Appraisals required; notice to consumer of high loan-to-value mortgage; refund of certain fees after consumer withdrawals from covered transaction

(a) The provisions of this section shall not apply to a mortgage company that is exempt pursuant to K.S.A. 9-2202(a), and amendments thereto. (b) Before making a covered transaction, a mortgage company shall obtain the appraised value of the real estate to be encumbered. If, based upon the appraisal, the loan-to-value ratio of the covered transaction exceeds 100%, then the mortgage company shall deliver to the consumer not less than three days before the loan is made a: (1) Free copy of the appraisal; and (2) written notice regarding high loan-to-value mortgages and the availability of consumer credit counseling. (c) If within three days after receiving the notice, the consumer elects not to enter into the covered transaction, then the mortgage company shall promptly refund to the consumer any application fees or other amounts paid by the consumer to such mortgage company except for the following: (1) Bona fide out-of-pocket costs incurred before the consumer elected not to enter into the covered transaction, provided that such costs were paid or are payable to unrelated persons; and (2) a bona fide appraisal fee paid or payable to the mortgage company or a related person. (d) This section shall be a part of and supplemental to the Kansas mortgage business act.