September 21, 2019
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_h1125__
HB 1125

1
A bill to be entitled
2An act relating to mortgage brokering and lending;
3amending s. 494.001, F.S.; revising definitions; amending
4s. 494.0014, F.S.; authorizing the Office of Financial
5Regulation to impose fines; amending s. 494.0029, F.S.;
6authorizing the office to take certain adverse actions on
7permits of certain mortgage business schools; providing
8additional requirements for such schools; amending s.
9494.00295, F.S.; providing an additional professional
10continuing education requirement; authorizing the office
11to offer professional continuing education programs;
12specifying requirements for electronically transmitted and
13distance education courses; amending s. 494.0033, F.S.;
14revising mortgage broker license applicant requirements;
15authorizing an additional fee for reviewing mortgage
16broker's license tests; providing for review of the
17testing process; amending s. 494.0038, F.S.; providing
18additional disclosure requirements for mortgage brokerage
19businesses; amending s. 494.004, F.S.; specifying an
20additional notification requirement for mortgage broker
21licensees; authorizing the commission to adopt rules;
22amending s. 494.0041, F.S.; specifying additional acts
23constituting grounds for certain disciplinary actions;
24providing for fines and penalties; amending s. 494.0064,
25F.S.; providing additional requirements for renewals of
26mortgage lender's licenses; amending s. 494.0067, F.S.;
27providing additional requirements for mortgage lender
28licenses; providing disclosure requirements; amending s.
29494.0072, F.S.; specifying additional acts constituting
30grounds for certain disciplinary actions; providing fines
31and penalties; amending s. 494.0073, F.S.; providing for
32application of certain provisions to mortgage brokerage
33businesses; providing for adoption of rules by the
34Financial Services Commission; providing an effective
35date.
36
37Be It Enacted by the Legislature of the State of Florida:
38
39     Section 1.  Subsection (2) of section 494.001, Florida
40Statutes, is amended, and subsections (32), (33), and (34) are
41added to that section, to read:
42     494.001  Definitions.--As used in ss. 494.001-494.0077, the
43term:
44     (2)  "Act as a loan originator" means being employed by a
45mortgage lender or correspondent mortgage lender, for
46compensation or gain or in the expectation of compensation or
47gain, to negotiate, or offer to negotiate, or assist any
48licensed or exempt entity in negotiating the making of a
49mortgage loan, including, but not limited to, working with a
50licensed or exempt entity to structure a loan or discussing
51terms and conditions necessary for the delivery of a loan
52product. A natural person whose activities are ministerial and
53clerical, which may include quoting available interest rates or
54loan terms and conditions, is not acting as a loan originator.
55     (32)  "Mortgage loan application" means a submission of a
56borrower's financial information in anticipation of a credit
57decision, whether written or computer-generated, relating to a
58mortgage loan. If the submission does not state or identify a
59specific property, the submission is an application for a
60prequalification and not an application for a mortgage loan
61under this part. The subsequent addition of an identified
62property to the submission converts the submission to an
63application for a mortgage loan.
64     (33)  "Mortgage brokerage fee" means the total compensation
65to be received by a mortgage business for acting as a mortgage
66broker.
67     (34)  "Business day" means any calendar day except Sunday
68or a legal holiday.
69     Section 2.  Subsection (4) is added to section 494.0014,
70Florida Statutes, to read:
71     494.0014  Cease and desist orders; administrative fines;
72refund orders.--
73     (4)  The office may impose upon any person who makes or
74brokers a loan, or any mortgage business school, a fine for
75violations of any provision of ss. 494.001-494.00295 or any rule
76or order issued under ss. 494.001-494.00295 in an amount not
77exceeding $5,000 for each separate count or offense.
78     Section 3.  Paragraph (f) is added to subsection (1) and
79paragraphs (g) and (h) are added to subsection (2) of section
80494.0029, Florida Statutes, to read:
81     494.0029  Mortgage business schools.--
82     (1)
83     (f)  In addition to the remedies set forth in s. 494.0014,
84the office may revoke, suspend, or place on probation the permit
85of any mortgage business school that fails to meet the
86requirements of this section, subject to all reasonable
87conditions that the office specifies.
