The Florida Senate

494.001  Definitions.

494.0011  Powers and duties of the commission and office.

494.0012  Investigations; complaints; examinations.

494.00125  Confidentiality of information relating to investigations and examinations.

494.0013  Injunction to restrain violations.

494.0014  Cease and desist orders; refund orders.

494.0015  Evidence; examiner's worksheets, investigative reports, other related documents.

494.0016  Books, accounts, and records; maintenance; examinations by the office.

494.00165  Prohibited advertising; record requirements.

494.0017  Regulatory Trust Fund.

494.0018  Penalties.

494.0019  Liability in case of unlawful transaction.

494.002  Statutory or common-law remedies.

494.0021  Public records.

494.0022  Applicability of act.

494.0023  Conflicting interest.

494.0024  Waiver.

494.0025  Prohibited practices.

494.0026  Disposition of insurance proceeds.

494.0028  Arbitration.

494.0029  Mortgage business schools.

494.00295  Professional education.

494.001  Definitions.--As used in ss. 494.001-494.0077, the term:

(1)  "Act as a correspondent mortgage lender" means to make a mortgage loan.

(2)  "Act as a loan originator" means being employed by a mortgage lender or correspondent mortgage lender, for compensation or gain or in the expectation of compensation or gain, to negotiate or offer to negotiate the making of a mortgage loan. A person whose activities are ministerial and clerical, which may include quoting available interest rates or loan terms and conditions, is not acting as a loan originator.

(3)  "Act as a mortgage broker" means, for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly, accepting or offering to accept an application for a mortgage loan, soliciting or offering to solicit a mortgage loan on behalf of a borrower, negotiating or offering to negotiate the terms or conditions of a mortgage loan on behalf of a lender, or negotiating or offering to negotiate the sale of an existing mortgage loan to a noninstitutional investor. An employee whose activities are ministerial and clerical, which may include quoting available interest rates or loan terms and conditions, is not acting as a mortgage broker.

(4)  "Act as a mortgage lender" means to make a mortgage loan or to service a mortgage loan for others or, for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly, to sell or offer to sell a mortgage loan to a noninstitutional investor.

(5)  "Associate" means a person required to be licensed as a mortgage broker under this chapter who is employed by or acting as an independent contractor for a mortgage brokerage business or a person acting as an independent contractor for a mortgage lender or correspondent mortgage lender. The use of the term associate, in contexts other than in the administration of ss. 494.003-494.0077, shall not be construed to impose or effect the common-law or statutory liability of the employer.

(6)  "Branch broker" means the licensee in charge of, and responsible for, the operation of a branch office of a mortgage brokerage business.

(7)  "Branch office" means a location, other than a licensee's principal place of business:

(a)  The address of which appears on business cards, stationery, or advertising used by the licensee in connection with business conducted under this chapter;

(b)  At which the licensee's name, advertising or promotional materials, or signage suggest that mortgage loans are originated, negotiated, funded, or serviced; or

(c)  Which, due to the actions of any employee or associate of the licensee, may be construed by the public as a branch office of the licensee where mortgage loans are originated, negotiated, funded, or serviced.

(8)  "Commission" means the Financial Services Commission.

(9)  "Office" means the Office of Financial Regulation of the commission.

(10)  "Employed" means engaged in the service of another for salary or wages subject to withholding, FICA, or other lawful deductions by the employer as a condition of employment.

(11)  "Employee" means a natural person who is employed and who is subject to the right of the employer to direct and control the actions of the employee.

(12)  "Good standing" means that the registrant or licensee, or a subsidiary or affiliate thereof, is not, at the time of application, being penalized for one or more of the following disciplinary actions by a licensing authority of any state, territory, or country:

(a)  Revocation of a license or registration.

(b)  Suspension of a license or registration.

(c)  Probation of a license or registration for an offense involving fraud, dishonest dealing, or an act of moral turpitude.

(13)  "Institutional investor" means a state or national bank, state or federal savings and loan association or savings bank, real estate investment trust, insurance company, real estate company, accredited investor as defined in 17 C.F.R. ss. 230.501 et seq., business licensed under ss. 494.001-494.0077, or other business entity that invests in mortgage loans, including a secondary mortgage market institution including, without limitation, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Government National Mortgage Association, conduits, investment bankers, and any subsidiary of such entities.

(14)  "Loan commitment" or "commitment" means a statement by the lender setting forth the terms and conditions upon which the lender is willing to make a particular mortgage loan to a particular borrower.

(15)  "Lock-in agreement" means an agreement whereby the lender guarantees for a specified number of days or until a specified date the availability of a specified rate of interest or specified formula by which the rate of interest will be determined and/or specific number of discount points, if the loan is approved and closed within the stated period of time.

(16)  "Make a mortgage loan" means to close a mortgage loan in a person's name or to advance funds, offer to advance funds, or make a commitment to advance funds to an applicant for a mortgage loan.

(17)  "Mortgage brokerage fee" means a fee received for acting as a mortgage broker.

(18)  "Mortgage brokerage business" means a person acting as a mortgage broker.

(19)  "Mortgage loan" means any:

(a)  Residential mortgage loan;

(b)  Loan on commercial real property if the borrower is a natural person or the lender is a noninstitutional investor; or

(c)  Loan on improved real property consisting of five or more dwelling units if the borrower is a natural person or the lender is a noninstitutional investor.

(20)  "Net worth" means total assets minus total liabilities pursuant to generally accepted accounting principles.

(21)  "Noninstitutional investor" means an investor other than an institutional investor.

(22)  "Nonresidential mortgage loan" means a mortgage loan other than a residential mortgage loan.

(23)  "Person" means an individual, partnership, corporation, association, or other group, however organized.

(24)  "Principal broker" means a licensee in charge of, and responsible for, the operation of the principal place of business and all branch brokers.

(25)  "Principal place of business" means a licensee's primary business office the street address or physical location of which is designated on the application for licensure or any amendment to such application.

(26)  "Residential mortgage loan" means any mortgage or other security instrument secured by improved real property consisting of no more than four dwelling units.

(27)  "Service a mortgage loan" means to receive or cause to be received or transferred for another installment payments of principal, interest, or other payments pursuant to a mortgage loan.

(28)  "Substantial fault of the borrower" means that the borrower:

(a)  Failed to provide information or documentation required by the lender or broker in a timely manner;

(b)  Provided information, in the application or subsequently, which upon verification proved to be significantly inaccurate, causing the need for review or further investigation by the lender or broker;

(c)  Failed to produce no later than the date specified by the lender all documentation specified in the commitment or closing instructions as being required for closing; or

(d)  Failed to be ready, willing, or able to close the loan no later than the date specified by the lender or broker.

For purposes of this definition, a borrower is considered to have provided information or documentation in a timely manner if such information and documentation was received by the lender within 7 days after the borrower received a request for same, and information is considered significantly inaccurate if the correct information materially affects the eligibility of the borrower for the loan for which application is made.

(29)  "Ultimate equitable owner" means a natural person who, directly or indirectly, owns or controls an ownership interest in a corporation, a foreign corporation, an alien business organization, or any other form of business organization, regardless of whether such natural person owns or controls such ownership interest through one or more natural persons or one or more proxies, powers of attorney, nominees, corporations, associations, partnerships, trusts, joint stock companies, or other entities or devices, or any combination thereof.

(30)  "Principal representative" means an individual who operates the business operations of a licensee under part III.

History.--ss. 1, 50, ch. 91-245; s. 4, ch. 91-429; s. 1, ch. 95-313; s. 1, ch. 99-213; s. 1, ch. 2001-228; s. 513, ch. 2003-261.

494.0011  Powers and duties of the commission and office.--

(1)  The office shall be responsible for the administration and enforcement of ss. 494.001-494.0077.

(2)  The commission has authority to adopt rules pursuant to ss. 120.536(1) and 120.54 to implement ss. 494.001-494.0077. The commission may adopt rules to allow electronic submission of any forms, documents, or fees required by this act. The commission may also adopt rules to accept certification of compliance with requirements of this act in lieu of requiring submission of documents.

(3)  All fees, charges, and fines collected pursuant to ss. 494.001-494.0077 shall be deposited in the State Treasury to the credit of the Regulatory Trust Fund under the office.

(4)(a)  The office has the power to issue and to serve subpoenas and subpoenas duces tecum to compel the attendance of witnesses and the production of all books, accounts, records, and other documents and materials relevant to an examination or investigation. The office, or its duly authorized representative, has the power to administer oaths and affirmations to any person.

(b)  The office may, in its discretion, seek subpoenas or subpoenas duces tecum from any court of competent jurisdiction commanding the appearance of witnesses and the production of books, accounts, records, and other documents or materials at a time and place named in the subpoenas; and any authorized representative of the office may serve any subpoena.

(5)(a)  In the event of substantial noncompliance with a subpoena or subpoena duces tecum issued or caused to be issued by the office, the office may petition the circuit court or any other court of competent jurisdiction of the county in which the person subpoenaed resides or has its principal place of business for an order requiring the subpoenaed person to appear and testify and to produce such books, accounts, records, and other documents as are specified in the subpoena duces tecum. The court may grant injunctive relief restraining the person from advertising, promoting, soliciting, entering into, offering to enter into, continuing, or completing any mortgage loan transaction or mortgage loan servicing transaction. The court may grant such other relief, including, but not limited to, the restraint, by injunction or appointment of a receiver, of any transfer, pledge, assignment, or other disposition of the person's assets or any concealment, alteration, destruction, or other disposition of books, accounts, records, or other documents and materials as the court deems appropriate, until the person has fully complied with the subpoena duces tecum and the office has completed its investigation or examination. In addition, the court may order the refund of any fees collected in a mortgage loan transaction whenever books and documents substantiating the transaction are not produced or cannot be produced. The office is entitled to the summary procedure provided in s. 51.011, and the court shall advance such cause on its calendar. Attorney's fees and any other costs incurred by the office to obtain an order granting, in whole or part, a petition for enforcement of a subpoena or subpoena duces tecum shall be taxed against the subpoenaed person, and failure to comply with such order is a contempt of court.

(b)  When it appears to the office that the compliance with a subpoena or subpoena duces tecum issued or caused to be issued by the office pursuant to this section is essential and otherwise unavailable to an investigation or examination, the office, in addition to the other remedies provided for in this section, may apply to the circuit court or any other court of competent jurisdiction of the county in which the subpoenaed person resides or has its principal place of business for a writ of ne exeat. The court shall thereupon direct the issuance of the writ against the subpoenaed person requiring sufficient bond conditioned on compliance with the subpoena or subpoena duces tecum. The court shall cause to be endorsed on the writ a suitable amount of bond upon the payment of which the person named in the writ shall be freed, having a due regard to the nature of the case.

(c)  Alternatively, the office may seek a writ of attachment from the court having jurisdiction over the person who has refused to obey a subpoena, who has refused to give testimony, or who has refused to produce the matters described in the subpoena duces tecum.

History.--ss. 2, 50, ch. 91-245; s. 4, ch. 91-429; s. 165, ch. 98-200; s. 20, ch. 99-155; s. 2, ch. 99-213; s. 514, ch. 2003-261.

494.0012  Investigations; complaints; examinations.--

(1)  The office may conduct an investigation of any person whenever the office has reason to believe, either upon complaint or otherwise, that any violation of ss. 494.001-494.0077 has been committed or is about to be committed.

(2)  Any person having reason to believe that a provision of this act has been violated may file a written complaint with the office setting forth details of the alleged violation.

(3)(a)  The office may, at intermittent periods, conduct examinations of any licensee or other person under the provisions of ss. 494.001-494.0077.

(b)  The office shall conduct all examinations at a convenient location in this state unless the office determines that it is more effective or cost-efficient to perform an examination at the licensee's out-of-state location. For an examination performed at the licensee's out-of-state location, the licensee shall pay the travel expense and per diem subsistence at the rate provided by law for up to thirty 8-hour days per year for each office examiner who participates in such an examination. However, if the examination involves or reveals fraudulent conduct by the licensee, the licensee shall pay the travel expense and per diem subsistence provided by law, without limitation, for each participating examiner.

History.--ss. 3, 50, ch. 91-245; s. 4, ch. 91-429; s. 1, ch. 92-9; s. 3, ch. 99-213; s. 515, ch. 2003-261.

494.00125  Confidentiality of information relating to investigations and examinations.--

(1)(a)  Except as otherwise provided by this section, information relative to an investigation or examination by the office pursuant to this chapter, including any consumer complaint received by the office or the Department of Financial Services, is confidential and exempt from s. 119.07(1) until the investigation or examination is completed or ceases to be active. The information compiled by the office in such an investigation or examination shall remain confidential and exempt from s. 119.07(1) after the office's investigation or examination is completed or ceases to be active if the office submits the information to any law enforcement or administrative agency for further investigation. Such information shall remain confidential and exempt from s. 119.07(1) until that agency's investigation is completed or ceases to be active. For purposes of this section, an investigation or examination shall be considered "active" so long as the office or any law enforcement or administrative agency is proceeding with reasonable dispatch and has a reasonable good faith belief that the investigation or examination may lead to the filing of an administrative, civil, or criminal proceeding or to the denial or conditional grant of a license. This section shall not be construed to prohibit disclosure of information which is required by law to be filed with the office and which, but for the investigation or examination, would be subject to s. 119.07(1).

(b)  Except as necessary for the office to enforce the provisions of this chapter, a consumer complaint and other information relative to an investigation or examination shall remain confidential and exempt from s. 119.07(1) after the investigation or examination is completed or ceases to be active to the extent disclosure would:

1.  Jeopardize the integrity of another active investigation or examination.

2.  Reveal the name, address, telephone number, social security number, or any other identifying number or information of any complainant, customer, or account holder.

3.  Disclose the identity of a confidential source.

4.  Disclose investigative techniques or procedures.

5.  Reveal a trade secret as defined in s. 688.002.

(c)  In the event that office personnel are or have been involved in an investigation or examination of such nature as to endanger their lives or physical safety or that of their families, then the home addresses, telephone numbers, places of employment, and photographs of such personnel, together with the home addresses, telephone numbers, photographs, and places of employment of spouses and children of such personnel and the names and locations of schools and day care facilities attended by the children of such personnel are confidential and exempt from s. 119.07(1).

(d)  Nothing in this section shall be construed to prohibit the office from providing information to any law enforcement or administrative agency. Any law enforcement or administrative agency receiving confidential information in connection with its official duties shall maintain the confidentiality of the information so long as it would otherwise be confidential.

(e)  All information obtained by the office from any person which is only made available to the office on a confidential or similarly restricted basis shall be confidential and exempt from s. 119.07(1). This exemption shall not be construed to prohibit disclosure of information which is required by law to be filed with the office or which is otherwise subject to s. 119.07(1).

(2)  If information subject to subsection (1) is offered in evidence in any administrative, civil, or criminal proceeding, the presiding officer may, in her or his discretion, prevent the disclosure of information which would be confidential pursuant to paragraph (1)(b).

(3)  A privilege against civil liability is granted to a person who furnishes information or evidence to the office, unless such person acts in bad faith or with malice in providing such information or evidence.

History.--s. 2, ch. 92-9; s. 328, ch. 96-406; s. 1140, ch. 97-103; s. 4, ch. 99-213; s. 516, ch. 2003-261.

494.0013  Injunction to restrain violations.--

(1)  The office may bring action through its own counsel in the name and on behalf of the state against any person who has violated or is about to violate any provision of ss. 494.001-494.0077 or any rule of the commission or order of the office issued under ss. 494.001-494.0077 to enjoin the person from continuing in or engaging in any act in furtherance of the violation.

