Bill Text: CT SB00361 | 2010 | General Assembly | Comm Sub
Bill Title: An Act Concerning Implementation Of The S.a.f.e. Mortgage Licensing Act.
Spectrum: Committee Bill
Status: (Engrossed - Dead) 2010-04-30 - House Calendar Number 467 [SB00361 Detail]
Download: Connecticut-2010-SB00361-Comm_Sub.html
General Assembly |
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February Session, 2010 |
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AN ACT CONCERNING IMPLEMENTATION OF THE S.A.F.E. MORTGAGE LICENSING ACT.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subdivision (1) of subsection (b) of section 36a-486 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 31, 2010):
(b) (1) No person licensed as a mortgage lender, mortgage correspondent lender or mortgage broker shall engage the services of a mortgage loan originator unless such mortgage loan originator is licensed under section 36a-489, as amended by this act. An individual, unless specifically exempted under subdivision (2) of this subsection, shall not engage in the business of a mortgage loan originator on behalf of a licensee or a person exempt under section 36a-487, as amended by this act, with respect to any dwelling, as defined in Section 103 of the Consumer Credit Protection Act, 15 USC 1602, located in this state without first obtaining and maintaining annually a license as a mortgage loan originator under section 36a-489, as amended by this act. Each licensed mortgage loan originator shall register with and maintain a valid unique identifier issued by the system. No individual may act as a mortgage loan originator for more than one person at the same time. The license of a mortgage loan originator is not effective during any period when such mortgage loan originator is not sponsored by a licensed mortgage lender, mortgage correspondent lender or mortgage broker, or by a person registered as an exempt registrant under subsection (c) of section 36a-487, as amended by this act, or during any period in which the license of the mortgage lender, mortgage correspondent lender or mortgage broker with whom such originator is associated has been suspended. Either the mortgage loan originator or the [mortgage lender, mortgage correspondent lender or mortgage broker] sponsor may file a notification of the termination of sponsorship of a mortgage loan originator with the system.
Sec. 2. Section 36a-487 of the 2010 supplement to the general statutes is amended by adding subsection (c) as follows (Effective July 31, 2010):
(NEW) (c) Any person exempt from licensure under this section may register on the system as an exempt registrant for purposes of sponsoring a mortgage loan originator pursuant to subdivision (1) of subsection (b) of section 36a-486, as amended by this act, and for purposes of satisfying the mortgage loan originator bonding requirements set forth in section 36a-492, as amended by this act. Such registration shall not affect the exempt status of such person.
Sec. 3. Subsection (a) of section 36a-488 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) (1) The commissioner shall not issue a mortgage lender license, a mortgage correspondent lender license or a mortgage broker license to any person unless such person meets the following tangible net worth and experience requirements, as applicable: (A) The minimum tangible net worth requirement for a mortgage lender shall be two hundred fifty thousand dollars and the minimum tangible net worth requirement for a mortgage correspondent lender and a mortgage broker shall be (i) prior to March 2, 2009, twenty-five thousand dollars, and (ii) on and after March 2, 2009, fifty thousand dollars, and (B) a mortgage lender, mortgage correspondent lender or mortgage broker shall have, at the main office for which the license is sought, a qualified individual and, at each branch office, a branch manager who have supervisory authority over the lending or brokerage activities who have at least three years' experience in the mortgage business within the five years immediately preceding the date of the application for the license and who, effective April 1, 2010, have completed the prelicensing education requirement described in section 36a-489a, as amended by this act, and passed a written test that meets the test requirement described in section 36a-489a, as amended by this act, except that such qualified individual and branch manager shall pass the state-specific component of such test on or before a date to be determined by the commissioner. As used in this subdivision, "experience in the mortgage business" means paid experience in the origination, processing or underwriting of residential mortgage loans, the marketing of such loans in the secondary market or in the supervision of such activities, or any other relevant experience as determined by the commissioner.
(2) Each licensee shall maintain the net worth required by this subsection.
