HB-5287, As Passed House, February 13, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 5287

A bill to amend 1987 PA 173, entitled

"Mortgage brokers, lenders, and servicers licensing act,"

by amending section 2 (MCL 445.1652), as amended by 2007 PA 179.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 2. (1) A person shall not act as a mortgage broker,

mortgage lender, or mortgage servicer without first obtaining a

license or registering under this act, unless 1 or more of the

following apply:

~~(a) The person is solely performing services as an employee of~~

~~only 1 mortgage broker, mortgage lender, or mortgage servicer.~~

(a) ~~(b)~~ The person is exempted from the act under section 25.

(b) ~~(c)~~ The person is licensed as a class I licensee under the

consumer financial services act, 1988 PA 161, MCL 487.2051 to

487.2072.

employer organization, as that term is defined in section 113 of

the Michigan business tax act, 2007 PA 36, MCL 208.1113, solely

acting as a residential mortgage originator of only 1 mortgage

broker or mortgage lender. The mortgage broker or mortgage lender

shall do all of the following:

(i) Direct and control the activities of the individual under

this act.

(ii) Be responsible for all activities of the individual and

assume responsibility for the individual’s actions that are covered

by the proof of financial responsibility deposit required under

section 4.

(2) A person that is licensed to make regulatory loans under

the regulatory loan act, 1939 PA 21, MCL 493.1 to 493.24, or is

licensed to make secondary mortgage loans under the secondary

mortgage loan act, 1981 PA 125, MCL 493.51 to 493.81, and is

registered with the commissioner shall file with the commissioner

an application for a license under section 3(1) or shall

discontinue all activities that are subject to this act.

(3) ~~Unless a residential mortgage originator is otherwise~~

~~licensed or registered under this act, a residential mortgage~~

~~originator~~ A loan officer shall not receive directly or indirectly

any compensation, commission, fee, points, or other remuneration or

benefits ~~from a mortgage broker, mortgage lender, or mortgage~~

~~servicer other than the employer of the residential mortgage~~

~~originator.~~ For originating a mortgage loan unless both of the

following are met:

(a) The loan officer is a loan officer registrant.

(b) The compensation, commission, fee, points, or other

remuneration or benefits are paid by the licensee or registrant for

which the loan officer originated that mortgage loan.

(4) ~~Unless a residential mortgage originator is otherwise~~

~~licensed or registered under this act, a~~ A mortgage broker,

mortgage lender, or mortgage servicer shall not pay directly or

indirectly any compensation, commission, fee, points, or other

remuneration or benefits to ~~a residential mortgage originator other~~

~~than an employee of the~~ any of the following:

(a) A loan officer who is not a loan officer registrant.

(b) A loan officer registrant who is not an employee or agent

of that mortgage broker, mortgage lender, or mortgage servicer. As

~~used in this subsection and subsection (3), "residential mortgage~~

~~originator" means a person who assists another person in obtaining~~

~~a mortgage loan.~~

(5) A mortgage broker, mortgage lender, or mortgage servicer

that ~~was~~ is exempt from regulation under this act and is a

subsidiary or affiliate of a depository financial institution or a

depository financial institution holding company that does not

maintain a main office or branch office in this state, shall

subject to this act.

(6) Except for a state or nationally chartered bank, savings

bank, or an affiliate of a bank or savings bank, the person subject

to this act shall not include in its name or assumed name, the

House Bill No. 5287 (H-2) as amended February 13, 2008

words "bank", "banker", "banking", "banc", "bankcorp", "bancorp",

or any other words or phrases that would imply that the person is a

bank, is engaged in the business of banking, or is affiliated with

a bank or savings bank. It is not a violation of this subsection

for a licensee or registrant to use the term "mortgage banker" or

"mortgage banking" in its name or assumed name. A person subject to

this act whose name or assumed name on January 1, 1995 contained a

word prohibited by this section may continue to use the name or

assumed name.

(7) As used in this section, "employee" means that term as

defined in section 3401 of the internal revenue code, 26 USC 3401.

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Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law:

(a) Senate Bill No. 826.

(b) Senate Bill No. 827.

(d) Senate Bill No. 829.

(e) Senate Bill No. 830.

(f) Senate Bill No. 831.

(g) Senate Bill No. 832.

(h) Senate Bill No. 833.