88     (2)
89     (g)  A school permitted under this section must conduct
90classes on the basis of a 50-minute classroom hour in accordance
91with the requirements of this chapter and commission rules.
92     (h)  Each school permitted under this section is
93responsible for developing procedures to confirm, and for
94actually confirming, the identity of each student attending any
95course offering.
96     Section 4.  Section 494.00295, Florida Statutes, is amended
97to read:
98     494.00295  Professional continuing education.--
99     (1)  Mortgage brokers, and the principal representatives
100and loan originators of a mortgage lender, correspondent
101mortgage lender, or mortgage lender pursuant to s. 494.0065,
102must successfully complete at least 14 hours of professional
103continuing education covering primary and subordinate mortgage
104financing transactions and the provisions of this chapter during
105the 2-year period immediately preceding the renewal deadline for
106a mortgage broker, mortgage lender, correspondent mortgage
107lender, or mortgage lender pursuant to s. 494.0065. A minimum of
1084 hours shall cover the provisions of this chapter and the rules
109adopted under this chapter. At the time of license renewal, a
110licensee must certify to the office that the professional
111continuing education requirements of this section have been met.
112Licensees shall maintain records documenting compliance with
113this subsection for a period of 4 years. The requirements for
114professional continuing education are waived for the license
115renewal of a mortgage broker who has completed the 24-hour
116prelicensing classroom education requirement of s. 494.0033(3)
117within 90 days of for the biennial license period immediately
118following the period in which the person became licensed as a
119mortgage broker. The requirements for professional continuing
120education for a principal representative are waived for the
121license renewal of a mortgage lender, correspondent mortgage
122lender, or mortgage lender pursuant to s. 494.0065 for the
123biennial license period immediately following the period in
124which the principal representative completed the 24 hours of
125classroom education and passed a written test in order to
126qualify to be a principal representative.
127     (2)  Professional continuing education programs must
128contribute directly to the professional competency of the
129participants, may only be offered by permitted mortgage business
130schools, the office, or entities specifically exempted from
131permitting as mortgage business schools, and may include
132electronically transmitted or distance education courses.
133     (3)(a)  All electronically transmitted courses shall
134require that the time spent attending electronically transmitted
135professional education courses is equal to the number of
136qualifying hours awarded to participants for course attendance.
137Before allowing a course participant to complete a course and
138receive a certificate of course completion, the course provider
139shall ensure that the course participant has:
140     1.  Logged the required number of hours for the particular
141timed module.
142     2.  Completed a test that comprehensively covers the course
143content for the particular timed module.
144     3.  Correctly answered all test questions for the
145particular timed module.
146     (b)  All distance education course participants shall
147successfully complete a test that comprehensively covers course
148content in order to receive a certificate of course completion.
149Distance education providers shall not provide answers to test
150questions to course participants and shall not issue a
151certificate of course completion to any course participant who
152has failed to correctly answer at least 75 percent of the total
153test questions. The test must consist of at least 100 questions.
154     (4)(3)  The commission shall adopt rules pursuant to ss.
155120.536(1) and 120.54 necessary to administer this section,
156including rules governing qualifying hours for professional
157continuing education programs and standards for electronically
158transmitted or distance education courses, including course
159completion requirements.
160     Section 5.  Paragraphs (a) and (b) of subsection (2) of
161section 494.0033, Florida Statutes, are amended to read:
162     494.0033  Mortgage broker's license.--
163     (2)  Each initial application for a mortgage broker's
164license must be in the form prescribed by rule of the
165commission. The commission may require each applicant to provide
166any information reasonably necessary to make a determination of
167the applicant's eligibility for licensure. The office shall
168issue an initial license to any natural person who:
169     (a)  Is at least 18 years of age and has a high school
170diploma or its equivalent.
