SENATE BILL 1055
48th legislature - STATE OF NEW MEXICO - first session, 2007
INTRODUCED BY
Mark Boitano
AN ACT
RELATING TO LICENSURE; CREATING LICENSING REQUIREMENTS FOR MORTGAGE LOAN ORIGINATORS; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 13 of this act may be cited as the "Mortgage Loan Originator Licensing Act".
Section 2. [NEW MATERIAL] DEFINITIONS.--As used in the Mortgage Loan Originator Licensing Act:
A. "affiliate" means an entity that controls, is controlled by or is under common control with another entity;
B. "applicant" means any person seeking to be licensed as a mortgage loan originator;
C. "director" means the director of the division;
D. "division" means the financial institutions division of the regulation and licensing department;
E. "license" means a license issued by the director pursuant to the Mortgage Loan Originator Licensing Act;
F. "licensee" means a person who obtains a license issued by the director pursuant to the Mortgage Loan Originator Licensing Act;
G. "mortgage loan" means a loan or agreement to extend credit made to a natural person that is secured by a first or second mortgage, deed of trust, contract for deed or other similar instrument or document representing a security interest or lien upon any lot intended for residential purposes or a one-to-four family dwelling, located in this state, including the renewal or refinancing of any such loan;
H. "mortgage loan origination" means engaging in, or holding out to the public as willing to engage in, for compensation or gain, or in the expectation of compensation or gain, directly or indirectly, the business of making, originating, soliciting, placing, negotiating, acquiring, selling or arranging for others, or offering to solicit, place, negotiate, acquire, sell or arrange for others, mortgage loans in the primary market;
I. "mortgage loan originator" means a natural person whose job responsibilities include direct contact with borrowers during the mortgage loan origination process, including soliciting, negotiating, acquiring or making mortgage loans for others, obtaining personal or financial information, assisting with the preparation of loan applications or other documents, quoting loan payments, rates or terms, or providing required disclosures. "Mortgage loan originator" does not mean a person whose job responsibilities on behalf of a licensee are clerical in nature;
J. "primary market" means the market wherein mortgage loans are originated between a lender and a borrower, whether or not through a mortgage broker or other means; and
K. "registrant" means a person who is registered as a mortgage loan company or loan broker pursuant to the Mortgage Loan Company and Loan Broker Act.
Section 3. [NEW MATERIAL] LICENSE EXEMPTIONS.--The following are exempt from the licensing requirements of the Mortgage Loan Originator Licensing Act:
A. a person employed by a bank, savings bank, savings and loan association or credit union that is authorized to make loans and to receive deposits and is chartered under the laws of the United States, the state of New Mexico or any other state or, by an affiliate or subsidiary of any such bank, savings bank, savings and loan association or credit union;
B. the United States, the state of New Mexico, any other state of the United States and an agency or instrumentality of any state government; and
C. a person who, with the person's own funds for the person's own investment, makes a purchase money mortgage or finances the sale of the person's own property, except that a person who enters into more than three such investments or sales in any twelve-month period shall be subject to all provisions of the Mortgage Loan Originator Licensing Act.
Section 4. [NEW MATERIAL] LICENSE REQUIRED TO ORIGINATE MORTGAGE LOANS.--
A. Mortgage loan origination shall only be conducted by a licensee.
B. A licensee shall only engage in mortgage loan origination on behalf of one registrant.
C. A person found to be in violation of the Mortgage Loan Originator Licensing Act shall be subject to a fine not to exceed five thousand dollars ($5,000) or revocation of that person's license for a period of not less than three years, or both.
Section 5. [NEW MATERIAL] APPLICATION FOR LICENSE.--
A. An applicant shall submit to the director an application and required fees for licensing on forms prescribed and provided by the director. The application shall contain information the director deems necessary to adequately identify the location where the person engages in mortgage loan origination activities, the registrants for whom the licensee will originate mortgage loans and other information the director requires to evaluate the condition, character, qualifications and fitness of the applicant and the applicant's compliance with the provisions of the Mortgage Loan Originator Licensing Act. Each application shall be accompanied by a nonrefundable fee pursuant to the Mortgage Loan Originator Licensing Act.
B. An application shall be approved, and a license shall be issued to the applicant if the director:
(1) has received the complete application and fee required by this subsection; and
(2) determines that the character, qualifications and fitness of the applicant warrant a belief that the business of the applicant will be conducted competently, honestly, fairly and in accordance with all applicable state and federal laws.
