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Senate Bill 1824

Senate Bill sb1824

CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                                  SB 1824

    By Senator Fasano





    11-1453-07                                              See HB

  1                      A bill to be entitled

  2         An act relating to mortgage brokering and

  3         lending; amending s. 494.001, F.S.; revising

  4         definitions; amending s. 494.0014, F.S.;

  5         authorizing the Office of Financial Regulation

  6         to impose fines; amending s. 494.0029, F.S.;

  7         authorizing the office to take certain adverse

  8         actions on permits of certain mortgage business

  9         schools; providing additional requirements for

10         such schools; amending s. 494.00295, F.S.;

11         providing an additional professional continuing

12         education requirement; authorizing the office

13         to offer professional continuing education

14         programs; specifying requirements for

15         electronically transmitted and distance

16         education courses; amending s. 494.0033, F.S.;

17         authorizing an additional fee for reviewing

18         mortgage broker's license tests; providing for

19         review of the testing process; amending s.

20         494.0038, F.S.; providing additional disclosure

21         requirements for mortgage brokerage businesses;

22         amending s. 494.004, F.S.; specifying an

23         additional notification requirement for

24         mortgage broker licensees; amending s.

25         494.0041, F.S.; specifying additional acts

26         constituting grounds for certain disciplinary

27         actions; providing for fines and penalties;

28         amending s. 494.0042, F.S.; limiting certain

29         brokerage fees; amending s. 494.0064, F.S.;

30         providing additional requirements for renewals

31         of mortgage lender's licenses; amending s.

                                  1

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1         494.0067, F.S.; providing additional

 2         requirements for mortgage lender licenses;

 3         providing disclosure requirements; amending s.

 4         494.0072, F.S.; specifying additional acts

 5         constituting grounds for certain disciplinary

 6         actions; providing fines and penalties;

 7         amending s. 494.0073, F.S.; providing for

 8         application of certain provisions to mortgage

 9         brokerage businesses; providing for adoption of

10         rules by the Financial Services Commission;

11         providing an effective date.

12  

13  Be It Enacted by the Legislature of the State of Florida:

14  

15         Section 1.  Subsection (2) of section 494.001, Florida

16  Statutes, is amended, and subsection (32) is added to that

17  section, to read:

18         494.001  Definitions.--As used in ss. 494.001-494.0077,

19  the term:

20         (2)  "Act as a loan originator" means being employed by

21  a mortgage lender or correspondent mortgage lender, for

22  compensation or gain or in the expectation of compensation or

23  gain, to negotiate, or offer to negotiate, or assist any

24  licensed or exempt entity in negotiating, the making of a

25  mortgage loan. A person whose activities are ministerial and

26  clerical, which may include quoting available interest rates

27  or loan terms and conditions, is not acting as a loan

28  originator.

29         (32)  "Mortgage loan application" means a submission of

30  a borrower's financial information in anticipation of a credit

31  decision, whether written or computer-generated, relating to a

                                  2

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1  mortgage loan. If the submission does not state or identify a

 2  specific property, the submission is an application for a

 3  prequalification and not an application for a mortgage loan

 4  under this part. The subsequent addition of an identified

 5  property to the submission converts the submission to an

 6  application for a mortgage loan.

 7         Section 2.  Section 494.0014, Florida Statutes, is

 8  amended to read:

 9         494.0014  Cease and desist orders; administrative

10  fines; refund orders.--

11         (1)  The office has the power to issue and serve upon

12  any person an order to cease and desist and to take corrective

13  action whenever it has reason to believe the person is

14  violating, has violated, or is about to violate any provision

15  of ss. 494.001-494.0077, any rule or order issued under ss.

16  494.001-494.0077, or any written agreement between the person

17  and the office. All procedural matters relating to issuance

18  and enforcement of such a cease and desist order are governed

19  by the Administrative Procedure Act.

20         (2)  The office has the power to order the refund of

21  any fee directly or indirectly assessed and charged on a

22  mortgage loan transaction which is unauthorized or exceeds the

23  maximum fee specifically authorized in ss. 494.001-494.0077.