(3) Not later than April 1, 2010, each qualified individual and branch manager shall have completed the prelicensing education requirement described in section 36a-489a, as amended by this act, and passed a written test that meets the test requirement described in section 36a-489a, as amended by this act, except that (A) such qualified individual and branch manager shall pass the state-specific component of the test on or before a date to be determined by the commissioner, and (B) a qualified individual or branch manager who was a qualified individual or branch manager on July 9, 2009, and was a licensed mortgage loan originator on July 9, 2009, shall have completed such prelicensing education requirement and passed such written test not later than October 31, 2010.
Sec. 4. Subsection (b) of section 36a-488 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 31, 2010):
(b) The commissioner may issue a mortgage lender license, a mortgage correspondent lender license, or a mortgage broker license. Each mortgage lender licensee may also act as a mortgage correspondent lender and a mortgage broker, and each mortgage correspondent lender licensee may also act as a mortgage broker. On and after July 1, 2008, an application for a license as a mortgage lender, mortgage correspondent lender or mortgage broker office or renewal of such license shall be filed, in a form prescribed by the commissioner, with the system. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-21, 36a-485 to 36a-498f, inclusive, 36a-534a and 36a-534b. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager, including personal history and experience in a form prescribed by the system and information related to any administrative, civil or criminal findings by any governmental jurisdiction. The following supplementary information shall be filed directly with the commissioner: (1) In the case of an initial application for a license for the main office, (A) a financial statement as of a date not more than twelve months prior to the filing of the application which reflects tangible net worth, and if such financial statement is unaudited, the proprietor, general partner, or duly authorized officer, trustee or member shall swear to its accuracy under oath before a notary public, [; (2)] and (B) a bond as required by section 36a-492, as amended by this act; [(3)] (2) evidence that the qualified individual or branch manager meets the experience required by subsection (a) of this section; and [(4)] (3) such other information pertaining to the applicant, the applicant's background, the background of its principals, employees, and mortgage loan originators, and the applicant's activities as the commissioner may require. For the purpose of this subsection, evidence of experience of the qualified individual or branch manager shall include: (A) A statement specifying the duties and responsibilities of such person's employment, the term of employment, including month and year, and the name, address and telephone number of a supervisor, employer or, if self-employed, a business reference; and (B) if required by the commissioner, copies of W-2 forms, 1099 tax forms or, if self-employed, 1120 corporate tax returns, signed letters from the employer on the employer's letterhead verifying such person's duties and responsibilities and term of employment including month and year, and if such person is unable to provide such letters, other proof satisfactory to the commissioner that such person meets the experience requirement. The commissioner may conduct a criminal history records check of the applicant, any control person of the applicant and the qualified individual or branch manager with supervisory authority at the office for which the license is sought and require the applicant to submit the fingerprints of such persons and authorization of such persons for the system and the commissioner to obtain an independent credit report from a consumer reporting agency, as described in Section 603(p) of the Fair Credit Reporting Act, 15 USC 1681a, as part of the application.
Sec. 5. Subsection (b) of section 36a-489 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(b) (1) The commissioner shall not issue an initial license for a mortgage loan originator unless the commissioner, at a minimum, finds that the applicant has: (A) Never had a mortgage loan originator license revoked in any governmental jurisdiction, except that a subsequent formal vacating of such revocation shall not be deemed a revocation; (B) notwithstanding the provisions of section 46a-80, not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven-year period preceding the date of the application for licensing or at any time preceding such date of application if such felony involved an act of fraud, dishonesty, a breach of trust, or money laundering, provided any pardon of a conviction shall not be a conviction for purposes of this subdivision; (C) demonstrated financial responsibility, character and general fitness so as to command the confidence of the community and to warrant a determination that the mortgage loan originator will operate honestly, fairly and efficiently within the purpose of sections 36a-485 to 36a-498f, inclusive, as amended by this act, 36a-534a and 36a-534b; (D) effective April 1, 2010, completed the prelicensing education requirement described in section 36a-489a, as amended by this act, and passed a written test that meets the test requirement described in section 36a-489a, as amended by this act, except that the applicant shall pass the state-specific component of the test by a date to be determined by the commissioner; (E) effective July 31, 2010, met the surety bond requirement under section 36a-492, as amended by this act; and (F) not made a material misstatement in the application. If the commissioner denies an application for a mortgage loan originator license, the commissioner shall notify the applicant and may notify the sponsor or any other person the commissioner deems appropriate of the denial and the reasons for such denial.
