CS/CS/HB 823

1
A bill to be entitled
2An act relating to loan processing; amending s. 494.001,
3F.S.; creating and revising definitions; deleting a
4redundant definition; amending s. 494.0011, F.S.;
5specifying rulemaking powers of the Financial Services
6Commission; amending s. 494.00255, F.S.; including in-
7house loan processors in disciplinary provisions; amending
8s. 494.00331, F.S.; providing that specified provisions do
9not apply to a licensed contract loan processor who has on
10file with the office a declaration of intent to act solely
11as a contract loan processor; deleting a definition;
12providing restrictions on employment of persons acting as
13in-house loan processors; amending s. 494.0035, F.S.;
14clarifying provisions concerning operation of mortgage
15brokers; amending s. 494.0038, F.S.; revising provisions
16relating to disclosure of settlement charges and loan
17terms; amending s. 494.00421, F.S.; revising an agency
18reference in the mortgage broker agreement; providing that
19a borrower may contact the Office of Financial Regulation
20rather than the Department of Financial Services regarding
21any complaints against a loan originator; amending s.
22494.00612, F.S.; requiring that in order to renew a
23mortgage lender license a mortgage lender must authorize
24the Nationwide Mortgage Licensing System and Registry to
25obtain an independent credit report on each of the
26mortgage lender's control persons; amending s. 494.0067,
27F.S.; requiring each mortgage lender to submit certain
28reports to the registry as may be required; providing an
29effective date.
30
31Be It Enacted by the Legislature of the State of Florida:
32
33     Section 1.  Subsections (5) through (9), (10) through (14),
34(15) through (24), and (26) through (34) of section 494.001,
35Florida Statutes, are renumbered as subsections (6) through
36(10), (12) through (16), (18) through (27), and (28) through
37(36), respectively, new subsections (5), (11), and (17) are
38added to that section, and present subsections (14), (25), and
39(26) of that section are amended, to read:
40     494.001  Definitions.-As used in ss. 494.001-494.0077, the
41term:
42     (5)  "Contract loan processor" means an individual who is
43licensed under part II of this chapter as a loan originator, who
44is an independent contractor for a mortgage broker or mortgage
45lender, and who engages only in loan processing.
46     (11)  "In-house loan processor" means an individual who is
47an employee of a mortgage broker or a mortgage lender who
48engages only in loan processing.
49     (16)(14)  "Loan originator" means an individual who,
50directly or indirectly, solicits or offers to solicit a mortgage
51loan, accepts or offers to accept an application for a mortgage
52loan, negotiates or offers to negotiate the terms or conditions
53of a new or existing mortgage loan on behalf of a borrower or
54lender, processes a mortgage loan application, or negotiates or
55offers to negotiate the sale of an existing mortgage loan to a
56noninstitutional investor for compensation or gain. The term
57includes an individual who is required to be licensed as a loan
58originator under the activities of a loan originator as that
59term is defined in the S.A.F.E. Mortgage Licensing Act of 2008,
60and an individual acting as a loan originator pursuant to that
61definition is acting as a loan originator for purposes of this
62definition. The term does not include an employee of a mortgage
63broker or mortgage lender whose duties are limited to who
64performs only administrative or clerical tasks, including
65quoting available interest rates, physically handling a
66completed application form, or transmitting a completed
67application form to a lender on behalf of a prospective
68borrower.
69     (17)  "Loan processing" means:
70     (a)  Receiving, collecting, distributing, and analyzing
71information common for the processing of a mortgage loan; or
72     (b)  Communicating with a consumer to obtain information
73necessary for the processing of a mortgage loan if such
74communication does not include offering or negotiating loan
75rates or terms, or counseling consumers about residential
76mortgage loan rates or terms.
77     (25)  "Person" has the same meaning as in s. 1.01.
78     (28)(26)  "Principal loan originator" means the licensed
79loan originator in charge of, and responsible for, the operation
80of a mortgage lender or mortgage broker, including all of the
81activities of the mortgage lender's or mortgage broker's loan
82originators, in-house loan processors, and branch managers,
83whether employees or independent contractors.
