224.74
224.74
Department's review of the operations of a loan solicitor, loan originator or mortgage banker. 224.74(1)
(1)
Audit of mortgage banker's or loan solicitor's operations. A mortgage banker or loan solicitor shall submit a copy of an annual audit of the mortgage banker's or loan solicitor's operations to the department within 20 days after the audit is completed.
224.74(2)(a)(a)
Conduct of examination and preparation of report. The department 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 registered under this subchapter. The department shall prepare a report of each examination conducted under this section. As part of the examination or preparation of the report, the department may examine under oath any of the members, officers, directors, agents, employes or customers of the mortgage banker, loan originator or loan solicitor. The department may require a mortgage banker, loan originator or loan solicitor who is examined under this paragraph to pay to the department a 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.
224.74(2)(b)
(b)
Confidentiality. Examination reports and correspondence regarding the reports are confidential, except that the secretary may release examination reports and correspondence in connection with a disciplinary proceeding conducted by the department, a liquidation proceeding or a criminal investigation or proceeding.
224.74 History
History: 1987 a. 359;
1987 a. 403 ss.
182,
256; Stats. 1987 s. 440.74;
1991 a. 39;
1995 a. 27 s.
6595; Stats. 1995 s. 224.74.
224.75
224.75
Record-keeping requirements for mortgage bankers and loan solicitors. 224.75(1)
(1)
Required records; loan documents. 224.75(1)(a)(a)
Fee record system. A mortgage banker or loan solicitor shall establish and maintain a record system which shows all fees which a mortgage banker charged a mortgage loan applicant and the application or disposition of those fees.
224.75(1)(b)
(b)
Loan application record system. A mortgage banker or loan solicitor shall establish and maintain a record system containing all of the following information for each mortgage loan application:
224.75(1)(b)4.
4. The disposition of the application and the reason for the particular disposition.
224.75(1)(c)
(c)
Loan application documents. A mortgage banker or loan solicitor shall maintain for each mortgage loan application all of the following documents, if used by the mortgage banker or loan solicitor in connection with the mortgage loan application file:
224.75(1)(c)9.
9. Any other documents, records or forms shown to or signed by a loan applicant.
224.75(2)
(2) Period of record retention. A mortgage banker or loan solicitor shall keep for at least 25 months copies of all deposit receipts, canceled checks, trust account records, the records which a mortgage banker or loan solicitor maintains under
sub. (1) (c) and other relevant documents or correspondence received or prepared by the mortgage banker or loan solicitor in connection with a loan or loan application. The retention period begins on the date the loan is closed or, if the loan is not closed, the date of loan application. The mortgage banker or loan solicitor shall make the records available for inspection and copying by the department. If the records are not kept within this state, the mortgage banker or loan solicitor shall, upon request of the department, promptly send exact and complete copies of requested records to the department.
224.75(3)
(3) Contents of credit and appraisal reports. 224.75(3)(a)(a)
Credit report. If a mortgage banker or loan solicitor charges a 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.
224.75(3)(b)
(b)
Appraisal report. If a mortgage banker or loan solicitor charges a 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 mortgage loan purposes, the basis for that opinion and the name of the person who conducted the appraisal.
224.75(4)
(4) Responsibility for forms. A mortgage banker or loan solicitor is responsible for the preparation and correctness of all entries on forms, documents and records which are under the mortgage banker's or loan solicitor's control and which are not dependent on information provided by the loan applicant or a 3rd party.
224.75(5)
(5) Accounting practices. A mortgage banker or loan solicitor shall maintain its books and records in accordance with generally accepted accounting principles.
224.75 History
History: 1987 a. 359;
1987 a. 403 s.
182; Stats. 1987 s. 440.75;
1995 a. 27 s.
6596; Stats. 1995 s. 224.75.
224.76
224.76
Mortgage banker, loan originator and loan solicitor trust accounts. A mortgage banker, loan originator or loan solicitor 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 loan solicitor may 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 which is federally chartered. The mortgage banker or loan solicitor shall notify the department of the location of its trust accounts and shall authorize the department to examine and audit any trust account as the department considers it necessary.
224.76 History
History: 1987 a. 359;
1987 a. 403 s.
182; Stats. 1987 s. 440.76;
1995 a. 27 s.
6597; Stats. 1995 s. 224.76.