(2) (A) The minimum standards for license renewal for a mortgage loan originator shall include the following: (i) The mortgage loan originator continues to meet the minimum standards for license issuance under subdivision (1) of this subsection; (ii) the mortgage loan originator has satisfied the annual continuing education requirements described in subsection (c) of section 36a-489a, as amended by this act; and (iii) the mortgage loan originator has paid all required fees for renewal of the license.
(B) The license of a mortgage loan originator that fails to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the system.
(3) No later than April 1, 2010, each mortgage loan originator licensee shall have completed the prelicensing education requirement described in section 36a-489a, as amended by this act, and passed a written test that meets the test requirement described in section 36a-489a, as amended by this act, [provided] except that (A) the applicant shall pass the state-specific component of the test by a date to be determined by the commissioner, and (B) a mortgage loan originator licensee who was licensed [as of the enactment of public act 09-209] on July 9, 2009, shall have completed such prelicensing education requirement and passed such written test not later than October 31, 2010.
Sec. 6. Subsection (e) of section 36a-489 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(e) Notwithstanding the provisions of this section, the commissioner may deem an application for a license as a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator abandoned if the applicant fails to respond to any request for information required under sections 36a-485 to [36a-498a] 36a-498f, inclusive, 36a-534a and 36a-534b or the regulations adopted pursuant to said sections. The commissioner shall notify the applicant, in writing, on the system that if such information is not submitted within sixty days the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license under said sections 36a-485 to [36a-498a] 36a-498f, inclusive, 36a-534a and 36a-534b.
Sec. 7. Section 36a-492 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 31, 2010):
[(a) (1) No mortgage lender, mortgage correspondent lender or mortgage broker license, and no renewal thereof, shall be granted unless the applicant has filed a bond with the commissioner written by a surety authorized to write such bonds in this state, in the sum of forty thousand dollars, the form of which shall be approved by the Attorney General. Effective July 31, 2010, the penal sum of the bond shall be maintained in an amount that reflects the dollar amount of the loans originated by the mortgage lender, mortgage correspondent lender or mortgage broker, as determined by the commissioner.
(2) Effective July 31, 2010, each person licensed as a mortgage loan originator shall be covered by a surety bond in accordance with this section, provided such coverage shall be provided through the bond of the mortgage lender, mortgage correspondent lender or mortgage broker who sponsors such mortgage loan originator. The penal sum of the bond shall be maintained in an amount that reflects the dollar amount of loans originated by the mortgage loan originator, as determined by the commissioner.]
(a) (1) Each licensed mortgage lender, mortgage correspondent lender and mortgage broker shall file with the commissioner a single surety bond written by a surety authorized to write such bonds in this state in a penal sum determined in accordance with subsection (d) of this section, provided the penal sum of the bond shall be not less than fifty thousand dollars. The bond shall cover all mortgage loan originators sponsored by such licensee.
(2) Each mortgage loan originator licensee shall be covered by a surety bond with a penal sum in an amount that reflects the dollar amount of loans originated by such mortgage loan originator in accordance with this section, provided such coverage shall be provided through the bond of the person who sponsors such mortgage loan originator. In the case of a mortgage loan originator licensee sponsored by an exempt registrant, the mortgage loan originator licensee shall be covered by a single surety bond filed with the commissioner by the exempt registrant. Such surety bond shall cover all mortgage loan originators sponsored by such exempt registrant and shall be written by a surety authorized to write such bonds in this state in a sum determined in accordance with subsection (d) of this section, provided the penal sum of the bond shall be not less than fifty thousand dollars.
(3) The principal on a bond required by subsection (a) of this section shall file a bond rider or endorsement to the surety bond on file with the commissioner to reflect any changes necessary to maintain the surety bond coverage required by this section.
