2009 Wisconsin Act 2

2,663 Section 663. 224.75 (1) (d) of the statutes is renumbered 224.75 (1) (d) (intro.) and amended to read:

224.75 (1) (d) Loan servicing records and documents. (intro.) A mortgage banker shall maintain for each residential mortgage loan serviced by the mortgage banker a copy of or a record of all of the following:

1. All correspondence relating to the loan.

2,664 Section 664. 224.75 (1) (d) 2., 3., 4. and 5. of the statutes are created to read:

224.75 (1) (d) 2. All payments received from the borrower.

3. All charges assessed to the borrower's account.

4. All payments made by the mortgage banker on behalf of the borrower.

5. The unpaid balance on the borrower's account.

2,665 Section 665. 224.75 (2) of the statutes is amended to read:

224.75 (2) Period of record retention. A mortgage banker or mortgage broker shall keep for at least 25 36 months, in an office of the mortgage banker or mortgage broker licensed under this subchapter, all books and records that, in the opinion of the division, will enable the division to determine whether the mortgage banker or mortgage broker is in compliance with the provisions of this subchapter. These books and records include copies of all deposit receipts, canceled checks, trust account records, the records which a mortgage banker or mortgage broker maintains under sub. (1) (c) or (d), and other relevant documents or correspondence received or prepared by the mortgage banker or mortgage broker in connection with a residential mortgage loan or residential mortgage loan application. The retention period begins on the date the residential mortgage loan is closed or, if the loan is not closed, the date of loan application. If the residential mortgage loan is serviced by a mortgage banker, the retention period commences on the date that the loan is paid in full. The mortgage banker or mortgage broker shall make the records available for inspection and copying by the division. If the records are not kept within this state, the mortgage banker or mortgage broker shall, upon request of the division, promptly send exact and complete copies of requested records to the division.

2,666 Section 666. 224.75 (3) of the statutes is amended to read:

224.75 (3) Contents of credit and appraisal reports. (a) Credit report. If a mortgage banker or mortgage broker charges a residential mortgage loan applicant a separate fee for a credit report, the credit report shall consist, at a minimum, of a written statement indicating the name of the credit reporting agency which investigated the credit history of the applicant.

(b) Appraisal report. If a mortgage banker or mortgage broker charges a residential mortgage loan applicant a separate fee for an appraisal report, the appraisal report shall consist, at a minimum, of a written statement indicating the appraiser's opinion of the value of the property appraised for residential mortgage loan purposes, the basis for that opinion and the name of the person who conducted the appraisal. If requested by a residential mortgage loan applicant, a mortgage banker or mortgage broker shall provide the loan applicant with a copy of any written appraisal report held by the mortgage banker or mortgage broker, if the loan applicant paid a fee for the report.

2,667 Section 667. 224.75 (4) of the statutes is amended to read:

224.75 (4) Responsibility for forms. A mortgage banker or mortgage broker is responsible for the preparation and correctness of all entries on forms, documents and records which are under the mortgage banker's or mortgage broker's control and which are not dependent on information provided by the residential mortgage loan applicant or a 3rd party.

2,668 Section 668. 224.75 (6) of the statutes is created to read:

224.75 (6) Furnishing books and records. Upon request by the division, any licensee under this subchapter, and any other person whom the division has authority to investigate and examine under s. 224.74 (2), shall make any books and records requested by the division available for inspection and copying by the division. If any records are kept at a licensed office not located within this state, the mortgage banker or mortgage broker shall, upon request of the division, promptly deliver such documents to any location within this state specified by the division.

2,669 Section 669. 224.755 (title) of the statutes is repealed and recreated to read:

224.755 (title) Education and testing requirements for mortgage loan originators.

2,670 Section 670. 224.755 of the statutes is renumbered 224.755 (5) and amended to read:

224.755 (5) Compliance records. A mortgage loan originator shall keep records documenting compliance with s. 224.72 (7) (d) this section for at least 4 years. The technical college system board and any professional trade association or other person that administers examinations or provides education under s. 224.72 (7) (d) shall maintain records documenting attendance and examination performance for at least 4 years.

2,671 Section 671. 224.755 (1), (2), (3) and (4) of the statutes are created to read:

224.755 (1) Education requirements applicable prior to license issuance. Subject to sub. (3) (a) and (c), an applicant for a license under s. 224.725 (1), prior to the division's issuance of the license, shall complete at least 20 hours of education, including a minimum of all of the following:

(a) Three hours of federal law and regulations.

(b) Three hours of ethics, including instruction on fraud, consumer protection, and fair lending issues.

(c) Two hours of training related to lending standards for the nontraditional mortgage product marketplace.

(2) Continuing education requirements. Subject to subs. (3) (a), (c), (d), and (f), an applicant for renewal of a license under s. 224.725 (5), prior to the division's renewal of the license, shall annually complete at least 8 hours of education, including a minimum of all of the following:

(a) Three hours of federal law and regulations.

(b) Two hours of ethics, including instruction on fraud, consumer protection, and fair lending issues.

(c) Two hours of training related to lending standards for the nontraditional mortgage product marketplace.

