House Bill hb0455c1

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    Florida House of Representatives - 2001              CS/HB 455

        By the Committee on Banking and Representative Detert






  1                      A bill to be entitled

  2         An act relating to mortgage brokering and

  3         lending; amending s. 494.001, F.S.; defining

  4         the term "principal representative"; creating

  5         s. 494.00295, F.S.; providing license renewal

  6         educational requirements for licensees and

  7         principal representatives; amending s.

  8         494.00311, F.S.; expanding the scope of

  9         mortgage business schools to include training

10         for certain other persons; amending s.

11         494.0034, F.S.; adding continuing education

12         requirements for mortgage broker license

13         renewal; amending s. 494.0035, F.S.; requiring

14         brokerage experience requirements for principal

15         brokers; amending s. 494.0061, F.S.; providing

16         educational requirements for mortgage lenders

17         and principal representatives; requiring the

18         designation of a principal representative;

19         requiring testing of such persons; amending s.

20         494.0062, F.S.; providing educational

21         requirements for correspondent mortgage

22         lenders; requiring the designation of a

23         principal representative; requiring the testing

24         of such persons; amending s. 494.0064, F.S.;

25         requiring licensees to submit certification of

26         completion of certain educational requirements

27         by certain persons; amending s. 494.0067, F.S.;

28         requiring licensees to require loan originators

29         and associates to complete certain continuing

30         education programs; requiring licensees to

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  1         maintain certain records; providing effective

  2         dates.

  3

  4  Be It Enacted by the Legislature of the State of Florida:

  5

  6         Section 1.  Subsections (29) is added to section

  7  494.001, Florida Statutes, to read:

  8         494.001  Definitions.--As used in ss. 494.001-494.0077,

  9  the term:

10         (29)  "Principal representative" means an individual

11  who operates the business operations of a licensee under part

12  III.

13         Section 2.  Section 494.00295, Florida Statutes, is

14  created to read:

15         494.00295  Professional education.--

16         (1)  Each mortgage broker, mortgage lender, and

17  correspondent mortgage lender must certify to the department

18  at the time of renewal that during the 2 years prior to an

19  application for license renewal, all mortgage brokers, and the

20  principal representative, loan originators, and associates of

21  a mortgage lender or correspondent mortgage lender have

22  successfully completed at least 14 hours of professional

23  education programs covering primary and subordinate mortgage

24  financing transactions and the provisions of this chapter.

25  Licensees shall maintain records documenting compliance with

26  this subparagraph for a period of 4 years.

27         (2)  Professional education programs must contribute

28  directly to the professional competency of the participants,

29  may only be offered by permitted mortgage business schools or

30  entities specifically exempted from permitting as mortgage

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  1  business schools, and may include electronically transmitted

  2  or distance education courses.

  3         (3)  The department shall adopt rules necessary to

  4  administer this section, including rules governing qualifying

  5  hours for professional education programs and standards for

  6  electronically transmitted or distance education courses,

  7  including course completion requirements.

  8         Section 3.  Section 494.00311, Florida Statutes, is

  9  renumbered as section 494.0029, Florida Statutes, and is

10  amended to read:

11         494.0029 494.00311  Mortgage business brokerage

12  schools.--

13         (1)  Each person, school, or institution, except

14  accredited colleges, universities, community colleges, and

15  area technical centers in this state, which offers or conducts

16  mortgage business brokerage training as a condition precedent

17  to licensure as a mortgage broker or lender or a correspondent

18  mortgage lender shall obtain a permit from the department and

19  abide by the regulations imposed upon such person, school, or

20  institution by this chapter and rules adopted pursuant to this

21  chapter.  The department shall, by rule, recertify the

22  mortgage brokerage school permits annually on an annual basis

23  with initial and renewal permit fees that do which shall not

24  exceed $500 plus the cost of accreditation.

25         (2)  All such mortgage brokerage schools shall maintain

26  curriculum and training materials necessary to determine the

27  mortgage brokerage school's compliance with this chapter and

28  rules adopted pursuant to this chapter.  Any school that which

29  offers or conducts mortgage business brokerage training shall

30  at all times maintain an operation of training, materials, and

31  curriculum which is open to review by the department to

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  1  determine compliance and competency as a mortgage business

  2  brokerage school.

