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; amending s. 494.0025, F.S.;
6prohibiting acting as an in-house loan processor without a
7specified license; amending s. 494.0018, F.S.; revising
8cross-references; amending s. 494.00255, F.S.; including
9licensed in-house loan processors in disciplinary
10provisions; creating s. 494.00314, F.S.; providing for
11licensing of in-house loan processors; providing
12application requirements; specifying when an application
13is considered received; providing grounds for denial of
14licensure; prohibiting issuance of licenses to applicants
15who have had certain licenses revoked in other
16jurisdictions; providing for annulment of licenses in
17certain circumstances; requiring annual renewal of
18licenses; providing that an in-house loan processor may
19not act as a loan originator without a loan originator
20license; providing that a licensed loan originator may act
21as an in-house loan processor without an in-house loan
22processor license; creating s. 494.00315, F.S.; providing
23for license renewals; amending s. 494.00312, F.S.;
24providing that a loan originator license may not be issued
25to a person who has had an in-house loan processor license
26or its equivalent revoked in any jurisdiction; amending s.
27494.00331, F.S.; providing that specified provisions do
28not apply to a licensed contract loan processor who has on
29file with the office a declaration of intent to act solely
30as a contract loan processor; deleting a definition;
31providing restrictions on employment of persons licensed
32as in-house loan processors; amending s. 494.0035, F.S.;
33clarifying language concerning operation of mortgage
34brokers; amending s. 494.0038, F.S.; revising provisions
35relating to disclosure of settlement charges and loan
36terms; amending s. 494.00421, F.S.; revising an agency
37reference; amending s. 494.00611, F.S.; providing that a
38mortgage lender license may not be issued to an applicant
39if any of the applicant's control persons has ever had an
40in-house loan processor license or its equivalent revoked
41in any jurisdiction; amending s. 494.00612, F.S.;
42requiring that in order to renew a mortgage lender license
43a mortgage lender must authorize the Nationwide Mortgage
44Licensing System and Registry to obtain an independent
45credit report on each of the mortgage lender's control
46persons; amending s. 494.0067, F.S.; requiring each
47mortgage lender to submit certain reports to the registry
48as may be required; providing an effective date.
49
50Be It Enacted by the Legislature of the State of Florida:
51
52     Section 1.  Subsections (5) through (9), (10) through (14),
53(15) through (24), and (26) through (34) of section 494.001,
54Florida Statutes, are renumbered as subsections (6) through
55(10), (12) through (16), (18) through (27), and (28) through
56(36), respectively, new subsections (5), (11), and (17) are
57added to that section, and present subsections (14), (25), and
58(26) of that section are amended, to read:
59     494.001  Definitions.-As used in ss. 494.001-494.0077, the
60term:
61     (5)  "Contract loan processor" means an individual who is
62an independent contractor for a mortgage broker or a mortgage
63lender who engages only in loan processing.
64     (11)  "In-house loan processor" means an individual who is
65an employee of a mortgage broker or a mortgage lender who
66engages only in loan processing.
67     (16)(14)  "Loan originator" means an individual who,
68directly or indirectly, solicits or offers to solicit a mortgage
69loan, accepts or offers to accept an application for a mortgage
70loan, negotiates or offers to negotiate the terms or conditions
71of a new or existing mortgage loan on behalf of a borrower or
72lender, processes a mortgage loan application, or negotiates or
73offers to negotiate the sale of an existing mortgage loan to a
74noninstitutional investor for compensation or gain. The term
75includes an individual who is required to be licensed as a loan
76originator under the activities of a loan originator as that
77term is defined in the S.A.F.E. Mortgage Licensing Act of 2008,
78and an individual acting as a loan originator pursuant to that
79definition is acting as a loan originator for purposes of this
80definition. The term does not include an employee of a mortgage
81broker or mortgage lender whose duties are limited to who
82performs only administrative or clerical tasks, including
83quoting available interest rates, physically handling a
84completed application form, or transmitting a completed
85application form to a lender on behalf of a prospective
86borrower.