84     Section 2.  Subsection (2) of section 494.0011, Florida
85Statutes, is amended to read:
86     494.0011  Powers and duties of the commission and office.-
87     (2)  To administer ss. 494.001-494.0077, The commission may
88adopt rules to administer parts I, II, and III of this chapter,
89including rules:
90     (a)  Requiring electronic submission of any forms,
91documents, or fees required by this act.
92     (b)  Relating to compliance with the S.A.F.E. Mortgage
93Licensing Act of 2008, including rules to:
94     1.  Require loan originators, mortgage brokers, mortgage
95lenders, and branch offices to register through the registry.
96     2.  Require the use of uniform forms that have been
97approved by the registry, and any subsequent amendments to such
98forms if the forms are substantially in compliance with the
99provisions of this chapter. Uniform forms that the commission
100may adopt include, but are not limited to:
101     a.  Uniform Mortgage Lender/Mortgage Broker Form, MU1.
102     b.  Uniform Mortgage Biographical Statement & Consent Form,
103MU2.
104     c.  Uniform Mortgage Branch Office Form, MU3.
105     d.  Uniform Individual Mortgage License/Registration &
106Consent Form, MU4.
107     3.  Require the filing of forms, documents, and fees in
108accordance with the requirements of the registry.
109     4.  Prescribe requirements for amending or surrendering a
110license or other activities as the commission deems necessary
111for the office's participation in the registry.
112     5.  Prescribe procedures that allow a licensee to challenge
113information contained in the registry.
114     6.  Prescribe procedures for reporting violations of this
115chapter and disciplinary actions on licensees to the registry.
116     (c)  Establishing time periods during which a loan
117originator, mortgage broker, or mortgage lender license
118applicant under part II or part III is barred from licensure due
119to prior criminal convictions of, or guilty or nolo contendere
120pleas by, any of the applicant's control persons, regardless of
121adjudication.
122     1.  The rules must provide:
123     a.  Permanent bars for felonies involving fraud,
124dishonesty, breach of trust, or money laundering;
125     b.  A 15-year disqualifying period for felonies involving
126moral turpitude;
127     c.  A 7-year disqualifying period for all other felonies;
128and
129     d.  A 5-year disqualifying period for misdemeanors
130involving fraud, dishonesty, or any other act of moral
131turpitude.
132     2.  The rules may provide for an additional waiting period
133due to dates of imprisonment or community supervision, the
134commitment of multiple crimes, and other factors reasonably
135related to the applicant's criminal history.
136     3.  The rules may provide for mitigating factors for crimes
137identified in sub-subparagraph 1.b. However, the mitigation may
138not result in a period of disqualification less than 7 years.
139The rule may not mitigate the disqualifying periods in sub-
140subparagraphs 1.a., 1.c., and 1.d.
141     4.  An applicant is not eligible for licensure until the
142expiration of the disqualifying period set by rule.
143     5.  Section 112.011 is not applicable to eligibility for
144licensure under this part.
145     Section 3.  Subsections (3), (4), (5), and (6) of section
146494.00255, Florida Statutes, are amended, and paragraph (m) of
147subsection (1) is reenacted, to read:
148     494.00255  Administrative penalties and fines; license
149violations.-
150     (1)  Each of the following acts constitutes a ground for
151which the disciplinary actions specified in subsection (2) may
152be taken against a person licensed or required to be licensed
153under part II or part III of this chapter:
154     (m)  In any mortgage transaction, violating any provision
155of the federal Real Estate Settlement Procedures Act, as
156amended, 12 U.S.C. ss. 2601 et seq.; the federal Truth in
157Lending Act, as amended, 15 U.S.C. ss. 1601 et seq.; or any
158regulations adopted under such acts.
159     (3)  A mortgage broker or mortgage lender, as applicable,
160is subject to the disciplinary actions specified in subsection
161(2) for a violation of subsection (1) by:
162     (a)  A control person of the mortgage broker or mortgage
163lender; or
164     (b)  A loan originator employed by or contracting with the
165mortgage broker or mortgage lender; or
166     (c)  An in-house loan processor who is an employee of the
167mortgage broker or mortgage lender.