24         (3)  The office may prohibit the association by a

25  mortgage broker business, or the employment by a mortgage

26  lender or correspondent mortgage lender, of any person who has

27  engaged in a pattern of misconduct while an associate of a

28  mortgage brokerage business or an employee of a mortgage

29  lender or correspondent mortgage lender. For the purpose of

30  this subsection, the term "pattern of misconduct" means the

31  commission of three or more violations of ss. 494.001-494.0077

                                  3

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1  or the provisions of chapter 494 in effect prior to October 1,

 2  1991, during any 1-year period or any criminal conviction for

 3  violating ss. 494.001-494.0077 or the provisions of chapter

 4  494 in effect prior to October 1, 1991.

 5         (4)  The office may impose upon any person who makes or

 6  brokers a loan, or any mortgage business school, a fine for

 7  violations of any provision of ss. 494.001-494.00295 or any

 8  rule or order issued under ss. 494.001-494.00295 in an amount

 9  not exceeding $5,000 for each separate count or offense. The

10  borrower may recover reasonable costs and attorney's fees.

11         Section 3.  Paragraph (f) is added to subsection (1)

12  and paragraphs (g) and (h) are added to subsection (2) of

13  section 494.0029, Florida Statutes, to read:

14         494.0029  Mortgage business schools.--

15         (1)

16         (f)  In addition to the remedies set forth in s.

17  494.0014, the office may revoke, suspend, or place on

18  probation the permit of any mortgage business school that

19  fails to meet the requirements of this section, subject to all

20  reasonable conditions that the office specifies.

21         (2)

22         (g)  A school permitted under this section must conduct

23  classes on an hour-for-hour basis in accordance with the

24  requirements of this chapter.

25         (h)  Each school permitted under this section is

26  responsible for developing procedures to confirm, and for

27  actually confirming, the identity of each student attending

28  any course offering.

29         Section 4.  Section 494.00295, Florida Statutes, is

30  amended to read:

31         494.00295  Professional continuing education.--

                                  4

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1         (1)  Mortgage brokers, and the principal

 2  representatives and loan originators of a mortgage lender,

 3  correspondent mortgage lender, or mortgage lender pursuant to

 4  s. 494.0065, must successfully complete at least 14 hours of

 5  professional continuing education covering primary and

 6  subordinate mortgage financing transactions and the provisions

 7  of this chapter during the 2-year period immediately preceding

 8  the renewal deadline for a mortgage broker, mortgage lender,

 9  correspondent mortgage lender, or mortgage lender pursuant to

10  s. 494.0065. A minimum of 4 hours shall cover the provisions

11  of this chapter and the rules adopted under this chapter. At

12  the time of license renewal, a licensee must certify to the

13  office that the professional continuing education requirements

14  of this section have been met. Licensees shall maintain

15  records documenting compliance with this subsection for a

16  period of 4 years. The requirements for professional

17  continuing education are waived for the license renewal of a

18  mortgage broker for the biennial license period immediately

19  following the period in which the person became licensed as a

20  mortgage broker. The requirements for professional continuing

21  education for a principal representative are waived for the

22  license renewal of a mortgage lender, correspondent mortgage

23  lender, or mortgage lender pursuant to s. 494.0065 for the

24  biennial license period immediately following the period in

25  which the principal representative completed the 24 hours of

26  classroom education and passed a written test in order to

27  qualify to be a principal representative.

28         (2)  Professional continuing education programs must

29  contribute directly to the professional competency of the

30  participants, may only be offered by permitted mortgage

31  business schools, the office, or entities specifically

                                  5

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1  exempted from permitting as mortgage business schools, and may

 2  include electronically transmitted or distance education

 3  courses.

 4         (3)(a)  All electronically transmitted courses shall

 5  require that the time spent attending electronically

 6  transmitted professional education courses is equal to the

 7  number of qualifying hours awarded to participants for course

 8  attendance. Before allowing a course participant to complete a

 9  course and receive a certificate of course completion, the

10  course provider shall ensure that the course participant has:

11         1.  Logged the required number of hours for the

12  particular timed module.

13         2.  Completed a test that comprehensively covers the

14  course content for the particular timed module.

