, believing that the interest of the
public and private sectors are best served through the voluntary
observance of ethical standards of practice, hereby subscribe
to the following Code of Ethics.
The following Standards of Professional
Practice are a model by which CAMB members can measure their
performance. No Standards of Practice can prescribe actions
covering all situations. Common sense and good moral judgment
are required in applying ethical principles to the complex
realities of the mortgage broker’s duties. Adherence to these
Standards will enhance professionalism in the Mortgage
Brokerage industry and foster goodwill among those who do
business with CAMB members.
Article I
Honesty and Integrity
CAMB members shall conduct business in a
manner reflecting honesty, honor, and integrity.
CAMB members, whether by law or by
professional commitment, have a fiduciary duty to their
clients, and strive to maintain absolute fidelity to their
borrowers’ best interests.
CAMB members support consumers’ right to be
treated fairly and honestly, to be given equal access and full
disclosure, and to be subject to an objective evaluation of
their creditworthiness.
CAMB members encourage borrower loan
requests only when there will be a clear benefit to the
borrower upon closing, such as realization of property
ownership, improved financial situation, or achievement of one
or more of borrower’s stated financial goals.
CAMB members will never knowingly arrange a
loan beyond the ability of the borrower to repay per the terms
of the applicable promissory note, or which will place the
borrower’s ownership interest at such risk that its loss may
be reasonably foreseen, based on the borrower’s circumstances
at the time the loan is made.
CAMB members make full disclosure of all
pertinent facts to parties to a transaction, neither
withholding relevant information nor being a party in any way
to false representations.
CAMB members neither condone, nor engage
in, nor allow themselves to be parties to unscrupulous
appraisal practices.
CAMB members offer only those interest
rates and other loan terms to prospective borrowers that are
reasonably likely to be realized at closing.
CAMB members provide timely and accurate
estimates of closing costs, and inform borrowers promptly if
expenses change significantly, so that borrowers may look
forward with confidence to closing without unanticipated
surprises.
CAMB members will decline participation in
transactions in which other parties, principals, agents, or
service providers, are engaged in dishonest or fraudulent
conduct.
CAMB members will never ask borrowers or
employees to sign a document in blank.
Article II
Professional Conduct
CAMB members shall conduct their business
activities in a professional manner.
CAMB members refrain from any practices
that are contrary to the best interest of the public or that
are not in keeping with the dignity and integrity of the
Mortgage Brokerage profession.
CAMB members charge for services only such
fees that are fair and reasonable and in accordance with
general practice in the mortgage broker’s market area.
CAMB members strive to stay in close
communication with borrowers and lenders to ensure that
questions are promptly answered and all significant events or
problems in a loan transaction are conveyed in a timely
manner.
CAMB members adopt policies and procedures
that enable the broker to avoid errors, fulfill compliance
requirements, and meet transaction deadlines.
CAMB members ensure that they and their
employees are knowledgeable in the areas of Mortgage Brokerage
in which they participate and are acting in accordance with
sound industry practices.
CAMB members are committed to continuing
education regarding industry principles and practices in order
to bring the highest level of knowledge and expertise to their
clients.
CAMB members stand for harmonious
relations, founded on mutual respect among mortgage
professionals, within the competitive brokerage industry. CAMB
members refrain, therefore, from publicly criticizing
colleagues or their business practices; however, if the
opinion of the CAMB member is sought, it is rendered with
integrity and a careful regard for the reputation of the
industry.
CAMB members refrain from soliciting
borrowers who have signed an application with another
reputable broker, and whose loan is already in process, unless
the borrower initiates the contact and clearly expresses
dissatisfaction with the terms or service of the original
broker.
CAMB members, for the protection of all
parties, ensure that all agreements are in writing, accurately
reflecting the agreement of the parties, and that each party,
at the time of signing or initialing, receives a copy.
CAMB members provide the same high level of
quality mortgage loan services to all borrowers regardless of
education, level of sophistication, race, color, gender,
marital status, religion, age, physical challenge, ancestry,
or national origin.
