Bill Text: FL H0823 | 2011 | Regular Session | Comm Sub

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Bill Title: Loan Processing

Spectrum: Slight Partisan Bill (? 2-1)

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [H0823 Detail]

Download: Florida-2011-H0823-Comm_Sub.html

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CS/CS/HB 823

1	A bill to be entitled
2	An act relating to loan processing; amending s. 494.001,
3	F.S.; creating and revising definitions; deleting a
4	redundant definition; amending s. 494.0011, F.S.;
5	specifying rulemaking powers of the Financial Services
6	Commission; amending s. 494.00255, F.S.; including in-
7	house loan processors in disciplinary provisions; amending
8	s. 494.00331, F.S.; providing that specified provisions do
9	not apply to a licensed contract loan processor who has on
10	file with the office a declaration of intent to act solely
11	as a contract loan processor; deleting a definition;
12	providing restrictions on employment of persons acting as
13	in-house loan processors; amending s. 494.0035, F.S.;
14	clarifying provisions concerning operation of mortgage
15	brokers; amending s. 494.0038, F.S.; revising provisions
16	relating to disclosure of settlement charges and loan
17	terms; amending s. 494.00421, F.S.; revising an agency
18	reference in the mortgage broker agreement; providing that
19	a borrower may contact the Office of Financial Regulation
20	rather than the Department of Financial Services regarding
21	any complaints against a loan originator; amending s.
22	494.00612, F.S.; requiring that in order to renew a
23	mortgage lender license a mortgage lender must authorize
24	the Nationwide Mortgage Licensing System and Registry to
25	obtain an independent credit report on each of the
26	mortgage lender's control persons; amending s. 494.0067,
27	F.S.; requiring each mortgage lender to submit certain
28	reports to the registry as may be required; providing an
29	effective date.
30
31	Be It Enacted by the Legislature of the State of Florida:
32
33	Section 1.  Subsections (5) through (9), (10) through (14),
34	(15) through (24), and (26) through (34) of section 494.001,
35	Florida Statutes, are renumbered as subsections (6) through
36	(10), (12) through (16), (18) through (27), and (28) through
37	(36), respectively, new subsections (5), (11), and (17) are
38	added to that section, and present subsections (14), (25), and
39	(26) of that section are amended, to read:
40	494.001  Definitions.-As used in ss. 494.001-494.0077, the
41	term:
42	(5)  "Contract loan processor" means an individual who is
43	licensed under part II of this chapter as a loan originator, who
44	is an independent contractor for a mortgage broker or mortgage
45	lender, and who engages only in loan processing.
46	(11)  "In-house loan processor" means an individual who is
47	an employee of a mortgage broker or a mortgage lender who
48	engages only in loan processing.
49	(16)(14)  "Loan originator" means an individual who,
50	directly or indirectly, solicits or offers to solicit a mortgage
51	loan, accepts or offers to accept an application for a mortgage
52	loan, negotiates or offers to negotiate the terms or conditions
53	of a new or existing mortgage loan on behalf of a borrower or
54	lender, processes a mortgage loan application, or negotiates or
55	offers to negotiate the sale of an existing mortgage loan to a
56	noninstitutional investor for compensation or gain. The term
57	includes an individual who is required to be licensed as a loan
58	originator under the activities of a loan originator as that
59	term is defined in the S.A.F.E. Mortgage Licensing Act of 2008,
60	and an individual acting as a loan originator pursuant to that
61	definition is acting as a loan originator for purposes of this
62	definition. The term does not include an employee of a mortgage
63	broker or mortgage lender whose duties are limited to who
64	performs only administrative or clerical tasks, including
65	quoting available interest rates, physically handling a
66	completed application form, or transmitting a completed
67	application form to a lender on behalf of a prospective
68	borrower.
69	(17)  "Loan processing" means:
70	(a)  Receiving, collecting, distributing, and analyzing
71	information common for the processing of a mortgage loan; or
72	(b)  Communicating with a consumer to obtain information
73	necessary for the processing of a mortgage loan if such
74	communication does not include offering or negotiating loan
75	rates or terms, or counseling consumers about residential
76	mortgage loan rates or terms.
77	(25)  "Person" has the same meaning as in s. 1.01.
78	(28)(26)  "Principal loan originator" means the licensed
79	loan originator in charge of, and responsible for, the operation
80	of a mortgage lender or mortgage broker, including all of the
81	activities of the mortgage lender's or mortgage broker's loan
