The aggregate of loans to any one borrower shall consist of any loans made directly to the borrower and to any corporation of which the borrower is an officer, director or shareholder.
(6) Maximum periods of loan amortization. 215.21(6)(a)(a)
Direct reduction mortgage loans.
The total monthly contractual payment on a direct reduction mortgage shall appear in the mortgage note. The division shall by regulation establish the maximum terms for the various types of direct reduction mortgages. The interest charges on loans of this type may be adjusted monthly or semiannually in accordance with the terms of the mortgage note.
Straight mortgage loans.
An association may make mortgage loans without the amortization of principal.
(7) Types of real estate security.
An association may make loans on the following types of real estate security as defined by the division:
Combination home-and-business type properties;
Commercial type properties, the aggregate of which shall be fixed by the division;
(8) Insurance coverage of mortgaged premises. 215.21(8)(a)(a)
The borrower shall cause the buildings and improvements on any property on which the association has a mortgage to be insured and kept insured, unless the association maintains insurance under par. (b)
, up to the full insurable value during the life of the loan, for the benefit of the association, against loss by fire, windstorm and such other hazards as the association requires. The selection of the insurance agent or insurer through which the insurance covering such property is to be negotiated shall be made in accordance with ss. 134.10
and 628.34 (5)
The insurance policies or evidence or certificate of the existence of such insurance policies shall remain on deposit with the association until the loan is paid. An association which carries adequate insurance, issued by a company licensed to write insurance protecting the association from losses under par. (a)
at no cost to the borrower if the borrower fails to maintain insurance, shall not be required to request or record future insurance policies of the borrower if at the time of closing the mortgage transaction the borrower deposited with the association an acceptable policy or evidence or certificate of the existence of such an insurance policy, with a mortgage clause protecting the interest of the association.
War damage insurance shall not be required unless the directors of the association, by resolution, demand that same be provided by the borrower.
Any association may accept, as additional collateral to its mortgage note, any other real estate, personal property or a policy of insurance on the life of any person who is a party to or responsible for the payment of the mortgage note. The association may be named beneficiary as well as absolute assignee of such life insurance and, to protect its interests therein, advance premiums thereon.
Upon written request of any borrower, any association may accept as additional collateral a policy of health and accident insurance on the life of any person responsible for the repayment of the mortgage loan, and may, in the event of the borrower's inability to pay premiums thereon, advance said premiums. Any premiums so advanced shall be added to the unpaid balance of the mortgage loan and become a part of the mortgage indebtedness.
(12) Insured or guaranteed loans.
An association may make mortgage loans insured or guaranteed wholly or in part under the national housing act approved June 27, 1934, or the servicemen's readjustment act of 1944, (P.L. 78-346
). All mortgage loans made under this section shall be in accordance with federal law and regulations and ch. 219
(13) Purchasing of loans.
Except as otherwise prescribed in s. 215.13 (21)
, an association may purchase mortgage loans from any person, provided that the association could have made such loans in the first instance. The association may enter into an agreement with the seller of such mortgages to service the loans.
(14) Selling loans.
Except as otherwise prescribed in s. 215.13 (22)
an association may sell mortgage loans, without recourse, to any person, and service such loans for the purchaser in accordance with a duly executed servicing agreement. The aggregate of loans sold in any calendar year shall not exceed such limits as may be set by the division and review board.
(15) Participation loans.
Any association may participate with other lenders in mortgage loans of any type that such association may otherwise make, subject to such rules as the division issues, including the interest in participation loans to be retained by the originator. The normal lending area, prescribed in sub. (2)
, shall not apply to any association purchasing a participating interest in such loan, provided the real estate securing such loan is located within the United States.
An association may make a mortgage loan on the security of vacant land, if the loan is any of the following:
A loan made to develop or to acquire and develop land for primarily residential purposes may be secured by the land to be developed.
A loan made to a builder to construct residential property may be secured by a lot suitable for the construction of a home.
A loan made to acquire a building site for future construction of a personal residence may be secured by the building site.
A loan made to acquire land for use in connection with a farm operated for profit may be secured by that land.
A loan that the association reasonably believes will be used to develop or to acquire and develop land for commercial or industrial use within 5 years after the acquisition of the land.
An association may not make a mortgage loan on the security of real estate in which an officer, director or employee of the association or his or her spouse has an interest. This paragraph does not apply to home-type property containing 4 dwelling units or less personally used by the borrower as a place of residence.
Nothing in this section shall prevent any property from being pledged as additional collateral for a loan as long as the value of the unacceptable security is not used to determine the appraised value of the real estate security upon which the loan is based.
An association may not make a mortgage loan on the security of or to finance the purchase of vacant land that is acquired or held for speculation.
No association may directly or indirectly make a mortgage loan to an officer, director or employee of the association.
Without the prior written approval of the division, no association may directly or indirectly make a mortgage loan to:
A business venture employing an officer, director or employee of the association.