224.77
224.77
Discipline of mortgage bankers, loan originators and loan solicitors. 224.77(1)
(1)
Prohibited conduct. The department may revoke, suspend or limit the certificate of registration of a mortgage banker, loan originator or loan solicitor, or reprimand a mortgage banker, loan originator or loan solicitor, if it finds that the mortgage banker, loan originator or loan solicitor did any of the following:
224.77(1)(a)
(a) Made a material misstatement in an application for registration, or in information furnished to the department.
224.77(1)(b)
(b) Made a substantial misrepresentation in the course of practice injurious to one or more of the parties to a transaction.
224.77(1)(c)
(c) Made a false promise that influences, persuades or induces a client to act to his or her injury or damage.
224.77(1)(d)
(d) Pursued a continued and flagrant course of misrepresentation, or made false promises, whether directly or through agents or advertising.
224.77(1)(e)
(e) Acted for more than one party in a transaction without the knowledge and consent of all parties on whose behalf the mortgage banker, loan originator or loan solicitor is acting.
224.77(1)(f)
(f) Accepted a commission, money or other thing of value for performing an act as a loan originator unless the payment is from a mortgage banker who is registered under
s. 224.72 (3) as employing the loan originator.
224.77(1)(g)
(g) As a loan originator, represented or attempted to represent a mortgage banker other than the mortgage banker who is registered under
s. 224.72 (3) as employing the loan originator.
224.77(1)(h)
(h) Failed, within a reasonable time, to account for or remit any moneys coming into the mortgage banker's, loan originator's or loan solicitor's possession which belong to another person.
224.77(1)(i)
(i) Demonstrated a lack of competency to act as a mortgage banker, loan originator or loan solicitor in a way which safeguards the interests of the public.
224.77(1)(j)
(j) Paid or offered to pay a commission, money or other thing of value to any person for acts or services in violation of this subchapter.
224.77(1)(k)
(k) Violated any provision of this subchapter,
ch. 138 or any federal or state statute, rule or regulation which relates to practice as a mortgage banker, loan originator or loan solicitor.
224.77(1)(L)
(L) Engaged in conduct which violates a standard of professional behavior which, through professional experience, has become established for mortgage bankers, loan originators or loan solicitors.
224.77(1)(m)
(m) Engaged in conduct, whether of the same or a different character than specified elsewhere in this section, which constitutes improper, fraudulent or dishonest dealing.
224.77(1)(o)
(o) In the course of practice as a mortgage banker, loan originator or loan solicitor, except in relation to housing designed to meet the needs of elderly individuals, treated 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.
224.77(1)(p)
(p) Intentionally encouraged or discouraged any person from purchasing or renting real estate on the basis of race.
224.77(1)(q)
(q) Because of the age or location of the property or the race of the loan applicant, rather than because of the credit worthiness of the applicant and the condition of the property securing the loan:
224.77(1)(q)1.
1. Refused to negotiate, to offer or to attempt to negotiate a land contract, loan or commitment for a loan, or refused to find a loan.
224.77(1)(q)2.
2. Found a loan or negotiated a loan on terms less favorable than are usually offered.
224.77(2)
(2) Conduct of officers, directors and others. The department may revoke, suspend or limit a certificate of registration issued under this subchapter or reprimand a mortgage banker or loan solicitor registered under this subchapter, if a director, officer, trustee, partner or member of the mortgage banker or loan solicitor or a person who has a financial interest in or is in any way connected with the operation of the mortgage banker's or loan solicitor's business is guilty of an act or omission which would be cause for refusing to issue a certificate of registration to that individual.
224.77(3)(a)(a)
Orders to prevent or correct actions. The department may issue general and special orders necessary to prevent or correct actions by a mortgage banker, loan originator or loan solicitor that constitute cause under this section for revoking, suspending or limiting a certificate of registration.
224.77(3)(b)
(b)
Types of special orders. Special orders may direct a mortgage banker, loan originator or loan solicitor to cease and desist from engaging in a particular activity or may direct the mortgage banker, loan originator or loan solicitor to refund or remit to a loan applicant or borrower amounts that the mortgage banker, loan originator or loan solicitor got from actions which constitute cause under this section for revoking, suspending or limiting a certificate of registration.
224.77(3)(c)
(c)
Judicial review. Orders of the department are subject to review as provided in
ch. 227.
224.77(4)
(4) Period of disciplinary action; ineligibility for registration. 224.77(4)(a)(a)
Period. Except as provided in
par. (b), the department shall determine in each case the period that a revocation, suspension or limitation of a certificate of registration is effective.
224.77(4)(b)1.1. Except as provided in
subd. 2., if the department revokes a certificate of registration under
sub. (1), the person is not eligible for a certificate of registration until the expiration of a period which may not exceed 2 years after the effective date of the revocation.