(2)  In any injunctive proceeding, the court may, on due showing by the office, issue a subpoena or subpoena duces tecum requiring the attendance of any witness and requiring the production of any books, accounts, records, or other documents and materials that appear necessary to the expeditious resolution of the application for injunction.

(3)  In addition to all other means provided by law for the enforcement of any temporary restraining order, temporary injunction, or permanent injunction issued in any such court proceeding, the court has the power and jurisdiction, upon application of the office, to impound, and to appoint a receiver or administrator for, the property, assets, and business of the defendant, including, but not limited to, the books, records, documents, and papers appertaining thereto. Such receiver or administrator, when appointed and qualified, has all powers and duties as to custody, collection, administration, winding up, and liquidation of the property and business as are from time to time conferred upon him or her by the court. In any such action, the court may issue an order staying all pending suits and enjoining any further suits affecting the receiver's or administrator's custody or possession of the property, assets, and business, or the court, in its discretion and with the consent of the chief judge of the circuit, may require that all such suits be assigned to the circuit court judge who appoints the receiver or administrator.

History.--ss. 4, 50, ch. 91-245; s. 4, ch. 91-429; s. 541, ch. 97-103; s. 517, ch. 2003-261.

494.0014  Cease and desist orders; refund orders.--

(1)  The office has the power to issue and serve upon any person an order to cease and desist and to take corrective action whenever it has reason to believe the person is violating, has violated, or is about to violate any provision of ss. 494.001-494.0077, any rule or order issued under ss. 494.001-494.0077, or any written agreement between the person and the office. All procedural matters relating to issuance and enforcement of such a cease and desist order are governed by the Administrative Procedure Act.

(2)  The office has the power to order the refund of any fee directly or indirectly assessed and charged on a mortgage loan transaction which is unauthorized or exceeds the maximum fee specifically authorized in ss. 494.001-494.0077.

(3)  The office may prohibit the association by a mortgage broker business, or the employment by a mortgage lender or correspondent mortgage lender, of any person who has engaged in a pattern of misconduct while an associate of a mortgage brokerage business or an employee of a mortgage lender or correspondent mortgage lender. For the purpose of this subsection, the term "pattern of misconduct" means the commission of three or more violations of ss. 494.001-494.0077 or the provisions of chapter 494 in effect prior to October 1, 1991, during any 1-year period or any criminal conviction for violating ss. 494.001-494.0077 or the provisions of chapter 494 in effect prior to October 1, 1991.

History.--ss. 5, 50, ch. 91-245; s. 4, ch. 91-429; s. 518, ch. 2003-261.

494.0015  Evidence; examiner's worksheets, investigative reports, other related documents.--In any hearing in which the financial examiner acting under authority of ss. 494.001-494.0077 is available for cross-examination, any official written report, worksheet, or other related paper, or a duly certified copy thereof, compiled, prepared, drafted, or otherwise made by the financial examiner, after being duly authenticated by the examiner, may be admitted as competent evidence upon the oath of the examiner that the report, worksheet, or related paper was prepared as a result of an examination of the books and records of a licensee or other person conducted pursuant to the authority of ss. 494.001-494.0077.

History.--ss. 6, 50, ch. 91-245; s. 4, ch. 91-429.

494.0016  Books, accounts, and records; maintenance; examinations by the office.--

(1)  Each licensee shall maintain, at the principal place of business designated on the license, all books, accounts, records, and documents necessary to determine the licensee's compliance with ss. 494.001-494.0077.

(2)  The office may authorize maintenance of records at a location other than a principal place of business. The office may require books, accounts, and records to be produced and available at a reasonable and convenient location in this state.

(3)  All books, accounts, records, documents, and receipts for expenses paid by the licensee on behalf of the borrower, including each closing statement signed by a borrower, shall be preserved and kept available for examination by the office for at least 3 years after the date of original entry.

(4)  The commission may prescribe by rule the minimum information to be shown in the books, accounts, records, and documents of licensees so that such records will enable the office to determine the licensee's compliance with ss. 494.001-494.0077.

History.--ss. 7, 50, ch. 91-245; s. 4, ch. 91-429; s. 5, ch. 99-213; s. 519, ch. 2003-261.

494.00165  Prohibited advertising; record requirements.--

(1)  It is a violation of this chapter for any person to:

(a)  Advertise that an applicant will have unqualified access to credit without disclosing what material limitations on the availability of credit exist. Such material limitations include, but are not limited to, the percentage of down payment required, that a higher rate or points could be required, or that restrictions as to the maximum principal amount of the loan offered could apply.

(b)  Advertise a mortgage loan at an expressed interest rate unless the advertisement specifically states that the expressed rate could change or not be available at commitment or closing.

(c)  Advertise mortgage loans, including rates, margins, discounts, points, fees, commissions, or other material information, including material limitations on such loans, unless such person is able to make such mortgage loans available to a reasonable number of qualified applicants.

(d)  Falsely advertise or misuse names indicating a federal agency pursuant to 18 U.S.C. s. 709.

(2)  Each person required to be licensed under this chapter shall maintain a record of samples of each of its advertisements, including commercial scripts of each radio or television broadcast, for examination by the office for a period of 2 years after the date of publication or broadcast.

History.--s. 6, ch. 99-213; s. 520, ch. 2003-261.

494.0017  Regulatory Trust Fund.--

(1)  The office shall pay valid claims arising under former ss. 494.042, 494.043, and 494.044, as provided in former s. 494.00171 from the Regulatory Trust Fund.

(2)  Funds from the Regulatory Trust Fund shall be disbursed as provided in former s. 494.044, upon approval by the office, to any party to a mortgage financing transaction who:

(a)  Is adjudged by a court of competent jurisdiction of this state to have suffered monetary damages as a result of any violation of chapter 494 in effect prior to October 1, 1991, committed by a licensee or registrant;

(b)  Has filed a claim for recovery prior to January 1, 1992; and

(c)  Has suffered monetary damages as a result of an act occurring prior to October 1, 1991.

(3)  Notwithstanding s. 215.965, the office may disburse funds to a court or court-appointed person for distribution, if the conditions precedent for recovery exist and the distribution would be the fairest and most equitable manner of distributing the funds.

History.--ss. 8, 50, ch. 91-245; s. 4, ch. 91-429; s. 2, ch. 95-313; s. 21, ch. 99-155; s. 15, ch. 2001-63; s. 521, ch. 2003-261; s. 29, ch. 2004-234.

494.0018  Penalties.--

(1)  Whoever knowingly violates any provision of s. 494.0041(2)(e), (f), or (g); s. 494.0072(2)(e), (f), or (g); or s. 494.0025(1), (2), (3), (4), or (5), except as provided in subsection (2) of this section, is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084. Each such violation constitutes a separate offense.

(2)  Any person convicted of a violation of any provision of ss. 494.001-494.0077, in which violation the total value of money and property unlawfully obtained exceeded $50,000 and there were five or more victims, is guilty of a felony of the first degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.

History.--ss. 9, 50, ch. 91-245; s. 4, ch. 91-429.

494.0019  Liability in case of unlawful transaction.--

(1)  If a mortgage transaction is made in violation of any provision of ss. 494.001-494.0077, the person making the transaction and every licensee, director, or officer who participated in making the transaction are jointly and severally liable to every party to the transaction in an action for damages incurred by the party or parties.

(2)  A person is not liable under this section upon a showing that such person's licensees, officers, and directors who participated in making the transaction, if any, acted in good faith and without knowledge and, with the exercise of due diligence, could not have known of the act committed in violation of ss. 494.001-494.0077.

History.--ss. 10, 50, ch. 91-245; s. 4, ch. 91-429; s. 210, ch. 92-303.

494.002  Statutory or common-law remedies.--Nothing in ss. 494.001-494.0077 limits any statutory or common-law right of any person to bring any action in any court for any act involved in the mortgage business or the right of the state to punish any person for any violation of any law.

History.--ss. 11, 50, ch. 91-245; s. 4, ch. 91-429.

494.0021  Public records.--All audited financial statements submitted pursuant to ss. 494.001-494.0077 are confidential and exempt from the requirements of s. 119.07(1), except that office employees may have access to such information in the administration and enforcement of ss. 494.001-494.0077 and such information may be used by office personnel in the prosecution of violations under ss. 494.001-494.0077.

History.--ss. 12, 50, ch. 91-245; s. 4, ch. 91-429; s. 1, ch. 95-131; s. 329, ch. 96-406; s. 522, ch. 2003-261.

494.0022  Applicability of act.--Failure to comply with the provisions of ss. 494.001-494.0077 does not affect the validity or enforceability of any mortgage loan; and no person acquiring a mortgage loan, as mortgagee or assignee, is required to ascertain whether or not the provisions of ss. 494.001-494.0077 have been complied with.

History.--ss. 13, 50, ch. 91-245; s. 4, ch. 91-429.

494.0023  Conflicting interest.--

(1)  If, in a mortgage transaction, a licensee has a conflicting interest as specified in subsection (2):

(a)  The type of conflicting interest shall be fully and fairly disclosed.

(b)  The licensee shall inform the borrower in writing that a financial benefit may be received by the licensee as a result of the conflicting interest.

(c)  The borrower shall be informed that alternative sources may be chosen by the borrower to provide any required services. The following language must be contained in 12-point type in any agreement between a mortgage broker, mortgage lender, or correspondent mortgage lender and a borrower in substantially this form:

You are not required to purchase additional products or services from any person or entity suggested or recommended by (Broker/Lender/Correspondent Lender). However, the (Broker/Lender/Correspondent Lender) hereby reserves the right to approve the entity selected by the borrower, which approval may not be unreasonably withheld.

(2)  A licensee has a conflicting interest if:

(a)  The licensee or the licensee's relative provides the borrower with additional products or services;

(b)  The licensee or licensee's relative, either directly or indirectly, owns, controls, or holds with power to vote, or holds proxies representing, 10 percent or more of any class of equity securities or other beneficial interest in such person providing the additional products or services;

(c)  The person providing the additional products or services, either directly or indirectly, owns, controls, or holds the power to vote, or holds proxies representing, 10 percent or more of any class of equity securities or other beneficial interest in the licensee;

(d)  A holding company, either directly or indirectly, owns, controls, or holds with power to vote, or holds proxies representing, 10 percent or more of any class of equity securities or other beneficial interest in both the licensee and the person providing the additional products or services;

(e)  One or more persons, or such person's relative, sits as an officer or director, or performs similar functions as an officer or director, for both the licensee and the person providing the additional products or services; or

(f)  The licensee or the licensee's relative sits as an officer or director, or performs similar functions as an officer or director, of the person providing the additional products or services.

(3)  As used in this section, the term "relative" of any natural person means any of the following persons, whether by the full or half blood or by adoption:

(a)  Such person's spouse, father, mother, children, brothers, and sisters.

(b)  The father, mother, brothers, and sisters of such person's spouse.

(c)  The spouses of children, brothers, or sisters of such person.

History.--ss. 14, 50, ch. 91-245; s. 4, ch. 91-429.

494.0024  Waiver.--Unless otherwise indicated, any waiver of ss. 494.001-494.0077 is unenforceable and void.

History.--ss. 15, 50, ch. 91-245; s. 4, ch. 91-429.

494.0025  Prohibited practices.--It is unlawful for any person:

(1)  To act as a mortgage lender in this state without a current, active license issued by the office pursuant to ss. 494.006-494.0077.

(2)  To act as a correspondent mortgage lender in this state without a current, active license issued by the office pursuant to ss. 494.006-494.0077.

(3)  To act as a mortgage broker in this state without a current, active license issued by the office pursuant to ss. 494.003-494.0043.

(4)  In any practice or transaction or course of business relating to the sale, purchase, negotiation, promotion, advertisement, or hypothecation of mortgage transactions, directly or indirectly:

(a)  To knowingly or willingly employ any device, scheme, or artifice to defraud;

(b)  To engage in any transaction, practice, or course of business which operates as a fraud upon any person in connection with the purchase or sale of any mortgage loan; or

(c)  To obtain property by fraud, willful misrepresentation of a future act, or false promise.

(5)  In any matter within the jurisdiction of the office, to knowingly and willfully falsify, conceal, or cover up by a trick, scheme, or device a material fact, make any false or fraudulent statement or representation, or make or use any false writing or document, knowing the same to contain any false or fraudulent statement or entry.

(6)  To violate s. 655.922(2), subject to ss. 494.001-494.0077.

(7)  Who is required to be licensed under ss. 494.006-494.0077, to fail to report to the office the failure to meet the net worth requirements of s. 494.0061, s. 494.0062, or s. 494.0065 within 48 hours after the person's knowledge of such failure or within 48 hours after the person should have known of such failure.

(8)  To pay a fee or commission in any mortgage loan transaction to any person or entity other than a mortgage brokerage business, mortgage lender, or correspondent mortgage lender, operating under an active license, or a person exempt from licensure under this chapter.

(9)  To record a mortgage brokerage agreement or any other document, not rendered by a court of competent jurisdiction, which purports to enforce the terms of the mortgage brokerage agreement.

(10)  To use the name or logo of a financial institution, as defined in s. 655.005(1), or its affiliates or subsidiaries when marketing or soliciting existing or prospective customers if such marketing materials are used without the written consent of the financial institution and in a manner that would lead a reasonable person to believe that the material or solicitation originated from, was endorsed by, or is related to or the responsibility of the financial institution or its affiliates or subsidiaries.

History.--ss. 16, 50, ch. 91-245; s. 4, ch. 91-429; s. 4, ch. 95-313; s. 7, ch. 99-213; s. 523, ch. 2003-261; s. 1, ch. 2004-340; s. 84, ch. 2004-390.

494.0026  Disposition of insurance proceeds.--The following provisions apply to mortgage loans held by a mortgagee or assignee that is subject to ss. 494.003-494.0077.

(1)  The mortgagee or assignee must promptly endorse a check, draft, or other negotiable instrument payable jointly to the mortgagee or assignee and the insured by the insurance company. However, the mortgagee or assignee is not required to endorse such instrument if the insured or a payee who is not subject to ss. 494.003-494.0077 refuses to endorse the instrument.

(2)  Insurance proceeds received by a mortgagee or assignee that relate to compensation for damage to property or contents insurance coverage in which the mortgagee or assignee has a security interest must be promptly deposited by the mortgagee or assignee into a segregated account of a federally insured financial institution.

(3)  Insurance proceeds received by a mortgagee or assignee that relate to contents insurance coverage in which the mortgagee or assignee does not have a security interest in the contents must be promptly distributed to the insured by the mortgagee or assignee.

(4)  Insurance proceeds received by a mortgagee or assignee that relate to additional living expenses must be promptly distributed to the insured by the mortgagee or assignee.

(5)  The mortgagee or assignee is not required to remit the portion of the proceeds relating to additional living expenses and contents insurance if the mortgagee or assignee is not able to determine which part of the proceeds relates to additional living expenses and contents insurance.

Nothing in this section shall be construed to prevent an insurance company from paying the insured directly for additional living expenses or paying the insured directly for contents insurance coverage if the mortgagee or assignee does not have a security interest in the contents.

History.--s. 5, ch. 95-313.

494.0028  Arbitration.--

(1)  This section applies to any mortgage brokerage agreement, servicing agreement, loan application, or purchase agreement which provides for arbitration between:

(a)  A noninstitutional investor and a mortgage lender or correspondent mortgage lender to service a mortgage loan.