Article III
Honesty In Advertising
CAMB members shall endeavor to be
accurate in all advertisements and solicitations.
CAMB members advertise only those loan
terms and conditions available to qualified borrowers at the
time of advertising, and likely to be available at closing.
CAMB members state clearly in advertising
and solicitations that rates and terms are subject to change
and include the date quoted rates were available.
CAMB members decline opportunities to
participate in multi-broker charts for advertising purposes
which require projection of rates and fees that may or may not
be available to borrowers when the chart is published. If
participation in such a chart is necessitated by business
considerations, CAMB brokers will request consumers to call
for rates, rather than advertise rates which may not
materialize.
CAMB members are knowledgeable regarding
laws and regulations affecting advertising of mortgage rates,
terms, and conditions, and scrupulously strive to comply to
the spirit, as well as the letter, of the law.
CAMB members who purchase loan leads from
third parties take all necessary steps to ensure that the
leads were originally obtained through advertising which meets
CAMB standards for honesty and full disclosure, and complies
with Federal, State, and local laws and regulations.
CAMB members disclose their membership in
CAMB in oral and print advertising and include the CAMB logo,
whenever possible, on stationery and business cards.
Article IV
Confidentiality
CAMB members shall avoid unauthorized
disclosure of confidential information.
CAMB members recognize that the information
provided by borrowers in the course of applying for a home
loan is deeply personal and private and hold the information
in the utmost confidentiality, releasing only what is required
for the purposes of arranging the mortgage, and to comply with
lawful requests of law enforcement agencies.
CAMB members refrain from divulging
non-public borrower information in conversation with persons
not directly involved in processing or funding a client’s loan
request, even with other professionals in the mortgage
industry.
CAMB members ensure that borrower files,
borrower lists, processing charts, and other materials
containing private confidential information are maintained in
locations and under conditions which protect that information
from unauthorized view.
CAMB members are careful to dispose of
daily waste material and trash featuring client information,
generated in the course of loan processing, by shredding or an
alternative destructive process, in order to prevent identity
thieves or other unauthorized persons from obtaining client
data from trash receptacles, or waste disposal sites.
CAMB members dispose of loan files, after
the regulatory term for file retention has expired, by
shredding or alternative destructive process, either by
authorized staff or by hiring a professional document
destruction firm whose integrity has been reviewed and
assured.
CAMB members take all necessary steps to
safeguard client confidential data stored on magnetic disks or
tapes, and that, when such disks or tapes are to be discarded,
they are electronically scrubbed or physically destroyed to
eliminate any chance data may be recovered by unscrupulous
persons.
Article V
Compliance With Law
CAMB members shall conduct their business
in compliance with all applicable laws and regulations.
CAMB members are knowledgeable regarding
rules, regulations, and laws pertaining to the mortgage
industry, and maintain reference materials where such rules,
regulations, and laws may be researched and confirmed.
CAMB member recognize the constantly
changing regulatory environment in which the mortgage industry
exists, and keep their knowledge current by being attentive to
industry publication, and by participating in seminars,
workshops, and classes created to assist them in maintaining
compliance expertise.
CAMB members monitor the actions and
policies of their employees and associates to ensure
compliance with local, state, and federal laws pertaining to
the industry.
CAMB members maintain strict quality
control procedures to track compliance and prevent fraud by
any of the parties involved in the loan process.
CAMB members refrain from engaging in
activities beyond the scope of their expertise. If their
clients require additional expertise, CAMB members may refer
them to a professional who specializes in that field.
Article VI
Disclosure of Financial Interests
CAMB members shall disclose any financial
interest they may have in a loan transaction.
CAMB members, when recommending or
suggesting the use of services of other professionals or
entities, disclose any direct interest they have in the
professional’s or entity’s enterprise, or compensation they
may realize from the recommendation or referral.
CAMB members, whenever they are principals
in a transaction involving the purchase or refinance of
property, scrupulously inform other parties in the transaction
of their professional status, and whether they will be
receiving financial gain.
CAMB members are fully knowledgeable
regarding DRE regulations concerning trust accounts, advance
fees, and collection of unearned compensation.