Such other persons as the division may by rule designate to avoid conflicts between the best interests of the association and the interests of its officers, directors or employees.
In this subsection "business venture" means any partnership, joint venture, corporation or similar entity.
On the security of home-type property containing 4 dwelling units or less and used by the borrower as his or her residence; or
To a nonprofit, religious, charitable or fraternal organization or a corporation in which the association has been authorized to invest by the division.
(18) Basis of appraisals.
All appraisals of real estate securing mortgage loans shall be based on the reasonable market value of the real estate.
(21) Penalty for giving or accepting money for loans.
Every officer, director, employee or agent of any association, or any appraiser making appraisals for any association, who accepts or receives, or offers or agrees to accept or receive anything of value in consideration of its loaning any money to any person; or any person who offers, gives, presents or agrees to give or present anything of value to any officer, director, employee or agent of any association or to any appraiser making appraisals for any association in consideration of its loaning money to the person, is guilty of a Class I felony. Nothing in this subsection prohibits an association from employing an officer, employee or agent to solicit mortgage loans and to pay the officer, employee or agent on a fee basis.
(23) False statement in loan applications; penalty.
Any person who makes or causes to be made any false written statement to any state or federal savings and loan association for the purpose of obtaining a loan for himself or herself or for another, with intent to mislead, or which may mislead the association, may be imprisoned for not more than 6 months or fined not to exceed $1,000.
(24) Board may waive principal payment on loans.
Any association, in the discretion of its board, may accept only payments of interest on the loan and taxes on the mortgaged premises, and may waive the principal payments for periods not exceeding one year at a time.
(25) Loans due, when.
Whenever a borrower is in arrears in any contractual payments, whether principal, interest, taxes or insurance, the board of directors may call the borrower's whole loan due and payable as provided in the mortgage note.
Subject to the rules of the division, an association may make or invest its funds in loans, originated and serviced by or through an institution, the accounts or deposits of which are insured by the deposit insurance corporation or by or through an approved federal housing administration mortgagee, in an aggregate amount not exceeding 10% of such association's assets on the security of real estate or leasehold interests.
History: 1971 c. 222
; 1973 c. 205
; 1975 c. 11
; 1975 c. 371
; 1975 c. 387
; 1977 c. 58
; 1979 c. 250
; 1981 c. 45
; 1983 a. 36
; 1989 a. 103
; 1991 a. 316
; 1993 a. 213
; 1995 a. 27
; 1997 a. 27
; 2001 a. 109
; 2005 a. 22
See ss. 138.051
for residential mortgage loans, s. 138.053
for interest adjustment clauses, and ss. 138.055
for variable interest rate clauses.
See s. 706.11 (1)
for provision as to priority of mortgages to federal savings and loan associations and the department of veterans affairs.
The limitation on loans to one borrower under sub. (5) is intended to protect the assets of the lender. A violation does not create a cause of action in favor of anyone else who claims that the excess loan damaged him or her. McNeill v. Jacobson, 55 Wis. 2d 254
, 198 N.W.2d 611
When money is advanced in reliance upon a justifiable expectation that the lender will have security equivalent to that in the existing mortgage that its advances discharged, equity will treat the transaction as tantamount to an assignment of the original security, provided no innocent 3rd party will suffer. Rock River Lumber Corp. v. Universal Mortgage Corp. 82 Wis. 2d 235
, 262 N.W.2d 114
Adjustable interest rates in home mortgages: a reconsideration. 1975 WLR 742.
Notwithstanding generally accepted underwriting standards, an association may make loans secured by real property used primarily for residential or farming purposes, even if those loans do not comply with one or more of the requirements under those provisions, if the total amount of loans made under this section does not exceed 5% of the association's total assets.
History: 1997 a. 144
Real estate owned by association. 215.22(1)
A savings and loan association may acquire such real estate, by purchase, exchange or otherwise, as may be necessary to protect or enforce its securities and to collect claims or debts due the association.
All real estate acquired pursuant to this section shall be sold within 10 years from acquiring title thereto, unless the division grants extensions of time within which such real estate shall be sold.
All real estate owned by the association shall be assessed for taxation.
History: 1975 c. 359
; 1995 a. 27
See also ch. DFI-SL 11
, Wis. adm. code.
Limitations on investments in office buildings and related facilities.
An association's aggregate investment in the following may not exceed the association's net worth without the prior written approval of the division:
Land used or intended to be used as the site of an office of the association.
Buildings used in whole or in part as an office of the association.
Leasehold improvements to properties rented or leased by the association for use as an office of the association.
Parking facilities used by the association in connection with an office of the association.
Minimum net worth.
An association shall maintain net worth at an amount not less than the minimum amount established by the division. If an association fails to maintain the minimum net worth required under this section, the division may take appropriate action, including but not limited to ordering the association to take corrective action or to restrict payment of dividends.
