SB-1283, As Passed Senate, October 17, 2012

SENATE BILL No. 1283

September 19, 2012, Introduced by Senators GREEN and BOOHER and referred to the Committee on Banking and Financial Institutions.

A bill to amend 1987 PA 173, entitled

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

by amending section 1a (MCL 445.1651a), as amended by 2009 PA 76.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1a. As used in this act:

(a) "Affiliate" means a person or group of persons that

directly or indirectly through 1 or more intermediaries controls,

is controlled by, or is under common control with another person

and engaged in a business or transaction regulated by this act.

(b) "Board" means the mortgage industry advisory board created

in section 33.

financial and insurance regulation of the department of ~~energy,~~

~~labor, and economic growth~~ licensing and regulatory affairs or his

or her authorized agent.

(d) "Construction loan" means a mortgage loan to construct a

1-to-4 family dwelling, that is approved and closed before

completion of the construction of the improvement on the real

property.

(e) "Control person" means a director or executive officer of

a licensee or registrant or ~~a person~~ an individual who has the

authority to participate in the direction, directly or indirectly

through 1 or more other persons, of the management or policies of a

licensee or registrant.

(f) "Depository financial institution" means a state or

nationally chartered bank, a state or federally chartered savings

and loan association, savings bank, or credit union, or an entity

of the federally chartered farm credit system.

(g) "Employee" means an individual who meets both of the

following:

(i) Has an employment relationship acknowledged by that

individual and the licensee or registrant that engages that

individual to originate mortgage loans.

(ii) Is treated as an employee by the licensee or registrant

that engages that individual to originate mortgage loans for

compliance with federal income tax laws.

(h) "Executive officer" means an officer, member, or partner

of a licensee or registrant. The term includes the chief executive

officer, president, vice president, chief financial officer,

controller, or compliance officer or ~~an individual holding~~ any

other individual who holds any other similar position.

(i) "Financial licensing act" means the consumer financial

services act, 1988 PA 161, MCL 487.2051 to 487.2072, and any of the

acts listed in section 2 of the consumer financial services act,

1988 PA 161, MCL 487.2052.

(j) "Firm commitment" means an underwriting in which a broker-

dealer commits to buy the mortgage loan or the entire issue of

securities based upon or backed by 1 or more mortgage loans and

assumes all financial responsibility for any unsold securities.

(k) "Individual investor" means a person that resides in this

state or has its principal place of business in this state. The

term does not include a bank, savings bank, savings and loan

association, credit union, trust company, insurance company,

investment company as defined in the investment company act of

1940, 15 USC 80a-1 to 80a-64, pension or profit sharing plan if the

assets of the plan are managed by a bank or trust company or other

institutional manager, financial institution, institutional

manager, broker-dealer that is a member of the New York stock

exchange or registered under the uniform securities act, 1964 PA

265, MCL 451.501 to 451.818, or the uniform securities act (2002),

2008 PA 551, MCL 451.2101 to 451.2703, the federal national

mortgage association, the government national mortgage association,

the federal home loan mortgage corporation, or a mortgage lender or

mortgage servicer.

(l) "License" means a license issued under this act.

(m) "Licensed loan officer" means a loan officer who is

licensed as a mortgage loan originator under the mortgage loan

originator licensing act.

(n) "Licensee" means a person licensed or required to be

licensed under this act.

(o) "Loan officer" means an individual who is an employee or

agent of a mortgage broker, mortgage lender, or mortgage servicer;

who originates mortgage loans; and who is not an employee or agent

of a depository financial institution or a subsidiary or affiliate

of a depository financial institution.

(p) "Mortgage broker" means a person ~~who,~~ that, directly or

indirectly, does 1 or both of the following:

(i) Serves or offers to serve as an agent for a person in an

attempt to obtain a mortgage loan.

(ii) Serves or offers to serve as an agent for a person who

makes or offers to make mortgage loans.

(q) "Mortgage lender" means a person ~~who,~~ that, directly or

indirectly, makes or offers to make mortgage loans.

(r) "Mortgage loan" means a loan secured by a first mortgage

on real property located in this state and used, or improved for

use, as a dwelling and designed for occupancy by 4 or fewer

families or a land contract covering real property located in this

state used, or improved for use, as a dwelling and designed for

occupancy by 4 or fewer families. ~~A mortgage~~ Mortgage loan does not

include a any of the following:

(i) A home improvement installment contract under the home

improvement finance act, 1965 PA 332, MCL 445.1101 to 445.1431.

(ii) A loan transaction in which the proceeds are not used

primarily for a personal, family, or household purpose.

(s) "Mortgage servicer" means a person ~~who,~~ that, directly or

indirectly, services or offers to service mortgage loans.

(t) "Originate" means any of the following:

(i) To negotiate, arrange, or offer to negotiate or arrange a

mortgage loan between a mortgage lender and 1 or more individuals.

(ii) To place, assist in placing, or find a mortgage loan for 1

or more individuals.

(u) "Person" means an individual, corporation, limited

liability company, partnership, association, governmental entity,

or any other legal entity.

(v) "Real estate broker" means a broker or associate broker

licensed under article 25 of the occupational code, 1980 PA 299,

MCL 339.2501 to 339.2518.

(w) "Real estate salesperson" means a salesperson licensed

under article 25 of the occupational code, 1980 PA 299, MCL

339.2501 to 339.2518.

(x) "Register" means filing a notice with the commissioner on

a form prescribed by the commissioner that notifies the

commissioner of the intent to engage in the activities of a

mortgage broker, mortgage lender, or mortgage servicer in this

state and the payment of any fees required under this act, along

with the other documents, proofs, and fees required by the

commissioner.

(y) "Registrant" means a person that is registered under

section 6 or required to register under section 6.

(z) "Secondary mortgage loan act" means the secondary mortgage

loan act, 1981 PA 125, MCL 493.51 to 493.81.

(aa) "Service" means the collection or remittance, or the