SB62: Bill Text

SB62,271,9 224.74 (1) Annual call reports; audits. (a) Annual call report. Except as provided in par. (b), each Each year, on a by the date specified by the division and in a the form required by the division, a nationwide mortgage licensing system and registry, each mortgage banker or, mortgage broker, and mortgage loan originator licensed under this subchapter shall submit to the division nationwide mortgage licensing system and registry an annual report relating to the mortgage banker's or mortgage broker's operations during its most recently completed fiscal year of condition, which shall contain such information as the nationwide mortgage licensing system and registry may require.

SB62,271,17 (b) Audit requirement. Each year, no later than 6 months following the end of its most recently completed fiscal year, a each 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.

SB62,272,6 (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 license issued 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.

SB62, s. 650 Section 650. 224.74 (2) (title) of the statutes is amended to read:

SB62,272,8 224.74 (2) (title) Examination and investigation.

SB62, s. 651 Section 651. 224.74 (2) (a) (title) of the statutes is repealed.

SB62, s. 652 Section 652. 224.74 (2) (a) of the statutes is renumbered 224.74 (2) (ag) (intro.) and amended to read:

SB62,272,16 224.74 (2) (ag) (intro.) The division may at any time, on its own motion or upon complaint, examine the conduct inquiries, investigations, and examinations of licensees under this subchapter, or of persons required to be licensed under or otherwise subject to the provisions of this subchapter, including doing any of the following:

SB62,272,22 1. Examining, accessing, receiving, or using any books of account, accounts, records, files, documents, or other information relating to the condition and or affairs of a mortgage banker, mortgage loan originator, or mortgage broker registered under this subchapter. The division shall prepare a report of each examination conducted under this section. As part of the examination or preparation of the report, the division may examine.

SB62,273,8 2. Interviewing or examining under oath any mortgage banker, mortgage loan originator, or mortgage broker, any of the members, officers, directors, agents, employees, contractors, or customers of the mortgage banker, mortgage loan originator, or mortgage broker. The division may require a mortgage banker, loan originator or mortgage broker who is examined under this paragraph to pay to the division a reasonable fee for the costs of conducting the examination. , or any other person whose testimony the division deems to be relevant. The division may direct, subpoena, or order the attendance of a person to provide testimony under this subdivision and may direct, subpoena, or order the person to produce books, accounts, records, files, and any other document the division deems relevant to the inquiry, investigation, or examination.

SB62, s. 653 Section 653. 224.74 (2) (ag) 3. and 4. of the statutes are created to read:

SB62,273,14 224.74 (2) (ag) 3. Direct or order any licensee under this subchapter to make or compile reports or other information, in a format directed by the division, that the division considers necessary to carry out any investigation or examination under this subchapter, including any accounting compilation or other loan transaction data, list, or information.

SB62,273,18 4. Examine, access, receive, and use any other records, documents, or other information that the division deems relevant to the inquiry, investigation, or examination, regardless of the location, possession, control, or custody of the records, documents, or information, including any of the following:

SB62,273,20 a. Criminal, civil, and administrative history information, including conviction information and nonconviction information to the extent permitted by law.

SB62,273,22 b. Personal history and experience information, including credit reports obtained from a consumer reporting agency, as defined in s. 100.54 (1) (c).

SB62, s. 654 Section 654. 224.74 (2) (ar) of the statutes is created to read:

SB62,274,10 224.74 (2) (ar) In making any investigation or examination authorized under this subchapter, the division may control access to any documents and records of the licensee or of any other person under investigation or examination. The division may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no person may remove or attempt to remove any of the documents and records except with the consent of the division or by court order. Unless the division has reasonable grounds to believe the documents and records have been or are at risk of being altered or destroyed for purposes of concealing a violation of this subchapter, the licensee or owner or custodian of the documents and records shall have access to the documents and records as necessary to conduct its ordinary business affairs.

SB62, s. 655 Section 655. 224.74 (2) (b) of the statutes is amended to read:

SB62,274,20 224.74 (2) (b) Confidentiality. Examination The division shall prepare a report for each investigation or examination conducted under this subsection. These reports, and correspondence regarding the these reports, are confidential, except that the division may release examination these reports and correspondence in connection with a disciplinary proceeding conducted by the division, a liquidation proceeding, or a criminal investigation or proceeding. In addition, any information from these reports or correspondence may be provided to the nationwide mortgage licensing system and registry and is not confidential to the extent specified in s. 224.728 (4) (b) and (c).

SB62, s. 656 Section 656. 224.74 (2) (c) of the statutes is created to read:

SB62,275,2 224.74 (2) (c) The division may require a mortgage banker, mortgage loan originator, or mortgage broker who is investigated or examined under this subsection to pay to the division a reasonable fee for the costs of conducting the investigation or examination. A mortgage banker, mortgage loan originator, or mortgage broker shall pay these costs to the division within 30 days after the division demands payment of these costs.

SB62, s. 657 Section 657. 224.74 (3) of the statutes is created to read:

SB62,275,5 224.74 (3) Additional division authority. To carry out the purposes of this section, the division may do any of the following:

SB62,275,8 (a) Retain attorneys, accountants, and other professionals and specialists as examiners, auditors, or investigators to conduct or assist in the conduct of investigations or examinations.