(b)  A borrower and a mortgage brokerage business, mortgage lender, or correspondent mortgage lender to obtain a mortgage loan.

(c)  A noninstitutional investor and a mortgage brokerage business, mortgage lender, or correspondent mortgage lender to fund or purchase a mortgage loan.

(2)  All agreements subject to this section shall provide that, at the voluntary election of the noninstitutional investor or borrower, disputes shall be handled by either a court of competent jurisdiction or by binding arbitration.

(3)  All agreements subject to this section shall provide the noninstitutional investor or borrower with the option to elect arbitration before the American Arbitration Association or other independent nonindustry arbitration forum. Any other nonindustry arbitration forum may apply to the office to allow such forum to provide arbitration services. The office shall grant the application if the applicant's fees, practices, and procedures do not materially differ from those of the American Arbitration Association.

(4)  At the election of the noninstitutional investor or borrower, venue shall be in the county in which the noninstitutional investor or borrower entered into the agreement or at a business location of the mortgage brokerage business, mortgage lender, or correspondent lender.

(5)  Any fees or charges shall be made as provided in the rules of the American Arbitration Association or other approved nonindustry arbitration forum and shall not be set in the agreement.

(6)  Any election made under this section shall be irrevocable.

(7)  This section shall not be construed to require an agreement which is subject to this section to contain an arbitration clause.

History.--s. 6, ch. 95-313; s. 524, ch. 2003-261.

494.0029  Mortgage business schools.--

(1)  Each person, school, or institution, except accredited colleges, universities, community colleges, and career centers in this state, which offers or conducts mortgage business training as a condition precedent to licensure as a mortgage broker or lender or a correspondent mortgage lender shall obtain a permit from the office and abide by the regulations imposed upon such person, school, or institution by this chapter and rules adopted pursuant to this chapter. The commission shall, by rule, recertify the permits annually with initial and renewal permit fees that do not exceed $500 plus the cost of accreditation.

(2)  All such schools shall maintain curriculum and training materials necessary to determine the school's compliance with this chapter and rules adopted pursuant to this chapter. Any school that offers or conducts mortgage business training shall at all times maintain an operation of training, materials, and curriculum which is open to review by the office to determine compliance and competency as a mortgage business school.

(3)(a)  It is unlawful for any such person, school, or institution to offer or conduct mortgage business courses, regardless of the number of pupils, without first procuring a permit or to guarantee that the pupils will pass any mortgage business examination given on behalf of the office or to represent that the issuance of a permit is any recommendation or endorsement of the person, school, or institution to which it is issued or of any course of instruction given thereunder. Any person who violates this paragraph commits a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083.

(b)  The location of classes and the frequency of class meetings shall be in the discretion of the school offering the courses, if such courses conform to this chapter and related rules adopted by the commission.

(c)  A mortgage business school may not use advertising of any nature which is false, inaccurate, misleading, or exaggerated. Publicity and advertising of a mortgage business school, or of its representative, shall be based upon relevant facts and supported by evidence establishing their truth.

(d)  A representative of a mortgage business school subject to the provisions of this chapter may not promise or guarantee employment or placement of any pupil or prospective pupil, using information, training, or skill purported to be provided or otherwise enhanced by a course or school as inducement to enroll in the school, unless such person offers the pupil or prospective pupil a bona fide contract of employment.

(e)  A school shall advertise only as a school and under the permitted name of such school as recognized by the office.

(f)  Reference may not be made in any publication or communication medium as to a pass/fail ratio on mortgage business examinations by any school permitted by the office.

History.--s. 9, ch. 95-313; s. 3, ch. 2001-228; s. 525, ch. 2003-261; s. 57, ch. 2004-357.

Note.--Former s. 494.00311.

494.00295  Professional education.--

(1)  Each mortgage broker, mortgage lender, and correspondent mortgage lender must certify to the office at the time of renewal that during the 2 years prior to an application for license renewal, all mortgage brokers and the principal representative, loan originators, and associates of a mortgage lender or correspondent mortgage lender have successfully completed at least 14 hours of professional education programs covering primary and subordinate mortgage financing transactions and the provisions of this chapter. Licensees shall maintain records documenting compliance with this subsection for a period of 4 years.

(2)  Professional education programs must contribute directly to the professional competency of the participants, may only be offered by permitted mortgage business schools or entities specifically exempted from permitting as mortgage business schools, and may include electronically transmitted or distance education courses.

(3)  The commission shall adopt rules necessary to administer this section, including rules governing qualifying hours for professional education programs and standards for electronically transmitted or distance education courses, including course completion requirements.

History.--s. 2, ch. 2001-228; s. 526, ch. 2003-261.

494.003  Exemptions.

494.0031  Licensure as a mortgage brokerage business.

494.0032  Renewal of mortgage brokerage business license or branch office license.

494.0033  Mortgage broker's license.

494.00331  Mortgage broker association.

494.0034  Renewal of mortgage broker's license.

494.0035  Principal broker and branch broker requirements.

494.0036  Mortgage brokerage business branch offices.

494.0038  Mortgage broker disclosures.

494.0039  Principal place of business requirements.

494.004  Requirements of licensees.

494.0041  Administrative penalties and fines; license violations.

494.0042  Brokerage fees.

494.00421  Fees earned upon obtaining a bona fide commitment.

494.0043  Requirements for brokering loans to noninstitutional investors.

494.003  Exemptions.--

(1)  None of the following persons is subject to the requirements of ss. 494.003-494.0043:

(a)  Any person licensed under ss. 494.006-494.0077, except as provided in s. 494.0073.

(b)  A bank, bank holding company, trust company, savings and loan association, savings bank, credit union, or consumer finance company licensed pursuant to chapter 516.

(c)  A wholly owned bank holding company subsidiary or a wholly owned savings and loan association holding company subsidiary that is approved or certified by the Department of Housing and Urban Development, the Veterans Administration, the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation.

(d)  The Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation; any agency of the Federal Government; any state, county, or municipal government; or any quasi-governmental agency that acts in such capacity under the specific authority of the laws of any state or the United States.

(e)  Any person licensed to practice law in this state, not actively and principally engaged in the business of negotiating loans secured by real property, when such person renders services in the course of her or his practice as an attorney at law.

(2)  None of the following persons is required to be licensed under ss. 494.003-494.0043:

(a)  An insurance company duly licensed in this state when dealing with its clients in the normal course of its insurance business.

(b)  A federally licensed small business investment company.

(c)  A securities dealer registered under the provisions of s. 517.12, when dealing with its corporate or individual clients in the normal course of its securities business.

(d)  Any person acting in a fiduciary capacity conferred by authority of any court.

(e)  A wholly owned subsidiary of a bank or savings and loan association the sole activity of which is to distribute the lending programs of such bank or savings and loan association to persons who arrange loans for, or make loans to, borrowers.

(3)  It is not necessary to negate any of the exemptions provided in this section in any complaint, information, indictment, or other writ or proceeding brought under ss. 494.001-494.0077. The burden of establishing the right to any such exemption is upon the party claiming the benefit of the exemption.

History.--ss. 17, 50, ch. 91-245; s. 4, ch. 91-429; s. 7, ch. 95-313; s. 542, ch. 97-103; s. 81, ch. 2002-1.

494.0031  Licensure as a mortgage brokerage business.--

(1)  The office shall issue a mortgage brokerage business license to each person who:

(a)  Has submitted a completed application form and a nonrefundable application fee of $425; and

(b)  Has a qualified principal broker pursuant to s. 494.0035.

(2)  The commission may require that each officer, director, and ultimate equitable owner of a 10-percent or greater interest in the mortgage brokerage business submit a complete set of fingerprints taken by an authorized law enforcement officer.

(3)  Notwithstanding the provisions of subsection (1), it is a ground for denial of licensure if the designated principal mortgage broker; any officer, director, partner, or joint venturer; any natural person owning a 10-percent or greater interest in the mortgage brokerage business; or any natural person who is the ultimate equitable owner of a 10-percent or greater interest in the mortgage brokerage business has committed any violation specified in ss. 494.001-494.0077 or has pending against him or her any criminal prosecution or administrative enforcement action, in any jurisdiction, which involves fraud, dishonest dealing, or any other act of moral turpitude.

(4)  A mortgage brokerage business or branch office license may be canceled if it was issued through mistake or inadvertence of the office. A notice of cancellation must be issued by the office within 90 days after the issuance of the license. A notice of cancellation shall be effective upon receipt. The notice of cancellation shall provide the applicant with notification of the right to request a hearing within 21 days after the applicant's receipt of the notice of cancellation. A license shall be reinstated if the applicant can demonstrate that the requirements for obtaining the license pursuant to this chapter have been satisfied.

(5)  If an initial mortgage brokerage business or branch office license has been issued but the check upon which the license is based is returned due to insufficient funds, the license shall be deemed canceled. A license deemed canceled pursuant to this subsection shall be reinstated if the office receives a certified check for the appropriate amount within 30 days after the date the check was returned due to insufficient funds.

History.--ss. 18, 50, ch. 91-245; s. 4, ch. 91-429; s. 8, ch. 95-313; s. 543, ch. 97-103; s. 8, ch. 99-213; s. 527, ch. 2003-261.

494.0032  Renewal of mortgage brokerage business license or branch office license.--

(1)  The office shall renew a mortgage brokerage business license upon receipt of a completed renewal form and payment of a nonrefundable renewal fee of $375. Each licensee shall pay at the time of renewal a nonrefundable renewal fee of $225 for the renewal of each branch office license.

(2)  The commission shall adopt rules establishing a procedure for the biennial renewal of mortgage brokerage business licenses and branch office licenses. The commission may prescribe the form for renewal and may require an update of all information provided in the licensee's initial application.

(3)  A mortgage brokerage business or branch office license that is not renewed by the end of the biennium established by the commission shall revert from active to inactive status. An inactive license may be reactivated within 6 months after becoming inactive by filing a completed reactivation form with the office, payment of the renewal fee, and payment of a nonrefundable reactivation fee of $100. A license that is not renewed within 6 months after the end of the biennial period automatically expires.

History.--ss. 19, 50, ch. 91-245; s. 4, ch. 91-429; s. 9, ch. 99-213; s. 528, ch. 2003-261.

494.0033  Mortgage broker's license.--

(1)  Each natural person who acts as a mortgage broker for a mortgage brokerage business must be licensed pursuant to this section. To act as a mortgage broker, an individual must be an associate of a mortgage brokerage business. A mortgage broker is prohibited from being an associate of more than one mortgage brokerage business.

(2)  Each initial application for a mortgage broker's license must be in the form prescribed by rule of the commission. The commission may require each applicant to provide any information reasonably necessary to make a determination of the applicant's eligibility for licensure. The office shall issue an initial license to any natural person who:

(a)  Is at least 18 years of age;

(b)  Has passed a written test adopted by the office which is designed to determine competency in primary and subordinate mortgage financing transactions as well as to test knowledge of ss. 494.001-494.0077 and the rules adopted pursuant thereto;

(c)  Has submitted a completed application and a nonrefundable application fee of $200. The commission may set by rule an additional fee for a retake of the examination; and

(d)  Has filed a complete set of fingerprints, taken by an authorized law enforcement officer, for submission by the office to the Department of Law Enforcement or the Federal Bureau of Investigation for processing.

(3)  Any person applying after July 1, 1992, must have completed 24 hours of classroom education on primary and subordinate financing transactions and the laws and rules of ss. 494.001-494.0077 to be eligible for licensure. The commission may adopt rules regarding qualifying hours.

(4)  Notwithstanding the provisions of subsection (1), it is a ground for denial of licensure if the applicant has committed any violation specified in ss. 494.001-494.0077 or has pending against her or him any criminal prosecution or administrative enforcement action, in any jurisdiction, which involves fraud, dishonest dealing, or any other act of moral turpitude.

(5)  An initial mortgage broker's license is valid for the remainder of the biennium in which the license is issued.

(6)  A mortgage broker license may be canceled if it was issued through mistake or inadvertence of the office. A notice of cancellation must be issued by the office within 90 days after the issuance of the license. A notice of cancellation shall be effective upon receipt. The notice of cancellation shall provide the applicant with notification of the right to request a hearing within 21 days after the applicant's receipt of the notice of cancellation. A license shall be reinstated if the applicant can demonstrate that the requirements for obtaining the license pursuant to this chapter have been satisfied.

(7)  If an initial mortgage broker license has been issued but the check upon which the license is based is returned due to insufficient funds, the license shall be deemed canceled. A license deemed canceled pursuant to this subsection shall be reinstated if the office receives a certified check for the appropriate amount within 30 days after the date the check was returned due to insufficient funds.

History.--ss. 20, 50, ch. 91-245; s. 4, ch. 91-429; s. 10, ch. 95-313; s. 544, ch. 97-103; s. 10, ch. 99-213; s. 529, ch. 2003-261.

494.00331  Mortgage broker association.--No person required to be licensed as a mortgage broker under this chapter shall be simultaneously an associate of more than one licensed mortgage brokerage business, licensed mortgage lender, or licensed correspondent mortgage lender.

History.--s. 11, ch. 95-313; s. 11, ch. 99-213.

494.0034  Renewal of mortgage broker's license.--

(1)  The office shall renew a mortgage broker license upon receipt of the completed renewal form, certification of compliance with continuing education requirements of s. 494.00295, and payment of a nonrefundable renewal fee of $150.

(2)  The commission shall adopt rules establishing a procedure for the biennial renewal of mortgage broker's licenses. The commission may prescribe the form of the renewal application and may require an update of information since the licensee's last renewal.

(3)  A license that is not renewed by the end of the biennium prescribed by the commission shall revert from active to inactive status. An inactive license may be reactivated within 2 years after becoming inactive by filing a completed reactivation form with the office, payment of the renewal fee, and payment of a nonrefundable reactivation fee of $100. A license that is not renewed within 2 years after becoming inactive automatically expires.

History.--ss. 21, 50, ch. 91-245; s. 4, ch. 91-429; s. 12, ch. 99-213; s. 4, ch. 2001-228; s. 530, ch. 2003-261.

494.0035  Principal broker and branch broker requirements.--

(1)  Each mortgage brokerage business must have a principal broker who shall operate the business under such broker's full charge, control, and supervision. The principal broker must have been a licensed mortgage broker pursuant to s. 494.0033 for at least 1 year prior to being designated as a principal broker, or shall demonstrate to the satisfaction of the office that such principal broker has been actively engaged in a mortgage-related business for at least 1 year prior to being designated as a principal broker. Each mortgage brokerage business shall maintain a form as prescribed by the commission indicating the business's designation of principal broker and the individual's acceptance of such responsibility. If the form is unavailable, inaccurate, or incomplete, it is deemed that the business was operated in the full charge, control, and supervision by each officer, director, or ultimate equitable owner of a 10-percent or greater interest in the mortgage brokerage business, or any other person in a similar capacity.

(2)  Each branch office of a mortgage brokerage business must have a designated branch broker who shall operate the business under such broker's full charge, control, and supervision. The designated branch broker must be a licensed mortgage broker pursuant to s. 494.0033. Each branch office shall maintain a form as prescribed by the commission logging the branch's designation of a branch broker and the individual's acceptance of such responsibility. If the form is unavailable, inaccurate, or incomplete, it is deemed that the branch was operated in the full charge, control, and supervision by each officer, director, or ultimate equitable owner of a 10-percent or greater interest in the mortgage brokerage business, or any other person in a similar capacity.