15         3.  Correctly answered all test questions for the

16  particular timed module.

17         (b)  All distance education course participants shall

18  successfully complete a test that comprehensively covers

19  course content in order to receive a certificate of course

20  completion. Distance education providers shall not provide

21  answers to test questions to course participants and shall not

22  issue a certificate of course completion to any course

23  participant who has failed to correctly answer at least 75

24  percent of the total test questions.

25         (4)(3)  The commission shall adopt rules pursuant to

26  ss. 120.536(1) and 120.54 necessary to administer this

27  section, including rules governing qualifying hours for

28  professional continuing education programs and standards for

29  electronically transmitted or distance education courses,

30  including course completion requirements.

31  

                                  6

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1         Section 5.  Paragraph (b) of subsection (2) of section

 2  494.0033, Florida Statutes, is amended to read:

 3         494.0033  Mortgage broker's license.--

 4         (2)  Each initial application for a mortgage broker's

 5  license must be in the form prescribed by rule of the

 6  commission. The commission may require each applicant to

 7  provide any information reasonably necessary to make a

 8  determination of the applicant's eligibility for licensure.

 9  The office shall issue an initial license to any natural

10  person who:

11         (b)  Has passed a written test adopted and administered

12  by the office, or has passed an electronic test adopted and

13  administered by the office or a third party approved by the

14  office, which is designed to determine competency in primary

15  and subordinate mortgage financing transactions as well as to

16  test knowledge of ss. 494.001-494.0077 and the rules adopted

17  pursuant thereto. The commission may prescribe by rule an

18  additional fee that may not exceed $100 for the electronic

19  version of the mortgage broker test. The commission may waive

20  by rule the examination requirement for any person who has

21  passed a test approved by the Conference of State Bank

22  Supervisors, the American Association of Residential Mortgage

23  Regulators, or the United States Department of Housing and

24  Urban Development if the test covers primary and subordinate

25  mortgage financing transactions. The commission may adopt

26  rules prescribing an additional fee that may not exceed $50

27  for an applicant to review his or her completed and graded

28  mortgage broker test. The commission may adopt rules regarding

29  the administration of the testing process, including, but not

30  limited to, procedures relating to test security, scoring,

31  

                                  7

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1  content, result notification, retest procedures and fees,

 2  postexamination review, and challenge provisions.

 3  

 4  The commission may require by rule information concerning any

 5  such applicant or person, including, but not limited to, his

 6  or her full name and any other names by which he or she may

 7  have been known, age, social security number, qualifications

 8  and educational and business history, and disciplinary and

 9  criminal history.

10         Section 6.  Section 494.0038, Florida Statutes, is

11  amended to read:

12         494.0038  Mortgage broker disclosures.--

13         (1)(a)1.  A person may not receive a fee for acting as

14  a mortgage brokerage business except pursuant to a written

15  agreement between the mortgage brokerage business and the

16  borrower that is signed and dated by the business and the

17  borrower.

18         2.  The written agreement must be executed within 3

19  days after accepting a mortgage loan application, describe the

20  services to be provided by the mortgage brokerage business,

21  and specify the amount and terms of the mortgage brokerage fee

22  that the mortgage brokerage business is to receive.

23         (b)1.  If the mortgage brokerage business is to receive

24  any payment of any kind from the lender, such fact shall be

25  specifically disclosed to the borrower and the maximum total

26  dollar amount of the payment must be disclosed to the borrower

27  in the written agreement. The commission may prescribe by rule

28  an acceptable form for disclosure of brokerage fees received

29  from the lender. If any of the rates, points, fees, and other

30  terms quoted by or on behalf of the lender are to be received

31  

                                  8

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1  by the mortgage brokerage business, such fact shall be

 2  specifically disclosed to the borrower.