  3         (3)(a)  It is unlawful for any such person, school, or

  4  institution to offer or conduct mortgage business brokerage

  5  courses, regardless of the number of pupils, without first

  6  procuring a permit or to guarantee that the pupils will pass

  7  any mortgage business brokerage examination given on behalf of

  8  the department or to represent that the issuance of a permit

  9  is any recommendation or endorsement of the person, school, or

10  institution to which it is issued or of any course of

11  instruction given thereunder.  Any person who violates this

12  paragraph commits a misdemeanor of the second degree,

13  punishable as provided in s. 775.082 or s. 775.083.

14         (b)  The location of classes and the frequency of class

15  meetings shall be in the discretion of the school offering the

16  mortgage brokerage courses, if provided such courses conform

17  to this chapter and related rules adopted by the department.

18         (c)  A mortgage business brokerage school may shall not

19  use advertising of any nature which is false, inaccurate,

20  misleading, or exaggerated.  Publicity and advertising of a

21  mortgage business brokerage school, or of its representative,

22  shall be based upon relevant facts and supported by evidence

23  establishing their truth.

24         (d)  A No representative of a any mortgage business

25  brokerage school subject to the provisions of this chapter may

26  not shall promise or guarantee employment or placement of any

27  pupil or prospective pupil, using information, training, or

28  skill purported to be provided or otherwise enhanced by a

29  course or school as inducement to enroll in the school, unless

30  such person offers the pupil or prospective pupil a bona fide

31  contract of employment.

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  1         (e)  A school shall advertise only as a school and

  2  under the permitted name of such school as recognized by the

  3  department.

  4         (f)  No Reference may not be made in any publication or

  5  communication medium as to a pass/fail ratio on mortgage

  6  business brokerage examinations by any school permitted by the

  7  department.

  8         Section 4.  Subsection (1) of section 494.0034, Florida

  9  Statutes, is amended to read:

10         494.0034  Renewal of mortgage broker's license.--

11         (1)  The department shall renew a mortgage broker

12  license upon receipt of the completed renewal form,

13  certification of compliance with continuing education

14  requirements of s. 494.00295, and payment of a nonrefundable

15  renewal fee of $150.

16         Section 5.  Subsection (1) of section 494.0035, Florida

17  Statutes, is amended to read:

18         494.0035  Principal broker and branch broker

19  requirements.--

20         (1)  Each mortgage brokerage business must have a

21  principal broker who shall operate the business under such

22  broker's full charge, control, and supervision.  The principal

23  broker must have been be a licensed mortgage broker pursuant

24  to s. 494.0033 for at least 1 year prior to being designated

25  as a principal broker, or shall demonstrate to the

26  satisfaction of the department that such principal broker has

27  been actively engaged in a mortgage-related business for at

28  least 1 year prior to being designated as a principal broker.

29  Each mortgage brokerage business shall maintain a form as

30  prescribed by the department indicating the business's

31  designation of principal broker and the individual's

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  1  acceptance of such responsibility.  If the form is

  2  unavailable, inaccurate, or incomplete, it is deemed that the

  3  business was operated in the full charge, control, and

  4  supervision by each officer, director, or ultimate equitable

  5  owner of a 10-percent or greater interest in the mortgage

  6  brokerage business, or any other person in a similar capacity.

  7         Section 6.  Subsection (1) of section 495.0061, Florida

  8  Statutes, is amended, and subsections (8), (9), and (10) are

  9  added to said section, to read:

10         494.0061  Mortgage lender's license requirements.--

11         (1)  The department may require each applicant for a

12  mortgage lender license to provide any information reasonably

13  necessary to make a determination of the applicant's

14  eligibility for licensure.  The department shall issue an

15  initial mortgage lender license to any person that submits:

16         (a)  A completed application form;

17         (b)  A nonrefundable application fee of $575;

18         (c)  Audited financial statements, which documents

19  disclose that the applicant has a bona fide and verifiable net

20  worth, pursuant to generally accepted accounting principles,

21  of at least $250,000, which must be continuously maintained as

22  a condition of licensure;

23         (d)  A surety bond in the amount of $10,000, payable to

24  the state and conditioned upon compliance with ss.

25  494.001-494.0077, which inures to the department and which

26  must be continuously maintained thereafter in full force; and

27         (e)  Documentation that the applicant is duly

28  incorporated, registered, or otherwise formed as a general

29  partnership, limited partnership, limited liability company,

30  or other lawful entity under the laws of this state or another

31  state of the United States; and

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  1         (f)  For applications submitted after October 1, 2001,

  2  proof that the applicant's principal representative has

  3  completed 24 hours of classroom instruction in primary and

  4  subordinate financing transactions and in the provisions of

  5  this chapter and rules adopted under this chapter.