(3) Education approval. (a) No education course may count toward the requirement under sub. (1) or (2) unless the course has been reviewed and approved by the nationwide mortgage licensing system and registry based upon reasonable standards, including review and approval of the course provider.

(b) An education course meeting the standard under par. (a) may count toward the requirements under subs. (1) and (2) even if the course is any of the following:

1. Provided by the applicant's or licensee's employer, by an entity affiliated with the applicant or licensee by an agency contract, or by any subsidiary or affiliate of such an employer or affiliated entity.

2. Offered through the Internet or another online or electronic medium.

3. Taken in another state.

(c) Subject to any rule promulgated under s. 224.72 (7) (bm) or 224.725 (5) (b), if an individual was previously registered as a loan originator under s. 224.72, 2007 stats., or previously licensed as a mortgage loan originator under s. 224.725, the division may not issue or renew a mortgage loan originator license for the individual under s. 224.725 unless the individual satisfies the requirements under sub. (1) or (2) or demonstrates to the division's satisfaction that the individual has completed all education requirements applicable to the individual in the last year in which the individual's license or registration was valid.

(d) Except as provided in any rule promulgated under s. 224.72 (7) (bm), a licensed mortgage loan originator may receive credit for a continuing education course only in the year in which the course is taken and may not take the same approved course in the same or successive years to meet the requirements under sub. (2).

(e) A licensed mortgage loan originator who is an approved instructor of an approved continuing education course may receive credit for the licensed mortgage loan originator's own annual continuing education requirement at the rate of 2 hours of credit for every one hour taught.

(f) The division may, by rule, allow an applicant for renewal of a license under s. 224.725 (5) to make up any deficiency in meeting the requirements specified in sub. (2).

(4) Testing requirements. (a) An applicant for a license under s. 224.725 (1), prior to the division's issuance of the license, shall pass a written test meeting the standards under par. (b). An individual shall answer at least 75 percent of the test questions correctly to achieve a passing test score.

(b) 1. No test may satisfy the requirement under par. (a) unless the test is developed by the nationwide mortgage licensing system and registry and administered by a test provider approved by the nationwide mortgage licensing system and registry based upon reasonable standards.

2. A test does not meet the standard under subd. 1. unless the test adequately measures the applicant's knowledge and comprehension in appropriate subject areas, including all of the following:

a. Ethics.

b. Federal and state law, regulations, and rules pertaining to mortgage origination.

c. Federal and state law, regulations, and rules relating to residential mortgage transactions, including instruction on fraud, consumer protection, the nontraditional mortgage product marketplace, and fair lending issues.

(c) A written test meeting the standards under par. (b) may satisfy the requirement under par. (a) even if the test is provided at the location of the applicant's employer, any subsidiary or affiliate of the applicant's employer, or any entity with which the applicant holds an exclusive arrangement to conduct the business of a mortgage loan originator.

(d) An individual may retake a test 3 consecutive times, with each test retaken no less than 30 days after the preceding test. If the individual fails 3 consecutive tests, the individual may not retake a test again for at least 6 months.

(e) If an individual previously licensed as a mortgage loan originator fails to maintain a valid license for a period of 5 years or longer, the individual shall retake the test under par. (a). For purposes of determining the 5-year period, the division shall not consider any period during which the individual is exempt from licensing under s. 224.726 (1).

2,672 Section 672. 224.76 of the statutes is amended to read:

224.76 Mortgage banker, mortgage loan originator, and mortgage broker trust accounts. A mortgage banker, mortgage loan originator, or mortgage broker shall deposit in one or more trust accounts all funds other than nonrefundable fees which it receives on behalf of any person, pending disbursement of the funds in accordance with instructions from the person on whose behalf the funds are deposited. A mortgage banker or mortgage broker shall maintain trust accounts in a bank, savings bank, savings and loan association or credit union which is authorized to do business in this state or whose accounts are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration depository institution. The mortgage banker or mortgage broker shall notify the division of the location of its trust accounts.

2,673 Section 673. 224.77 (title) of the statutes is amended to read:

224.77 (title) Discipline Prohibited acts and practices, and discipline, of mortgage bankers, mortgage loan originators, and mortgage brokers.

2,674 Section 674. 224.77 (1) (intro.) of the statutes is amended to read:

224.77 (1) Prohibited conduct acts and practices. (intro.) The division may deny an application submitted to it under s. 224.72, or may revoke, suspend or limit the certificate of registration of a mortgage banker, loan originator or mortgage broker, or may reprimand a mortgage banker, loan originator or mortgage broker, if it finds that the No mortgage banker, mortgage loan originator, or mortgage broker did, and no member, officer, director, principal, partner, trustee, or other agent of a mortgage banker or mortgage broker, may do any of the following:

2,675 Section 675. 224.77 (1) (a) of the statutes is amended to read:

224.77 (1) (a) Made Make a material misstatement, or knowingly omit a material fact, in an a license application for registration, or in other information or reports furnished to the division, to the nationwide mortgage licensing system and registry, or to any other governmental agency, including failing to disclose a criminal conviction or any disciplinary action taken by a state or federal regulatory agency.