87     (17)  "Loan processing" means:
88     (a)  The receipt, collection, distribution, and analysis of
89information common for the processing of a mortgage loan; or
90     (b)  Communicating with a consumer to obtain the
91information necessary for the processing of a mortgage loan, to
92the extent that such communication does not include offering or
93negotiating loan rates or terms or counseling consumers about
94residential mortgage loan rates or terms.
95     (25)  "Person" has the same meaning as in s. 1.01.
96     (28)(26)  "Principal loan originator" means the licensed
97loan originator in charge of, and responsible for, the operation
98of a mortgage lender or mortgage broker, including all of the
99activities of the mortgage lender's or mortgage broker's loan
100originators, in-house loan processors, and branch managers,
101whether employees or independent contractors.
102     Section 2.  Subsection (2) of section 494.0011, Florida
103Statutes, is amended to read:
104     494.0011  Powers and duties of the commission and office.-
105     (2)  To administer ss. 494.001-494.0077, the commission may
106adopt rules pursuant to ss. 120.536(1) and 120.54 to implement
107parts I, II, and III of this chapter, including rules:
108     (a)  Requiring electronic submission of any forms,
109documents, or fees required by this act.
110     (b)  Relating to compliance with the S.A.F.E. Mortgage
111Licensing Act of 2008, including rules to:
112     1.  Require loan originators, mortgage brokers, mortgage
113lenders, and branch offices to register through the registry.
114     2.  Require the use of uniform forms that have been
115approved by the registry, and any subsequent amendments to such
116forms if the forms are substantially in compliance with the
117provisions of this chapter. Uniform forms that the commission
118may adopt include, but are not limited to:
119     a.  Uniform Mortgage Lender/Mortgage Broker Form, MU1.
120     b.  Uniform Mortgage Biographical Statement & Consent Form,
121MU2.
122     c.  Uniform Mortgage Branch Office Form, MU3.
123     d.  Uniform Individual Mortgage License/Registration &
124Consent Form, MU4.
125     3.  Require the filing of forms, documents, and fees in
126accordance with the requirements of the registry.
127     4.  Prescribe requirements for amending or surrendering a
128license or other activities as the commission deems necessary
129for the office's participation in the registry.
130     5.  Prescribe procedures that allow a licensee to challenge
131information contained in the registry.
132     6.  Prescribe procedures for reporting violations of this
133chapter and disciplinary actions on licensees to the registry.
134     (c)  Establishing time periods during which a loan
135originator, mortgage broker, or mortgage lender license
136applicant under part II or part III is barred from licensure due
137to prior criminal convictions of, or guilty or nolo contendere
138pleas by, any of the applicant's control persons, regardless of
139adjudication.
140     1.  The rules must provide:
141     a.  Permanent bars for felonies involving fraud,
142dishonesty, breach of trust, or money laundering;
143     b.  A 15-year disqualifying period for felonies involving
144moral turpitude;
145     c.  A 7-year disqualifying period for all other felonies;
146and
147     d.  A 5-year disqualifying period for misdemeanors
148involving fraud, dishonesty, or any other act of moral
149turpitude.
150     2.  The rules may provide for an additional waiting period
151due to dates of imprisonment or community supervision, the
152commitment of multiple crimes, and other factors reasonably
153related to the applicant's criminal history.
154     3.  The rules may provide for mitigating factors for crimes
155identified in sub-subparagraph 1.b. However, the mitigation may
156not result in a period of disqualification less than 7 years.
157The rule may not mitigate the disqualifying periods in sub-
158subparagraphs 1.a., 1.c., and 1.d.
159     4.  An applicant is not eligible for licensure until the
160expiration of the disqualifying period set by rule.
161     5.  Section 112.011 is not applicable to eligibility for
162licensure under this part.
163     Section 3.  Subsections (2) through (10) of section
164494.0025, Florida Statutes, are renumbered as subsections (3)
165through (11), respectively, and a new subsection (2) is added to
166that section to read:
167     494.0025  Prohibited practices.-It is unlawful for any
168person:
169     (2)  To act as an in-house loan processor in this state
170without a current, active license issued by the office pursuant
171to part II of this chapter.
172     Section 4.  Subsection (1) of section 494.0018, Florida
173Statutes, is amended to read:
174     494.0018  Penalties.-
175     (1)  Whoever knowingly violates any provision of s.