 3         2.  The exact amount of any payment of any kind by the

 4  lender to the mortgage brokerage business must be disclosed in

 5  writing no later than 10 days prior to the execution of the

 6  closing or settlement statement if the execution of the

 7  closing or settlement statement is scheduled more than 25 days

 8  after the execution of the mortgage brokerage agreement and no

 9  later than 3 days prior to the execution of the closing or

10  settlement statement if the execution of the closing or

11  settlement statement is scheduled 25 days or less after the

12  execution of the mortgage brokerage agreement. If the mortgage

13  brokerage fee is for brokering a loan for a particular program

14  under which the brokerage fee varies according to the terms of

15  the loan, the brokerage fee may be disclosed as a range of

16  fees at the time of application. The mortgage broker shall, in

17  such instance, disclose the nature of the fee arrangement to

18  the borrower, and the exact amount of the fee must be

19  disclosed at settlement or closing.

20         (c)  The commission may prescribe by rule the form of

21  disclosure of brokerage fees.

22         (2)  At the time a written agreement is executed by the

23  borrower or at the time the mortgage brokerage business

24  accepts an application fee, credit report fee, property

25  appraisal fee, or any other third-party fee, but not fewer

26  than 3 days prior to execution of the closing or settlement

27  statement, the mortgage brokerage business shall disclose in

28  writing to any applicant for a mortgage loan the following

29  information:

30         (a)  That such mortgage brokerage business may not make

31  mortgage loans or commitments. The mortgage brokerage business

                                  9

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1  may make a commitment and may furnish a lock-in of the rate

 2  and program on behalf of the lender when the mortgage

 3  brokerage business has obtained a written commitment or

 4  lock-in for the loan from the lender on behalf of the borrower

 5  for the loan. The commitment must be in the same form and

 6  substance as issued by the lender.

 7         (b)  That such mortgage brokerage business cannot

 8  guarantee acceptance into any particular loan program or

 9  promise any specific loan terms or conditions.

10         (c)  A good faith estimate, signed and dated by the

11  borrower, that discloses of the total amount of each of the

12  fees that the borrower may reasonably expect to pay if the

13  loan is closed, including, but not limited to, fees earned by

14  the mortgage brokerage business, lender fees, third-party

15  fees, and official fees, together with credit report fee,

16  property appraisal fee, or any other third-party fee and the

17  terms and conditions for obtaining a refund of such fees, if

18  any. Any amount collected in excess of the actual cost shall

19  be returned within 60 days after rejection, withdrawal, or

20  closing. This requirement does not supplant or is not a

21  substitute for the written agreement described in subsection

22  (1).

23         (3)  The disclosures required by this subsection must

24  be made in writing at the time an adjustable rate mortgage

25  loan is offered to the borrower and whenever the terms of the

26  adjustable rate mortgage loan offered change prior to closing.

27  The commission may prescribe by rule the form for disclosures

28  required by this subsection.

29         (a)  The highest possible payment that could be reached

30  based on the terms of the loan offered shall be disclosed to

31  the borrower.

                                  10

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1         (b)  The methodology used to determine how and when the

 2  applicable interest rate is calculated shall be fully

 3  explained to the borrower, including identification of what

 4  index will be used to determine the applicable interest rate.

 5         (4)  The disclosures in this subsection shall be made

 6  in writing at the time a mortgage loan is offered and whenever

 7  the terms of the mortgage loan offered change prior to closing

 8  if, at the time the loan is made, any scheduled payment over

 9  the life of the mortgage loan is insufficient to pay the

10  interest due at the time the scheduled payment is due. The

11  commission may prescribe by rule the form for disclosures

12  required by this subsection.

13         (a)  The borrower shall be provided a complete

14  amortization schedule. Each scheduled payment that is

15  insufficient to pay the interest due at the time of the

16  payment shall be specifically identified to the borrower.

17         (b)  The borrower shall be provided an explanation of

18  the effect each insufficient payment will have on the

19  principal balance of the mortgage loan.

20         (5)  The disclosures in this subsection shall be made

21  in writing at the time a mortgage loan is offered and whenever

22  the terms of the mortgage loan offered change prior to closing

23  if, at the time the loan is made, any scheduled payment over

24  the life of the mortgage loan is sufficient to pay only the

25  interest due at the time of the scheduled payment. The

26  commission may prescribe by rule the form for disclosures

27  required by this subsection.