History.--ss. 22, 50, ch. 91-245; s. 4, ch. 91-429; s. 5, ch. 2001-228; s. 531, ch. 2003-261.

494.0036  Mortgage brokerage business branch offices.--

(1)  A mortgage brokerage business branch office license is required for each branch office maintained by a mortgage brokerage business.

(2)  The office shall issue a mortgage brokerage business branch office license upon receipt of a completed application in a form as prescribed by commission rule and payment of an initial nonrefundable branch office license fee of $225. Branch office licenses must be renewed in conjunction with the renewal of the mortgage brokerage business license. The branch office license shall be issued in the name of the mortgage brokerage business that maintains the branch office.

(3)  Each branch office must prominently display the license issued for such branch office. Each person licensed as a mortgage broker must prominently display his or her license in the office where such person acts as a mortgage broker.

History.--ss. 23, 50, ch. 91-245; s. 4, ch. 91-429; s. 13, ch. 99-213; s. 532, ch. 2003-261.

494.0038  Mortgage broker disclosures.--

(1)(a)  A person may not receive a fee for acting as a mortgage brokerage business except pursuant to a written agreement between the mortgage brokerage business and the borrower. The agreement must describe the services to be provided by the mortgage brokerage business and specify the amount and terms of the mortgage brokerage fee that the mortgage brokerage business is to receive.

(b)1.  If any of the rates, points, fees, and other terms quoted by or on behalf of the lender are to be received by the mortgage brokerage business, such fact shall be specifically disclosed to the borrower.

2.  If the mortgage brokerage fee is for brokering a loan for a particular program under which the brokerage fee varies according to the terms of the loan, the brokerage fee may be disclosed as a range of fees at the time of application. The mortgage broker shall, in such instance, disclose the nature of the fee arrangement to the borrower, and the exact amount of the fee must be disclosed at settlement or closing.

(c)  The commission may prescribe by rule the form of disclosure of brokerage fees.

(2)  At the time a written agreement is executed by the borrower or at the time the mortgage brokerage business accepts an application fee, credit report fee, property appraisal fee, or any other third-party fee, the mortgage brokerage business shall disclose in writing to any applicant for a mortgage loan the following information:

(a)  That such mortgage brokerage business may not make mortgage loans or commitments. The mortgage brokerage business may make a commitment and may furnish a lock-in of the rate and program on behalf of the lender when the mortgage brokerage business has obtained a written commitment or lock-in for the loan from the lender on behalf of the borrower for the loan. The commitment must be in the same form and substance as issued by the lender.

(b)  That such mortgage brokerage business cannot guarantee acceptance into any particular loan program or promise any specific loan terms or conditions.

(c)  A good faith estimate of the credit report fee, property appraisal fee, or any other third-party fee and the terms and conditions for obtaining a refund of such fees, if any. Any amount collected in excess of the actual cost shall be returned within 60 days after rejection, withdrawal, or closing.

(3)  If the mortgage brokerage agreement includes a nonrefundable application fee, the following requirements are applicable:

(a)  The amount of the application fee, which must be clearly denominated as such, shall be clearly disclosed.

(b)  The specific services that will be performed in consideration for the application fee shall be disclosed.

(c)  The application fee must be reasonably related to the services to be performed and may not be based upon a percentage of the principal amount of the loan or the amount financed.

(4)  A mortgage brokerage business may not accept any fee in connection with a mortgage loan other than an application fee, credit report fee, property appraisal fee, or other third-party fee prior to obtaining a written commitment from a qualified lender.

(5)  Any third-party fee entrusted to a mortgage brokerage business shall immediately, upon receipt, be placed into a segregated account with a financial institution located in the state the accounts of which are insured by the Federal Government. Such funds shall be held in trust for the payor and shall be kept in the account until disbursement. Such funds may be placed in one account if adequate accounting measures are taken to identify the source of the funds.

(6)  All mortgage brokerage fees shall be paid to a mortgage brokerage business licensee.

(7)  This section does not prohibit a mortgage brokerage business from offering products and services, in addition to those offered in conjunction with the loan origination process, for a fee or commission.

History.--ss. 25, 50, ch. 91-245; s. 4, ch. 91-429; s. 14, ch. 99-213; s. 41, ch. 2000-154; s. 533, ch. 2003-261.

494.0039  Principal place of business requirements.--

(1)  Each mortgage brokerage business licensee shall maintain and transact business from a principal place of business.

(2)  A licensee under ss. 494.003-494.0043 shall report any change of address of the principal place of business or any branch office within 15 days after the change.

(3)  Each mortgage brokerage business must prominently display its license at the principal place of business. Each licensed mortgage broker must prominently display his or her license in the office where such person acts as a mortgage broker.

History.--ss. 26, 50, ch. 91-245; s. 4, ch. 91-429; s. 545, ch. 97-103; s. 15, ch. 99-213.

494.004  Requirements of licensees.--

(1)  Each licensee under ss. 494.003-494.0043 shall report, in writing, any conviction of, or plea of nolo contendere to, regardless of adjudication, any crime or administrative violation that involves fraud, dishonest dealing, or any other act of moral turpitude, in any jurisdiction, by the licensee or any natural person named in s. 494.0031(3), not later than 30 days after the date of conviction, entry of a plea of nolo contendere, or final administrative action.

(2)  Each licensee under ss. 494.003-494.0043 shall report, in a form prescribed by rule of the commission, any conviction of, or plea of nolo contendere to, regardless of whether adjudication is withheld, any felony committed by the licensee or any natural person named in s. 494.0031(3), not later than 30 days after the date of conviction or the date the plea of nolo contendere is entered.

(3)  Each licensee under ss. 494.003-494.0043 shall report any action in bankruptcy, voluntary or involuntary, to the office not later than 7 business days after the action is instituted.

(4)  Each licensee under ss. 494.003-494.0043 shall report any change in the form of business organization or any change of a person named, pursuant to s. 494.0031(3), to the office in writing not later than 30 days after the change is effective.

(5)  A license issued under ss. 494.003-494.0043 is not transferable or assignable.

(6)  On or before April 30, 2000, each mortgage brokerage business shall file an initial report stating the name, social security number, date of birth, mortgage broker license number, date of hire and, if applicable, date of termination for each person who was an associate of the mortgage brokerage business during the immediate preceding quarter. Thereafter, a mortgage brokerage business shall file a quarterly report only if a person became an associate or ceased to be an associate of the mortgage brokerage business during the immediate preceding quarter. Such report shall be filed within 30 days after the last day of each calendar quarter and shall contain the name, social security number, date of birth, mortgage broker license number, date of hire and, if applicable, the date of termination of each person who became or ceased to be an associate of the mortgage brokerage business during the immediate preceding quarter. The commission shall prescribe, by rule, the procedures for filing reports required by this subsection.

History.--ss. 27, 50, ch. 91-245; s. 4, ch. 91-429; ss. 16, 17, ch. 99-213; s. 534, ch. 2003-261.

494.0041  Administrative penalties and fines; license violations.--

(1)  Whenever the office finds a person in violation of an act specified in subsection (2), it may enter an order imposing one or more of the following penalties against the person:

(a)  Revocation of a license or registration.

(b)  Suspension of a license or registration subject to reinstatement upon satisfying all reasonable conditions that the office specifies.

(c)  Placement of the licensee, registrant, or applicant on probation for a period of time and subject to all reasonable conditions that the office specifies.

(d)  Issuance of a reprimand.

(e)  Imposition of a fine in an amount not exceeding $5,000 for each count or separate offense.

(f)  Denial of a license or registration.

(2)  Each of the following acts constitutes a ground for which the disciplinary actions specified in subsection (1) may be taken:

(a)  Pleading nolo contendere to, or having been convicted or found guilty of, regardless of whether adjudication was withheld, a crime involving fraud, dishonest dealing, or any act of moral turpitude.

(b)  Fraud, misrepresentation, deceit, negligence, or incompetence, in any mortgage financing transaction.

(c)  A material misstatement of fact on an initial or renewal application.

(d)  Disbursement, or an act which has caused or will cause disbursement, to any person in any amount from the Regulatory Trust Fund, the Securities Guaranty Fund, or the Florida Real Estate Recovery Fund, regardless of any repayment or restitution to the disbursed fund by the licensee or any person acting on behalf of the licensee or registrant.

(e)  Failure to place immediately upon receipt, and maintain until authorized to disburse, any money entrusted to her or him by a person dealing with her or him as a mortgage broker in a segregated account of a federally insured financial institution in this state.

(f)  Failure to account or deliver to any person any property that has come into her or his hands and that is not her or his property or that she or he is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery.

(g)  Failure to disburse funds in accordance with agreements.

(h)  Any misuse, misapplication, or misappropriation of personal property entrusted to her or his care to which she or he had no current property right at the time of entrustment.

(i)  Having a license, or the equivalent, to practice any profession or occupation revoked, suspended, or otherwise acted against, including the denial of licensure by a licensing authority of this state or another state, territory, or country for fraud, dishonest dealing, or any other act of moral turpitude.

(j)  Failure to comply with any order or rule made or issued under ss. 494.001-494.0077.

(k)  Acting as a mortgage broker or mortgage brokerage business without a current, active license issued under ss. 494.003-494.0043.

(l)  Failure to timely pay any fee, charge, or fine under ss. 494.001-494.0077.

(m)  Failure to maintain, preserve, and keep available for examination all books, accounts, or other documents required by ss. 494.001-494.0077 and the rules of the commission.

(n)  Refusal to permit an investigation or examination of books and records, or refusal to comply with an office subpoena or subpoena duces tecum.

(o)  Consistently and materially underestimating maximum closing costs.

(p)  Failure to comply with, or violation of, any other provision of ss. 494.001-494.0077.

(q)  Commission of fraud, misrepresentation, concealment, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in any state, nation, or territory; or aiding, assisting, or conspiring with any other person engaged in any such misconduct and in furtherance thereof.

(r)  Failure to timely pay any fee, charge, or fine imposed or assessed pursuant to this chapter or rules adopted under this chapter.

(3)  A mortgage brokerage business is subject to the disciplinary actions specified in subsection (1) for a violation of subsection (2) by any officer, director, joint venturer, partner, ultimate equitable owner of a 10-percent or greater interest in the mortgage brokerage business, or associate mortgage broker of the licensee.

(4)  A principal mortgage broker is subject to the disciplinary actions specified in subsection (1) for violations of subsection (2) by associates in the course of an association with the mortgage brokerage business. The principal mortgage broker is only subject to suspension or revocation for associate actions if there is a pattern of repeated violations by associates or if the principal mortgage broker has knowledge of the violations.

(5)  A natural person who is associated with a mortgage brokerage business is subject to the disciplinary actions specified in subsection (1) for a violation of subsection (2) with respect to an action in which such person was involved.

History.--ss. 28, 50, ch. 91-245; s. 4, ch. 91-429; s. 546, ch. 97-103; s. 22, ch. 99-155; s. 18, ch. 99-213; s. 535, ch. 2003-261; s. 30, ch. 2004-234.

494.0042  Brokerage fees.--

(1)  A mortgage brokerage fee earned by a licensee, pursuant to ss. 494.003-494.0043, is not considered interest or a finance charge under chapter 687.

(2)  A person may not charge or exact, directly or indirectly, from the mortgagor a fee or commission in excess of the maximum fee or commission specified in this section. The maximum fees or commissions that may be charged for mortgage loans are as follows:

(a)  On a mortgage loan of $1,000 or less: $250.

(b)  On a mortgage loan exceeding $1,000 and not exceeding $2,000: $250 for the first $1,000 of the mortgage loan, plus $10 for each additional $100 of the mortgage loan.

(c)  On a mortgage loan exceeding $2,000 and not exceeding $5,000: $350 for the first $2,000 of the mortgage loan, plus $10 for each additional $100 of the mortgage loan.

(d)  On a mortgage loan exceeding $5,000: $250 plus 10 percent of the entire mortgage loan.

For the purpose of determining the maximum fee, the amount of the mortgage loan is based on the amount of mortgage loan actually funded exclusive of the authorized maximum fees or commissions.

(3)  At the time of accepting a mortgage loan application, a mortgage brokerage business may receive from the borrower a nonrefundable application fee. If the mortgage loan is funded, the nonrefundable application fee shall be credited against the amount owed as a result of the loan being funded. A person may not receive any form of compensation for acting as a mortgage broker other than a nonrefundable application fee, a fee based on the mortgage amount being funded, or a fee which complies with s. 494.00421.

History.--ss. 29, 50, ch. 91-245; s. 4, ch. 91-429; s. 12, ch. 95-313.

494.00421  Fees earned upon obtaining a bona fide commitment.--Notwithstanding the provisions of ss. 494.001-494.0077, any mortgage brokerage business which contracts to receive from a borrower a mortgage brokerage fee upon obtaining a bona fide commitment shall accurately disclose in the mortgage brokerage agreement:

(1)  The gross loan amount.

(2)  In the case of a fixed-rate mortgage, the note rate.

(3)  In the case of an adjustable rate mortgage:

(a)  The initial note rate.

(b)  The length of time for which the initial note rate is effective.

(c)  The frequency of changes.

(d)  The limitation upon such changes including adjustment to adjustment cap and life cap.

(e)  Whether the loan has any potential for negative amortization.

(f)  Identification of the margin-interest rate differential.

(g)  Identification of a nationally recognized index which index must be free from control of the mortgage broker, mortgage brokerage business, mortgage lender, or correspondent mortgage lender.

(4)  The estimated net proceeds to be paid directly to the borrower. "Estimated net proceeds" means the cash to be received by the borrower after payment of any fees, charges, debts, liens, or encumbrances to perfect the lien of the new mortgage and establish the agreed-upon priority of the new mortgage.

(5)  The lien priority of the new proposed mortgage.

(6)  The number of calendar days, which are mutually agreed upon, within which the mortgage brokerage business shall obtain a bona fide mortgage commitment.

(7)(a)  The following statement, in no less than 12-point boldface type immediately above the signature lines for the borrowers:


"You are entering into a contract with a mortgage brokerage business to obtain a bona fide mortgage loan commitment under the same terms and conditions as stated hereinabove or in a separate executed good faith estimate form. If the mortgage brokerage business obtains a bona fide commitment under the same terms and conditions, you will be obligated to pay the mortgage brokerage business fees, including, but not limited to, a mortgage brokerage fee, even if you choose not to complete the loan transaction. If the provisions of s. 494.00421, Florida Statutes, are not met, the mortgage brokerage fee can only be earned upon the funding of the mortgage loan. The borrower may contact the Department of Financial Services, Tallahassee, Florida, regarding any complaints that the borrower may have against the mortgage broker or the mortgage brokerage business. The telephone number of the department is:  [insert telephone number] ."

(b)  Paragraph (a) does not apply to nonresidential mortgage loan commitments in excess of $1 million.

(8)  Any other disclosure required pursuant to s. 494.0038.

History.--s. 13, ch. 95-313; s. 23, ch. 99-155; s. 536, ch. 2003-261.

494.0043  Requirements for brokering loans to noninstitutional investors.--

(1)  A mortgage broker, when arranging a mortgage loan for a noninstitutional investor, shall:

(a)  Before any payment of money by a noninstitutional investor, provide an opinion of value from an appraiser stating the value of the security property unless the opinion is waived in writing. The opinion must state the value of the property as it exists on the date of the opinion. If any relationship exists between the broker and the appraiser, that relationship shall be disclosed to the investor.

(b)  Provide to the noninstitutional investor a mortgagee's title insurance policy or an opinion of title by an attorney licensed to practice law in the state, or a copy thereof.