176494.00255(1)(a), (b), or (c) or s. 494.0025(1), (3)(2), (4)(3),
177(5)(4), or (6)(5), except as provided in subsection (2) of this
178section, commits a felony of the third degree, punishable as
179provided in s. 775.082, s. 775.083, or s. 775.084. Each such
180violation constitutes a separate offense.
181     Section 5.  Paragraphs (n) and (p) of subsection (1),
182paragraph (f) of subsection (2), and subsections (3), (4), (5),
183(6), and (8) of section 494.00255, Florida Statutes, are amended
184to read:
185     494.00255  Administrative penalties and fines; license
186violations.-
187     (1)  Each of the following acts constitutes a ground for
188which the disciplinary actions specified in subsection (2) may
189be taken against a person licensed or required to be licensed
190under part II or part III of this chapter:
191     (n)  Having a loan originator, an in-house loan processor,
192a mortgage broker, or a mortgage lender license, or the
193equivalent of such license, revoked in any jurisdiction.
194     (p)  Acting as a loan originator, an in-house loan
195processor, a mortgage broker, or a mortgage lender without a
196current license issued under part II or part III of this
197chapter.
198     (2)  If the office finds a person in violation of any act
199specified in this section, it may enter an order imposing one or
200more of the following penalties:
201     (f)  An administrative fine of up to $1,000 per day, but
202not to exceed $25,000 cumulatively, for each day that:
203     1.  A mortgage broker or mortgage lender conducts business
204at an unlicensed branch office.
205     2.  An unlicensed person acts as a loan originator, an in-
206house loan processor, a mortgage broker, or a mortgage lender.
207     (3)  A mortgage broker or mortgage lender, as applicable,
208is subject to the disciplinary actions specified in subsection
209(2) for a violation of subsection (1) by:
210     (a)  A control person of the mortgage broker or mortgage
211lender; or
212     (b)  A loan originator employed by or contracting with the
213mortgage broker or mortgage lender; or
214     (c)  An in-house loan processor who is an employee of the
215mortgage broker or mortgage lender.
216     (4)  A principal loan originator of a mortgage broker is
217subject to the disciplinary actions specified in subsection (2)
218for violations of subsection (1) by a loan originator or an in-
219house loan processor in the course of an association with the
220mortgage broker if there is a pattern of repeated violations by
221the loan originator or an in-house loan processor or if the
222principal loan originator has knowledge of the violations.
223     (5)  A principal loan originator of a mortgage lender is
224subject to the disciplinary actions specified in subsection (2)
225for violations of subsection (1) by a loan originator or an in-
226house loan processor in the course of an association with a
227mortgage lender if there is a pattern of repeated violations by
228the loan originator or an in-house loan processor or if the
229principal loan originator has knowledge of the violations.
230     (6)  A branch manager is subject to the disciplinary
231actions specified in subsection (2) for violations of subsection
232(1) by a loan originator or an in-house loan processor in the
233course of an association with the mortgage broker or mortgage
234lender if there is a pattern of repeated violations by the loan
235originator or an in-house loan processor or if the branch
236manager has knowledge of the violations.
237     (8)  Pursuant to s. 120.60(6), the office may summarily
238suspend the license of a loan originator, an in-house loan
239processor, a mortgage broker, or a mortgage lender if the office
240has reason to believe that a licensee poses an immediate,
241serious danger to the public's health, safety, or welfare. The
242arrest of the licensee, or the mortgage broker or the mortgage
243lender's control person, for any felony or any crime involving
244fraud, dishonesty, breach of trust, money laundering, or any
245other act of moral turpitude is deemed sufficient to constitute
246an immediate danger to the public's health, safety, or welfare.
247Any proceeding for the summary suspension of a license must be
248conducted by the commissioner of the office, or designee, who
249shall issue the final summary order.
250     Section 6.  Section 494.00314, Florida Statutes, is created
251to read:
252     494.00314  In-house loan processor license.-
253     (1)  An individual acting as an in-house loan processor
254must be licensed under this section.
255     (2)  In order to apply for an in-house loan processor
256license, an applicant must:
257     (a)  Be at least 18 years of age and have a high school
258diploma or its equivalent.