171     (b)  Has passed a written test adopted and administered by
172the office, or has passed an electronic test adopted and
173administered by the office or a third party approved by the
174office, which is designed to determine competency in primary and
175subordinate mortgage financing transactions as well as to test
176knowledge of ss. 494.001-494.0077 and the rules adopted pursuant
177thereto. The commission may prescribe by rule an additional fee
178that may not exceed $100 for the electronic version of the
179mortgage broker test. The commission may waive by rule the
180examination requirement for any person who has passed a test
181approved by the Conference of State Bank Supervisors, the
182American Association of Residential Mortgage Regulators, or the
183United States Department of Housing and Urban Development if the
184test covers primary and subordinate mortgage financing
185transactions. The commission may adopt rules prescribing an
186additional fee that may not exceed $50 for an applicant to
187review his or her completed and graded mortgage broker test. The
188commission may adopt rules regarding the administration of the
189testing process, including, but not limited to, procedures
190relating to pretest registration, test security, scoring,
191content, result notification, retest procedures and fees,
192postexamination review, and challenge provisions.
193
194The commission may require by rule information concerning any
195such applicant or person, including, but not limited to, his or
196her full name and any other names by which he or she may have
197been known, age, social security number, qualifications and
198educational and business history, and disciplinary and criminal
199history.
200     Section 6.  Section 494.0038, Florida Statutes, is amended
201to read:
202     494.0038  Mortgage broker disclosures.--
203     (1)(a)1.  A person may not receive a mortgage brokerage fee
204for acting as a mortgage brokerage business except pursuant to a
205written mortgage brokerage agreement between the mortgage
206brokerage business and the borrower that is signed and dated by
207the business and the borrower.
208     2.  The written mortgage brokerage agreement must be
209executed within 3 days after accepting a mortgage loan
210application, describe the services to be provided by the
211mortgage brokerage business, and specify the amount and terms of
212the mortgage brokerage fee that the mortgage brokerage business
213is to receive.
214     (b)1.  If the mortgage brokerage business is to receive any
215payment of any kind from the lender, the maximum total dollar
216amount of the payment must be disclosed to the borrower in the
217written mortgage brokerage agreement as described in paragraph
218(a). The commission may prescribe by rule an acceptable form for
219disclosure of brokerage fees received from the lender. The
220mortgage brokerage agreement must state the nature of the
221relationship with the lender, describe how compensation is paid
222by the lender, and describe how the mortgage interest rate
223affects the compensation paid to the mortgage brokerage
224business. If any of the rates, points, fees, and other terms
225quoted by or on behalf of the lender are to be received by the
226mortgage brokerage business, such fact shall be specifically
227disclosed to the borrower.
228     2.  The exact amount of any payment of any kind by the
229lender to the mortgage brokerage business must be disclosed in
230writing to the borrower within 3 business days after the
231mortgage brokerage business is made aware of the exact amount of
232the payment from the lender but no later than 3 business days
233prior to the execution of the closing or settlement statement.
234The licensee bears the burden of proving such notification was
235provided to the borrower. If the mortgage brokerage fee is for
236brokering a loan for a particular program under which the
237brokerage fee varies according to the terms of the loan, the
238brokerage fee may be disclosed as a range of fees at the time of
239application. The mortgage broker shall, in such instance,
240disclose the nature of the fee arrangement to the borrower, and
241the exact amount of the fee must be disclosed at settlement or
242closing.
243     (c)  The commission may prescribe by rule what constitutes
244a mortgage brokerage fee and the form of disclosure of brokerage
245fees.
246     (2)  At the time a written mortgage brokerage agreement is
247executed by the borrower or at the time the mortgage brokerage
248business accepts an application fee, credit report fee, property
249appraisal fee, or any other third-party fee, but not fewer than
2503 business days prior to execution of the closing or settlement
251statement, the mortgage brokerage business shall disclose in
252writing to any applicant for a mortgage loan the following
253information:
254     (a)  That such mortgage brokerage business may not make
255mortgage loans or commitments. The mortgage brokerage business
256may make a commitment and may furnish a lock-in of the rate and
257program on behalf of the lender when the mortgage brokerage
258business has obtained a written commitment or lock-in for the
259loan from the lender on behalf of the borrower for the loan. The
260commitment must be in the same form and substance as issued by
261the lender.