C. An applicant shall complete satisfactorily a course of mortgage lending study approved by the director and shall pass a written examination approved by the director to ensure the applicant has sufficient knowledge to conduct mortgage business in compliance with state and federal law. D. An applicant shall satisfy a background check authorized and approved by the director.
Section 6. [NEW MATERIAL] ANNUAL RENEWAL OF LICENSE.--
A. A license shall become effective as of the date specified on the face of the license.
B. A license shall be renewed annually by filing with the director, at least thirty days prior to the expiration of the license, a renewal application containing information the director requires to determine the existence of material changes from the information contained in the applicant's original license application or prior renewal applications, including evidence of satisfactory completion of a minimum of twelve hours of continuing professional education approved by the director.
C. Each renewal application shall be accompanied by a nonrefundable fee pursuant to Section 12 of the Mortgage Loan Originator Licensing Act.
Section 7. [NEW MATERIAL] APPLICATION DENIAL--APPEAL.--If the director denies an initial license application or a license renewal application, the applicant may make a written request for a hearing. The director shall conduct a hearing to determine if the denial was warranted.
Section 8. [NEW MATERIAL] DENIAL, SUSPENSION, REVOCATION AND NONRENEWAL OF LICENSE--NOTICE.--The director may deny, suspend, revoke or refuse to renew a license issued pursuant to the Mortgage Loan Originator Licensing Act if the director finds, after notice and opportunity for a hearing, that:
A. the applicant or licensee has violated a section of the Mortgage Loan Originator Licensing Act or a rule promulgated pursuant to that act;
B. facts or conditions exist that would have justified the denial of the license or renewal application had those facts or conditions existed or been known to exist at the time the application for an initial license or license renewal was made;
C. the applicant or licensee has filed with the division a document or statement containing a false representation of a material fact or fails to state a material fact;
D. the applicant or licensee, or an employee of the applicant or licensee, has been convicted of a crime involving fraud, dishonesty or deceit;
E. the applicant or licensee, or an employee of the applicant or licensee, has engaged in or is engaging in deceptive business practices;
F. the applicant or licensee, or an employee of the applicant or licensee, has been the subject of a disciplinary action by the division or any other state or federal regulatory agency;
G. a final judgment has been entered against the applicant or licensee, or an employee of the applicant or licensee, in a civil action and the director finds, based upon the conduct on which the judgment is based, that the licensing of that applicant or licensee would be contrary to the public interest;
H. the applicant or licensee, or an employee of the applicant or licensee, has been convicted of engaging in mortgage business activity without authorization pursuant to the Mortgage Loan Originator Licensing Act or a substantially similar offense in another state; or
I. the applicant or licensee has refused to furnish information required by the director within a reasonable period of time as established by the director.
Section 9. [NEW MATERIAL] LICENSE DISPLAY.--A licensee shall prominently display the licensee's original license in a way that reasonably ensures recognition by customers and members of the general public who enter the licensee's place of business.
Section 10. [NEW MATERIAL] DUTIES OF THE DIRECTOR.--The director shall:
A. promulgate rules necessary to carry out the intent and purpose of the Mortgage Loan Originator Licensing Act;
B. order a licensee to cease any activity or practice that the director deems to be deceptive, dishonest, violative of state or federal law or unduly harmful to the interests of the public;
C. exchange any information regarding the administration of the Mortgage Loan Originator Licensing Act with an agency of the United States or an agency of any state that regulates the licensee or administers statutes, rules or programs related to mortgage loans;
D. disclose that an applicant's or licensee's application or license has been denied, suspended, revoked or refused renewal;
E. require or permit a person to file a written statement, under oath or otherwise as the director may direct, setting forth all the facts and circumstances concerning any apparent violation of the Mortgage Loan Originator Licensing Act or any rule promulgated pursuant to that act; and
F. follow the procedures set forth in the Uniform Licensing Act in carrying out the director's duties pursuant to the Mortgage Loan Originator Licensing Act.
