LRB-3646/1
ARG:wlj:jf
2007 - 2008 LEGISLATURE
February 21, 2008 - Introduced by Representatives Newcomer, Nass and Albers,
cosponsored by Senators Sullivan, Darling and Schultz. Referred to
Committee on Financial Institutions.
AB827,1,2
1An Act to amend 224.71 (1g) and 224.75 (3) (b) of the statutes;
relating to:
2mortgage bankers, mortgage brokers, and loan originators.
Analysis by the Legislative Reference Bureau
Under current law, a person may not act as a mortgage banker, mortgage
broker, or loan originator unless the person is registered as such with the Division
of Banking in the Department of Financial Institutions (division). A mortgage
banker is, with certain exceptions, a person who originates loans for itself, as payee
on the note evidencing the loan, or for another person; sells loans or interests in loans
to another person; or services loans or land contracts or provides escrow services. A
mortgage broker is, with certain exceptions, a person who, on behalf of a loan
applicant or an investor and for commission or other compensation, finds a loan or
negotiates a land contract, loan, or commitment for a loan. A loan originator is a
person who, on behalf of a mortgage banker or mortgage broker, finds a loan or
negotiates a land contract, loan, or commitment for a loan. State and federally
chartered financial institutions are excluded from the definitions of mortgage
banker and mortgage broker. For purposes of the statutes regulating mortgage
bankers, mortgage brokers, and loan originators, "loan" is defined as a loan secured
by a lien or mortgage, or equivalent security interest, on real property.
This bill changes this definition of "loan," altering the scope of the persons and
transactions that are subject to the statutes regulating mortgage bankers, mortgage
brokers, and loan originators. Under the bill, a "loan" is defined as a loan for
personal, family, or household purposes that is secured by a lien or mortgage, or
equivalent security interest, on real property located in this state. The definition of
"loan" also specifies that a loan secured by real property consisting of one to four
dwelling units, including individual condominium units, is a loan for household
purposes, but a loan made by a landlord to a tenant secured by leasehold
improvements is not.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB827, s. 1
1Section
1. 224.71 (1g) of the statutes is amended to read:
AB827,2,72
224.71
(1g) "Loan" means a loan
for personal, family, or household purposes
3that is secured by a lien or mortgage, or equivalent security interest, on real property
4located in this state. For purposes of this subsection, a loan secured by real property
5consisting of 1 to 4 dwelling units, including individual condominium units, is a loan
6for household purposes, but a loan made by a landlord to a tenant as described in sub.
7(3) (b) 4. is not a loan for household purposes.
AB827, s. 2
8Section
2. 224.75 (3) (b) of the statutes is amended to read:
AB827,2,189
224.75
(3) (b)
Appraisal report. If a mortgage banker or mortgage broker
10charges a loan applicant a separate fee for an appraisal report, the appraisal report
11shall consist, at a minimum, of a written statement indicating the appraiser's
12opinion of the value of the property appraised for mortgage loan purposes, the basis
13for that opinion and the name of the person who conducted the appraisal. If
14requested by a loan applicant, a mortgage banker or mortgage broker shall provide
15the loan applicant with a copy of any written appraisal report held by the mortgage
16banker or mortgage broker, if the loan applicant paid a fee for the report
and the
17report relates to residential real estate that the loan applicant owns or has agreed
18to purchase.
AB827,3,2
1(1) This act first applies to loans originated on the effective date of this
2subsection.