259     (b)  Submit a completed license application form as
260prescribed by commission rule.
261     (c)  Submit a nonrefundable application fee of $100.
262Application fees may not be prorated for partial years of
263licensure.
264     (d)  Submit fingerprints in accordance with rules adopted
265by the commission.
266     1.  The fingerprints must be submitted to a live-scan
267vendor authorized by the Department of Law Enforcement.
268     2.  A state criminal history background check must be
269conducted through the Department of Law Enforcement, and a
270federal criminal history check must be conducted through the
271Federal Bureau of Investigation.
272     3.  All fingerprints submitted to the Department of Law
273Enforcement must be submitted electronically and entered into
274the statewide automated fingerprint identification system
275established in s. 943.05(2)(b) and available for use in
276accordance with s. 943.05(2)(g) and (h). The office shall pay an
277annual fee to the department to participate in the system and
278inform the department of any person whose fingerprints are no
279longer required to be retained.
280     4.  The costs of fingerprint processing, including the cost
281of retaining fingerprints, shall be borne by the person subject
282to the background check.
283     5.  The office is responsible for reviewing the results of
284the state and federal criminal history checks and determining
285whether the applicant meets licensure requirements.
286     (e)  Submit additional information or documentation
287requested by the office and required by rules concerning the
288applicant. Additional information may include documentation of
289pending or prior disciplinary or criminal history events,
290including arrest reports and certified copies of charging
291documents, plea agreements, judgments and sentencing documents,
292documents relating to pretrial intervention, orders terminating
293probation or supervised release, final administrative agency
294orders, or other comparable documents that may provide the
295office with the appropriate information to determine eligibility
296for licensure.
297     (f)  Submit any other information required by the registry
298for the processing of the application.
299     (3)  An application is considered received for the purposes
300of s. 120.60 upon the office's receipt of all documentation from
301the registry, including the completed application form, criminal
302history information, and license application fee.
303     (4)  The office shall issue an in-house loan processor
304license to each person who is not otherwise ineligible and who
305meets the requirements of this section. However, it is a ground
306for denial of licensure if the applicant:
307     (a)  Has committed any violation specified in ss. 494.001-
308494.0077; or
309     (b)  Is the subject of a pending felony criminal
310prosecution or a prosecution or an administrative enforcement
311action in any jurisdiction that involves fraud, dishonesty,
312breach of trust, money laundering, or any other act of moral
313turpitude.
314     (5)  The office may not issue a license to an applicant who
315has had an in-house loan processor or loan originator license or
316its equivalent revoked in any jurisdiction.
317     (6)  An in-house loan processor license shall be annulled
318pursuant to s. 120.60 if it was issued by the office by mistake.
319A license must be reinstated if the applicant demonstrates that
320the requirements for obtaining the license have been satisfied.
321     (7)  All in-house loan processor licenses must be renewed
322annually by December 31, pursuant to s. 494.00315. If a person
323holding an active in-house loan processor license has not
324applied to renew the license on or before December 31, the in-
325house loan processor license expires on December 31. If a person
326holding an active in-house loan processor license has applied to
327renew on or before December 31, the in-house loan processor
328license remains active until the renewal application is approved
329or denied. An in-house loan processor is not precluded from
330reapplying for licensure upon expiration of a previous license.
331     (8)  An in-house loan processor licensed under this section
332may not act as a loan originator without a loan originator
333license issued under this part.
334     (9)  A loan originator licensed under this part may also
335act as an in-house loan processor without an in-house loan
336processor license.
337     Section 7.  Section 494.00315, Florida Statutes, is created
338to read:
339     494.00315  In-house loan processor license renewal.-In
340order to renew an in-house loan processor license, an in-house
341loan processor must:
342     (1)  Submit a completed license renewal form as prescribed
343by commission rule.
344     (2)  Submit a nonrefundable renewal fee of $75 and
345nonrefundable fees to cover the costs of further fingerprint
346processing and retention as set forth in commission rule.
347     (3)  Submit any additional information or documentation
348requested by the office and required by rule concerning the
349licensee. Additional information may include documentation of
350pending and prior disciplinary and criminal history events,
351including arrest reports and certified copies of charging
352documents, plea agreements, judgments and sentencing documents,
353documents relating to pretrial intervention, orders terminating
354probation or supervised release, final administrative agency
355orders, or other comparable documents that may provide the
356office with the appropriate information to determine eligibility
357for renewal of licensure.