(4) The commissioner may adopt regulations in accordance with chapter 54 with respect to the requirements for such surety bonds.
(b) The bond required by subsection (a) of this section shall be (1) in a form approved by the Attorney General, and (2) conditioned upon [such] the mortgage lender, mortgage correspondent lender or mortgage broker licensee and [, effective July 31, 2010,] any mortgage loan originator [who is covered by the surety bond of a mortgage lender, mortgage correspondent lender or mortgage broker,] licensee sponsored by such mortgage lender, mortgage correspondent lender or mortgage broker or, in the case of a mortgage loan originator licensee sponsored by an exempt registrant, upon such mortgage loan originator licensee faithfully performing any and all written agreements or commitments with or for the benefit of borrowers and prospective borrowers, truly and faithfully accounting for all funds received from a borrower or prospective borrower by the licensee in the licensee's capacity as a mortgage lender, mortgage correspondent lender, [or a] mortgage broker or [, effective July 31, 2010, a] mortgage loan originator, and conducting such mortgage business consistent with the provisions of sections 36a-485 to 36a-498f, inclusive, as amended by this act, 36a-534a and 36a-534b. Any borrower or prospective borrower who may be damaged by failure to perform any written agreements or commitments, or by the wrongful conversion of funds paid by a borrower or prospective borrower to a licensee, may proceed on such bond against the principal or surety thereon, or both, to recover damages. Commencing August 1, 2009, any borrower or prospective borrower who may be damaged by a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator licensee's failure to satisfy a judgment against the licensee arising from the making or brokering of a nonprime home loan, as defined in section 36a-760, as amended by this act, may proceed on such bond against the principal or surety thereon, or both, to recover the amount of the judgment. The commissioner may proceed on such bond against the principal or surety thereon, or both, to collect any civil penalty imposed upon [the] a licensee pursuant to subsection (a) of section 36a-50 and any unpaid costs of examination of [the] a licensee as determined pursuant to section 36a-65. The proceeds of the bond, even if commingled with other assets of the [licensee] principal, shall be deemed by operation of law to be held in trust for the benefit of such claimants against the [licensee] principal in the event of bankruptcy of the [licensee] principal and shall be immune from attachment by creditors and judgment creditors. The bond shall run concurrently with the period of the license [granted to the applicant,] for the main office and the aggregate liability under the bond shall not exceed the penal sum of the bond. The [licensee] principal shall notify the commissioner of the commencement of an action on the [licensee's] bond. When an action is commenced on a [licensee's] principal's bond, the commissioner may require the filing of a new bond and immediately on recovery on any action on the bond, the [licensee] principal shall file a new bond.
(c) The surety company shall have the right to cancel the bond at any time by a written notice to the [licensee] principal stating the date cancellation shall take effect. Such notice shall be sent by certified mail to the [licensee] principal at least thirty days prior to the date of cancellation. A surety bond shall not be cancelled unless the surety company notifies the commissioner in writing not less than thirty days prior to the effective date of cancellation. After receipt of such notification from the surety company, the commissioner shall give written notice to the [licensee] principal of the date such bond cancellation shall take effect and, in the case where the principal is an exempt registrant, such notice shall be deemed notice to each mortgage loan originator licensee sponsored by such principal for the purposes of subsection (c) of section 4-182. The commissioner shall automatically suspend the [license] licenses of a mortgage lender, mortgage correspondent lender or mortgage broker on such date, and, in the case of a cancellation of an exempt registrant's bond, shall automatically suspend the licenses of the mortgage loan originators sponsored by such exempt registrant, unless prior to the date that the bond cancellation shall take effect, (1) the [licensee prior to such date] principal submits a letter of reinstatement of the bond from the surety company or a new bond, [or] (2) the mortgage lender, mortgage correspondent lender or mortgage broker licensee has ceased business and has surrendered [the license] all licenses in accordance with subsection (a) of section 36a-490, or (3) in the case of a mortgage loan originator licensee sponsored by an exempt registrant, the sponsorship has been terminated. After a mortgage lender, mortgage correspondent lender, mortgage broker or mortgage loan originator license has been automatically suspended pursuant to this section, the commissioner shall give [the] such licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-494 and an opportunity for a hearing on such action in accordance with section 36a-51 and require [the] such licensee to take or refrain from taking such action as in the opinion of the commissioner will effectuate the purposes of this section. The commissioner may provide information to an exempt registrant concerning actions taken by the commissioner pursuant to this subsection against any mortgage loan originator licensee that was sponsored and bonded by such exempt registrant.