168     (4)  A principal loan originator of a mortgage broker is
169subject to the disciplinary actions specified in subsection (2)
170for violations of subsection (1) by a loan originator or an in-
171house loan processor in the course of an association with the
172mortgage broker if there is a pattern of repeated violations by
173the loan originator or in-house loan processor or if the
174principal loan originator has knowledge of the violations.
175     (5)  A principal loan originator of a mortgage lender is
176subject to the disciplinary actions specified in subsection (2)
177for violations of subsection (1) by a loan originator or an in-
178house loan processor in the course of an association with a
179mortgage lender if there is a pattern of repeated violations by
180the loan originator or in-house loan processor or if the
181principal loan originator has knowledge of the violations.
182     (6)  A branch manager is subject to the disciplinary
183actions specified in subsection (2) for violations of subsection
184(1) by a loan originator or an in-house loan processor in the
185course of an association with the mortgage broker or mortgage
186lender if there is a pattern of repeated violations by the loan
187originator or in-house loan processor or if the branch manager
188has knowledge of the violations.
189     Section 4.  Section 494.00331, Florida Statutes, is amended
190to read:
191     494.00331  Loan originator and loan processor employment.-
192     (1)  LOAN ORIGINATORS.-An individual may not act as a loan
193originator unless he or she is an employee of, or an independent
194contractor for, a mortgage broker or a mortgage lender, and may
195not be employed by or contract with more than one mortgage
196broker or mortgage lender, or either simultaneously.
197     (2)  CONTRACT LOAN PROCESSORS.-Subsection (1) However, this
198provision does not apply to a contract loan processor who has a
199declaration of intent to act solely as a contract loan processor
200on file with the office. The declaration of intent must be on a
201form as prescribed by commission rule any licensed loan
202originator who acts solely as a loan processor and contracts
203with more than one mortgage broker or mortgage lender, or either
204simultaneously.
205     (2)  For purposes of this section, the term "loan
206processor" means an individual who is licensed as a loan
207originator who engages only in:
208     (a)  The receipt, collection, distribution, and analysis of
209information common for the processing or underwriting of a
210residential mortgage loan; or
211     (b)  Communication with consumers to obtain the information
212necessary for the processing or underwriting of a loan, to the
213extent that such communication does not include offering or
214negotiating loan rates or terms or does not include counseling
215consumers about residential mortgage loan rates or terms.
216     (3)  A person may not act as a loan processor unless the
217person is licensed as a loan originator under this chapter and
218has on file with the office a declaration of intent to engage
219solely in loan processing. The declaration of intent must be on
220such form as prescribed by the commission by rule.
221     (a)(4)  A loan originator that currently has a declaration
222of intent to engage solely in loan processing on file with the
223office may withdraw his or her declaration of intent to engage
224solely in loan processing. The withdrawal of declaration of
225intent must be on such form as prescribed by commission rule.
226     (b)(5)  A declaration of intent or a withdrawal of
227declaration of intent is effective upon receipt by the office.
228     (c)(6)  The fee earned by a contract loan processor may be
229paid to the company that employs the loan processor without
230violating the restriction in s. 494.0025(8)(7) requiring fees or
231commissions to be paid to a licensed mortgage broker or mortgage
232lender or a person exempt from licensure under this chapter.
233     (3)  IN-HOUSE LOAN PROCESSORS.-An individual may not act as
234an in-house loan processor unless he or she is an employee of a
235mortgage broker or a mortgage lender and may not be employed by
236more than one mortgage broker or mortgage lender, or either,
237simultaneously. An in-house loan processor must work at the
238direction of and be subject to the supervision and instruction
239of a loan originator licensed under this part.
240     Section 5.  Subsection (1) of section 494.0035, Florida
241Statutes, is amended to read:
242     494.0035  Principal loan originator and branch manager for
243mortgage broker.-
244     (1)  Each mortgage broker must be operated by a principal
245loan originator who shall have full charge, control, and
246supervision of the mortgage broker business. The principal loan
247originator must have been licensed as a loan originator for at
248least 1 year before being designated as the principal loan
249originator, or must demonstrate to the satisfaction of the
250office that he or she has been actively engaged in a mortgage-
251related mortgage broker-related business for at least 1 year
252before being designated as a principal loan originator. Each
253mortgage broker must keep the office informed of the person
254designated as the principal loan originator as prescribed by
255commission rule. If the designation is inaccurate, the mortgage
256broker business shall be deemed to be operated under the full
257charge, control, and supervision of each officer, director, or
258ultimate equitable owner of a 10-percent or greater interest in
259the mortgage broker, or any other person in a similar capacity.
