January 25, 2012, Introduced by Senator BOOHER and referred to the Committee on Banking and Financial Institutions.
A bill to amend 2009 PA 75, entitled
"Mortgage loan originator licensing act,"
by amending sections 3 and 5 (MCL 493.133 and 493.135), section 3
as amended by 2010 PA 356.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. As used in this act:
(a) "Commissioner" means the commissioner of the office of
financial
and insurance regulation in the department of energy,
labor,
and economic growth.licensing
and regulatory affairs.
(b) "Depository institution" means that term as defined in
section 3 of the federal deposit insurance act, 12 USC 1813, or a
credit union.
(c) "Dwelling" means that term as defined in section 103(v) of
the truth in lending act, 15 USC 1602.
(d) "Employee" means an individual who meets both of the
following:
(i) Has an employment relationship acknowledged by that
individual and the person that engages that individual to originate
mortgage loans.
(ii) Is treated as an employee by the person that engages that
individual to originate mortgage loans for compliance with federal
income tax laws.
(e) "Federal banking agencies" means the board of governors of
the federal reserve system, the comptroller of the currency, the
director of the office of thrift supervision, the national credit
union administration, and the federal deposit insurance
corporation.
(f) "Financial licensing acts" means that term as defined in
section 2 of the consumer financial services act, 1988 PA 161, MCL
487.2052.
(g) "Immediate family member" means a spouse, child, sibling,
parent, grandparent, or grandchild. The term includes stepparents,
stepchildren, stepsiblings, and adoptive relationships.
(h) "Individual" means a natural person.
(i) "Licensed mortgage loan originator" means a mortgage loan
originator who holds a valid license issued by the commissioner
under this act.
(j)
"Loan modification activities" means any of the following:
(i) Collecting or receiving payments, including
payments of
principal,
interest, escrow amounts, and other amounts due, on
existing
residential mortgage loans due and owing to a mortgagor or
mortgage
servicer, when the borrower is in default or in reasonably
foreseeable
likelihood of default.
(ii) Working with a borrower described in subparagraph
(i) to
collect
data concerning the borrower's residential mortgage loan or
loans.
(iii) Making any decisions necessary to modify, either
temporarily
or permanently, certain terms of the residential
mortgage
loan or loans of a borrower described in subparagraph (i)
or
to otherwise finalize collection through the foreclosure
process.
These decisions may include changing the principal amount,
the
rate of annual interest charged, or the term of a residential
mortgage
loan; waiving any fees or charges, including late charges,
a
borrower is obligated to pay; deferring residential mortgage loan
payments;
or making similar adjustments to a borrower's residential
mortgage
loan or the borrower's obligations under the loan.
(j) (k)
"Loan processor or
underwriter" means an individual
who performs clerical or support duties as an employee at the
direction of and subject to the supervision and instruction of a
person licensed or designated as exempt from licensing under the
mortgage brokers, lenders, and servicers licensing act, 1987 PA
173, MCL 445.1651 to 445.1684; the secondary mortgage loan act,
1981 PA 125, MCL 493.51 to 493.81; or the consumer financial
services act, 1988 PA 161, MCL 487.2051 to 487.2072. For purposes
of this subdivision, "clerical or support duties" may include any
of the following after an application is received:
(i) The receipt, collection, distribution, and analysis of
information common for the processing or underwriting of a
residential mortgage loan.
(ii) Communicating with a consumer to obtain the information
necessary for the processing or underwriting of a loan, to the
extent that the communication does not include offering or
negotiating loan rates or terms, or counseling consumers about
residential mortgage loan rates or terms.
(k) (l) "Mortgage
loan originator" means an individual who
originates residential mortgage loans and meets all of the
following:
(i) Is not an individual engaged solely as a loan processor or
underwriter except as otherwise provided in section 5(3).
(ii) Is not a person who only performs real estate brokerage
activities and is licensed or registered under the laws of this
state, unless the person is compensated by a lender, a mortgage
broker, or other mortgage loan originator or by any agent of a
lender, mortgage broker, or other mortgage loan originator.
(iii) Is not a person solely involved in extensions of credit
relating to timeshare plans, as that term is defined in 11 USC
101(53D).
(l) (m)
"Originate" means do any
of the following for
compensation or gain, or in the expectation of compensation or
gain, in connection with a residential mortgage loan:
(i) Take a residential mortgage loan application.
(ii) Offer or negotiate terms of a residential mortgage loan.
(m) (n)
"Mortgage servicer" means
a person who directly or
indirectly services or offers to service residential mortgage
loans.
(n) (o)
"Nationwide mortgage licensing
system and registry"
means a mortgage licensing system developed and maintained by the
conference of state bank supervisors and the American association
of residential mortgage regulators for the licensing and
registration of licensed mortgage loan originators.