(d) The penal sum of the bond required by subsection (a) of this section shall be determined as follows:
(1) (A) If the aggregate dollar amount of the residential mortgage loans originated by all mortgage loan originator licensees in the preceding calendar year is less than thirty million dollars, the penal sum of the bond shall be fifty thousand dollars. (B) If the aggregate dollar amount of the residential mortgage loans originated by all mortgage loan originator licensees in the preceding calendar year is thirty million dollars or more but less than fifty million dollars, the penal sum of the bond shall be one hundred thousand dollars. (C) If the aggregate dollar amount of the residential mortgage loans originated by all mortgage loan originator licensees in the preceding calendar year is fifty million dollars or more, the penal sum of the bond shall be one hundred fifty thousand dollars.
(2) For purposes of this subsection, the aggregate dollar amount of residential mortgage loans originated by all mortgage loan originator licensees in the preceding calendar year shall be such amount as is reflected in reports filed on the system and in accordance with subdivision (1) of this subsection. If such reports are not available on the system, the licensee and exempt registrant shall submit to the commissioner, at the time the bond is filed, such financial information in such form as the commissioner deems necessary to verify the aggregate dollar amount; and
(3) The commissioner may require a change in the penal sum of the bond if the commissioner determines at any time that the aggregate dollar amount of the residential mortgage loans originated by all mortgage loan originator licensees warrants a change in the penal sum of the bond.
Sec. 8. Section 36a-489a of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) (1) In order to meet the prelicensing education and testing [requirement] requirements referred to in [section] sections 36a-488, as amended by this act, and 36a-489, as amended by this act, an [applicant] individual shall complete at least twenty hours of education approved in accordance with subdivision (2) of this subsection, which shall include at least (A) three hours of instruction on relevant federal law and regulations; (B) three hours of ethics, including instruction on fraud, consumer protection and fair lending issues; and (C) two hours of training related to lending standards for the nontraditional mortgage product marketplace.
(2) For purposes of subdivision (1) of this subsection, prelicensing education courses shall be reviewed and approved by the system based upon reasonable standards. Review and approval of a prelicensing education course shall include review and approval of the course provider.
(3) Nothing in this subsection shall preclude any prelicensing education course, as approved by the system, that is provided by the individual's sponsor [of the applicant] or employer or an entity which is affiliated with the [applicant] individual by an agency contract, or any subsidiary or affiliate of such sponsor, employer or entity.
(4) Prelicensing education may be offered either in a classroom, online or by any other means approved by the system.
(5) When prelicensing education requirements described in subdivision (1) of this subsection are completed in another state, such out-of-state prelicensing education requirements shall be accepted as credit towards completion of the prelicensing education requirements of this state, provided such out-of-state prelicensing education requirements are approved by the system.
(6) (A) [A person] An individual previously licensed under section 36a-489, as amended by this act, subsequent to the applicable effective date of the prelicensing and testing requirements referred to in section 36a-489, as amended by this act, who is applying to be [licensed again] relicensed shall prove that such [person] individual has completed all of the continuing education requirements for the year in which the license was last held.
(B) An individual who previously held a position as a qualified individual or branch manager subsequent to the applicable effective date of the prelicensing and testing requirements referred to in section 36a-488, as amended by this act, may not hold such position again until such individual has completed all of the continuing education requirements for the year in which such individual last held such position.
(b) (1) In order to meet the written test [requirement] requirements referred to in [section] sections 36a-488, as amended by this act, and 36a-489, as amended by this act, an individual shall pass, in accordance with the standards established under this subsection, a qualified written test developed by the system and administered by a test provider approved by the system based upon reasonable standards.