1.  If a title insurance policy is issued, it must insure the noninstitutional investor against the unmarketability of the mortgagee's interest in such title. It shall also specify any superior liens that exist against the property. If an opinion of title is issued by an attorney licensed to practice law in the state, the opinion must include a statement as to the marketability of the title to the property described in the mortgage and specify the priority of the mortgage being closed.

2.  If the title insurance policy or opinion of title is not available at the time of purchase, the licensee shall provide a binder of the title insurance or conditional opinion of title. This binder or opinion must include any conditions or requirements needed to be corrected prior to the issuance of the final title policy or opinion of title. The binder or opinion must also include information concerning the requirements specified in subparagraph 1. Any conditions must be eliminated or waived in writing by the investor prior to delivery to the noninstitutional investor. The policy or opinion, or a copy thereof, shall be delivered to the investor within a reasonable period of time, not exceeding 6 months, after closing.

3.  The requirements of this paragraph may be waived in writing. If the requirements are waived by the noninstitutional investor, the waiver must include the following wording: "The noninstitutional investor acknowledges that the mortgage broker or mortgage lender brokering this mortgage loan is not providing a title insurance policy or opinion of title issued by an attorney who is licensed to practice law in the State of Florida. Any requirement for title insurance or for a legal opinion of title is the sole responsibility of the noninstitutional mortgage investor."

(c)  Provide, if the loan is other than a first mortgage, a statement showing the balance owed by the mortgagor on any existing mortgages prior to this investment and the status of such existing mortgages.

(d)  Provide a disclosure if the licensee is directly or indirectly acting as a borrower or principal in the transaction.

(2)  Each mortgage, or other instrument securing a note or assignment thereof, shall be recorded before being delivered to the noninstitutional investor. A mortgage broker shall cause the properly endorsed original note to be delivered to the noninstitutional investor.

(3)  Each mortgage and assignment shall be recorded as soon as practical, but no later than 30 business days after the date of closing.

(4)  Any money from a noninstitutional investor for disbursement at a mortgage loan closing shall be deposited with and disbursed by an attorney duly licensed in this state or by a title company duly licensed in this state. A person acting as a mortgage broker may not have control of any money from a noninstitutional investor. This subsection does not prohibit a licensee under ss. 494.003-494.0043 from receiving a mortgage brokerage fee upon the closing of the mortgage loan funded by the noninstitutional investor.

History.--ss. 30, 50, ch. 91-245; s. 4, ch. 91-429.

494.006  Exemptions.

494.0061  Mortgage lender's license requirements.

494.0062  Correspondent mortgage lender's license requirements.

494.0063  Audited financial statements.

494.0064  Renewal of mortgage lender's license; branch office license renewal.

494.0065  Saving clause.

494.0066  Branch offices.

494.0067  Requirements of licensees under ss. 494.006-494.0077.

494.0068  Loan application process.

494.0069  Lock-in agreement.

494.007  Commitment process.

494.0071  Expiration of lock-in agreement or commitment.

494.0072  Administrative penalties and fines; license violations.

494.00721  Net worth.

494.0073  Mortgage lender or correspondent mortgage lender when acting as a mortgage brokerage business.

494.0074  Lender fees and charges.

494.0075  Requirements for selling loans to noninstitutional investors.

494.0076  Servicing audits.

494.0077  Other products and services.

494.006  Exemptions.--

(1)  None of the following persons are subject to the requirements of ss. 494.006-494.0077 in order to act as a mortgage lender or correspondent mortgage lender:

(a)  A bank, bank holding company, trust company, savings and loan association, savings bank, credit union, or insurance company if the insurance company is duly licensed in this state.

(b)  Any person acting in a fiduciary capacity conferred by authority of any court.

(c)  A wholly owned bank holding company subsidiary or a wholly owned savings and loan association holding company subsidiary that is approved or certified by the Department of Housing and Urban Development, the Veterans Administration, the Government National Mortgage Association, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation.

(d)  Any person who, as a seller of his or her own real property, receives one or more mortgages in a purchase money transaction.

(e)  Any person who receives a mortgage as security for an obligation arising out of materials furnished or as services rendered by the person in the improvement of the real property.

(f)  Any person who makes only nonresidential mortgage loans and sells loans only to institutional investors.

(g)  The Federal National Mortgage Association; the Federal Home Loan Mortgage Corporation; an agency of the Federal Government; any state, county, or municipal government; or any quasi-governmental agency that acts in such capacity under the specific authority of the laws of any state or the United States.

(h)  A consumer finance company licensed pursuant to chapter 516 as of October 1, 1991.

(i)  Any person making or acquiring a mortgage loan with his or her own funds for his or her own investment, and who does not hold himself or herself out to the public, in any manner, as being in the mortgage lending business.

(j)  Any person selling a mortgage that was made or purchased with that person's funds for his or her own investment, and who does not hold himself or herself out to the public, in any manner, as being in the mortgage lending business.

(k)  Any person who acts solely under contract and as an agent for federal, state, or municipal agencies in the servicing of mortgage loans.

(2)(a)  A natural person employed by a mortgage lender licensed under ss. 494.001-494.0077 is exempt from the licensure requirements of ss. 494.001-494.0077 when acting within the scope of employment with the licensee.

(b)  A corporation that is in existence on October 1, 1991, and that is a wholly owned subsidiary of a consumer finance company licensed pursuant to chapter 516 on October 1, 1991, is not required to be licensed under ss. 494.006-494.0077 in order to act as a mortgage lender or a correspondent mortgage lender.

(3)  It is unnecessary to negate any of the exemptions provided in ss. 494.001-494.0077 in any complaint, information, indictment, or other writ or proceeding brought under ss. 494.001-494.0077. The burden of establishing the right to any exemption is upon the party claiming the benefit of the exemption.

History.--ss. 31, 50, ch. 91-245; s. 4, ch. 91-429; s. 211, ch. 92-303; s. 1, ch. 92-328; s. 14, ch. 95-313; s. 547, ch. 97-103; s. 82, ch. 2002-1.

494.0061  Mortgage lender's license requirements.--

(1)  The commission or office may require each applicant for a mortgage lender license to provide any information reasonably necessary to make a determination of the applicant's eligibility for licensure. The office shall issue an initial mortgage lender license to any person that submits:

(a)  A completed application form;

(b)  A nonrefundable application fee of $575;

(c)  Audited financial statements, which documents disclose that the applicant has a bona fide and verifiable net worth, pursuant to generally accepted accounting principles, of at least $250,000, which must be continuously maintained as a condition of licensure;

(d)  A surety bond in the amount of $10,000, payable to the state and conditioned upon compliance with ss. 494.001-494.0077, which inures to the office and which must be continuously maintained thereafter in full force;

(e)  Documentation that the applicant is duly incorporated, registered, or otherwise formed as a general partnership, limited partnership, limited liability company, or other lawful entity under the laws of this state or another state of the United States; and

(f)  For applications submitted after October 1, 2001, proof that the applicant's principal representative has completed 24 hours of classroom instruction in primary and subordinate financing transactions and in the provisions of this chapter and rules adopted under this chapter.

(2)  Notwithstanding the provisions of subsection (1), it is a ground for denial of licensure if the applicant, any principal officer or director of the applicant, or any natural person owning a 10-percent or greater interest in the applicant, or any natural person who is the ultimate equitable owner of a 10-percent or greater interest in the applicant has committed any violation specified in s. 494.0072, or has pending against her or him any criminal prosecution or administrative enforcement action, in any jurisdiction, which involves fraud, dishonest dealing, or any act of moral turpitude.

(3)  Each initial application for a mortgage lender's license must be in a form prescribed by the commission. The commission or office may require each applicant to provide any information reasonably necessary to make a determination of the applicant's eligibility for licensure. The commission or office may require that each officer, director, and ultimate equitable owner of a 10-percent or greater interest in the applicant submit a complete set of fingerprints taken by an authorized law enforcement officer.

(4)  A person required to be licensed under ss. 494.006-494.0077, or an agent or employee thereof, is deemed to have consented to the venue of courts of competent jurisdiction in this state regarding any matter within the authority of ss. 494.001-494.0077 regardless of where an act or violation was committed.

(5)  A license issued in accordance with ss. 494.006-494.0077 is not transferable or assignable.

(6)  A mortgage lender or branch office license may be canceled if it was issued through mistake or inadvertence of the office. A notice of cancellation must be issued by the office within 90 days after the issuance of the license. A notice of cancellation shall be effective upon receipt. The notice of cancellation shall provide the applicant with notification of the right to request a hearing within 21 days after the applicant's receipt of the notice of cancellation. A license shall be reinstated if the applicant can demonstrate that the requirements for obtaining the license pursuant to this chapter have been satisfied.

(7)  If an initial mortgage lender or branch office license has been issued but the check upon which the license is based is returned due to insufficient funds, the license shall be deemed canceled. A license deemed canceled pursuant to this subsection shall be reinstated if the office receives a certified check for the appropriate amount within 30 days after the date the check was returned due to insufficient funds.

(8)  Each lender, regardless of the number of branches it operates, shall designate a principal representative who exercises control of the licensee's business and shall maintain a form prescribed by the commission designating the principal representative. If the form is not accurately maintained, the business is considered to be operated by each officer, director, or equitable owner of a 10-percent or greater interest in the business.

(9)  After October 1, 2001, an applicant's principal representative must pass a written test prescribed by the commission which covers primary and subordinate mortgage financing transactions and the provisions of this chapter and rules adopted under this chapter.

(10)  A lender shall notify the office of the name and address of any new principal representative and shall document that the person has completed the educational and testing requirements of this section upon the designation of a new principal representative.

History.--ss. 32, 50, ch. 91-245; s. 4, ch. 91-429; s. 15, ch. 95-313; s. 548, ch. 97-103; s. 24, ch. 99-155; s. 19, ch. 99-213; s. 6, ch. 2001-228; s. 537, ch. 2003-261.

494.0062  Correspondent mortgage lender's license requirements.--

(1)  The office shall issue an initial correspondent mortgage lender license to any person who submits:

(a)  A completed application form;

(b)  A nonrefundable application fee of $500;

(c)  Audited financial statements, which document that the application has a bona fide and verifiable net worth pursuant to generally accepted accounting principles of $25,000 or more, which must be continuously maintained as a condition of licensure;

(d)  A surety bond in the amount of $10,000, payable to the State of Florida and conditioned upon compliance with ss. 494.001-494.0077, which inures to the office and which must be continuously maintained, thereafter, in full force;

(e)  Documentation that the applicant is duly incorporated, registered, or otherwise formed as a general partnership, limited partnership, limited liability company, or other lawful entity under the laws of this state or another state of the United States; and

(f)  For applications filed after October 1, 2001, proof that the applicant's principal representative has completed 24 hours of classroom instruction in primary and subordinate financing transactions and in the provisions of this chapter and rules enacted under this chapter.

(2)  Notwithstanding the provisions of subsection (1), it is a ground for denial of licensure if the applicant, any principal officer or director of the applicant, or any natural person who is the ultimate equitable owner of a 10-percent or greater interest in the applicant has committed any violation specified in s. 494.0072, or has pending against her or him any criminal prosecution or administrative enforcement action, in any jurisdiction, which involves fraud, dishonest dealing, or any act of moral turpitude.

(3)  Each initial application for a correspondent mortgage lender's license must be in a form prescribed by the commission. The commission or office may require each applicant to provide any information reasonably necessary to make a determination of the applicant's eligibility for licensure. The commission or office may require that each officer, director, and ultimate equitable owner of a 10-percent or greater interest submit a complete set of fingerprints taken by an authorized law enforcement officer.

(4)  Each license is valid for the remainder of the biennium in which the license is issued.

(5)  A person licensed as a correspondent mortgage lender may make mortgage loans, but may not service a mortgage loan for more than 4 months after the date the mortgage loan was made or acquired by the correspondent mortgage lender.

(6)  A licensee under ss. 494.006-494.0077, or an agent or employee thereof, is deemed to have consented to the venue of courts of competent jurisdiction in this state regarding any matter within the authority of ss. 494.001-494.0077 regardless of where an act or violation was committed.

(7)  A correspondent mortgage lender is subject to the same requirements and restrictions as a licensed mortgage lender unless otherwise provided in this section.

(8)  A license issued under this section is not transferable or assignable.

(9)  A correspondent mortgage lender or branch office license may be canceled if it was issued through mistake or inadvertence of the office. A notice of cancellation must be issued by the office within 90 days after the issuance of the license. A notice of cancellation shall be effective upon receipt. The notice of cancellation shall provide the applicant with notification of the right to request a hearing within 21 days after the applicant's receipt of the notice of cancellation. A license shall be reinstated if the applicant can demonstrate that the requirements for obtaining the license pursuant to this chapter have been satisfied.

(10)  If an initial correspondent mortgage lender or branch office license has been issued but the check upon which the license is based is returned due to insufficient funds, the license shall be deemed canceled. A license deemed canceled pursuant to this subsection shall be reinstated if the office receives a certified check for the appropriate amount within 30 days after the date the check was returned due to insufficient funds.

(11)  Each correspondent lender shall designate a principal representative who exercises control over the business and shall maintain a form prescribed by the commission designating the principal representative. If the form is not accurately maintained, the business is considered to be operated by each officer, director, or equitable owner of a 10-percent or greater interest in the business.

(12)  After October 1, 2001, an applicant's principal representative must pass a written test prescribed by the commission which covers primary and subordinate mortgage financing transactions and the provisions of this chapter and rules adopted under this chapter.

(13)  A correspondent lender shall notify the office of the name and address of any new principal representative and shall document that such person has completed the educational and testing requirements of this section upon the lender's designation of a new principal representative.

History.--ss. 33, 50, ch. 91-245; s. 4, ch. 91-429; s. 16, ch. 95-313; s. 549, ch. 97-103; s. 25, ch. 99-155; s. 20, ch. 99-213; s. 7, ch. 2001-228; s. 538, ch. 2003-261.

494.0063  Audited financial statements.--All audited financial statements required by ss. 494.001-494.0077 must be prepared by an independent licensed certified public accountant.

History.--ss. 34, 50, ch. 91-245; s. 4, ch. 91-429.

494.0064  Renewal of mortgage lender's license; branch office license renewal.--

(1)(a)  The office shall renew a mortgage lender license upon receipt of a completed renewal form and the nonrefundable renewal fee of $575. The office shall renew a correspondent lender license upon receipt of a completed renewal form and a nonrefundable renewal fee of $475. Each licensee shall pay at the time of renewal a nonrefundable fee of $325 for the renewal of each branch office license.

(b)  A licensee shall also submit, as part of the renewal form, certification that during the preceding 2 years the licensee's principal representative, loan originators, and associates have completed the education requirements of s. 494.00295.

(2)  The commission shall adopt rules establishing a procedure for the biennial renewal of mortgage lender's licenses, correspondent lender's licenses, and branch office permits. The commission may prescribe the form for renewal and may require an update of all information provided in the licensee's initial application.

(3)  The license of a mortgage lender, correspondent mortgage lender, or branch office that is not renewed by the end of the biennium prescribed by the commission automatically reverts to inactive status. An inactive license may be reactivated within 6 months after becoming inactive by filing a completed reactivation form with the office, payment of the appropriate renewal fee, and payment of a nonrefundable reactivation fee of $100. A license that is not renewed within 6 months after the end of the biennial period automatically expires.

(4)  The commission may adopt rules setting forth the evidence or documentation of minimum net worth to be submitted for renewal of a license.

