Maine Origination Practices and Prohibited Conduct
Origination duties
Maine requires MLOs to deal honestly and in good faith, present loan terms accurately, and account for borrower funds and documents. An MLO may not originate without an active license and sponsorship, and may not accept compensation from an unlicensed party for origination activity. Advertising and solicitation must not misstate rates, fees, or the MLO's authority.
Prohibited conduct
- Fraud, deceit, or misrepresentation about rates, fees, or loan terms
- Forgery, alteration of loan documents, or false statements on license filings
- Collecting fees without authorization or failing to account for borrower funds
- Steering a borrower into a loan that benefits the MLO rather than the borrower
- Holding out as licensed when the license is inactive or sponsored elsewhere
Worked example
An MLO tells a borrower that a refinance has "no prepayment penalty," but the closing documents contain a penalty. Even though the borrower signs the papers, the oral statement is a misrepresentation and creates both licensing and consumer-protection exposure under Maine law. The accurate document does not cure the misleading sales statement.
Traps
Believing accurate closing documents excuse oral misstatements; assuming referral fees to unlicensed marketers are always permissible; ignoring that conduct outside Maine can still be disciplined if it affects Maine borrowers or a Maine-licensed entity.