262     (b)  That such mortgage brokerage business cannot guarantee
263acceptance into any particular loan program or promise any
264specific loan terms or conditions.
265     (c)  A good faith estimate, signed and dated by the
266borrower, that discloses of the total amount of each of the fees
267that the borrower may reasonably expect to pay if the loan is
268closed, including, but not limited to, fees earned by the
269mortgage brokerage business, lender fees, third-party fees, and
270official fees, together with credit report fee, property
271appraisal fee, or any other third-party fee and the terms and
272conditions for obtaining a refund of such fees, if any. Any
273amount collected in excess of the actual cost shall be returned
274within 60 days after rejection, withdrawal, or closing. The good
275faith estimate must identify the recipient of all payments
276charged the borrower and, except for all fees to be received by
277the mortgage brokerage business, may be disclosed in generic
278terms, such as, but not limited to, paid to lender, appraiser,
279officials, title company, or any other third-party service
280provider. This requirement does not supplant or is not a
281substitute for the written mortgage brokerage agreement
282described in subsection (1).
283     (3)  The disclosures required by this subsection must be
284furnished in writing at the time an adjustable rate mortgage
285loan is offered to the borrower and whenever the terms of the
286adjustable rate mortgage loan offered materially change prior to
287closing. The broker shall furnish the disclosures relating to
288adjustable rate mortgages in a format prescribed by ss. 226.18
289and 226.19 of Regulation Z of the Board of Governors of the
290Federal Reserve System, as amended, its commentary, as amended,
291and the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et
292seq., as amended, together with the Consumer Handbook on
293Adjustable Rate Mortgages, as amended, published by the Federal
294Reserve Board and the Federal Home Loan Bank Board or a suitable
295substitute for such handbook. The licensee bears the burden of
296proving such disclosures were provided to the borrower. The
297commission may adopt rules establishing criteria as to what
298constitutes a material change and what constitutes a suitable
299substitute for the handbook.
300     (4)(3)  If the mortgage brokerage agreement includes a
301nonrefundable application fee, the following requirements are
302applicable:
303     (a)  The amount of the application fee, which must be
304clearly denominated as such, shall be clearly disclosed.
305     (b)  The specific services that will be performed in
306consideration for the application fee shall be disclosed.
307     (c)  The application fee must be reasonably related to the
308services to be performed and may not be based upon a percentage
309of the principal amount of the loan or the amount financed.
310     (5)(4)  A mortgage brokerage business may not accept any
311fee in connection with a mortgage loan other than an application
312fee, credit report fee, property appraisal fee, or other third-
313party fee prior to obtaining a written commitment from a
314qualified lender.
315     (6)(5)  Any third-party fee entrusted to a mortgage
316brokerage business shall immediately, upon receipt, be placed
317into a segregated account with a financial institution located
318in the state the accounts of which are insured by the Federal
319Government. Such funds shall be held in trust for the payor and
320shall be kept in the account until disbursement. Such funds may
321be placed in one account if adequate accounting measures are
322taken to identify the source of the funds.
323     (7)(6)  All mortgage brokerage fees shall be paid to a
324mortgage brokerage business licensee.
325     (8)(7)  This section does not prohibit a mortgage brokerage
326business from offering products and services, in addition to
327those offered in conjunction with the loan origination process,
328for a fee or commission.
329     Section 7.  Subsection (8) is added to section 494.004,
330Florida Statutes, to read:
331     494.004  Requirements of licensees.--
332     (8)  In every mortgage loan transaction, each licensee
333under ss. 494.003-494.0043 shall notify a borrower of any
334material changes in the terms of a mortgage loan previously
335offered to the borrower within 3 business days after being made
336aware of such changes by the lender but not less than 3 business
337days before the signing of the settlement or closing statement.
338The licensee bears the burden of proving such notification was
339provided and accepted by the borrower. The commission may adopt
340rules establishing criteria as to what constitutes a material
341change.
342     Section 8.  Paragraph (v) is added to subsection (2) of
343section 494.0041, Florida Statutes, to read:
344     494.0041  Administrative penalties and fines; license
345violations.--
346     (1)  Whenever the office finds a person in violation of an
347act specified in subsection (2), it may enter an order imposing
348one or more of the following penalties against the person:
349     (a)  Revocation of a license or registration.