(o) (p)
"Nontraditional mortgage
product" means any mortgage
product other than a 30-year fixed rate mortgage.
(p) (q)
"Person" means an
individual, corporation, limited
liability company, partnership, association, or other legal entity.
(q) (r)
"Real estate brokerage
activity" means any activity
that involves offering or providing real estate brokerage services
to the public, including, but not limited to, any of the following:
(i) Acting as a real estate agent or real estate broker for a
buyer, seller, lessor, or lessee of real property.
(ii) Bringing together parties interested in the sale,
purchase, lease, rental, or exchange of real property.
(iii) On behalf of any party, negotiating any portion of a
contract relating to the sale, purchase, lease, rental, or exchange
of real property, other than in connection with providing financing
with respect to that contract.
(iv) Engaging in any activity for which a person engaged in the
activity is required to be registered or licensed as a real estate
agent or real estate broker under any applicable law.
(v) Offering to engage in any activity, or act in any
capacity, described in subparagraphs (i), (ii), (iii), or (iv).
(r) (s)
"Registered mortgage loan
originator" means an
individual who meets all of the following:
(i) Is a mortgage loan originator and is an employee of any of
the following:
(A) A depository institution.
(B) A subsidiary of a depository institution that is owned and
controlled by that depository institution and is regulated by a
federal banking agency.
(C) An institution regulated by the farm credit
administration.
(ii) Is registered with, and maintains a unique identifier
through, the nationwide mortgage licensing system and registry.
(s) (t)
"Residential mortgage
loan" means any loan primarily
for personal, family, or household use that is secured by a
mortgage, deed of trust, or other equivalent consensual security
interest on a dwelling or residential real estate on which a person
has constructed or intends to construct a dwelling.
(t) (u)
"Residential real estate"
means any real property
located in this state on which a person has constructed or intends
to construct a dwelling.
(u) (v)
"SAFE
act" means the secure and fair enforcement for
mortgage
licensing act of 2008, title V of the housing and economic
recovery
act of 2008, Public Law 110-289, 12
USC 5101 to 5116.
(v) (w)
"Service" means the
collection or remittance for a
lender, noteowner, or noteholder or a person's own account of 4 or
more installment payments of the principal of, interest of, or an
amount placed in escrow under a residential mortgage loan, mortgage
servicing agreement, or an agreement with a mortgagor.
(w) (x)
"Unique identifier" means
a number or other identifier
assigned by protocols established by the nationwide mortgage
licensing system and registry.
Sec.
5. (1) Subject to subsection (5), unless Unless
specifically exempted under subsection (2), beginning July 31,
2010, an individual shall not engage in the business of a mortgage
loan originator with respect to any dwelling located in this state
without first obtaining and maintaining annually a license under
this act. Each licensed mortgage loan originator must register with
and maintain a valid unique identifier issued by the nationwide
mortgage licensing system and registry.
(2) Each of the following is exempt from this act:
(a) A registered mortgage loan originator, when acting for an
entity described in section 3(r)(i)(A), (B), or (C).
(b) An individual who offers or negotiates terms of a
residential mortgage loan with or on behalf of an immediate family
member of that individual.
(c) An individual who offers or negotiates terms of a
residential mortgage loan secured by a dwelling that served as his
or her residence.
(d) A licensed attorney who negotiates the terms of a
residential mortgage loan on behalf of a client as an ancillary
matter to the attorney's representation of the client, unless the
attorney is compensated by a lender, mortgage broker, or other
mortgage loan originator or by any agent of a lender, mortgage
broker, or other mortgage loan originator.
(3) A loan processor or underwriter who is an independent
contractor may not engage in the activities of a loan processor or
underwriter unless that independent contractor loan processor or
underwriter obtains and maintains a license under subsection (1).
Each independent contractor loan processor or underwriter licensed
as a mortgage loan originator must have and maintain a valid unique
identifier issued by the nationwide mortgage licensing system and
registry.
(4) The commissioner may establish licensing rules and interim
procedures for licensing and acceptance of applications. For
previously registered or licensed individuals, the commissioner may
establish expedited review and licensing procedures.
(5)
An individual engaged in the business of a mortgage loan
originator
is not required to obtain and maintain a license under
this
act until July 31, 2011 if that individual is employed
exclusively
by a mortgage servicer; if that individual is
authorized
to perform loan modification activities concerning
existing
residential mortgage loans, and not to originate new
residential
mortgage loans or perform any other activities of a
mortgage
loan originator, on behalf of that mortgage servicer; and
if
this extension of time is not inconsistent with any guideline,
rule,
regulation, or interpretative letter of the United States
department
of housing and urban development concerning the
interpretation
of the SAFE act and its applicability to loan
modification
activities.