1997 Wisconsin Act 145

(b) (intro.) “Loan solicitor" “Mortgage broker" does not include any of the following:

145,8 Section 8 . 224.71 (3) (a) 3. of the statutes is amended to read:

224.71 (3) (a) 3. Services loans or land contracts or provides escrow services, for another person and for commission, money or other thing of value.

145,9 Section 9 . 224.71 (3) (b) 6. of the statutes is created to read:

224.71 (3) (b) 6. A person who originates, sells, or services loans only with the person's own funds for the person's own investment and the person has originated, sold or serviced no more than 4 loans during the previous 12 months.

145,10 Section 10 . 224.71 (5) of the statutes is created to read:

224.71 (5) “Table funding" means a transaction in which a person conducts a loan closing in the person's name with funds provided by a 3rd party and the person assigns the loan to the 3rd party within 24 hours of the loan closing.

145,11 Section 11 . 224.72 (title) of the statutes is amended to read:

224.72 (title) Registration of mortgage bankers, loan originators and loan solicitors mortgage brokers.

145,12 Section 12 . 224.72 (1m) of the statutes is amended to read:

224.72 (1m) Registration required. A person may not act as a mortgage banker, loan originator or loan solicitor mortgage broker, use the title “mortgage banker", “loan originator" or “loan solicitor" “ mortgage broker", or advertise or otherwise portray himself or herself as a mortgage banker, loan originator or loan solicitor mortgage broker, unless the person has been issued a certificate of registration from the department division.

145,13 Section 13 . 224.72 (2) (intro.) of the statutes is amended to read:

224.72 (2) Applying for registration. (intro.) A person desiring to act as a mortgage banker, loan originator or loan solicitor mortgage broker shall apply for a certificate of registration to the department division on forms prescribed by the department division and shall pay the fee specified in rules promulgated under sub. (8) (a). An application shall satisfy all of the following:

145,14 Section 14 . 224.72 (2) (b) of the statutes is amended to read:

224.72 (2) (b) Identity of partner, member or officer. If the applicant is a partnership, limited liability company or corporation, the application shall identify each partner, member or officer who will use the title “mortgage banker", “loan originator" or “loan solicitor" “mortgage broker".

145,15 Section 15 . 224.72 (3) of the statutes is amended to read:

224.72 (3) Additional requirement for loan originator applicant. In addition to the requirements of sub. (2), an applicant for registration as a loan originator shall include in the application the name of the mortgage banker or mortgage broker who will employ the loan originator.

145,16 Section 16 . 224.72 (4) (intro.) of the statutes is renumbered 224.72 (4) (a) (intro.) and amended to read:

224.72 (4) (a) (title) With a bona fide office. (intro.) In addition to the requirements of sub. (2), an applicant for registration as a mortgage banker who maintains a bona fide office shall do at least one of the following:

145,17 Section 17 . 224.72 (4) (a) of the statutes is renumbered 224.72 (4) (a) 1. (intro.) and amended to read:

224.72 (4) (a) 1. `Approval by federal agency.' (intro.) Submit evidence which shows, to the department's division's satisfaction, that the federal department of housing and urban development has one or more of the following have approved the applicant as a mortgagee. :

145,18 Section 18 . 224.72 (4) (a) 1. a. to d. of the statutes are created to read:

224.72 (4) (a) 1. a. The federal department of housing and urban development.

b. The Federal National Mortgage Association.

c. The Government National Mortgage Association.

d. The Federal Home Loan Mortgage Corporation.

145,19 Section 19 . 224.72 (4) (a) 3. of the statutes is created to read:

224.72 (4) (a) 3. `Other bond or guarantee.' File a personal bond or 3rd-party guarantee in the amount of $25,000 in a form acceptable to the division and secured by one of the following forms of security:

a. A certificate of deposit.

b. A debt security acceptable to the division.

  c. An irrevocable bank letter of credit issued by a financial institution that is authorized to do business in this state or that is federally chartered.