(2) A written test shall not be treated as a qualified written test for purposes of subdivision (1) of this subsection unless the test adequately measures the [applicant's] individual's knowledge and comprehension in appropriate subject areas, including ethics, federal law and regulation pertaining to mortgage origination, state law and regulation pertaining to mortgage origination, and federal and state law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace and fair lending issues.
(3) Nothing in this subsection shall prohibit a test provider approved by the system from providing a test at the location of the sponsor [of the applicant] or employer, any subsidiary or affiliate of the sponsor [of the applicant] or employer, or any entity with which the [applicant] individual holds an exclusive arrangement to conduct the business of a mortgage loan originator or acts as a qualified individual or branch manager.
(4) (A) An individual shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than seventy-five per cent correct answers to questions.
(B) An individual may retake a test [three] four consecutive times with each consecutive taking occurring at least thirty days after the preceding test. After failing [three] four consecutive tests, an individual shall wait at least six months before taking the test again.
(C) [A licensed mortgage lender, mortgage correspondent lender, mortgage broker or] (i) An individual who has not been licensed as a mortgage loan originator [who fails to maintain a valid license for a period of five years or longer] within the five-year period preceding the date of the filing of such individual's application for a mortgage loan originator license, not taking into account any time during which such individual is a registered mortgage loan originator, shall retake such test, and (ii) a qualified individual or branch manager who has not held such position within the five-year period preceding the date of the filing on the system designating such individual as a qualified individual or branch manager shall retake such test, unless such individual was licensed as a mortgage loan originator during the five-year period preceding the date of the filing on the system designating such individual as a qualified individual or branch manger, not taking into account any time during which such individual is a registered mortgage loan originator. [, shall retake the test.]
(c) (1) In order to meet the annual continuing education requirements referred to in [subdivision (2) of subsection] subsections (a) and (b) of section 36a-489, as amended by this act, a licensed mortgage loan originator or a qualified individual or branch manager shall complete at least eight hours of education approved in accordance with subdivision (2) of this subsection. Such courses shall include at least (A) three hours of instruction on relevant federal law and regulation; (B) two hours of ethics, including instruction on fraud, consumer protection and fair lending issues; and (C) two hours of training related to lending standards for the nontraditional mortgage product marketplace.
(2) For purposes of subdivision (1) of this subsection, continuing education courses shall be reviewed and approved by the system based upon reasonable standards. Review and approval of a continuing education course shall include review and approval of the course provider.
(3) Nothing in this subsection shall preclude any education course approved by the system that is provided by the sponsor [of the mortgage loan originator] or employer or an entity that is affiliated with the mortgage loan originator, qualified individual or branch manager by an agency contract, or by any subsidiary or affiliate of such sponsor, employer or entity.
(4) Continuing education may be offered either in a classroom, online or by any other means approved by the system.
(5) Except as [otherwise] provided in procedures adopted under [subparagraph (B) of subdivision (2) of subsection] subsections (a) and (b) of section 36a-489, as amended by this act, or in regulations adopted under subdivision (9) of this subsection, a licensed mortgage loan originator or a qualified individual or branch manager may only receive credit for a continuing education course in the year in which the course is taken, and may not take the same approved course in the same or successive years to meet the annual requirements for continuing education.
(6) A licensed mortgage loan originator or a qualified individual or branch manager who is an approved instructor of an approved continuing education course may receive credit for the [licensee's] individual's own annual continuing education requirement at the rate of two hours credit for every one hour taught.
(7) When education requirements described in subdivision (1) of subsection (a) of this section are completed in another state, such out-of-state education requirements shall be accepted as credit towards completion of the education requirements of this state, provided such out-of-state education requirements are approved by the system.
(8) A licensed mortgage loan originator who subsequently becomes unlicensed must complete the continuing education requirements for the last year in which the license was held prior to issuance of an initial or renewed license. A qualified individual or branch manager who ceases to hold such position must complete the continuing education requirements for the last year in which such position was held prior to holding such position again.
(9) A person who meets the requirements of subparagraphs (A)(i) and (A)(iii) of subdivision (2) of subsection (a) or (b) of section 36a-489, as amended by this act, may compensate for any deficiency in continuing education requirements pursuant to regulations adopted by the commissioner.