82	originators, in-house loan processors, and branch managers,
83	whether employees or independent contractors.
84	Section 2.  Subsection (2) of section 494.0011, Florida
85	Statutes, is amended to read:
86	494.0011  Powers and duties of the commission and office.-
87	(2)  To administer ss. 494.001-494.0077, The commission may
88	adopt rules to administer parts I, II, and III of this chapter,
89	including rules:
90	(a)  Requiring electronic submission of any forms,
91	documents, or fees required by this act.
92	(b)  Relating to compliance with the S.A.F.E. Mortgage
93	Licensing Act of 2008, including rules to:
94	1.  Require loan originators, mortgage brokers, mortgage
95	lenders, and branch offices to register through the registry.
96	2.  Require the use of uniform forms that have been
97	approved by the registry, and any subsequent amendments to such
98	forms if the forms are substantially in compliance with the
99	provisions of this chapter. Uniform forms that the commission
100	may adopt include, but are not limited to:
101	a.  Uniform Mortgage Lender/Mortgage Broker Form, MU1.
102	b.  Uniform Mortgage Biographical Statement & Consent Form,
103	MU2.
104	c.  Uniform Mortgage Branch Office Form, MU3.
105	d.  Uniform Individual Mortgage License/Registration &
106	Consent Form, MU4.
107	3.  Require the filing of forms, documents, and fees in
108	accordance with the requirements of the registry.
109	4.  Prescribe requirements for amending or surrendering a
110	license or other activities as the commission deems necessary
111	for the office's participation in the registry.
112	5.  Prescribe procedures that allow a licensee to challenge
113	information contained in the registry.
114	6.  Prescribe procedures for reporting violations of this
115	chapter and disciplinary actions on licensees to the registry.
116	(c)  Establishing time periods during which a loan
117	originator, mortgage broker, or mortgage lender license
118	applicant under part II or part III is barred from licensure due
119	to prior criminal convictions of, or guilty or nolo contendere
120	pleas by, any of the applicant's control persons, regardless of
121	adjudication.
122	1.  The rules must provide:
123	a.  Permanent bars for felonies involving fraud,
124	dishonesty, breach of trust, or money laundering;
125	b.  A 15-year disqualifying period for felonies involving
126	moral turpitude;
127	c.  A 7-year disqualifying period for all other felonies;
128	and
129	d.  A 5-year disqualifying period for misdemeanors
130	involving fraud, dishonesty, or any other act of moral
131	turpitude.
132	2.  The rules may provide for an additional waiting period
133	due to dates of imprisonment or community supervision, the
134	commitment of multiple crimes, and other factors reasonably
135	related to the applicant's criminal history.
136	3.  The rules may provide for mitigating factors for crimes
137	identified in sub-subparagraph 1.b. However, the mitigation may
138	not result in a period of disqualification less than 7 years.
139	The rule may not mitigate the disqualifying periods in sub-
140	subparagraphs 1.a., 1.c., and 1.d.
141	4.  An applicant is not eligible for licensure until the
142	expiration of the disqualifying period set by rule.
143	5.  Section 112.011 is not applicable to eligibility for
144	licensure under this part.
145	Section 3.  Subsections (3), (4), (5), and (6) of section
146	494.00255, Florida Statutes, are amended, and paragraph (m) of
147	subsection (1) is reenacted, to read:
148	494.00255  Administrative penalties and fines; license
149	violations.-
150	(1)  Each of the following acts constitutes a ground for
151	which the disciplinary actions specified in subsection (2) may
152	be taken against a person licensed or required to be licensed
153	under part II or part III of this chapter:
154	(m)  In any mortgage transaction, violating any provision
155	of the federal Real Estate Settlement Procedures Act, as
156	amended, 12 U.S.C. ss. 2601 et seq.; the federal Truth in
157	Lending Act, as amended, 15 U.S.C. ss. 1601 et seq.; or any
158	regulations adopted under such acts.
159	(3)  A mortgage broker or mortgage lender, as applicable,
160	is subject to the disciplinary actions specified in subsection
161	(2) for a violation of subsection (1) by:
162	(a)  A control person of the mortgage broker or mortgage
163	lender; or
164	(b)  A loan originator employed by or contracting with the
165	mortgage broker or mortgage lender; or
166	(c)  An in-house loan processor who is an employee of the
167	mortgage broker or mortgage lender.
168	(4)  A principal loan originator of a mortgage broker is
169	subject to the disciplinary actions specified in subsection (2)
170	for violations of subsection (1) by a loan originator or an in-
171	house loan processor in the course of an association with the
172	mortgage broker if there is a pattern of repeated violations by
173	the loan originator or in-house loan processor or if the