145,20 Section 20 . 224.72 (4) (b) of the statutes is renumbered 224.72 (4) (a) 2. and amended to read:

224.72 (4) (a) 2. `File a bond.' File with the department a division a commercial surety bond which is in the amount of $25,000, is furnished issued by a surety company authorized to do business in this state and is approved by the department, secures the applicant's faithful performance of all duties and obligations of a mortgage banker, is payable to the division for the benefit of persons to whom the mortgage banker provided services as a mortgage banker, is issued on a form that is acceptable to the division and provides that the bond may not be terminated without at least 30 days' written notice to the division.

145,21 Section 21 . 224.72 (4) (c) of the statutes is renumbered 224.72 (4) (a) 4. and amended to read:

224.72 (4) (a) 4. `Minimum net worth.' Submit evidence that establishes, to the department's division's satisfaction, a minimum net worth of $25,000 and a warehouse line of credit of not less than $250,000 or a minimum net worth of $100,000. Evidence of net worth shall include the submission of a balance sheet that is accompanied by a written statement by an independent certified public accountant attesting that he or she has reviewed the balance sheet in accordance with generally accepted accounting principles.

145,22 Section 22 . 224.72 (4) (d) of the statutes is created to read:

224.72 (4) (d) Without a bona fide office. In addition to the requirements of sub. (2), an applicant for registration as a mortgage banker who does not maintain a bona fide office shall do all of the following:

1. `File a bond.' File with the division a commercial surety bond that is in the amount of $300,000, is issued by a surety company authorized to do business in this state, secures the applicant's faithful performance of all duties and obligations of a mortgage banker, is payable to the division for the benefit of persons to whom the mortgage banker provided services as a mortgage banker, is issued on a form that is acceptable to the division and provides that the bond may not be terminated without at least 30 days' written notice to the division.

2. `Minimum net worth.' Submit evidence that establishes, to the division's satisfaction, a minimum net worth of $250,000. Evidence of net worth shall include the submission of a balance sheet that is accompanied by a written statement by an independent certified public accountant attesting that he or she has reviewed the balance sheet in accordance with generally accepted accounting principles.

145,23 Section 23 . 224.72 (4m) of the statutes is created to read:

224.72 (4m) Additional requirement for mortgage broker applicant. (a) With a bona fide office. In addition to the requirements of sub. (2), an applicant for registration as a mortgage broker who maintains a bona fide office shall do at least one of the following:

1. `File a bond.' File with the division a commercial surety bond that is in the amount of $10,000, is issued by a surety company authorized to do business in this state, secures the applicant's faithful performance of all duties and obligations of a mortgage broker, is payable to the division for the benefit of persons to whom the mortgage broker provided services as a mortgage broker, is issued on a form that is acceptable to the division and provides that the bond may not be terminated without at least 30 days' written notice to the division.

  2. `Other bond or guarantee.' File a personal bond or 3rd-party guarantee in the amount of $10,000 in a form acceptable to the division and secured by one of the following forms of security:

a. A certificate of deposit.

b. A debt security acceptable to the division.

  c. An irrevocable bank letter of credit issued by a financial institution that is authorized to do business in this state or that is federally chartered.

  3. `Minimum net worth.' Submit evidence that establishes, to the division's satisfaction, a minimum net worth of $100,000. Evidence of net worth shall include the submission of a balance sheet that is accompanied by a written statement by an independent certified public accountant attesting that he or she has reviewed the balance sheet in accordance with generally accepted accounting principles.

(b) Without a bona fide office. In addition to the requirements of sub. (2), an applicant for registration as a mortgage broker who does not maintain a bona fide office shall do all of the following:

1. `File a bond.' File with the division a commercial surety bond that is in the amount of $120,000, is issued by a surety company authorized to do business in this state, secures the applicant's faithful performance of all duties and obligations of a mortgage broker, is payable to the division for the benefit of persons to whom the mortgage broker provided services as a mortgage broker, is issued on a form that is acceptable to the division and provides that the bond may not be terminated without at least 30 days' written notice to the division.

2. `Minimum net worth.' Submit evidence that establishes, to the division's satisfaction, a minimum net worth of $250,000. Evidence of net worth shall include the submission of a balance sheet that is accompanied by a written statement by an independent certified public accountant attesting that he or she has reviewed the balance sheet in accordance with generally accepted accounting principles.