28         (a)  The borrower shall be provided a complete

29  amortization schedule. Each scheduled payment that is

30  sufficient to pay only the interest due at the time of the

31  payment shall be specifically identified to the borrower.

                                  11

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1         (b)  The borrower shall be provided an explanation of

 2  the effect each payment that is sufficient to pay only the

 3  interest due at the time the payment is due will have on the

 4  principal balance of the mortgage loan.

 5         (6)(3)  If the mortgage brokerage agreement includes a

 6  nonrefundable application fee, the following requirements are

 7  applicable:

 8         (a)  The amount of the application fee, which must be

 9  clearly denominated as such, shall be clearly disclosed.

10         (b)  The specific services that will be performed in

11  consideration for the application fee shall be disclosed.

12         (c)  The application fee must be reasonably related to

13  the services to be performed and may not be based upon a

14  percentage of the principal amount of the loan or the amount

15  financed.

16         (7)(4)  A mortgage brokerage business may not accept

17  any fee in connection with a mortgage loan other than an

18  application fee, credit report fee, property appraisal fee, or

19  other third-party fee prior to obtaining a written commitment

20  from a qualified lender.

21         (8)(5)  Any third-party fee entrusted to a mortgage

22  brokerage business shall immediately, upon receipt, be placed

23  into a segregated account with a financial institution located

24  in the state the accounts of which are insured by the Federal

25  Government. Such funds shall be held in trust for the payor

26  and shall be kept in the account until disbursement. Such

27  funds may be placed in one account if adequate accounting

28  measures are taken to identify the source of the funds.

29         (9)(6)  All mortgage brokerage fees shall be paid to a

30  mortgage brokerage business licensee.

31  

                                  12

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1         (10)(7)  This section does not prohibit a mortgage

 2  brokerage business from offering products and services, in

 3  addition to those offered in conjunction with the loan

 4  origination process, for a fee or commission.

 5         Section 7.  Subsections (8) and (9) are added to

 6  section 494.004, Florida Statutes, to read:

 7         494.004  Requirements of licensees.--

 8         (8)  Each licensee under ss. 494.003-494.0043 has a

 9  duty to act in good faith and with fair dealing in any

10  transaction, practice, or course of business in connection

11  with the brokering or originating of any mortgage loan and

12  shall make reasonable efforts to secure a mortgage loan from

13  lenders with whom the licensee regularly does business. The

14  commission may adopt rules providing guidance regarding what

15  acting in good faith and with fair dealing means.

16         (9)  In every mortgage loan transaction, each licensee

17  under ss. 494.003-494.0043 shall notify a borrower of any

18  changes in the terms of a mortgage loan previously offered to

19  the borrower within 24 hours after being made aware of such

20  changes by the lender but not less than 3 business days before

21  the signing of the settlement or closing statement. The

22  licensee bears the burden of proving such notification was

23  provided and accepted by the borrower.

24         Section 8.  Paragraph (v) is added to subsection (2) of

25  section 494.0041, Florida Statutes, to read:

26         494.0041  Administrative penalties and fines; license

27  violations.--

28         (1)  Whenever the office finds a person in violation of

29  an act specified in subsection (2), it may enter an order

30  imposing one or more of the following penalties against the

31  person:

                                  13

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1         (a)  Revocation of a license or registration.

 2         (b)  Suspension of a license or registration subject to

 3  reinstatement upon satisfying all reasonable conditions that

 4  the office specifies.

 5         (c)  Placement of the licensee, registrant, or

 6  applicant on probation for a period of time and subject to all

 7  reasonable conditions that the office specifies.

 8         (d)  Issuance of a reprimand.

 9         (e)  Imposition of a fine in an amount not exceeding

10  $5,000 for each count or separate offense.

11         (f)  Denial of a license or registration.

12         (2)  Each of the following acts constitutes a ground

13  for which the disciplinary actions specified in subsection (1)

14  may be taken:

15         (v)  In any mortgage transaction, violating any

16  provision of the federal Real Estate Settlement Procedure Act,

17  as amended, 12 U.S.C. s. 2601 et seq., the federal Truth In

18  Lending Act, 15 U.S.C. s. 1601 et seq., or any regulations

19  adopted under such acts.