History.--ss. 35, 50, ch. 91-245; s. 4, ch. 91-429; s. 21, ch. 99-213; s. 8, ch. 2001-228; s. 539, ch. 2003-261.

494.0065  Saving clause.--

(1)(a)  Any person in good standing who holds an active registration pursuant to former s. 494.039 or license pursuant to former s. 521.205, or any person who acted solely as a mortgage servicer on September 30, 1991, is eligible to apply to the office for a mortgage lender's license and is eligible for licensure if the applicant:

1.  For at least 12 months during the period of October 1, 1989, through September 30, 1991, has engaged in the business of either acting as a seller or assignor of mortgage loans or as a servicer of mortgage loans, or both;

2.  Has documented a minimum net worth of $25,000 in audited financial statements; and

3.  Has applied for licensure pursuant to this section by January 1, 1992, and paid an application fee of $100.

(b)  A licensee pursuant to paragraph (a) may operate a wholly owned subsidiary or affiliate for the purpose of servicing accounts if the subsidiary or affiliate is operational as of September 30, 1991. Such subsidiary or affiliate is not required to obtain a separate license, but is subject to all the requirements of a licensee under ss. 494.006-494.0077.

(2)  A licensee issued a license pursuant to subsection (1) may renew its mortgage lending license if it documents a minimum net worth of $25,000, according to generally accepted accounting principles, which must be continuously maintained as a condition to licensure. The office shall require an audited financial statement which documents such net worth.

(3)  The commission may prescribe by rule forms and procedures for application for licensure, and amendment and withdrawal of application for licensure, or transfer, including any existing branch offices, in accordance with subsections (4) and (5), and for renewal of licensure of licensees under this section.

(4)(a)  Notwithstanding ss. 494.0061(5) and 494.0067(3), the ultimate equitable owner, as of the effective date of this act, of a mortgage lender licensed under this section may transfer, one time, at least 50 percent of the ownership, control, or power to vote any class of equity securities of such mortgage lender, except as provided in paragraph (b). For purposes of this subsection, satisfaction of the amount of the ownership transferred may be met in multiple transactions or in a single transaction.

(b)  A person who is an ultimate equitable owner on the effective date of this act may transfer, at any time, at least 50 percent of the ownership, control, or power to vote any class of equity securities of such person to the person's spouse or child, and any such transferee may transfer, at any time, such ownership, control, or power to vote to a spouse or child of such transferee, in perpetuity.

(5)  The commission or office may require each applicant for any transfer to provide any information reasonably necessary to make a determination of the applicant's eligibility for licensure. The office shall issue the transfer of licensure to any person who submits the following documentation at least 90 days prior to the anticipated transfer:

(a)  A completed application form.

(b)  A nonrefundable fee set by rule of the commission in the amount of $500.

(c)  Audited financial statements that substantiate that the applicant has a bona fide and verifiable net worth, according to generally accepted accounting principles, of at least $25,000, which must be continuously maintained as a condition of licensure.

(d)  Documentation that the applicant is incorporated, registered, or otherwise formed as a general partnership, limited partnership, limited liability company, or other lawful entity under the laws of this state or another state of the United States.

The commission or office may require that each officer, director, and ultimate equitable owner of a 10-percent or greater interest in the applicant submit a complete set of fingerprints taken by an authorized law enforcement officer.

(6)  Notwithstanding subsection (5), a transfer under subsection (4) may be denied if the applicant, any principal officer or director of the applicant, or any natural person owning a 10-percent or greater interest in the applicant has committed any violation specified in s. 494.0072, or has entered a plea of nolo contendere, regardless of adjudication, or has an action pending against the applicant in any criminal prosecution or administrative enforcement action, in any jurisdiction, which involves fraud, dishonest dealing, or any act of moral turpitude.

(7)  A license issued in accordance with this section is not transferable or assignable except as provided in subsection (4).

(8)  Each person applying for a transfer of any branch office pursuant to subsection (4) must comply with the requirements of s. 494.0066.

History.--ss. 36, 50, ch. 91-245; s. 4, ch. 91-429; s. 17, ch. 95-313; s. 1, ch. 98-45; s. 540, ch. 2003-261.

494.0066  Branch offices.--

(1)  A branch office license is required for each branch office maintained by a licensee under ss. 494.006-494.0077.

(2)  The office shall issue a branch office license upon receipt of a completed application form as prescribed by rule by the commission and an initial nonrefundable branch office license fee of $325. The branch office application must include the name and license number of the licensee under ss. 494.006-494.0077, the name of the licensee's employee in charge of the branch office, and the address of the branch office. The branch office license shall be issued in the name of the licensee under ss. 494.006-494.0077 and must be renewed in conjunction with the license renewal.

History.--ss. 37, 50, ch. 91-245; s. 4, ch. 91-429; s. 22, ch. 99-213; s. 541, ch. 2003-261.

494.0067  Requirements of licensees under ss. 494.006-494.0077.--

(1)  Each license of a mortgage lender, correspondent mortgage lender, or branch office shall be prominently displayed in the office for which it is issued.

(2)  Each licensee under ss. 494.006-494.0077 which makes mortgage loans on real estate in this state shall transact business from a principal place of business. Each principal place of business and each branch office shall be operated under the full charge, control, and supervision of the licensee under ss. 494.006-494.0077.

(3)  A license issued under ss. 494.006-494.0077 is not transferable or assignable.

(4)  The commission or office may require each licensee under ss. 494.006-494.0077 to report any change of address of the principal place of business, change of address of any branch office, or change of principal officer, director, or ultimate equitable owner of 10 percent or more of the licensed corporation to the office in a form prescribed by rule of the commission not later than 30 business days after the change is effective.

(5)  Each licensee under ss. 494.006-494.0077 shall report in a form prescribed by rule by the commission any indictment, information, charge, conviction, plea of nolo contendere, or plea of guilty to any crime or administrative violation that involves fraud, dishonest dealing, or any other act of moral turpitude, in any jurisdiction, by the licensee under ss. 494.006-494.0077 or any principal officer, director, or ultimate equitable owner of 10 percent or more of the licensed corporation, not later than 30 business days after the indictment, information, charge, conviction, or final administrative action.

(6)  Each licensee under ss. 494.006-494.0077 shall report any action in bankruptcy, voluntary or involuntary, to the office, not later than 7 business days after the action is instituted.

(7)  Each licensee under ss. 494.006-494.0077 shall designate a registered agent in this state for service of process.

(8)  Each licensee under ss. 494.006-494.0077 shall provide an applicant for a mortgage loan a good faith estimate of the costs the applicant can reasonably expect to pay in obtaining a mortgage loan. The good faith estimate of costs shall be mailed or delivered to the applicant within a reasonable time after the licensee receives a written loan application from the applicant. The estimate of costs may be provided to the applicant by a person other than the licensee making the loan. The commission may adopt rules that set forth the disclosure requirements of this section.

(9)  On or before April 30, 2000, each mortgage lender or correspondent mortgage lender shall file an initial report stating the full legal name, residential address, social security number, date of birth, mortgage broker license number, date of hire, and, if applicable, date of termination for each person who acted as a loan originator or an associate of the mortgage lender or correspondent mortgage lender during the immediate preceding quarter. Thereafter, a mortgage lender or correspondent mortgage lender shall file a report only if a person became or ceased to be a loan originator or an associate of the mortgage lender or correspondent mortgage lender during the immediate preceding quarter. Such report shall be filed within 30 days after the last day of each calendar quarter and shall contain the full legal name, residential address, social security number, date of birth, date of hire and, if applicable, the mortgage broker license number and date of termination of each person who became or ceased to be a loan originator or an associate of the mortgage lender or correspondent mortgage lender during the immediate preceding quarter. The commission shall prescribe, by rule, the procedures for filing reports required by this subsection.

(10)(a)  Each licensee shall require the principal representative and all loan originators or associates who perform services for the licensee to complete 14 hours of professional education during each biennial license period. The education shall cover primary and subordinate mortgage financing transactions and the provisions of this chapter and the rules adopted under this chapter.

(b)  The licensee shall maintain records of such training for a period of 4 years, including records of the content of and hours designated for each program and the date and location of the program.

(c)  Evidence of completion of such programs shall be included with the licensee's renewal application.

History.--ss. 38, 50, ch. 91-245; s. 4, ch. 91-429; ss. 23, 24, ch. 99-213; s. 9, ch. 2001-228; s. 542, ch. 2003-261.

494.0068  Loan application process.--

(1)  In addition to the requirements set forth in s. 494.0067(8), before accepting an application fee in whole or in part, a credit report fee, an appraisal fee, or a fee charged as reimbursement for third-party charges, a lender shall make a written disclosure to the borrower, which disclosure may be contained in the application, setting forth:

(a)  Whether all or any part of such fees or charges is refundable.

(b)  The terms and conditions for the refund, if all or any part of the fees or charges is refundable.

(c)  A realistic estimate of the number of days required to issue a commitment following receipt of the application by the lender.

(d)  The name or title of a person within the lender's organization to whom the borrower may address written questions, comments, or complaints and who is required to promptly respond to such inquiries.

(2)  The disclosures required in subsection (1) shall be acknowledged in writing by the borrower and maintained by the lender, and a copy of such acknowledgment shall be given to the borrower.

(3)  The borrower may, without penalty or responsibility for paying additional fees and charges, withdraw an application at any time prior to acceptance of commitment. Upon such withdrawal, the lender is responsible for refunding to the borrower only those fees and charges to which the borrower may be entitled pursuant to the terms set forth in the written disclosure required by subsection (1), except that:

(a)  If the lender failed to provide the borrower with the written disclosure required by subsection (1), the lender shall promptly refund to the borrower all funds paid to the lender; or

(b)  If the lender failed to make a good faith effort to approve the loan, the lender shall promptly refund to the borrower all funds paid to the lender.

(4)  The application fee must be reasonably related to the services to be performed and may not be based upon a percentage of the principal amount of the loan or the amount financed.

(5)  For the purposes of this section, the term "application fee" means any moneys advanced by the borrower upon filing an application with a mortgage lender to offset the lender's expenses for determining whether the borrower is qualified for the mortgage loan or whether the mortgage loan should be funded.

History.--ss. 39, 50, ch. 91-245; s. 4, ch. 91-429.

494.0069  Lock-in agreement.--

(1)  Each lock-in agreement must be in writing and must contain:

(a)  The expiration date of the lock-in, if any;

(b)  The interest rate locked in, if any;

(c)  The discount points locked in, if any;

(d)  The commitment fee locked in, if any;

(e)  The lock-in fee, if any; and

(f)  A statement advising of the provisions of ss. 494.006-494.0077 regarding lock-in agreements.

(2)  The mortgage lender or correspondent mortgage lender shall make a good faith effort to process the mortgage loan application and stand ready to fulfill the terms of its commitment before the expiration date of the lock-in agreement or any extension thereof.

(3)  Any lock-in agreement received by a mortgage lender or correspondent mortgage lender by mail or through a broker must be signed by the mortgage lender or correspondent mortgage lender in order to become effective. The borrower may rescind any lock-in agreement until a written confirmation of the agreement has been signed by the lender and mailed to the borrower or to the brokerage business pursuant to its contractual relationship with the borrower. If a borrower elects to so rescind, the mortgage lender or correspondent mortgage lender shall promptly refund any lock-in fee paid.

(4)(a)  Any correspondent mortgage lender or mortgage lender prior to issuing a mortgage loan rate lock-in agreement must have the ability to timely advance funds on all mortgage loans for which rate lock-in agreements have been issued. As used in this section, "ability to timely advance funds" means having sufficient liquid assets or a line of credit necessary to cover all rate lock-in agreements issued with respect to which a lock-in fee is collected.

(b)  A correspondent mortgage lender or mortgage lender that does not comply with paragraph (a) may issue mortgage rate lock-in agreements only if, prior to the issuance, the correspondent mortgage lender or mortgage lender:

1.  Has received a written rate lock-in agreement from a correspondent mortgage lender or mortgage lender that complies with paragraph (a); or

2.  Has received a written rate lock-in agreement from an institutional investor or an agency of the Federal Government or the state or local government that will be funding, making, or purchasing the mortgage loan.

(c)  All rate lock-in fees collected by a mortgage lender or correspondent mortgage lender who is not in compliance with paragraph (a) must be deposited into an escrow account in a federally insured financial institution, and such fees shall not be removed from such escrow account until:

1.  The mortgage loan closes and is funded;

2.  The applicant cancels the loan application or the loan application is rejected; or

3.  The mortgage lender or correspondent mortgage lender is required to forward a portion of the lock-in fee to another correspondent mortgage lender, mortgage lender, institutional investor, or agency that will be funding, making, or purchasing the loan. The mortgage lender or correspondent mortgage lender may remove only the amount of the lock-in fee actually paid to another mortgage lender, correspondent mortgage lender, institutional investor, or agency.

(5)  For purposes of this section, the term "lock-in fee" means any moneys advanced by the borrower to lock in for a specified period of time a specified interest rate or discount points.

(6)  The commission may adopt by rule a form for required lock-in agreement disclosures.

History.--ss. 40, 50, ch. 91-245; s. 4, ch. 91-429; s. 18, ch. 95-313; s. 543, ch. 2003-261.

494.007  Commitment process.--

(1)  If a commitment is issued, the lender shall disclose in writing:

(a)  The expiration date of the commitment;

(b)  The mortgage amount, meaning the face amount of credit provided to the borrower or in the borrower's behalf;

(c)  If the interest rate or other terms are subject to change before expiration of the commitment:

1.  The basis, index, or method, if any, which will be used to determine the rate at closing. Such basis, index, or method shall be established and disclosed with direct reference to the movement of an interest rate index or of a national or regional index that is available to and verifiable by the borrower and beyond the control of the lender; or

2.  The following statement, in at least 10-point bold type: "The interest rate will be the rate established by the lender in its discretion as its prevailing rate . . . days before closing.";

(d)  The amount of the commitment fee, if any, and whether and under what circumstances the commitment fee is refundable; and

(e)  The time, if any, within which the commitment must be accepted by the borrower.

(2)  The provisions of a commitment cannot be changed prior to expiration of the specified period within which the borrower must accept it. If any information necessary for an accurate disclosure required by subsection (1) is unknown to the lender at the time disclosure is required, the lender shall make the disclosure based upon the best information reasonably available to it and shall state that the disclosure is an estimate.

(3)  A commitment fee is refundable if:

(a)  The commitment is contingent upon approval by parties to whom the lender seeks to sell the loan.

(b)  The loan purchaser's requirements are not met due to circumstances beyond the borrower's control.

(c)  The borrower is willing but unable to comply with the loan purchaser's requirements.

History.--ss. 41, 50, ch. 91-245; s. 4, ch. 91-429.

494.0071  Expiration of lock-in agreement or commitment.--If a lock-in agreement has been executed and the loan does not close before the expiration date of either the lock-in agreement or any commitment issued consistent therewith through no substantial fault of the borrower, the borrower may withdraw the application or reject or terminate any commitment, whereupon the mortgage lender or correspondent mortgage lender shall promptly refund to the borrower any lock-in fee and any commitment fee paid by the borrower.

History.--ss. 42, 50, ch. 91-245; s. 4, ch. 91-429; s. 19, ch. 95-313.

494.0072  Administrative penalties and fines; license violations.--

(1)  Whenever the office finds a person in violation of an act specified in subsection (2), it may enter an order imposing one or more of the following penalties against that person:

(a)  Revocation of a license or registration.