145,24 Section 24 . 224.72 (4n) of the statutes is created to read:

224.72 (4n) Security held by the division; release. The division or its agent shall hold security filed under subs. (4) (a) 3. and (4m) (a) 2. The security shall remain in effect, and the division may not release it, until all of the following conditions are met:

  (a) A period of 180 days has elapsed since at least one of the following:

1. The date on which the mortgage banker or mortgage broker gives notice to the division that the mortgage banker or mortgage broker is no longer acting as a mortgage banker or mortgage broker.

2. The date on which the mortgage banker's or mortgage broker's registration expires or is revoked.

  (b) The division determines that the mortgage banker or mortgage broker is no longer in business.

(c) The division determines that all claims of persons to whom the mortgage banker or mortgage broker provided services as a mortgage banker or mortgage broker have been satisfied.

145,25 Section 25 . 224.72 (4r) of the statutes is created to read:

224.72 (4r) Insufficient security; division order; suspension of registration. If the division finds that the surety bond, security or insurance policy filed by a mortgage banker or mortgage broker has been cancelled without the required notice to the division, the division may summarily suspend the mortgage banker's or mortgage broker's registration.

145,26 Section 26 . 224.72 (5) (a) of the statutes is amended to read:

224.72 (5) (a) (title) Loan originator and loan solicitor. Upon receiving a properly completed application for registration as a loan originator or loan solicitor and the fee specified in rules promulgated under sub. (8) (a), the department shall division may issue to the applicant a certificate of registration as a loan originator or loan solicitor.

145,27 Section 27 . 224.72 (5) (b) 1. of the statutes, as affected by 1997 Wisconsin Acts 27 and 35, is renumbered 224.72 (5) (b) and amended to read:

224.72 (5) (b) (title) Mortgage banker and mortgage broker. Upon receiving a properly completed application for registration as a mortgage banker or a mortgage broker, the fee specified in rules promulgated under sub. (8) (b) and satisfactory evidence of compliance with sub. subs. (4) and (4m), the department shall division may issue to the applicant a temporary certificate of registration as a mortgage banker. A temporary certificate of registration is valid for 6 months after the date of issuance or mortgage broker.

145,28 Section 28 . 224.72 (5) (b) 2. of the statutes is repealed.

145,29 Section 29 . 224.72 (7) of the statutes, as affected by 1997 Wisconsin Act 27, is repealed and recreated to read:

224.72 (7) Renewal of registration. (a) A loan originator, mortgage broker or mortgage banker shall renew a certificate of registration by submitting to the division a renewal application and the renewal fee specified in rules promulgated under sub. (8) on or before the renewal date specified in rules promulgated under sub. (8).

(b) An applicant for renewal of a certificate of registration as a mortgage banker shall, as part of the application, do the following:

1. For a mortgage banker who maintains a bona fide office, refile a bond that satisfies sub. (4) (a) 2. or 3. or resubmit evidence that satisfies sub. (4) (a) 1. or 4.

2. For a mortgage banker who does not maintain a bona fide office, refile a bond that satisfies sub. (4) (d) 1. and resubmit evidence that satisfies sub. (4) (d) 2.

(c) An applicant for renewal of a certificate of registration as a mortgage broker shall, as part of the application, do the following:

1. For a mortgage broker who maintains a bona fide office, refile a bond that satisfies sub. (4m) (a) 1. or 2. or resubmit evidence that satisfies sub. (4m) (a) 3.

2. For a mortgage broker who does not maintain a bona fide office, refile a bond that satisfies sub. (4m) (b) 1. and resubmit evidence that satisfies sub. (4m) (b) 2.

145,30 Section 30 . 224.72 (8) of the statutes is repealed and recreated to read:

224.72 (8) Registration period; fees. The division shall promulgate rules establishing the registration period and the registration fees for loan originators, mortgage bankers and mortgage brokers.