224.77(4)(b)2.
2. If the department revokes a certificate of registration under
sub. (1) (p) or
(q), the person is not eligible for a certificate of registration until 5 years after the effective date of the revocation.
224.77(5)
(5) Penalties for certain discriminatory conduct. 224.77(5)(a)(a) Mandatory revocation or suspension. Notwithstanding
sub. (1) (intro.) and
(4), if the department finds that a mortgage banker, loan originator or loan solicitor has violated
sub. (1) (p) or
(q), the department shall:
224.77(5)(a)1.
1. For the first offense, suspend the registration of the mortgage banker, loan originator or loan solicitor for not less than 90 days.
224.77(5)(a)2.
2. For the 2nd offense, revoke the registration of the mortgage banker, loan originator or loan solicitor.
224.77 History
History: 1987 a. 359;
1987 a. 403 ss.
182,
256; Stats. 1987 s. 440.77;
1993 a. 112;
1995 a. 27 ss.
6598 to
6600; Stats. 1995 s. 224.77.
224.78
224.78
Fee splitting. A mortgage banker, loan originator or loan solicitor may not pay a person who is not registered under this subchapter a commission, money or other thing of value for performing an act as a mortgage banker, loan originator or loan solicitor.
224.78 History
History: 1987 a. 359;
1987 a. 403 s.
182; Stats. 1987 s. 440.78;
1995 a. 27 s.
6601; Stats. 1995 s. 224.78.
224.80
224.80
Penalties and private cause of action. 224.80(1)
(1)
Penalties. A person who violates
s. 224.72 (1m) may be fined not more than $1,000 or imprisoned for not more than 6 months or both. The district attorney of the county where the violation occurs shall enforce the penalty under this subsection on behalf of the state.
224.80(2)
(2) Private cause of action. A person who is aggrieved by an act which is committed by a mortgage banker, loan originator or loan solicitor and which is described in
s. 224.77 (1) may recover all of the following in a private action:
224.80(2)(a)
(a) An amount equal to the greater of the following:
224.80(2)(a)1.
1. Twice the amount of the cost of loan origination connected with the transaction, except that the liability under this subdivision may not be less than $100 nor greater than $1,000 for each violation.
224.80(2)(a)2.
2. The actual damages, including any incidental and consequential damages, which the person sustained because of the violation.
224.80(2)(b)
(b) The aggregate amount of costs and expenses which the court determines were reasonably incurred by the person in connection with the action, together with reasonable attorney fees, notwithstanding
s. 814.04 (1).
224.80 History
History: 1987 a. 359;
1987 a. 403 ss.
182,
256; Stats. 1987 s. 440.80;
1989 a. 45;
1995 a. 27 s.
6602; Stats. 1995 s. 224.80.
224.81
224.81
Limitation on actions for commissions and other compensation. A person who is engaged in the business or acting in the capacity of a mortgage banker, loan originator or loan solicitor in this state may not bring or maintain an action in this state to collect a commission, money or other thing of value for performing an act as a mortgage banker, loan originator or loan solicitor without alleging and proving that the person was registered under this subchapter as a mortgage banker, loan originator or loan solicitor when the alleged cause of action arose.
224.81 History
History: 1987 a. 359;
1987 a. 403 s.
182; Stats. 1987 s. 440.81;
1995 a. 27 s.
6603; Stats. 1995 s. 224.81.
224.82
224.82
Compensation presumed. In a prosecution arising from a violation of this subchapter, proof that a person acted as a mortgage banker, loan originator or loan solicitor is sufficient, unless rebutted, to establish that compensation was received by, or promised to, that person.
224.82 History
History: 1987 a. 359;
1987 a. 403 s.
182; Stats. 1987 s. 440.82;
1995 a. 27 s.
6604; Stats. 1995 s. 224.82.
224.85
224.85
Applicability of subchapter to certain nonprofit corporations. 224.85(1)(a)
(a) "Community-based organization" is an organization that meets the definition in
s. 16.30 (1) and that is described in section
501 (c) (3) of the internal revenue code and which is exempt from taxation under section
501 (a) of the internal revenue code.
224.85(2)
(2) Except for registration under
s. 224.72 (1m),
(2),
(5) and
(7) and discipline under
s. 224.77 (1) (a) and
(4), this subchapter does not apply to a mortgage banker, loan originator or loan solicitor that is a community-based organization or a housing authority that provides services to low-income individuals directly related to housing assistance.