174	principal loan originator has knowledge of the violations.
175	(5)  A principal loan originator of a mortgage lender is
176	subject to the disciplinary actions specified in subsection (2)
177	for violations of subsection (1) by a loan originator or an in-
178	house loan processor in the course of an association with a
179	mortgage lender if there is a pattern of repeated violations by
180	the loan originator or in-house loan processor or if the
181	principal loan originator has knowledge of the violations.
182	(6)  A branch manager is subject to the disciplinary
183	actions specified in subsection (2) for violations of subsection
184	(1) by a loan originator or an in-house loan processor in the
185	course of an association with the mortgage broker or mortgage
186	lender if there is a pattern of repeated violations by the loan
187	originator or in-house loan processor or if the branch manager
188	has knowledge of the violations.
189	Section 4.  Section 494.00331, Florida Statutes, is amended
190	to read:
191	494.00331  Loan originator and loan processor employment.-
192	(1)  LOAN ORIGINATORS.-An individual may not act as a loan
193	originator unless he or she is an employee of, or an independent
194	contractor for, a mortgage broker or a mortgage lender, and may
195	not be employed by or contract with more than one mortgage
196	broker or mortgage lender, or either simultaneously.
197	(2)  CONTRACT LOAN PROCESSORS.-Subsection (1) However, this
198	provision does not apply to a contract loan processor who has a
199	declaration of intent to act solely as a contract loan processor
200	on file with the office. The declaration of intent must be on a
201	form as prescribed by commission rule any licensed loan
202	originator who acts solely as a loan processor and contracts
203	with more than one mortgage broker or mortgage lender, or either
204	simultaneously.
205	(2)  For purposes of this section, the term "loan
206	processor" means an individual who is licensed as a loan
207	originator who engages only in:
208	(a)  The receipt, collection, distribution, and analysis of
209	information common for the processing or underwriting of a
210	residential mortgage loan; or
211	(b)  Communication with consumers to obtain the information
212	necessary for the processing or underwriting of a loan, to the
213	extent that such communication does not include offering or
214	negotiating loan rates or terms or does not include counseling
215	consumers about residential mortgage loan rates or terms.
216	(3)  A person may not act as a loan processor unless the
217	person is licensed as a loan originator under this chapter and
218	has on file with the office a declaration of intent to engage
219	solely in loan processing. The declaration of intent must be on
220	such form as prescribed by the commission by rule.
221	(a)(4)  A loan originator that currently has a declaration
222	of intent to engage solely in loan processing on file with the
223	office may withdraw his or her declaration of intent to engage
224	solely in loan processing. The withdrawal of declaration of
225	intent must be on such form as prescribed by commission rule.
226	(b)(5)  A declaration of intent or a withdrawal of
227	declaration of intent is effective upon receipt by the office.
228	(c)(6)  The fee earned by a contract loan processor may be
229	paid to the company that employs the loan processor without
230	violating the restriction in s. 494.0025(8)(7) requiring fees or
231	commissions to be paid to a licensed mortgage broker or mortgage
232	lender or a person exempt from licensure under this chapter.
233	(3)  IN-HOUSE LOAN PROCESSORS.-An individual may not act as
234	an in-house loan processor unless he or she is an employee of a
235	mortgage broker or a mortgage lender and may not be employed by
236	more than one mortgage broker or mortgage lender, or either,
237	simultaneously. An in-house loan processor must work at the
238	direction of and be subject to the supervision and instruction
239	of a loan originator licensed under this part.
240	Section 5.  Subsection (1) of section 494.0035, Florida
241	Statutes, is amended to read:
242	494.0035  Principal loan originator and branch manager for
243	mortgage broker.-
244	(1)  Each mortgage broker must be operated by a principal
245	loan originator who shall have full charge, control, and
246	supervision of the mortgage broker business. The principal loan
247	originator must have been licensed as a loan originator for at
248	least 1 year before being designated as the principal loan
249	originator, or must demonstrate to the satisfaction of the
250	office that he or she has been actively engaged in a mortgage-
251	related mortgage broker-related business for at least 1 year
252	before being designated as a principal loan originator. Each
253	mortgage broker must keep the office informed of the person
254	designated as the principal loan originator as prescribed by
255	commission rule. If the designation is inaccurate, the mortgage
256	broker business shall be deemed to be operated under the full
257	charge, control, and supervision of each officer, director, or
258	ultimate equitable owner of a 10-percent or greater interest in
259	the mortgage broker, or any other person in a similar capacity.
260	A loan originator may not be a principal loan originator for
261	more than one mortgage broker at any given time.
262	Section 6.  Paragraph (c) of subsection (3) of section
263	494.0038, Florida Statutes, is amended to read:
264	494.0038  Loan origination and mortgage broker fees and
265	disclosures.-
266	(3)  At the time a written mortgage broker agreement is
267	signed by the borrower or forwarded to the borrower for
268	signature, or at the time the mortgage broker business accepts
269	an application fee, credit report fee, property appraisal fee,
270	or any other third-party fee, but at least 3 business days
271	before execution of the closing or settlement statement, the
272	mortgage broker shall disclose in writing to any applicant for a
273	mortgage loan the following information:
274	(c)  A good faith estimate that discloses settlement
275	charges and loan terms, signed and dated by the borrower, which
276	discloses the total amount of each of the fees the borrower may
277	reasonably expect to pay if the loan is closed, including, but
278	not limited to, fees earned by the mortgage broker, lender fees,
279	third-party fees, and official fees, together with the terms and
280	conditions for obtaining a refund of such fees, if any.
281	1.  Any amount collected in excess of the actual cost shall
282	be returned within 60 days after rejection, withdrawal, or
283	closing.
284	2.  At the time a good faith estimate is provided to the
285	borrower, the loan originator must identify in writing an
286	itemized list that provides the recipient of all payments
287	charged the borrower, which, except for all fees to be received
288	by the mortgage broker, may be disclosed in generic terms, such
289	as, but not limited to, paid to lender, appraiser, officials,
290	title company, or any other third-party service provider. This
291	requirement does not supplant or is not a substitute for the
292	written mortgage broker agreement described in subsection (1).
293	The disclosure required under this subparagraph must be signed
294	and dated by the borrower.
295	Section 7.  Paragraph (a) of subsection (7) of section
296	494.00421, Florida Statutes, is amended to read:
297	494.00421  Fees earned upon obtaining a bona fide
298	commitment.-Notwithstanding the provisions of ss. 494.001-
299	494.0077, any mortgage broker which contracts to receive a loan
300	origination fee from a borrower upon obtaining a bona fide
301	commitment shall accurately disclose in the mortgage broker
302	agreement:
303	(7)(a)  The following statement, in at least 12-point
304	boldface type immediately above the signature lines for the
305	borrowers:
306	"You are entering into a contract with a mortgage broker to
307	obtain a bona fide mortgage loan commitment under the same terms
308	and conditions as stated hereinabove or in a separate executed
309	good faith estimate form. If the mortgage broker obtains a bona
310	fide commitment under the same terms and conditions, you will be
311	obligated to pay the loan origination fees even if you choose
312	not to complete the loan transaction. If the provisions of s.
313	494.00421, Florida Statutes, are not met, the loan origination
314	fee can only be earned upon the funding of the mortgage loan.
315	The borrower may contact the Office of Financial Regulation
316	Department of Financial Services, Tallahassee, Florida,
317	regarding any complaints that the borrower may have against the
318	loan originator. The telephone number of the office department
319	is: ...(insert telephone number)...."
320	Section 8.  Paragraph (e) of subsection (1) of section
321	494.00612, Florida Statutes, is amended to read:
322	494.00612  Mortgage lender license renewal.-
323	(1)  In order to renew a mortgage lender license, a
324	mortgage lender must:
325	(e)  Authorize the registry to obtain an independent credit
326	report on each of the mortgage lender's control persons lender
327	from a consumer reporting agency, and transmit or provide access
328	to the report to the office. The cost of the credit report shall
329	be borne by the licensee.
330	Section 9.  Subsection (13) is added to section 494.0067,
331	Florida Statutes, to read:
332	494.0067  Requirements of mortgage lenders.-
333	(13)  Each mortgage lender shall submit to the registry
334	reports of condition which are in a form and which contain such
335	information as the registry may require.
336	Section 10.  This act shall take effect July 1, 2011.

CODING: Words stricken are deletions; words underlined are additions.