145,31 Section 31 . 224.73 of the statutes is amended to read:

224.73 (title) Relationship between loan originator and either a mortgage banker or a mortgage broker. (1) Responsibility for loan originator. A mortgage banker or a mortgage broker is responsible for, and shall supervise the acts of, a loan originator who registers under s. 224.72 (3) as an employe of the mortgage banker or mortgage broker. A mortgage banker or mortgage broker is also responsible for, and shall supervise the acts of, a loan originator or any other person who otherwise acts on behalf of the mortgage banker or the mortgage broker.

(2) Restriction on loan originator. If the department division suspends or revokes a mortgage banker's or a mortgage broker's certificate of registration, a loan originator may not act on behalf of that mortgage banker or mortgage broker during the period of suspension or revocation.

(3) Transfer by loan originator. A registered loan originator may at any time apply, on forms prescribed and provided by the department division, to transfer employment to another registered mortgage banker or mortgage broker. The fee for transfer is specified under s. 224.72 (8) (d) and is payable when the loan originator files the application division shall promulgate rules establishing a fee for a transfer application under this subsection.

145,32 Section 32 . 224.74 (title) of the statutes is amended to read:

224.74 (title) Department's Division's review of the operations of a loan solicitor, loan originator, mortgage broker or mortgage banker.

145,33 Section 33 . 224.74 (1) of the statutes is repealed and recreated to read:

224.74 (1) Annual reports; audits. (a) Annual report. Except as provided in par. (b), each year, on a date specified by the division and in a form required by the division, a mortgage banker or mortgage broker shall submit to the division an annual report relating to the mortgage banker's or mortgage broker's operations during its most recently completed fiscal year.

(b) Audit requirement. Each year, no later than 6 months following the end of its most recently completed fiscal year, a mortgage banker or mortgage broker that qualified for registration under s. 224.72 (4) (a) 4. or (d) or (4m) (a) 3. or (b), shall submit a copy of an audit of the mortgage banker's or mortgage broker's operations during that fiscal year. An audit under this paragraph shall be conducted by an independent certified public accountant in accordance with generally accepted auditing standards. The financial statements in the audit report shall be prepared in accordance with generally accepted accounting principles.

(c) Audits requested by the division. The division may request that a mortgage banker or mortgage broker obtain an audit of the mortgage banker's or mortgage broker's operations if the division has reason to believe that the mortgage banker or mortgage broker may not have sufficient financial resources to meet its obligations to its clients or investors or to other persons directly affected by the activities conducted by the mortgage banker or mortgage broker under the certificate of registration granted by the division. If the division requests an audit under this paragraph, the mortgage banker or mortgage broker shall have the audit completed no later than 90 days after the date of the division's request. The mortgage banker or mortgage broker shall submit the audit report to the division no later than 5 days after the date on which the audit is completed. An audit under this paragraph shall be conducted by an independent certified public accountant in accordance with generally accepted auditing standards. The financial statements in the audit report shall be prepared in accordance with generally accepted accounting principles.

145,34 Section 34 . 224.74 (2) (a) of the statutes is amended to read:

224.74 (2) (a) Conduct of examination and preparation of report. The department division may at any time, on its own motion or upon complaint, examine the books of account, records, condition and affairs of a mortgage banker, loan originator or loan solicitor mortgage broker registered under this subchapter. The department division shall prepare a report of each examination conducted under this section. As part of the examination or preparation of the report, the department division may examine under oath any of the members, officers, directors, agents, employes or customers of the mortgage banker, loan originator or loan solicitor mortgage broker. The department division may require a mortgage banker, loan originator or loan solicitor mortgage broker who is examined under this paragraph to pay to the department division a reasonable fee for the costs of conducting the examination. If the department requires a fee under this paragraph, the department shall establish the amount of the fee by rule.

145,35 Section 35 . 224.74 (2) (b) of the statutes is amended to read:

224.74 (2) (b) Confidentiality. Examination reports and correspondence regarding the reports are confidential, except that the secretary division may release examination reports and correspondence in connection with a disciplinary proceeding conducted by the department division, a liquidation proceeding or a criminal investigation or proceeding.

145,36 Section 36 . 224.75 (title) of the statutes is amended to read: