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Permitted Fees
For HELOCs of $10,001 or more,
Arizona law expressly authorizes only these fees: attorney fees,
broker’s fee (the amount charged must be customary), court
costs,
escrow fees, exact third-party fees for services actually rendered,
filing or recording costs in a public office, insurance premiums,
mortgage banker’s fees for acknowledging the instrument
securing the
loan, preliminary title report expenses, title insurance, and transfer
and assumption fees (limited to $100 or1% of the balance due on the
obligation, whichever is greater).
For HELOCs of $10,000 or less,
Arizona law expressly authorizes only these fees: attorney fees,
broker’s fees (the amount charged must be customary), court
costs,
escrow fees, filing or recording costs in a public office, insurance
premiums, mortgage banker’s fees for acknowledging the
instrumentsecuring the loan, preliminary title report expenses, and
title insurance.
Prohibited Fees
For closed-end loans,
administrative fees, advance fees, commitment fees, deferral fees, doc
prep & review fees, lock-in fees, referral fees, unearned
finance charges and warehouse fees.
For HELOCs,
administrative fees, advance fees, application fees, appraisal fees,
commitment fees, credit report fees, deferral fees, discount points,
doc prep & review fees, flood certification fees, lock-in fees,
origination fees, processing fees, tax service fees, transfer &
assumption fees, underwriting fees, and warehouse fees.
Late Charge Fees
For closed-end loans of $5,001 or
higher, and HELOCs of $10,001 or higher,
Arizona law allows a lender may charge any late payment fee that the
borrower(s) agree to pay, as long as that charge is customary. Late
charges may not exceed 6.00% of the installment principal and interest,
which becomes payableafter 15 days of the due date.
For closed-end loans of $5,000 or
less,
Arizona law states that a lender may only charge a late payment fee on
an installment that is not paid in full within 10 days of its due date.
This late payment fee chargedmay not exceed 5.00% of the unpaid
installment, or $10, whichever is less.
For HELOCs of $10,000 or less,
Arizona law allows a lender to charge a late payment fee of $10 or 5%
of the delinquent installment, whichever is less, on an installment
that is not paid within 10 days.
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Funding Settlement
Dry State
Borrower Signing
Requirements
Arizona is a community
property state and a homestead state. Even though one spouse is not a
borrower on a loan, both spouses are required to sign the Security
Instrument, the Truth In Lending
disclosure, the Notice of Right to Cancel, and any Section 32 of
Federal Regulation Z disclosures, unless the property was acquired by
one spouse before the marriage or by gift, devise or descent during the
marriage. However, spouses are permitted to authorize each other to
execute and acknowledge conveyances and encumbrances through a power of
attorney. Dower laws and curtesy laws do not apply in Arizona.
Closing Customs
Arizona law does not
regulate who must conduct a closing, or who must be present at closing.
In
addition, closings may be conducted by mail. Conveyance is typically
executed with a Warranty Deed (joint tenancy), a Tenancy Deed, or a
Special Warranty. The encumbrance is usually a Deed of Trust.
Trustee
The title company
should be listed as the trustee in Arizona
Real Estate Taxes
Taxes are due
September
1st and March 1st.
Taxes are delinquent on November 1st and May 1st.
For owner-occupied
purchase transactions, calculate .75% of the sales price, and for
non-owner occupied properties, calculate 1% of the sales price. For
refinance transactions, estimate the current property taxes by using
the last annual assessed amount.
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