(b)  Suspension of a license or registration, subject to reinstatement upon satisfying all reasonable conditions that the office specifies.

(c)  Placement of the licensee or applicant on probation for a period of time and subject to all reasonable conditions that the office specifies.

(d)  Issuance of a reprimand.

(e)  Imposition of a fine in an amount not exceeding $5,000 for each count or separate offense.

(f)  Denial of a license or registration.

(2)  Each of the following acts constitutes a ground for which the disciplinary actions specified in subsection (1) may be taken:

(a)  Pleading nolo contendere to, or having been convicted or found guilty of, regardless of whether adjudication was withheld, a crime involving fraud, dishonest dealing, or any act of moral turpitude.

(b)  Fraud, misrepresentation, deceit, negligence, or incompetence in any mortgage financing transaction.

(c)  A material misstatement of fact on an initial or renewal application.

(d)  Disbursement, or an act which has caused or will cause disbursement, to any person in any amount from the Regulatory Trust Fund, the Securities Guaranty Fund, or the Florida Real Estate Recovery Fund, regardless of any repayment or restitution to the disbursed fund by the licensee or any person acting on behalf of the licensee.

(e)  Failure to place immediately upon receipt, and maintain until authorized to disburse, any money entrusted to him or her by a person dealing with him or her as a lender in a segregated account in a federally insured financial institution;

(f)  Failure to account for or deliver to any person any personal property that has come into his or her hands and that is not his or her property or that he or she is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery.

(g)  Failure to disburse funds in accordance with agreements.

(h)  Any misuse, misapplication, or misappropriation of personal property entrusted to his or her care to which he or she had no current property right at the time of entrustment.

(i)  Having a license, or the equivalent, to practice any profession or occupation revoked, suspended, or otherwise acted against, including the denial of licensure by a licensing authority of this state or another state, territory, or country for fraud, dishonest dealing, or any other act of moral turpitude.

(j)  Failure to comply with any order or rule made or issued under the provisions of ss. 494.001-494.0077.

(k)  Acting as a mortgage lender or correspondent mortgage lender without a current, active license issued under ss. 494.006-494.0077.

(l)  Failure to timely pay any fee, charge, or fine under ss. 494.001-494.0077.

(m)  Failure to maintain, preserve, and keep available for examination all books, accounts, or other documents required by ss. 494.001-494.0077 or the rules of the commission.

(n)  Refusal to permit an investigation or examination of books and records, or refusal to comply with an office subpoena or subpoena duces tecum.

(o)  Consistently and materially underestimating the closing costs.

(p)  Failure to comply with, or violations of, any other provision of ss. 494.001-494.0077.

(q)  Commission of fraud, misrepresentation, concealment, dishonest dealing by trick, scheme, or device, culpable negligence, or breach of trust in any business transaction in any state, nation, or territory; or aiding, assisting, or conspiring with any other person engaged in any such misconduct and in furtherance thereof.

(r)  Failure to timely pay any fee, charge, or fine imposed or assessed pursuant to this chapter or rules adopted under this chapter.

(3)  A mortgage lender or correspondent mortgage lender is subject to the disciplinary actions specified in subsection (1) if any officer, director, or ultimate equitable owner of a 10-percent or greater interest in the mortgage lender or correspondent mortgage lender, associate, or employee of the mortgage lender or correspondent mortgage lender violates any provision of subsection (2).

(4)  A natural person who is an associate of or employed by a mortgage lender or correspondent mortgage lender is subject to the disciplinary actions specified in subsection (1) if such person violates any provision of subsection (2).

History.--ss. 43, 50, ch. 91-245; s. 4, ch. 91-429; s. 550, ch. 97-103; s. 26, ch. 99-155; s. 25, ch. 99-213; s. 544, ch. 2003-261; s. 31, ch. 2004-234.

494.00721  Net worth.--

(1)  The net worth requirements required in ss. 494.0061, 494.0062, and 494.0065 shall be continually maintained as a condition of licensure.

(2)  If a mortgage lender or correspondent mortgage lender fails to satisfy the net worth requirements, the mortgage lender or correspondent mortgage lender shall immediately cease taking any new mortgage loan applications. Thereafter, the mortgage lender or correspondent mortgage lender shall have up to 60 days within which to satisfy the net worth requirements. If the licensee makes the office aware, prior to an examination, that the licensee no longer meets the net worth requirements, the mortgage lender or correspondent mortgage lender shall have 120 days within which to satisfy the net worth requirements. A mortgage lender or correspondent mortgage lender shall not resume acting as a mortgage lender or correspondent mortgage lender without written authorization from the office, which authorization shall be granted if the mortgage lender or correspondent mortgage lender provides the office with documentation which satisfies the requirements of s. 494.0061(1)(c), s. 494.0062(1)(c), or s. 494.0065(2), whichever is applicable.

(3)  If the mortgage lender or correspondent mortgage lender does not satisfy the net worth requirements within the 120-day period, the license of the mortgage lender or correspondent mortgage lender shall be deemed to be relinquished and canceled and all servicing contracts shall be disposed of in a timely manner by the mortgage lender or correspondent mortgage lender.

History.--s. 20, ch. 95-313; s. 545, ch. 2003-261.

494.0073  Mortgage lender or correspondent mortgage lender when acting as a mortgage brokerage business.--Sections 494.006-494.0077 do not prohibit a mortgage lender or correspondent mortgage lender from acting as a mortgage brokerage business. However, in mortgage transactions in which a mortgage lender or correspondent mortgage lender acts as a mortgage brokerage business, the provisions of ss. 494.0038, 494.0042, and 494.0043(1), (2), and (3) apply.

History.--ss. 44, 50, ch. 91-245; s. 4, ch. 91-429; s. 26, ch. 99-213.

494.0074  Lender fees and charges.--

(1)  In a mortgage financing transaction, fees designated as loan origination fees, up to 4 percent of the face amount of the loan or line of credit, are not considered interest or finance charge under chapter 687.

(2)  In a mortgage finance transaction, fees designated as loan origination fees, up to 10 percent of the face amount of the loan or line of credit, are not considered interest or finance charges under chapter 687 if such licensee sells or assigns the loan to another person within 90 days after the date the loan was funded.

History.--ss. 46, 50, ch. 91-245; s. 4, ch. 91-429.

494.0075  Requirements for selling loans to noninstitutional investors.--

(1)  A mortgage lender, when selling a mortgage loan to a noninstitutional investor, shall:

(a)  Before any payment of money by a noninstitutional investor, provide an opinion of value from an appraiser stating the value of the security property unless the opinion is waived in writing. The opinion must state the value of the property as it exists on the date of the opinion. If any relationship exists between the lender and the appraiser, that relationship shall be disclosed;

(b)  Provide to the noninstitutional investor a mortgagee's title insurance policy or an opinion of title by an attorney licensed to practice law in this state, or a copy thereof:

1.  If a title insurance policy is issued, it must insure the noninstitutional investor against the unmarketability of the mortgagee's interest in such title. It must also specify any superior liens that exist against the property. If an opinion of title is issued by an attorney licensed to practice law in this state, the opinion must include a statement as to the marketability of the title to the property described in the mortgage and specify the priority of the mortgage being purchased.

2.  If the title insurance policy or opinion of title is not available at the time of purchase, the licensee shall provide a binder of the title insurance or conditional opinion of title. This binder or opinion must include any conditions or requirements needed to be corrected prior to the issuance of the final title policy or opinion of title. The binder or opinion must also include information concerning the requirements specified in subparagraph 1. Any conditions must be eliminated or waived in writing by the investor prior to delivery to the noninstitutional investor. The policy or opinion, or a copy thereof, shall be delivered to the investor within a reasonable period of time, not exceeding 6 months, after purchase.

3.  The requirements of this paragraph may be waived in writing. If the requirements are waived by the noninstitutional investor, the waiver must include the following wording: "The noninstitutional investor acknowledges that the mortgage lender selling this mortgage loan is not providing a title insurance policy or opinion of title issued by an attorney who is licensed to practice law in the State of Florida. Any requirement for title insurance or for a legal opinion of title is the sole responsibility of the noninstitutional mortgage purchaser."

(c)  Provide, if the loan is other than a first mortgage, a statement showing the balance owed by the mortgagor on any existing mortgages prior to this investment and the status of such existing mortgages.

(d)  Provide a disclosure if the licensee is directly or indirectly acting as a borrower or principal in the transaction.

(2)  Each mortgage, or other instrument securing a note or assignment thereof, shall be recorded before being delivered to the noninstitutional investor.

(3)  Each mortgage and assignment shall be recorded as soon as practical, but no later than 30 business days after the date of purchase.

(4)  If the loan is to be serviced by a licensee under ss. 494.006-494.0077 for a noninstitutional investor, there shall be a written servicing agreement.

(5)  The mortgage lender shall cause the original note to be properly endorsed showing the assignment of the note to the noninstitutional investor.

History.--ss. 47, 50, ch. 91-245; s. 4, ch. 91-429.

494.0076  Servicing audits.--

(1)(a)  Each licensee under ss. 494.006-494.0077 which services mortgage loans shall:

1.  Maintain a segregated set of records for accounts that are serviced by the licensee.

2.  Have a separate, segregated depository account for all receipts relating to servicing.

(b)  For fiscal years ending after January 1, 1992, such records and receipts shall be audited annually pursuant to the Uniform Single Audit Program for Mortgage Bankers as approved by the Mortgage Bankers Association of America with the cooperation of the American Institute of Certified Public Accountants.

(c)  The audited statement shall be maintained at the licensee's place of business.

(2)(a)  In lieu of the audit referred to in subsection (1), a person who services an aggregate value of less than $7.5 million in outstanding mortgage loans, excluding mortgage loans serviced under contract as an agent for federal, state, or municipal agencies, may obtain a fidelity bond, financial guaranty bond, fidelity insurance, or other financial guaranty providing protection against theft, loss, or other illegal diversion of funds for any amounts normally held by such person.

(b)  The commission may adopt rules to ensure that investors are adequately protected under this subsection.

History.--ss. 48, 50, ch. 91-245; s. 4, ch. 91-429; s. 546, ch. 2003-261.

494.0077  Other products and services.--Sections 494.006-494.0077 do not prohibit a mortgage lender from offering, for a fee or commission, products and services in addition to those offered in conjunction with a loan.

History.--ss. 49, 50, ch. 91-245; s. 4, ch. 91-429.

494.0078  Short title; purposes.

494.0079  Definitions.

494.00791  Prohibited acts.

494.00792  Required disclosures for high-cost home loans.

494.00793  Liability of purchasers and assignees.

494.00794  Right to cure high-cost home loans.

494.00795  Powers and duties of the commission and office; investigations; examinations; injunctions; orders.

494.00796  Enforcement.

494.00797  General rule.

494.0078  Short title; purposes.--

(1)  This act shall be known as the "Florida Fair Lending Act."

(2)(a)  The Legislature finds that abusive mortgage lending has become a problem in this state even though most high-cost home loans do not involve abusive mortgage practices. One of the most common forms of abusive lending is the making of loans that are equity-based rather than income-based. The financing of points and fees in these loans provides immediate income to the originator and encourages creditors to repeatedly refinance home loans. As long as there is sufficient equity in the home, an abusive creditor benefits even if the borrower is unable to make the payments and is forced to refinance. The financing of high points and fees causes the loss of equity in each refinancing and often leads to foreclosure.

(b)  Abusive lending has threatened the viability of many communities and caused decreases in home ownership. While the marketplace appears to operate effectively for conventional mortgages, too many homeowners find themselves victims of overreaching creditors who provide loans with unnecessarily high costs and terms that are unnecessary to secure repayment of the loan. The Legislature finds that as competition and self-regulation have not eliminated the abusive terms from home-secured loans, the consumer protection provisions of this act are necessary to encourage fair lending.

History.--s. 1, ch. 2002-57.

494.0079  Definitions.--As used in this act:

(1)  "Affiliate" means any company that controls, is controlled by, or is in common control with another company, as set forth in 12 U.S.C. ss. 1841 et seq. and the regulations adopted thereunder.

(2)  "Annual percentage rate" means the annual percentage rate for the loan calculated according to the provisions of 15 U.S.C. s. 1606 and the regulations adopted thereunder by the Federal Reserve Board.

(3)  "Borrower" means any natural person obligated to repay a loan, including, but not limited to, a coborrower, cosignor, or guarantor.

(4)  "Bridge loan" means a loan with a maturity of less than 18 months that only requires the payment of interest until such time as the entire unpaid balance is due and payable.

(5)  "Commission" means the Financial Services Commission.

(6)  "Office" means the Office of Financial Regulation of the commission.

(7)  "High-cost home loan" means a home loan as defined in 15 U.S.C. s. 1602(aa) and regulations adopted thereunder.

(8)  "Lender" means any person who makes a high-cost home loan or acts as a mortgage broker or lender, finance company, or retail installment seller with respect to a high-cost home loan, but shall not include any entity chartered by the United States Congress when engaging in secondary market mortgage transactions as an assignee or otherwise.

History.--s. 2, ch. 2002-57; s. 547, ch. 2003-261.

494.00791  Prohibited acts.--

(1)  PREPAYMENT PENALTIES.--

(a)  A high-cost home loan may not contain terms that require a borrower to pay a prepayment penalty for paying all or part of the loan principal before the date on which the payment is due.

(b)  Notwithstanding paragraph (a), a lender making a high-cost home loan may include in the loan contract a prepayment fee or penalty, for up to the first 36 months after the date of consummation of the loan, if:

1.  The borrower has also been offered a choice of another product without a prepayment penalty.

2.  The borrower has been given, at least 3 business days prior to the loan consummation, a written disclosure of the terms of the prepayment fee or penalty by the lender, including the benefit the borrower will receive for accepting the prepayment fee or penalty through either a reduced interest rate on the loan or reduced points or fees.

(2)  DEFAULT INTEREST RATE.--A high-cost home loan may not provide for a higher interest rate after default on the loan. However, this prohibition does not apply to interest rate changes in a variable rate loan otherwise consistent with the provisions of the loan documents, provided the change in interest rate is not triggered by a default or the acceleration of the interest rate.

(3)  BALLOON PAYMENTS.--A high-cost home loan having a term of less than 10 years may not contain terms under which the aggregate amount of the regular periodic payments would not fully amortize the outstanding principal balance. However, this prohibition does not apply when the payment schedule is adjusted to account for the seasonal or irregular income of the borrower or if the loan is a bridge loan.

(4)  NEGATIVE AMORTIZATION.--A high-cost home loan may not contain terms under which the outstanding principal balance will increase at any time over the course of the loan because the regular periodic payments do not cover the full amount of the interest due.

(5)  PREPAID PAYMENTS.--A high-cost home loan may not include terms under which more than two periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the borrower.

(6)  EXTENDING CREDIT WITHOUT REGARD TO THE PAYMENT ABILITY OF THE BORROWER.--A lender making a high-cost home loan shall not engage in any pattern or practice of extending high-cost home loans to borrowers based upon the borrowers' collateral without regard to the borrowers' ability to repay the loan, including the borrowers' current and expected income, current obligations, and employment.

(7)  PAYMENTS TO A HOME CONTRACTOR.--A lender shall not make any payments to a contractor under a home improvement contract from amounts of a high-cost home loan other than:

(a)  In the form of an instrument that is payable to the borrower or jointly to the borrower and the contractor; or

(b)  At the election of the borrower by a third-party escrow agent in accordance with terms established in a written agreement signed by the borrower, the lender, and the contractor prior to the date of payment.