358     Section 8.  Subsection (5) of section 494.00312, Florida
359Statutes, is amended to read:
360     494.00312  Loan originator license.-
361     (5)  The office may not issue a license to an applicant who
362has had a loan originator or an in-house loan processor license
363or its equivalent revoked in any jurisdiction.
364     Section 9.  Section 494.00331, Florida Statutes, is amended
365to read:
366     494.00331  Loan originator and loan processor employment.-
367     (1)  LOAN ORIGINATORS.-An individual may not act as a loan
368originator unless he or she is an employee of, or an independent
369contractor for, a mortgage broker or a mortgage lender, and may
370not be employed by or contract with more than one mortgage
371broker or mortgage lender, or either simultaneously.
372     (2)  CONTRACT LOAN PROCESSORS.-Subsection (1) However, this
373provision does not apply to a contract loan processor who is
374licensed as a loan originator under this part and has on file
375with the office a declaration of intent to act solely as a
376contract loan processor. The declaration of intent must be on a
377form prescribed by the commission by rule any licensed loan
378originator who acts solely as a loan processor and contracts
379with more than one mortgage broker or mortgage lender, or either
380simultaneously.
381     (2)  For purposes of this section, the term "loan
382processor" means an individual who is licensed as a loan
383originator who engages only in:
384     (a)  The receipt, collection, distribution, and analysis of
385information common for the processing or underwriting of a
386residential mortgage loan; or
387     (b)  Communication with consumers to obtain the information
388necessary for the processing or underwriting of a loan, to the
389extent that such communication does not include offering or
390negotiating loan rates or terms or does not include counseling
391consumers about residential mortgage loan rates or terms.
392     (3)  A person may not act as a loan processor unless the
393person is licensed as a loan originator under this chapter and
394has on file with the office a declaration of intent to engage
395solely in loan processing. The declaration of intent must be on
396such form as prescribed by the commission by rule.
397     (a)(4)  A loan originator who that currently has a
398declaration of intent to engage solely in loan processing on
399file with the office may withdraw his or her declaration of
400intent to engage solely in loan processing. The withdrawal of
401declaration of intent must be on such form as prescribed by
402commission rule.
403     (b)(5)  A declaration of intent or a withdrawal of
404declaration of intent is effective upon receipt by the office.
405     (c)(6)  The fee earned by a contract loan processor may be
406paid to the company that employs the loan processor without
407violating the restriction in s. 494.0025(8)(7) requiring fees or
408commissions to be paid to a licensed mortgage broker or mortgage
409lender or a person exempt from licensure under this chapter.
410     (3)  IN-HOUSE LOAN PROCESSORS.-An individual may not act as
411an in-house loan processor unless he or she is an employee of a
412mortgage broker or a mortgage lender and may not be employed by
413more than one mortgage broker or mortgage lender, or either,
414simultaneously. An in-house loan processor is required to work
415at the direction of and subject to the supervision and
416instruction of a loan originator licensed under this part.
417     Section 10.  Subsection (1) of section 494.0035, Florida
418Statutes, is amended to read:
419     494.0035  Principal loan originator and branch manager for
420mortgage broker.-
421     (1)  Each mortgage broker must be operated by a principal
422loan originator who shall have full charge, control, and
423supervision of the mortgage broker business. The principal loan
424originator must have been licensed as a loan originator for at
425least 1 year before being designated as the principal loan
426originator, or must demonstrate to the satisfaction of the
427office that he or she has been actively engaged as in a mortgage
428broker broker-related business for at least 1 year before being
429designated as a principal loan originator. Each mortgage broker
430must keep the office informed of the person designated as the
431principal loan originator as prescribed by commission rule. If
432the designation is inaccurate, the mortgage broker business
433shall be deemed to be operated under the full charge, control,
434and supervision of each officer, director, or ultimate equitable
435owner of a 10-percent or greater interest in the mortgage
436broker, or any other person in a similar capacity. A loan
437originator may not be a principal loan originator for more than
438one mortgage broker at any given time.