(d) For purposes of this section "nontraditional mortgage product" means any mortgage product other than a thirty-year fixed rate mortgage. [, and "system" has the same meaning as provided in section 36a-485.]
Sec. 9. Subsection (b) of section 36a-490 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective July 31, 2010):
(b) A mortgage lender, mortgage correspondent lender or mortgage broker licensee may change the name of the licensee or address of the office specified on the most recent filing with the system if (1) at least thirty calendar days prior to such change, the licensee files such change with the system and, in the case of a main office, provides, directly to the commissioner, a bond rider or endorsement to the surety bond on file with the commissioner that reflects the new name or address of the main office, and (2) the commissioner does not disapprove such change, in writing, or request further information within such thirty-day period. The licensee shall promptly file any change in the information most recently submitted in connection with the license with the system or, if the information cannot be filed on the system, directly notify the commissioner, in writing, of such change in the information.
Sec. 10. Subsection (d) of section 36a-490 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(d) Each mortgage loan originator licensee shall promptly file with the system or, if the information cannot be filed on the system, directly notify the commissioner, in writing, of any change in the information most recently submitted in connection with the license and of the occurrence of any of the following developments:
(1) Filing for bankruptcy of the mortgage loan originator licensee;
(2) Filing of a criminal indictment against the mortgage loan originator licensee;
(3) Receiving notification of the institution of license or registration denial, cease and desist, suspension or revocation procedures, or other formal or informal regulatory action by any governmental agency against the mortgage loan originator licensee and the reasons therefor; or
(4) Receiving notification of the initiation of any action against the mortgage loan originator licensee by the Attorney General or the attorney general of any other state and the reasons therefor.
Sec. 11. Subsection (a) of section 36a-760 of the 2010 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):
(a) As used in this section and sections 36a-760a to 36a-760j, inclusive:
(1) "APR" has the same meaning as provided in section 36a-746a;
(2) "CHFA loan" means a loan made, insured, purchased, subsidized or guaranteed by the Connecticut Housing Finance Authority;
(3) "FHA loan" means a loan made, insured, purchased, subsidized or guaranteed by the Federal Housing Administration;
(4) "First mortgage loan" has the same meaning as provided in section 36a-485;
(5) "Lender" means any person engaged in the business of the making of mortgage loans who is required to be licensed by the Department of Banking under chapter 668, or their successors or assigns, and shall also mean any bank, out-of-state bank, Connecticut credit union, federal credit union, out-of-state credit union, or an operating subsidiary of a federal bank or a federally chartered out-of-state bank where such subsidiary engages in the business of making mortgage loans, and their successors and assigns, but shall not include any mortgage broker, as defined in this section, or any mortgage loan originator, as defined in section 36a-485;
(6) "Mortgage broker" means any person, other than a lender, who (A) for a fee, commission or other valuable consideration, negotiates, solicits, arranges, places or finds a mortgage, and (B) who is required to be licensed by the Department of Banking under chapter 668, or their successors or assigns;
(7) "Nonprime home loan" means any loan or extension of credit, excluding an open-end line of credit, and further excluding a reverse mortgage transaction, as defined in 12 CFR 226.33, as amended from time to time:
(A) In which the borrower is a natural person;
(B) The proceeds of which are to be used primarily for personal family or household purposes;
(C) In which the loan is secured by a mortgage upon any interest in one-to-four family [residential] improved real property located in this state which is, or when the loan is made, intended to be used or occupied by the borrower as a principal residence;
(D) In which the principal amount of the loan does not exceed (i) four hundred seventeen thousand dollars for a loan originated on or after July 1, 2008, but before July 1, 2010; and (ii) the then current conforming loan limit, as established from time to time by the Federal National Mortgage Association, for a loan originated on or after July 1, 2010;
(E) Where the loan is not a CHFA loan; and
(F) In which the conditions set forth in clauses (i) and (ii) of this subparagraph apply, subject to any adjustments made pursuant to clause (iii) of this subparagraph:
(i) The difference, at the time of consummation, between the APR for the loan and the conventional mortgage rate is either equal to or greater than (I) one and three-quarters percentage points, if the loan is a first mortgage loan, or (II) three and three-quarters percentage points, if the loan is a secondary mortgage loan. For purposes of such calculation, "conventional mortgage rate" means the contract interest rate on commitments for fixed-rate mortgages published by the Board of Governors of the Federal Reserve System in its statistical release H.15, or any publication that may supersede it, during the week preceding the week in which the interest rate for the loan is set.