(8)  DUE-ON-DEMAND CLAUSE.--A high-cost home loan may not contain a provision that permits the lender, in its sole discretion, to call or accelerate the indebtedness. This provision does not prohibit acceleration of the loan due to the borrower's failure to abide by the terms of the loan, or due to fraud or material misrepresentation by the consumer in connection with the loan.

(9)  REFINANCING WITHIN AN 18-MONTH PERIOD.--

(a)  A lender, its affiliate, or an assignee shall not refinance any high-cost home loan to the same borrower within the first 18 months of the loan when the refinancing does not have a reasonable benefit to the borrower considering all of the circumstances, including, but not limited to, the terms of both the new and refinanced loans, the cost of the new loan, and the borrower's circumstances.

(b)  A lender or assignee shall not engage in acts or practices to evade this requirement, including a pattern or practice of arranging for the refinancing of the lender's or assignee's own loans by affiliated or unaffiliated lenders or modifying a loan agreement, whether or not the existing loan is satisfied and replaced by the new loan, and charging a fee.

(10)  OPEN-ENDED LOANS.--A lender shall not make any loan as an open-ended loan in order to evade the provisions of this act unless such open-ended loans meet the definition in 12 C.F.R. s. 226.2(a)(20).

(11)  RECOMMENDATION OF DEFAULT.--A lender shall not recommend or encourage default on an existing loan or other debt prior to and in connection with the closing or planned closing of a high-cost home loan that refinances all or any portion of such existing loan or debt.

(12)  PROHIBITED DOOR-TO-DOOR LOANS.--A high-cost home loan may not be made as a direct result of a potential or future lender or its representative offering or selling a high-cost home loan at the residence of a potential borrower without a prearranged appointment with the potential borrower or the expressed invitation of the potential borrower. This subsection does not apply to mail solicitations that may be received by the potential borrower.

(13)  LATE PAYMENT FEES.--A lender may not charge a late payment fee for a high-cost home loan except as provided in this subsection:

(a)  A late payment fee may not be in excess of 5 percent of the amount of the payment past due.

(b)  A late payment fee may only be assessed for a payment past due for 15 days or more.

(c)  A late payment fee may not be charged more than once with respect to a single late payment. If a late payment fee is deducted from a payment made on the loan and such deduction causes a subsequent default on a subsequent payment, no late payment fee may be imposed for such default. If a late payment fee has been imposed once with respect to a particular late payment, no such fee shall be imposed with respect to any future payment which would have been timely and sufficient, but for the previous default.

(14)  MODIFICATION OR DEFERRAL FEES.--A lender may not charge a borrower any fees or other charges to modify, renew, extend, or amend a high-cost home loan or to defer any payment due under the terms of a high-cost home loan on a minimum of one modification, renewal, extension, or deferral per each 12 months of the length of the loan.

History.--s. 3, ch. 2002-57.

494.00792  Required disclosures for high-cost home loans.--

(1)  In addition to other disclosures required by law and in conspicuous type:

(a)  Notice to borrower.--A lender making a high-cost home loan shall provide a notice to a borrower in substantially the following form:

If you obtain this high-cost home loan, the lender will have a mortgage on your home. You could lose your home and any money you have put into it if you do not meet your obligations under the loan.

Mortgage loan rates and closing costs and fees vary based on many factors, including your particular credit and financial circumstances, your employment history, the loan-to-value requested, and the type of property that will secure your loan. The loan rate and fees could also vary based upon which lender or broker you select. As a borrower, you should shop around and compare loan rates and fees.

You should also consider consulting a qualified independent credit counselor or other experienced financial adviser regarding the rates, fees, and provisions of this mortgage loan before you proceed. You should contact the United States Department of Housing and Urban Development for a list of credit counselors available in your area.

You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application.

Borrowing for the purpose of debt consolidation can be an appropriate financial management tool. However, if you continue to incur significant new credit card charges or other debts after this high-cost home loan is closed and then experience financial difficulties, you could lose your home and any equity you have in it if you do not meet your mortgage loan obligations.

Remember that property taxes and homeowners' insurance are your responsibility. Not all lenders provide escrow services for these payments. You should ask your lender about these services.

Also, your payments on existing debts contribute to your credit rating. You should not accept any advice to ignore your regular payments to your existing creditors.

(b)  Annual percentage rate.--A lender making a high-cost home loan shall disclose:

1.  In the case of a fixed mortgage, the annual percentage rate and the amount of the regular monthly payment.

2.  In the case of any other credit transaction, the annual percentage rate, the amount of the regular monthly payment and the amount of any balloon payment permitted under this section, a statement that the interest rate and monthly payment may increase, and the amount of the maximum monthly payment based upon the maximum interest rate allowed pursuant to law.

(c)  Notice to purchasers and assignees.--All high-cost home loans shall contain the following notice:

Notice: This is a mortgage subject to the provisions of the Florida Fair Lending Act. Purchasers and assignees of this mortgage could be liable for all claims and defenses with respect to the mortgage which the borrower could assert against the creditor.

(2)  TIMING OF DISCLOSURE.--

(a)  The disclosure required by this subsection shall be given not less than 3 business days prior to the consummation of the high-cost home loan.

(b)  New disclosures are required when, after disclosure is made, the lender making the high-cost home loan changes the terms of the extension of credit, including if such changes make the original disclosures inaccurate, unless new disclosures are provided that meet the requirements of this section.

(c)  A lender may provide new disclosures pursuant to paragraph (b) by telephone, if:

1.  The change is initiated by the borrower.

2.  At the consummation of the high-cost home loan:

a.  The lender provides the disclosures in writing to the borrower.

b.  The lender and the borrower certify in writing that the new disclosures were provided by telephone no later than 3 days prior to the consummation of the high-cost home loan.

(d)  A creditor must disclose to any high-cost home loan borrower the rights of the borrower to rescind the high-cost home loan within 3 business days pursuant to 15 U.S.C. s. 1635(a) and shall provide appropriate forms for the borrower to exercise his or her right to rescission. The notice, forms, and provisions thereof must be in accordance with the requirements of 15 U.S.C. s. 1635(a).

History.--s. 4, ch. 2002-57.

494.00793  Liability of purchasers and assignees.--Any person who purchases or is otherwise assigned a high-cost home loan shall be subject to all claims and defenses with respect to that mortgage that the borrower could assert against the creditor of the mortgage, to the same extent and subject to the same limitations that a borrower of a high-cost home loan may assert against an assignee or purchaser pursuant to 15 U.S.C. s. 1641.

History.--s. 5, ch. 2002-57.

494.00794  Right to cure high-cost home loans.--

(1)  RIGHT TO REINSTATE.--For a high-cost home loan, if a lender asserts that grounds for acceleration exist and requires the payment in full of all sums secured by the security instrument, the borrower, or anyone authorized to act on the borrower's behalf, shall have the right, during the 45-day period set forth in subsection (2), to cure the default and reinstate the home loan by tendering the amount or performance as specified in this section. However, once a lender has provided two such notices as required by this section, for two separate incidents, a lender is not thereafter required to provide the notice required by this section, and the borrower is not entitled by this section to cure the default, for a third or subsequent incident for which the lender asserts that grounds exist for acceleration of the loan and repayment in full. Cure of default as provided in this section shall reinstate the borrower to the same position as if the default had not occurred and shall nullify, as of the date of the cure, any acceleration of any obligation under the security instrument or note arising from the default.

(2)  GROUNDS FOR REINSTATEMENT.--Before any action filed to foreclose upon the home or other action is taken to seize or transfer ownership of the home, a notice of the right to cure the default must be delivered to the borrower at the address of the property upon which any security exists for the home loan by postage prepaid certified United States mail, return receipt requested, which notice is effective upon deposit in the United States mail, and shall inform the borrower:

(a)  Of the nature of default claimed on the home loan and of the borrower's right to cure the default by paying the sum of money required to cure the default. If the amount necessary to cure the default will change during the 45-day period after the effective date of the notice due to the application of a daily interest rate or the addition of late payment fees, as allowed by this act, the notice shall give sufficient information to enable the borrower to calculate the amount at any point during the 45-day period.

(b)  Of the date by which the borrower shall cure the default to avoid acceleration and initiation of foreclosure or other action to seize the home, which date shall not be less than 45 days after the date the notice is effective, and the name and address and telephone number of a person to whom the payment or tender shall be made.

(c)  That if the borrower does not cure the default by the date specified, the creditor may take steps to terminate the borrower's ownership of the property by requiring payment in full of the home loan and commencing a foreclosure proceeding or other action to seize the home.

(d)  Of the name and address of the creditor and the telephone number of a representative of the creditor whom the borrower may contact if the borrower disagrees with the creditor's assertion that a default has occurred or the correctness of the creditor's calculation of the amount required to cure the default.

(3)  FEES.--To cure a default under this section, a borrower shall not be required to pay any charge, fee, or penalty attributable to the exercise of the right to cure a default as provided for in this section, other than the fees specifically allowed by this act. The borrower shall not be liable for any attorney's fees or costs relating to the borrower's default that are incurred by the creditor prior to or during the 45-day period set forth in paragraph (2)(b).

History.--s. 6, ch. 2002-57.

494.00795  Powers and duties of the commission and office; investigations; examinations; injunctions; orders.--

(1)(a)  The commission and office are responsible for the administration and enforcement of this act.

(b)  The commission may adopt rules pursuant to ss. 120.536(1) and 120.54 to implement this act. The commission may adopt rules to allow electronic submission of any forms, documents, or fees required by this act.

(2)(a)  The office may conduct an investigation of any person whenever the office has reason to believe, upon complaint or otherwise, that any violation of the act has occurred.

(b)  Any person having reason to believe that a provision of this act has been violated may file a written complaint with the office setting forth the details of the alleged violation.

(c)  The office may conduct examinations of any person to determine compliance with this act.

(3)(a)  The office may bring action, through its own counsel in the name and on behalf of the state, against any person who has violated or is about to violate any provision of this act, or any rule or order issued under the act, to enjoin the person from continuing in or engaging in any act in furtherance of the violation.

(b)  In any injunctive proceeding, the court may, on due showing by the office, issue a subpoena or subpoena duces tecum requiring the attendance of any witness and requiring the production of any books, accounts, records, or other documents and materials that appear necessary to the expeditious resolution of the application for injunction.

(4)  The office may issue and serve upon any person an order to cease and desist and to take corrective action whenever the office has reason to believe the person is violating, has violated, or is about to violate any provision of this act, any rule or order issued under this act, or any written agreement between the person and the office. All procedural matters relating to issuance and enforcement of cease and desist orders are governed by the Administrative Procedure Act.

(5)  Whenever the office finds a person in violation of this act, it may enter an order imposing a fine in an amount not exceeding $5,000 for each count or separate offense, provided that the aggregate fine for all violations of this act that could have been asserted at the time of the order imposing the fine shall not exceed $500,000.

(6)  Any violation of this act shall also be deemed to be a violation of chapter 494, chapter 516, chapter 520, chapter 655, chapter 657, chapter 658, chapter 660, chapter 663, chapter 665, or chapter 667. The commission may adopt rules to enforce this subsection.

History.--s. 7, ch. 2002-57; s. 548, ch. 2003-261.

494.00796  Enforcement.--

(1)  Any person or the agent, officer, or other representative of any person committing a material violation of the provisions of this act shall forfeit the entire interest charged in the high-cost home loan or contracted to be charged or received, and only the principal sum of such high-cost home loan can be enforced in any court in this state, either at law or in equity.

(2)  A creditor in a home loan who, when acting in good faith, fails to comply with the provisions of this act shall not be deemed to have violated this act if the creditor establishes that within 60 days after receiving any notice from the borrower of the compliance failure, which compliance failure was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such errors, the borrower has been notified of the compliance failure, appropriate restitution has been made to the borrower, and appropriate adjustments are made to the loan. Bona fide errors shall include, but not be limited to, clerical, calculation, computer malfunction and programming, and printing errors. An error of legal judgment with respect to a person's obligations under this section is not a bona fide error.

(3)  The remedies provided in this section are cumulative.

History.--s. 8, ch. 2002-57.

494.00797  General rule.--All counties and municipalities of this state are prohibited from enacting and enforcing ordinances, resolutions, and rules regulating financial or lending activities, including ordinances, resolutions, and rules disqualifying persons from doing business with a city, county, or municipality based upon lending interest rates or imposing reporting requirements or any other obligations upon persons regarding financial services or lending practices of persons or entities, and any subsidiaries or affiliates thereof, who:

(1)  Are subject to the jurisdiction of the office, including for activities subject to this chapter, except entities licensed under s. 537.004;

(2)  Are subject to the jurisdiction of the Office of Thrift Supervision, the Office of the Comptroller of the Currency, the National Credit Union Administration, the Federal Deposit Insurance Corporation, the Federal Trade Commission, or the United States Department of Housing and Urban Development;

(3)  Originate, purchase, sell, assign, secure, or service property interests or obligations created by financial transactions or loans made, executed, or originated by persons referred to in subsection (1) or subsection (2) to assist or facilitate such transactions;

(4)  Are chartered by the United States Congress to engage in secondary market mortgage transactions; or

(5)  Are created by the Florida Housing Finance Corporation.

Proof of noncompliance with this act can be used by a city, county, or municipality of this state to disqualify a vendor or contractor from doing business with a city, county, or municipality of this state.

History.--s. 9, ch. 2002-57; s. 549, ch. 2003-261.

494.008  Mortgages offered by land developers licensed pursuant to the Florida Uniform Land Sales Practices Law; requirements; prohibitions.

494.008  Mortgages offered by land developers licensed pursuant to the Florida Uniform Land Sales Practices Law; requirements; prohibitions.--No mortgage loan which has a face amount of $35,000 or less and is secured by vacant land registered under the Florida Uniform Land Sales Practices Law, chapter 498, shall be sold to a mortgagee, except a financial institution, by any person unless all of the following requirements are met:

(1)  Each mortgage securing a note or other obligation sold or offered for sale shall be eligible for a recordation as a first mortgage.

(2)  Each mortgage negotiated pursuant to this section must include a mortgagee's title insurance policy or an opinion of title, from an attorney who is licensed to practice law in this state, on each parcel of land which is described in the mortgage. The policy or opinion shall reflect that there are no other mortgages on the property. A notice stating the priority of the mortgage shall be placed on the face of each mortgage in an amount over $35,000 issued pursuant to this section.

(3)  Contracts to purchase a mortgage loan shall contain, immediately above the purchaser's signature line, the statement in 10-point boldfaced type: "This mortgage is secured by vacant land subject to development at a future time." This statement shall also be typed or printed in 10-point type on the face of the note and mortgage sold.

(4)  The most recent assessment for tax purposes made by the county property appraiser of each parcel of land described in the mortgage shall be furnished to each mortgagee.

(5)  The mortgage broker shall record or cause to be recorded all mortgages or other similar documents prior to delivery of the note and mortgage to the mortgagee.

(6)  All funds received by the mortgage broker pursuant to this section shall promptly be deposited in the broker's trust account where they shall remain until the note and mortgage are fully executed and recorded.

(7)  Willful failure to comply with any of the above provisions shall subject the person to the penalties of ¹s. 494.05.

History.--s. 3, ch. 77-397; s. 376, ch. 81-259; s. 2, ch. 81-318; ss. 10, 30, ch. 86-68; s. 50, ch. 91-245; s. 4, ch. 91-429.

¹Note.--Repealed by s. 29, ch. 86-68.

Note.--Former s. 494.041.