350     (b)  Suspension of a license or registration subject to
351reinstatement upon satisfying all reasonable conditions that the
352office specifies.
353     (c)  Placement of the licensee, registrant, or applicant on
354probation for a period of time and subject to all reasonable
355conditions that the office specifies.
356     (d)  Issuance of a reprimand.
357     (e)  Imposition of a fine in an amount not exceeding $5,000
358for each count or separate offense.
359     (f)  Denial of a license or registration.
360     (2)  Each of the following acts constitutes a ground for
361which the disciplinary actions specified in subsection (1) may
362be taken:
363     (v)  In any mortgage transaction, violating any provision
364of the federal Real Estate Settlement Procedure Act, as amended,
36512 U.S.C. ss. 2601 et seq., the federal Truth In Lending Act, as
366amended, 15 U.S.C. ss. 1601 et seq., or any regulations adopted
367under such acts.
368     Section 9.  Subsection (1) of section 494.0064, Florida
369Statutes, is amended to read:
370     494.0064  Renewal of mortgage lender's license; branch
371office license renewal.--
372     (1)(a)  The office shall renew a mortgage lender license
373upon receipt of a completed renewal form, certification from the
374licensee that the licensee currently meets the minimum net worth
375requirements of s. 494.0061 or s. 494.0065, certification from
376the licensee that during the preceding 2 years the licensee's
377principal representative and loan originators have completed the
378professional continuing education requirements of s. 494.00295,
379and the nonrefundable renewal fee of $575. The office shall
380renew a correspondent lender license upon receipt of a completed
381renewal form, certification from the licensee that the licensee
382currently meets the minimum net worth requirements of s.
383494.0062, certification from the licensee that during the
384preceding 2 years the licensee's principal representative and
385loan originators have completed the professional continuing
386education requirements of s. 494.00295, and a nonrefundable
387renewal fee of $475. Each licensee shall pay at the time of
388renewal a nonrefundable fee of $325 for the renewal of each
389branch office license.
390     (b)  A licensee shall also submit, as part of the renewal
391form, certification that during the preceding 2 years the
392licensee's principal representative and loan originators have
393completed the professional continuing education requirements of
394s. 494.00295.
395     Section 10.  Subsection (8) and paragraph (a) of subsection
396(10) of section 494.0067, Florida Statutes, are amended, and
397subsections (11) and (12) are added to that section, to read:
398     494.0067  Requirements of licensees under ss. 494.006-
399494.0077.--
400     (8)  Each licensee under ss. 494.006-494.0077 shall provide
401an applicant for a mortgage loan a good faith estimate of the
402costs the applicant can reasonably expect to pay in obtaining a
403mortgage loan. The good faith estimate of costs shall be mailed
404or delivered to the applicant within a reasonable time after the
405licensee receives a written loan application from the applicant.
406The estimate of costs may be provided to the applicant by a
407person other than the licensee making the loan. The good faith
408estimate must identify the recipient of all payments charged to
409the borrower and, except for all fees to be received by the
410mortgage brokerage business and the mortgage lender or
411correspondent mortgage lender, may be disclosed in generic
412terms, such as, but not limited to, paid to appraiser,
413officials, title company, or any other third-party service
414provider. The licensee bears the burden of proving such
415disclosures were provided to the borrower. The commission may
416adopt rules that set forth the disclosure requirements of this
417section.
418     (10)(a)  Each mortgage lender or correspondent mortgage
419lender licensee shall require the principal representative and
420all loan originators, not currently licensed as mortgage brokers
421pursuant to s. 494.0033, who perform services for the licensee
422to complete 14 hours of professional continuing education during
423each biennial license period. The education shall cover primary
424and subordinate mortgage financing transactions and the
425provisions of this chapter and the rules adopted under this
426chapter.