260A loan originator may not be a principal loan originator for
261more than one mortgage broker at any given time.
262     Section 6.  Paragraph (c) of subsection (3) of section
263494.0038, Florida Statutes, is amended to read:
264     494.0038  Loan origination and mortgage broker fees and
265disclosures.-
266     (3)  At the time a written mortgage broker agreement is
267signed by the borrower or forwarded to the borrower for
268signature, or at the time the mortgage broker business accepts
269an application fee, credit report fee, property appraisal fee,
270or any other third-party fee, but at least 3 business days
271before execution of the closing or settlement statement, the
272mortgage broker shall disclose in writing to any applicant for a
273mortgage loan the following information:
274     (c)  A good faith estimate that discloses settlement
275charges and loan terms, signed and dated by the borrower, which
276discloses the total amount of each of the fees the borrower may
277reasonably expect to pay if the loan is closed, including, but
278not limited to, fees earned by the mortgage broker, lender fees,
279third-party fees, and official fees, together with the terms and
280conditions for obtaining a refund of such fees, if any.
281     1.  Any amount collected in excess of the actual cost shall
282be returned within 60 days after rejection, withdrawal, or
283closing.
284     2.  At the time a good faith estimate is provided to the
285borrower, the loan originator must identify in writing an
286itemized list that provides the recipient of all payments
287charged the borrower, which, except for all fees to be received
288by the mortgage broker, may be disclosed in generic terms, such
289as, but not limited to, paid to lender, appraiser, officials,
290title company, or any other third-party service provider. This
291requirement does not supplant or is not a substitute for the
292written mortgage broker agreement described in subsection (1).
293The disclosure required under this subparagraph must be signed
294and dated by the borrower.
295     Section 7.  Paragraph (a) of subsection (7) of section
296494.00421, Florida Statutes, is amended to read:
297     494.00421  Fees earned upon obtaining a bona fide
298commitment.-Notwithstanding the provisions of ss. 494.001-
299494.0077, any mortgage broker which contracts to receive a loan
300origination fee from a borrower upon obtaining a bona fide
301commitment shall accurately disclose in the mortgage broker
302agreement:
303     (7)(a)  The following statement, in at least 12-point
304boldface type immediately above the signature lines for the
305borrowers:
306     "You are entering into a contract with a mortgage broker to
307obtain a bona fide mortgage loan commitment under the same terms
308and conditions as stated hereinabove or in a separate executed
309good faith estimate form. If the mortgage broker obtains a bona
310fide commitment under the same terms and conditions, you will be
311obligated to pay the loan origination fees even if you choose
312not to complete the loan transaction. If the provisions of s.
313494.00421, Florida Statutes, are not met, the loan origination
314fee can only be earned upon the funding of the mortgage loan.
315The borrower may contact the Office of Financial Regulation
316Department of Financial Services, Tallahassee, Florida,
317regarding any complaints that the borrower may have against the
318loan originator. The telephone number of the office department
319is: ...(insert telephone number)...."
320     Section 8.  Paragraph (e) of subsection (1) of section
321494.00612, Florida Statutes, is amended to read:
322     494.00612  Mortgage lender license renewal.-
323     (1)  In order to renew a mortgage lender license, a
324mortgage lender must:
325     (e)  Authorize the registry to obtain an independent credit
326report on each of the mortgage lender's control persons lender
327from a consumer reporting agency, and transmit or provide access
328to the report to the office. The cost of the credit report shall
329be borne by the licensee.
330     Section 9.  Subsection (13) is added to section 494.0067,
331Florida Statutes, to read:
332     494.0067  Requirements of mortgage lenders.-
333     (13)  Each mortgage lender shall submit to the registry
334reports of condition which are in a form and which contain such
335information as the registry may require.
336     Section 10.  This act shall take effect July 1, 2011.


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