See also s. DFI-SL 5.01
, Wis. adm. code.
Annual audit requirement. 215.25(1)
Except as provided in sub. (2)
, the board of directors of an association shall hire a certified public accountant licensed or certified under ch. 442
or other qualified person to conduct a comprehensive annual audit of the records, accounts, and affairs of the association.
The board of directors of an association may appoint an auditing committee of one or more capable persons to annually audit the records, accounts, and cash of the association and to verify customer accounts. Verification procedures shall be conducted according to the association's auditing program or the rules of the division.
Audit reports under this section shall be submitted to the association's board of directors and retained as records of the association.
Miscellaneous provisions. 215.26(2)
Retaliatory taxes and restrictions.
When the laws of any other state or territory impose any taxes, fines, penalties, licenses, fees, deposits, money, securities or other obligations or prohibitions on associations of this state doing business in such other state or territory or upon their agents therein, so long as such laws continue in force, the same obligations and prohibitions shall be imposed upon all associations of such other state or territory and their agents in this state.
(3) Obsolete records.
Any association may destroy or dispose of such of its records as may become obsolete after first obtaining the written consent of the division.
(4) Reproduction and destruction of records. 215.26(4)(a)(a)
Any association may cause any or all records kept by such association to be recorded, copied or reproduced by any photostatic, photographic or miniature photographic process or by optical imaging if the process employed correctly, accurately and permanently copies, reproduces or forms a medium for copying, reproducing or recording the original record on a film or other durable material. An association may thereafter dispose of the original record after first obtaining the written consent of the division. This section, excepting the part of it which requires written consent of the division, is applicable to federal associations insofar as it does not contravene federal law.
Any photographic, photostatic or miniature photographic copy or reproduction or copy reproduced from a film record or any copy of a record generated by optical disk storage of an association record shall be deemed to be an original record for all purposes and shall be treated as an original record in all courts or administrative agencies for the purpose of its admissibility in evidence. A facsimile, exemplification or certified copy of any such photographic copy or reproduction, copy reproduced from a film record or copy generated from optical disk storage of a record shall, for all purposes, be deemed a facsimile, exemplification or certified copy of the original record.
(4m) Record search.
An association is entitled to reimbursement for expenses and costs incurred in searching for, reproducing and transporting books, papers, records and other data required to be produced by legal process, unless otherwise prohibited by law from collecting these expenses and costs or unless the person seeking the production is a government unit, as defined in s. 108.02 (17)
. The expenses and costs shall be paid by persons seeking such production. If an association is entitled to reimbursement under this section, an association may not be required to produce books, papers, records and other data in response to legal process unless the expenses and costs, identified in an itemized invoice to be provided by the association, are paid or unless payment is tendered to the association in cash or by certified check or draft.
(5) Legal holidays.
The division shall designate such of the legal holidays listed in s. 995.20
as days on which no association may transact business or be open for the purpose of transacting business. For purposes of this subsection, operation of a remote service unit as defined in s. 215.13 (46) (a) 1.
or an unstaffed facility does not constitute the transaction of business.
(6) Agent of savings and loan association.
Any person who acts as the agent for any unauthorized savings and loan association in this state, or sells or disposes of any savings accounts, certificates, bonds or other evidences of indebtedness of or for any such unauthorized association, not licensed to transact business in this state, and any person who acts for any such unauthorized association or in any manner aids in the transaction of the business of such association in this state shall be guilty of a misdemeanor and be fined not less than $100 nor more than $500 for each offense, and shall be personally liable for any sums received by the person for or on behalf of such unauthorized association.
(7) Federal associations located in Wisconsin.
Federal savings and loan associations which have their home offices located in Wisconsin, and are incorporated pursuant to the home owners' loan act of 1933, as now or hereafter amended, are not foreign corporations or associations. Unless federal law or regulations provide otherwise, such federal savings and loan associations and members thereof shall possess all of the rights, powers, privileges, benefits, immunities and exemptions that are now provided or that may be hereafter provided by the laws of this state for associations organized under the laws of this state and for the members thereof. This provision is additional and supplemental to any provision which, by specific reference, is applicable to such federal savings and loan associations and the members thereof.
Every person may inspect those books and records of an association which pertain to the person's loan or savings account. An association and officers and employees of an association may provide books, records or other information as required by court order or by a subpoena in a court or administrative proceeding.
If requested by an individual who is a customer, loan applicant or credit applicant, a financial institution, as defined in s. 705.01 (3)
, shall provide that individual with a copy of any written appraisal report which is held by the financial institution, which relates to residential real estate that the individual owns or has agreed to purchase and for which a fee is imposed.
If requested by an individual who is a customer, loan applicant or credit applicant, a financial institution, as defined in s. 705.01 (3)
, shall provide that individual, at no additional charge, with a copy of any written credit report which is held by the financial institution, which relates to that individual and for which a fee is imposed.