(ii) The difference, at the time of consummation, between the APR for the loan or extension of credit and the average prime offer rate for a comparable transaction, as of the date the interest rate is set, is greater than one and one-half percentage points if the loan is a first mortgage loan or three and one-half percentage points if the loan is a secondary mortgage loan. For purposes of this subparagraph, "average prime offer rate" has the meaning as provided in 12 CFR 226.35, as amended from time to time.
(iii) The commissioner shall have the authority, after consideration of the relevant factors, to increase the percentages set forth in clauses (i) and (ii) of this subparagraph. The authority of the commissioner, and any increases or decreases made under this clause, shall expire on August 31, 2010. For purposes of this clause, the relevant factors to be considered by the commissioner shall include, but not be limited to, the existence and amount of increases in fees or charges in connection with purchases of mortgages by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation and increases in fees or charges imposed by mortgage insurers and the impact, including the magnitude of the impact, that such increases have had, or will likely have, on APRs for mortgage loans in this state. When considering such factors, the commissioner shall focus on those increases that are related to the deterioration in the housing market and credit conditions. The commissioner may refrain from increasing such percentages if it appears that lenders are increasing interest rates or fees in bad faith or if increasing the percentages would be contrary to the purposes of sections 36a-760 to 36a-760f, inclusive, as amended by this act. No increase authorized by the commissioner to a particular percentage shall exceed one-quarter of one percentage point, and the total of all increases to a particular percentage under this clause shall not exceed one-half of one percentage point. No increase shall be made unless: (I) The increase is noticed in the Banking Department Bulletin and the Connecticut Law Journal, and (II) a public comment period of twenty days is provided. Any increase made under this clause shall be reduced proportionately when the need for the increase has diminished or no longer exists. The commissioner, in the exercise of his discretion, may authorize an increase in the percentages with respect to all loans or just with respect to a certain class or classes of loans;
(8) "Open-end line of credit" means a mortgage extended by a lender under a plan in which: (A) The lender reasonably contemplates repeated transactions; (B) the lender may impose a finance charge from time to time on an outstanding unpaid balance; (C) the amount of credit that may be extended to the consumer during the term of the plan, up to any limit set by the lender, is generally made available to the extent that any outstanding balance is repaid; and (D) none of the proceeds of the open-end line of credit are used at closing to (i) purchase the borrower's primary residence, or (ii) refinance a mortgage loan that had been used by the borrower to purchase the borrower's primary residence;
[(9) "Residential property" has the same meaning as provided in section 36a-485;]
[(10)] (9) "Secondary mortgage loan" has the same meaning as provided in section 36a-485.
(b) The provisions of sections 36a-760a to 36a-760i, inclusive, as amended by this act, shall be applicable to nonprime home loans and mortgages, as appropriate, for which applications have been received on or after August 1, 2008.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
July 31, 2010 |
36a-486(b)(1) |
Sec. 2 |
July 31, 2010 |
36a-487 |
Sec. 3 |
from passage |
36a-488(a) |
Sec. 4 |
July 31, 2010 |
36a-488(b) |
Sec. 5 |
from passage |
36a-489(b) |
Sec. 6 |
from passage |
36a-489(e) |
Sec. 7 |
July 31, 2010 |
36a-492 |
Sec. 8 |
from passage |
36a-489a |
Sec. 9 |
July 31, 2010 |
36a-490(b) |
Sec. 10 |
from passage |
36a-490(d) |
Sec. 11 |
from passage |
36a-760(a) |
BA |
Joint Favorable Subst. |