20         Section 9.  Subsection (4) is added to section

21  494.0042, Florida Statutes, to read:

22         494.0042  Brokerage fees.--

23         (4)  A person may charge a borrower and receive only

24  one fee from the borrower for acting as a mortgage broker

25  business.

26         Section 10.  Subsection (1) of section 494.0064,

27  Florida Statutes, is amended to read:

28         494.0064  Renewal of mortgage lender's license; branch

29  office license renewal.--

30         (1)(a)  The office shall renew a mortgage lender

31  license upon receipt of a completed renewal form,

                                  14

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1  certification from the licensee that the licensee currently

 2  meets the minimum net worth requirements of s. 494.0061 or s.

 3  494.0065, certification from the licensee that during the

 4  preceding 2 years the licensee's principal representative and

 5  loan originators have completed the professional continuing

 6  education requirements of s. 494.00295, and the nonrefundable

 7  renewal fee of $575. The office shall renew a correspondent

 8  lender license upon receipt of a completed renewal form,

 9  certification from the licensee that the licensee currently

10  meets the minimum net worth requirements of s. 494.0062,

11  certification from the licensee that during the preceding 2

12  years the licensee's principal representative and loan

13  originators have completed the professional continuing

14  education requirements of s. 494.00295, and a nonrefundable

15  renewal fee of $475. Each licensee shall pay at the time of

16  renewal a nonrefundable fee of $325 for the renewal of each

17  branch office license.

18         (b)  A licensee shall also submit, as part of the

19  renewal form, certification that during the preceding 2 years

20  the licensee's principal representative and loan originators

21  have completed the professional continuing education

22  requirements of s. 494.00295.

23         Section 11.  Paragraph (a) of subsection (10) of

24  section 494.0067, Florida Statutes, is amended, and

25  subsections (11), (12), (13), and (14) are added to that

26  section, to read:

27         494.0067  Requirements of licensees under ss.

28  494.006-494.0077.--

29         (10)(a)  Each mortgage lender or correspondent mortgage

30  lender licensee shall require the principal representative and

31  all loan originators, not currently licensed as mortgage

                                  15

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1  brokers pursuant to s. 494.0033, who perform services for the

 2  licensee to complete 14 hours of professional continuing

 3  education during each biennial license period. The education

 4  shall cover primary and subordinate mortgage financing

 5  transactions and the provisions of this chapter and the rules

 6  adopted under this chapter.

 7         (11)  The disclosures in this subsection must be made

 8  in writing at the time an adjustable rate mortgage loan is

 9  offered to the borrower and whenever the terms of the

10  adjustable rate mortgage loan offered change prior to closing.

11  The commission may prescribe by rule the form for disclosures

12  required by this subsection.

13         (a)  The highest possible payment that could be reached

14  based on the terms of the loan offered shall be disclosed to

15  the borrower.

16         (b)  The methodology used to determine how and when the

17  applicable interest rate is calculated shall be fully

18  explained to the borrower, including identification of what

19  index will be used to determine the applicable interest rate.

20         (12)  The disclosures in this subsection shall be made

21  in writing at the time a mortgage loan is offered and whenever

22  the terms of the mortgage loan offered change prior to closing

23  if, at the time the loan is made, any scheduled payment over

24  the life of the mortgage loan is insufficient to pay the

25  interest due at the time the scheduled payment is due. The

26  commission may prescribe by rule the form for disclosures

27  required by this subsection.

28         (a)  The borrower shall be provided a complete

29  amortization schedule. Each scheduled payment that is

30  insufficient to pay the interest due at the time of the

31  payment shall be specifically identified to the borrower.

                                  16

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1         (b)  The borrower shall be provided an explanation of

 2  the effect each insufficient payment will have on the

 3  principal balance of the mortgage loan.

 4         (13)  The disclosures in this subsection shall be made

 5  in writing at the time a mortgage loan is offered and whenever

 6  the terms of the mortgage loan offered change prior to closing

 7  if, at the time the loan is made, any scheduled payment over

 8  the life of the mortgage loan is sufficient to pay only the

 9  interest due at the time the scheduled payment is due. The

10  commission may prescribe by rule the form of disclosure

11  required by this subsection.

