What actions are prohibited for a lender regarding insurance contracts linked to real property loans?

A lender is prohibited from soliciting insurance before a loan is committed because this practice can create a conflict of interest and undue pressure on the borrower. The intent behind this prohibition is to ensure that borrowers are not coerced or influenced in their decision-making regarding insurance products associated with the loan. By waiting until the loan commitment stage, the lender allows the borrower to make informed choices based on their specific financial situation and needs without any external influence that might arise from premature solicitation. This practice also promotes transparency and fairness in the lending process.

The other actions outlined, such as requiring insurance on personal properties or offering lower interest rates contingent on specific insurance products, can fall within acceptable business practices as long as they comply with regulatory standards. Requesting information from unrelated insurers is also permissible as it can aid the lender in understanding the market and securing the best options for their clients.