Section 11. [NEW MATERIAL] CEASE AND DESIST ORDER--CIVIL FINES.--
A. If the director determines after notice and opportunity for a hearing that a person has engaged, is engaging or is about to engage in any act or practice constituting a violation of any provision of the Mortgage Loan Originator Licensing Act or any rule pursuant to that act, the director by order may require any or all of the following:
(1) that the person cease and desist from the unlawful act or practice;
(2) that the person pay a fine not to exceed five thousand dollars ($5,000) per incident for the unlawful act or practice; and
(3) that the person take such affirmative action as in the judgment of the director will carry out the purposes of the Mortgage Loan Originator Licensing Act.
B. Whenever it appears to the director that a person has engaged, is engaging or is about to engage in any act or practice constituting a violation of a provision of the Mortgage Loan Originator Licensing Act or any rule pursuant to that act, the director may bring an action in any court of competent jurisdiction to enjoin the acts or practices and to require compliance with that act or any rule pursuant to that act. Upon a proper showing, a permanent or temporary injunction, restraining order, restitution, writ of mandamus or other equitable relief shall be granted, and a receiver or conservator may be appointed for the defendant or the defendant's assets.
Section 12. [NEW MATERIAL] MORTGAGE LOAN ORIGINATOR FEES.--At the time of filing any application, an applicant, licensee or registrant shall pay to the division the following nonrefundable fees as may be applicable:
Application for licensing as mortgage loan
originator. . . . . . . . . . . . . . . . . . . . . . . . .$200
Renewal application for licensing as mortgage loan
originator. . . . . . . . . . . . . . . . . . . . . . . . .$125
Amendment of any license. . . . . . . . . . . . . $50.00.
Section 13. [NEW MATERIAL] CONTINUING PROFESSIONAL EDUCATION--REQUIREMENTS--WAIVER.--A licensee shall annually complete at least twelve hours of approved continuing professional education as a condition of licensing renewal as follows:
A. each continuing professional education course shall first be approved by the director;
B. continuing professional education courses shall focus on issues of mortgage business or related industry topics;
C. evidence of satisfactory completion of approved continuing professional education courses shall be submitted on forms provided by the director. The form may be submitted by the licensee seeking continuing professional education credit or the person sponsoring the continuing professional education course. A licensee shall be ultimately responsible for ensuring that continuing professional education credit has been properly submitted to the director and shall maintain verification records in the form of completion certificates or other documents supporting evidence of attendance at approved continuing professional education courses;
D. a continuing professional education year shall be the calendar year;
E. continuing professional education hours shall not be carried forward from one year to the next year;
F. a licensee issued a license on or after the first day of July of a year shall have until December 31 of the following year to comply with annual continuing professional education requirements;
G. a licensee who fails to renew a license pursuant to the provisions of the Mortgage Loan Originator Licensing Act shall obtain all delinquent continuing professional education hours before receiving a new license, unless a period of twelve months has elapsed from the initial expiration date of the license. In that case, the licensee may renew with the completion of only twelve hours of continuing professional education; and
H. the requirement for completion of continuing professional education may be waived or the deadline for completion may be extended by the director if the licensee is called to active duty in the armed forces of the United States for a period exceeding one hundred twenty consecutive days in any continuing professional education year.
Section 14. Section 58-21-5 NMSA 1978 (being Laws 1983, Chapter 86, Section 5, as amended by Laws 2001, Chapter 251, Section 4 and by Laws 2001, Chapter 264, Section 4) is amended to read:
"58-21-5. REGISTRATION FEES--DURATION OF
REGISTRATION.--
A. Applicants shall, at the time of application, pay to the division [four hundred dollars ($400)] five hundred dollars ($500) for initial registration and [three hundred dollars ($300)] four hundred dollars ($400) for each renewal registration. Additionally, the director shall charge and collect from an applicant a fee of ten dollars ($10.00) per day for late filings of a renewal registration or three hundred dollars ($300), whichever is less.
B. A registration shall continue for a period of twelve months from the date of registration. Each registrant shall submit a renewal application at least thirty days before the expiration of [his] the registrant's existing registration.
C. A registrant shall pay a replacement license fee of fifty dollars ($50.00)."
Section 15. A new section of the Mortgage Loan Company and Loan Broker Act is enacted to read:
"[NEW MATERIAL] PROHIBITED PRACTICES.--A person required to be registered pursuant to Section 58-21-3 NMSA 1978 shall not pay compensation to, contract with or employ a person in the capacity of a mortgage loan originator as defined in Subsection H of Section 2 of the Mortgage Loan Originator Licensing Act who does not have a license in good standing pursuant to that act."
Section 16. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2009.
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