SB62,275,12 (b) Enter into agreements or relationships with other government officials or regulatory associations to improve efficiencies and reduce regulatory burden by sharing resources, standardized or uniform methods or procedures, and documents, records, or information obtained under this section.

SB62,275,15 (c) Use, hire, contract, or employ public or privately available analytical systems, methods, or software to examine or investigate any licensee or other person subject to investigation or examination.

SB62,275,17 (d) Accept and rely on investigation or examination reports made by other government officials, in this state or elsewhere.

SB62,275,20 (e) Accept audit reports made by an independent certified public accountant for the licensee or another person relevant to the investigation or examination and incorporate any such audit report into any report of the division.

SB62, s. 658 Section 658. 224.75 (title) of the statutes is amended to read:

SB62,275,23 224.75 (title) Record-keeping requirements for mortgage bankers and mortgage brokers licensees.

SB62, s. 659 Section 659. 224.75 (1) (a) of the statutes is amended to read:

SB62,276,5 224.75 (1) (a) Fee record system. A mortgage banker or mortgage broker shall establish and maintain a record system which shows all fees which a mortgage banker or mortgage broker charged a residential mortgage loan applicant or a mortgagor in connection with a residential mortgage loan. The record shall show the application or disposition of those fees.

SB62, s. 660 Section 660. 224.75 (1) (b) (intro.) of the statutes is amended to read:

SB62,276,9 224.75 (1) (b) Loan application record system. (intro.) A mortgage banker or mortgage broker shall establish and maintain a record system containing all of the following information for each residential mortgage loan application:

SB62, s. 661 Section 661. 224.75 (1) (b) 6. and 7. of the statutes are created to read:

SB62,276,11 224.75 (1) (b) 6. The name of the mortgage loan originator.

SB62,276,12 7. The loan amount.

SB62, s. 662 Section 662. 224.75 (1) (c) (intro.) of the statutes is amended to read:

SB62,276,17 224.75 (1) (c) Loan application documents. (intro.) A mortgage banker or mortgage broker shall maintain for each residential mortgage loan application all of the following documents, if used by the mortgage banker or mortgage broker in connection with the residential mortgage loan application file:

SB62, s. 663 Section 663. 224.75 (1) (d) of the statutes is renumbered 224.75 (1) (d) (intro.) and amended to read:

SB62,276,22 224.75 (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:

SB62,276,23 1. All correspondence relating to the loan.

SB62, s. 664 Section 664. 224.75 (1) (d) 2., 3., 4. and 5. of the statutes are created to read:

SB62,276,25 224.75 (1) (d) 2. All payments received from the borrower.

SB62,277,1 3. All charges assessed to the borrower's account.

SB62,277,2 4. All payments made by the mortgage banker on behalf of the borrower.

SB62,277,3 5. The unpaid balance on the borrower's account.

SB62, s. 665 Section 665. 224.75 (2) of the statutes is amended to read:

SB62,277,21 224.75 (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.

SB62, s. 666 Section 666. 224.75 (3) of the statutes is amended to read:

SB62,278,2 224.75 (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.

SB62,278,11 (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.

SB62, s. 667 Section 667. 224.75 (4) of the statutes is amended to read:

SB62,278,17 224.75 (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.

SB62, s. 668 Section 668. 224.75 (6) of the statutes is created to read:

SB62,278,25 224.75 (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.

SB62, s. 669 Section 669. 224.755 (title) of the statutes is repealed and recreated to read:

SB62,279,3 224.755 (title) Education and testing requirements for mortgage loan originators.

SB62, s. 670 Section 670. 224.755 of the statutes is renumbered 224.755 (5) and amended to read:

SB62,279,11 224.755 (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.

SB62, s. 671 Section 671. 224.755 (1), (2), (3) and (4) of the statutes are created to read:

SB62,279,16 224.755 (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:

SB62,279,17 (a) Three hours of federal law and regulations.

SB62,279,19 (b) Three hours of ethics, including instruction on fraud, consumer protection, and fair lending issues.

SB62,279,21 (c) Two hours of training related to lending standards for the nontraditional mortgage product marketplace.

SB62,279,25 (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:

SB62,280,1 (a) Three hours of federal law and regulations.

SB62,280,3 (b) Two hours of ethics, including instruction on fraud, consumer protection, and fair lending issues.

SB62,280,5 (c) Two hours of training related to lending standards for the nontraditional mortgage product marketplace.

SB62,280,9 (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.

SB62,280,11 (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:

SB62,280,14 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.

SB62,280,15 2. Offered through the Internet or another online or electronic medium.

SB62,280,16 3. Taken in another state.

SB62,280,24 (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.

SB62,281,5 (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).

SB62,281,9 (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.

SB62,281,12 (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).

SB62,281,16 (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.

SB62,281,20 (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.

SB62,281,23 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:

SB62,281,24 a. Ethics.

SB62,282,2 b. Federal and state law, regulations, and rules pertaining to mortgage origination.

SB62,282,5 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.

SB62,282,10 (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.

SB62,282,13 (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.

SB62,282,18 (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).

SB62, s. 672 Section 672. 224.76 of the statutes is amended to read:

SB62,283,5 224.76 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.