12         (a)  The borrower shall be provided a complete

13  amortization schedule and each scheduled payment that is

14  sufficient to pay only the interest due at the time of the

15  payment shall be specifically identified to the borrower.

16         (b)  The borrower shall be provided an explanation of

17  the effect each payment that is sufficient to pay only the

18  interest due at the time the payment is due will have on the

19  principal balance of the mortgage loan.

20         (14)  In every mortgage loan transaction, each licensee

21  under ss. 494.003-494.0043 shall notify a borrower of any

22  changes in the terms of a mortgage loan previously offered to

23  the borrower within 24 hours after being made aware of such

24  changes by the lender but not less than 3 business days before

25  the signing of the settlement or closing statement. The

26  licensee bears the burden of proving such notification was

27  provided and accepted by the borrower.

28         Section 12.  Paragraph (v) is added to subsection (2)

29  of section 494.0072, Florida Statutes, subsection (3) of that

30  section is amended, and subsection (5) is added to that

31  section, to read:

                                  17

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1         494.0072  Administrative penalties and fines; license

 2  violations.--

 3         (1)  Whenever the office finds a person in violation of

 4  an act specified in subsection (2), it may enter an order

 5  imposing one or more of the following penalties against that

 6  person:

 7         (a)  Revocation of a license or registration.

 8         (b)  Suspension of a license or registration, subject

 9  to reinstatement upon satisfying all reasonable conditions

10  that the office specifies.

11         (c)  Placement of the licensee or applicant on

12  probation for a period of time and subject to all reasonable

13  conditions that the office specifies.

14         (d)  Issuance of a reprimand.

15         (e)  Imposition of a fine in an amount not exceeding

16  $5,000 for each count or separate offense.

17         (f)  Denial of a license or registration.

18         (2)  Each of the following acts constitutes a ground

19  for which the disciplinary actions specified in subsection (1)

20  may be taken:

21         (v)  In any mortgage transaction, violating any

22  provision of the federal Real Estate Settlement Procedure Act,

23  as amended, 12 U.S.C. s. 2601 et seq., the federal Truth In

24  Lending Act, 15 U.S.C. s. 1601 et seq., or any regulations

25  adopted under such acts.

26         (3)  A mortgage lender or correspondent mortgage lender

27  is subject to the disciplinary actions specified in subsection

28  (1) if any officer, member, director, control person, joint

29  venturer, or ultimate equitable owner of a 10-percent or

30  greater interest in the mortgage lender or correspondent

31  mortgage lender, associate, or employee of the mortgage lender

                                  18

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    Florida Senate - 2007                                  SB 1824
    11-1453-07                                              See HB




 1  or correspondent mortgage lender violates or has violated any

 2  provision of subsection (2).

 3         (5)  A principal representative of a mortgage lender or

 4  correspondent mortgage lender is subject to the disciplinary

 5  actions specified in subsection (1) for violations of

 6  subsection (2) by associates or employees in the course of an

 7  association or employment with the correspondent mortgage

 8  lender or the mortgage lender. The principal representative is

 9  only subject to suspension or revocation for associate or

10  employee actions if there is a pattern of repeated violations

11  by associates or employees or if the principal broker or

12  principal representative had knowledge of the violations.

13         Section 13.  Section 494.0073, Florida Statutes, is

14  amended to read:

15         494.0073  Mortgage lender or correspondent mortgage

16  lender when acting as a mortgage brokerage business.--Sections

17  494.006-494.0077 do not prohibit a mortgage lender or

18  correspondent mortgage lender from acting as a mortgage

19  brokerage business. However, in mortgage transactions in which

20  a mortgage lender or correspondent mortgage lender acts as a

21  mortgage brokerage business, the provisions of ss. 494.0038,

22  494.0042, 494.004(8) and (9), and 494.0043(1), (2), and (3)

23  apply.

24         Section 14.  This act shall take effect July 1, 2007.

25  

26  

27  

28  

29  

30  

31  

                                  19

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

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