427     (11)  The disclosures in this subsection must be furnished
428in writing at the time an adjustable rate mortgage loan is
429offered to the borrower and whenever the terms of the adjustable
430rate mortgage loan offered have a material change prior to
431closing. The lender shall furnish the disclosures relating to
432adjustable rate mortgages in a format prescribed by ss. 226.18
433and 226.19 of Regulation Z of the Board of Governors of the
434Federal Reserve System, as amended, its commentary, as amended,
435and the federal Truth in Lending Act, 15 U.S.C. ss. 1601 et
436seq., as amended, together with the Consumer Handbook on
437Adjustable Rate Mortgages, as amended, published by the Federal
438Reserve Board and the Federal Home Loan Bank Board or a suitable
439substitute for the handbook. The licensee bears the burden of
440proving such disclosures were provided to the borrower. The
441commission may adopt rules establishing criteria as to what
442constitutes a material change and what constitutes a suitable
443substitute for the handbook.
444     (12)  In every mortgage loan transaction, each licensee
445under ss. 494.006-494.0077 shall notify a borrower of any
446material changes in the terms of a mortgage loan previously
447offered to the borrower within 3 business days after being made
448aware of such changes by the lender but not less than 3 business
449days before the signing of the settlement or closing statement.
450The licensee bears the burden of proving such notification was
451provided and accepted by the borrower. The commission may adopt
452rules establishing criteria as to what constitutes a material
453change.
454     Section 11.  Paragraph (v) is added to subsection (2) of
455section 494.0072, Florida Statutes, subsection (3) of that
456section is amended, and subsection (5) is added to that section,
457to read:
458     494.0072  Administrative penalties and fines; license
459violations.--
460     (1)  Whenever the office finds a person in violation of an
461act specified in subsection (2), it may enter an order imposing
462one or more of the following penalties against that person:
463     (a)  Revocation of a license or registration.
464     (b)  Suspension of a license or registration, subject to
465reinstatement upon satisfying all reasonable conditions that the
466office specifies.
467     (c)  Placement of the licensee or applicant on probation
468for a period of time and subject to all reasonable conditions
469that the office specifies.
470     (d)  Issuance of a reprimand.
471     (e)  Imposition of a fine in an amount not exceeding $5,000
472for each count or separate offense.
473     (f)  Denial of a license or registration.
474     (2)  Each of the following acts constitutes a ground for
475which the disciplinary actions specified in subsection (1) may
476be taken:
477     (v)  In any mortgage transaction, violating any provision
478of the federal Real Estate Settlement Procedure Act, as amended,
47912 U.S.C. ss. 2601 et seq., the federal Truth In Lending Act, as
480amended, 15 U.S.C. ss. 1601 et seq., or any regulations adopted
481under such acts.
482     (3)  A mortgage lender or correspondent mortgage lender is
483subject to the disciplinary actions specified in subsection (1)
484if any officer, member, director, control person, joint
485venturer, or ultimate equitable owner of a 10-percent or greater
486interest in the mortgage lender or correspondent mortgage
487lender, associate, or employee of the mortgage lender or
488correspondent mortgage lender violates or has violated any
489provision of subsection (2).
490     (5)  A principal representative of a mortgage lender or
491correspondent mortgage lender is subject to the disciplinary
492actions specified in subsection (1) for violations of subsection
493(2) by associates or employees in the course of an association
494or employment with the correspondent mortgage lender or the
495mortgage lender. The principal representative is only subject to
496suspension or revocation for associate or employee actions if
497there is a pattern of repeated violations by associates or
498employees or if the principal broker or principal representative
499had knowledge of the violations.
500     Section 12.  Section 494.0073, Florida Statutes, is amended
501to read:
502     494.0073  Mortgage lender or correspondent mortgage lender
503when acting as a mortgage brokerage business.--Sections 494.006-
504494.006-494.0077 do not prohibit a mortgage lender or
505correspondent mortgage lender from acting as a mortgage
506brokerage business. However, in mortgage transactions in which a
507mortgage lender or correspondent mortgage lender acts as a
508mortgage brokerage business, the provisions of ss. 494.0038,
509494.0042, 494.004(8), and 494.0043(1), (2), and (3) apply.
510     Section 13.  This act shall take effect October 1, 2007.


CODING: Words stricken are deletions; words underlined are additions.
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