(1) This section applies to any mortgage broker agreement, servicing agreement, loan application, or purchase agreement that provides for arbitration between:(a) A noninstitutional investor and a mortgage lender servicing a mortgage loan.
(b) A borrower and a mortgage broker or mortgage lender to obtain a mortgage loan.
(c) A noninstitutional investor and a mortgage broker or mortgage lender to fund or purchase a mortgage loan.
(2) All agreements subject to this section must provide that, at the voluntary election of the noninstitutional investor or borrower, disputes shall be handled by a court or by binding arbitration.
(3) All agreements subject to this section must provide the noninstitutional investor or borrower with the option to elect arbitration before the American Arbitration Association or other independent nonindustry arbitration forum. Any other nonindustry arbitration forum may apply to the office to allow such forum to provide arbitration services. The office shall grant the application if the applicant’s fees, practices, and procedures do not materially differ from those of the American Arbitration Association.
(4) At the election of the noninstitutional investor or borrower, venue shall be in the county in which the noninstitutional investor or borrower entered into the agreement or at a business location of the mortgage broker or mortgage lender.
(5) Any fees or charges must be in accordance with the rules of the American Arbitration Association or other approved nonindustry arbitration forum and may not be set in the agreement.
(6) Any election made under this section is irrevocable.
(7) This section does not require an agreement that is subject to this section to contain an arbitration clause.