2,676 Section 676. 224.77 (1) (b) of the statutes is repealed and recreated to read:

224.77 (1) (b) Make, in any manner, any materially false or deceptive statement or representation, including engaging in bait and switch advertising or falsely representing residential mortgage loan rates, points, or other financing terms or conditions.

2,677 Section 677. 224.77 (1) (c) and (d) of the statutes are amended to read:

224.77 (1) (c) Made Make a false, deceptive, or misleading promise relating to the services being offered or that influences, persuades, or induces a client to act to his or her injury or damage detriment.

(d) Pursued Pursue a continued and flagrant course of misrepresentation, or made make false promises, whether directly or through agents or advertising.

2,678 Section 678. 224.77 (1) (e) and (f) of the statutes are amended to read:

224.77 (1) (e) Acted Act for more than one party in a transaction without the knowledge and consent of all parties on whose behalf the mortgage banker, mortgage loan originator, or mortgage broker is acting.

(f) Accepted Accept a commission, money, or other thing of value for performing an act as a mortgage loan originator unless the payment is from a mortgage banker or mortgage broker who is registered under s. 224.72 (3) as employing the loan originator with whom the mortgage loan originator's license is associated, as identified in the records of the division at the time the act is performed.

2,679 Section 679. 224.77 (1) (fg) of the statutes is created to read:

224.77 (1) (fg) As a mortgage banker or mortgage broker, pay a commission, money, or other thing of value to any person for performing an act as a mortgage loan originator unless the mortgage loan originator's license is associated with the mortgage banker or mortgage broker in the records of the division at the time the act is performed.

2,680 Section 680. 224.77 (1) (g) of the statutes is amended to read:

224.77 (1) (g) As a mortgage loan originator, represented or attempted represent or attempt to represent a mortgage banker or mortgage broker other than the mortgage banker who is registered under s. 224.72 (3) as employing the loan originator or mortgage broker with whom the mortgage loan originator's license was associated, as identified in the records of the division at the time the representation or attempted representation occurs.

2,681 Section 681. 224.77 (1) (gd), (gh) and (gp) of the statutes are created to read:

224.77 (1) (gd) As a mortgage banker or mortgage broker, permit a person who is not licensed under this subchapter to act as a mortgage loan originator on behalf of the mortgage banker or mortgage broker.

(gh) As a mortgage banker or mortgage broker, permit a person whose mortgage loan originator license is not associated in the records of the division with the mortgage banker or mortgage broker to act as a mortgage loan originator on behalf of the mortgage banker or mortgage broker.

(gp) As a mortgage banker or mortgage broker, conduct business at or from a principal office or branch office that is not licensed under this subchapter.

2,682 Section 682. 224.77 (1) (h) to (L) of the statutes are amended to read:

224.77 (1) (h) Failed Fail, within a reasonable time, to account for or remit any moneys coming into the mortgage banker's, mortgage loan originator's, or mortgage broker's possession which that belong to another person.

(i) Demonstrated Demonstrate a lack of competency to act as a mortgage banker, mortgage loan originator , or mortgage broker in a way which that safeguards the interests of the public.

(j) Paid or offered Pay or offer to pay a commission, money, or other thing of value to any person for acts or services in violation of this subchapter.

(k) Violated Violate any provision of this subchapter, ch. 138, or any federal or state statute, rule, or regulation which that relates to practice as a mortgage banker, mortgage loan originator, or mortgage broker.

(L) Engaged Engage in conduct which that violates a standard of professional behavior which, through professional experience, has become established for mortgage bankers, mortgage loan originators, or mortgage brokers.

2,683 Section 683. 224.77 (1) (m) of the statutes is amended to read:

224.77 (1) (m) Engaged Engage in conduct, whether of the same or a different character than specified elsewhere in this section, which that constitutes improper, fraudulent, or dishonest dealing.

2,684 Section 684. 224.77 (1) (o) of the statutes is amended to read:

224.77 (1) (o) In the course of practice as a mortgage banker, mortgage loan originator, or mortgage broker, except in relation to housing designed to meet the needs of elderly individuals, treated treat a person unequally solely because of sex, race, color, handicap, sexual orientation, as defined in s. 111.32 (13m), religion, national origin, age, or ancestry, the person's lawful source of income, or the sex or marital status of the person maintaining a household.

2,685 Section 685. 224.77 (1) (p) of the statutes is amended to read:

224.77 (1) (p) Intentionally encouraged or discouraged encourage or discourage any person from purchasing or renting real estate on the basis of race.

2,686 Section 686. 224.77 (1) (q) of the statutes is amended to read:

224.77 (1) (q) Because of the age or location of the property or the race of the residential mortgage loan applicant, rather than because of the credit worthiness of the applicant and the condition of the property securing the loan:

1. Refused Refuse to negotiate, to offer, or to attempt to negotiate a land contract, residential mortgage loan or commitment for a residential mortgage loan, or refused refuse to find a residential mortgage loan.

2. Found a Find a residential mortgage loan or negotiated a negotiate a residential mortgage loan on terms less favorable than are usually offered.

2,687 Section 687. 224.77 (1) (r) of the statutes is repealed.