439     Section 11.  Paragraph (c) of subsection (3) of section
440494.0038, Florida Statutes, is amended to read:
441     494.0038  Loan origination and mortgage broker fees and
442disclosures.-
443     (3)  At the time a written mortgage broker agreement is
444signed by the borrower or forwarded to the borrower for
445signature, or at the time the mortgage broker business accepts
446an application fee, credit report fee, property appraisal fee,
447or any other third-party fee, but at least 3 business days
448before execution of the closing or settlement statement, the
449mortgage broker shall disclose in writing to any applicant for a
450mortgage loan the following information:
451     (c)  A good faith estimate that discloses settlement
452charges and loan terms, signed and dated by the borrower, which
453discloses the total amount of each of the fees the borrower may
454reasonably expect to pay if the loan is closed, including, but
455not limited to, fees earned by the mortgage broker, lender fees,
456third-party fees, and official fees, together with the terms and
457conditions for obtaining a refund of such fees, if any.
458     1.  Any amount collected in excess of the actual cost shall
459be returned within 60 days after rejection, withdrawal, or
460closing.
461     2.  At the time a good faith estimate is provided to the
462borrower, the loan originator must identify in writing an
463itemized list that provides the recipient of all payments
464charged the borrower, which, except for all fees to be received
465by the mortgage broker, may be disclosed in generic terms, such
466as, but not limited to, paid to lender, appraiser, officials,
467title company, or any other third-party service provider. This
468requirement does not supplant or is not a substitute for the
469written mortgage broker agreement described in subsection (1).
470The disclosure required under this subparagraph must be signed
471and dated by the borrower.
472     Section 12.  Paragraph (a) of subsection (7) of section
473494.00421, Florida Statutes, is amended to read:
474     494.00421  Fees earned upon obtaining a bona fide
475commitment.-Notwithstanding the provisions of ss. 494.001-
476494.0077, any mortgage broker which contracts to receive a loan
477origination fee from a borrower upon obtaining a bona fide
478commitment shall accurately disclose in the mortgage broker
479agreement:
480     (7)(a)  The following statement, in at least 12-point
481boldface type immediately above the signature lines for the
482borrowers:
483     "You are entering into a contract with a mortgage broker to
484obtain a bona fide mortgage loan commitment under the same terms
485and conditions as stated hereinabove or in a separate executed
486good faith estimate form. If the mortgage broker obtains a bona
487fide commitment under the same terms and conditions, you will be
488obligated to pay the loan origination fees even if you choose
489not to complete the loan transaction. If the provisions of s.
490494.00421, Florida Statutes, are not met, the loan origination
491fee can only be earned upon the funding of the mortgage loan.
492The borrower may contact the Office of Financial Regulation
493Department of Financial Services, Tallahassee, Florida,
494regarding any complaints that the borrower may have against the
495loan originator. The telephone number of the office department
496is: ...(insert telephone number)...."
497     Section 13.  Subsection (5) of section 494.00611, Florida
498Statutes, is amended to read:
499     494.00611  Mortgage lender license.-
500     (5)  The office may not issue a license if the applicant
501has had a mortgage lender license or its equivalent revoked in
502any jurisdiction, or any of the applicant's control persons has
503ever had a loan originator or an in-house loan processor license
504or its equivalent revoked in any jurisdiction.
505     Section 14.  Paragraph (e) of subsection (1) of section
506494.00612, Florida Statutes, is amended to read:
507     494.00612  Mortgage lender license renewal.-
508     (1)  In order to renew a mortgage lender license, a
509mortgage lender must:
510     (e)  Authorize the registry to obtain an independent credit
511report on each of the mortgage lender's control persons lender
512from a consumer reporting agency, and transmit or provide access
513to the report to the office. The cost of the credit report shall
514be borne by the licensee.
515     Section 15.  Subsection (13) is added to section 494.0067,
516Florida Statutes, to read:
517     494.0067  Requirements of mortgage lenders.-
518     (13)  Each mortgage lender shall submit to the registry
519reports of condition that must be in a form and contain such
520information as the registry may require.
521     Section 16.  This act shall take effect July 1, 2011.


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