  6         (8)  Each lender, regardless of the number of branches

  7  it operates, shall designate a principal representative who

  8  exercises control of the licensee's business and shall

  9  maintain a form prescribed by the department designating the

10  principal representative. If the form is not accurately

11  maintained, the business is considered to be operated by each

12  officer, director, or equitable owner of a 10 percent or

13  greater interest in the business.

14         (9)  After October 1, 2001, an applicant's principal

15  representative must pass a written test prescribed by the

16  department which covers primary and subordinate mortgage

17  financing transactions and the provisions of this chapter and

18  rules adopted under this chapter.

19         (10)  A lender shall notify the department of the name

20  and address of any new principal representative and shall

21  document that the person has completed the educational and

22  testing requirements of this section upon the designation of a

23  new principal representative.

24         Section 7.  Subsection (1) of section 494.0062, Florida

25  Statutes, is amended, and subsections (11), (12), and (13) are

26  added to said section, to read:

27         494.0062  Correspondent mortgage lender's license

28  requirements.--

29         (1)  The department shall issue an initial

30  correspondent mortgage lender license to any person who

31  submits:

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  1         (a)  A completed application form;

  2         (b)  A nonrefundable application fee of $500;

  3         (c)  Audited financial statements, which document that

  4  the application has a bona fide and verifiable net worth

  5  pursuant to generally accepted accounting principles of

  6  $25,000 or more, which must be continuously maintained as a

  7  condition of licensure;

  8         (d)  A surety bond in the amount of $10,000, payable to

  9  the State of Florida and conditioned upon compliance with ss.

10  494.001-494.0077, which inures to the department and which

11  must be continuously maintained, thereafter, in full force;

12  and

13         (e)  Documentation that the applicant is duly

14  incorporated, registered, or otherwise formed as a general

15  partnership, limited partnership, limited liability company,

16  or other lawful entity under the laws of this state or another

17  state of the United States; and

18         (f)  For applications filed after October 1, 2001,

19  proof that the applicant's principal representative has

20  completed 24 hours of classroom instruction in primary and

21  subordinate financing transactions and in the provisions of

22  this chapter and rules enacted under this chapter.

23         (11)  Each correspondent lender shall designate a

24  principal representative who exercises control over the

25  business and shall maintain a form prescribed by the

26  department designating the principal representative. If the

27  form is not accurately maintained, the business is considered

28  to be operated by each officer, director, or equitable owner

29  of a 10 percent or greater interest in the business.

30         (12)  After October 1, 2001, an applicant's principal

31  representative must pass a written test prescribed by the

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  1  department which covers primary and subordinate mortgage

  2  financing transactions and the provisions of this chapter and

  3  rules adopted under this chapter.

  4         (13)  A correspondent lender shall notify the

  5  department of the name and address of any new principal

  6  representative and shall document that such person has

  7  completed the educational and testing requirements of this

  8  section upon the lender's designation of a new principal

  9  representative.

10         Section 8.  Subsection (1) of section 494.0064, Florida

11  Statutes, is amended to read:

12         494.0064  Renewal of mortgage lender's license; branch

13  office license renewal.--

14         (1)(a)  The department shall renew a mortgage lender

15  license upon receipt of a completed renewal form and the

16  nonrefundable renewal fee of $575. The department shall renew

17  a correspondent lender license upon receipt of a completed

18  renewal form and a nonrefundable renewal fee of $475.  Each

19  licensee shall pay at the time of renewal a nonrefundable fee

20  of $325 for the renewal of each branch office license.

21         (b)  A licensee shall also submit, as part of the

22  renewal form, certification that during the preceding 2 years

23  the licensee's principal representative, loan originators, and

24  associates have completed the education requirements of s.

25  494.00295.

26         Section 9.  Effective October 1, 2002, subsection (10)

27  is added to section 494.0067, Florida Statutes, to read:

28         494.0067  Requirements of licensees under ss.

29  494.006-494.0077.--

30         (10)(a)  Each licensee shall require all loan

31  originators or associates who perform services for the

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  1  licensee to complete 14 hours of professional education during

  2  each biennial license period. The education shall cover

  3  primary and subordinate mortgage financing transactions and

  4  the provisions of this chapter and the rules adopted under

  5  this chapter.

  6         (b)  The licensee shall maintain records of such

  7  training for a period of 4 years, including records of the

  8  content of and hours designated for each program and the date

  9  and location of the program.

10         (c)  Evidence of completion of such programs shall be

11  included with the licensee's renewal application.

12         Section 10.  Except as otherwise provided herein, this

13  act shall take effect October 1, 2001.

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