HB-4596, As Passed Senate, February 27, 2008

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4596

     A bill to amend 1987 PA 173, entitled

"Mortgage brokers, lenders, and servicers licensing act,"

by amending sections 6, 7, 8, and 25 (MCL 445.1656, 445.1657,

445.1658, and 445.1675), sections 6, 7, and 8 as amended by 1996 PA

210 and section 25 as amended by 1998 PA 371.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 6. (1) The following shall register with the commissioner

on a form prescribed by the commissioner:

     (a) A mortgage broker, mortgage lender, or mortgage servicer

approved as a seller or servicer by the federal national mortgage

association or the federal home loan mortgage corporation.

     (b) A mortgage broker, mortgage lender, or mortgage servicer

approved as an issuer or servicer by the government national

mortgage association.

     (c) A real estate broker or real estate salesperson licensed

under article 25 of the occupational code, Act No. 299 of the

Public Acts of 1980, being sections 339.2501 to 339.2518 of the

Michigan Compiled Laws 1980 PA 299, MCL 339.2501 to 339.2518, who

acts as a mortgage broker for not more than 1 licensee or 1

registrant, or who acts as a mortgage broker, mortgage lender, or

mortgage servicer only in connection with real estate sales in

which the real estate broker or salesperson affiliated with the

real estate broker is engaged and who receives for such those

services additional compensation beyond the customary commission on

real estate sales.

     (d) A mortgage broker, mortgage lender, or mortgage servicer

which that is a subsidiary or affiliate of a depository financial

institution or a depository financial institution holding company

if the depository institution does not maintain a main office or a

branch office in this state.

     (2) A registrant is not required to comply with section 3, 4,

or 5 and is not subject to annual examination by the commissioner.

     (3) A mortgage broker, mortgage lender, or a mortgage servicer

which that is a subsidiary or affiliate of a depository financial

institution or a subsidiary or affiliate of a holding company of a

depository financial institution shall is not be subject to section

29(1)(b) or (c).

     (4) Notwithstanding section 25(m), a mortgage broker, mortgage

lender, or a mortgage servicer which that is a subsidiary or

affiliate of a depository financial institution or a subsidiary or

affiliate of a holding company of a depository financial

institution may register and become subject to the provisions of

the act applicable to registrants.

     (5) If a real estate broker or real estate salesperson acts as

a mortgage broker, mortgage lender, or mortgage servicer not in

connection with real estate sales in which the real estate broker

or real estate salesperson affiliated with the real estate broker

is engaged, the real estate broker or real estate salesperson shall

be licensed or registered as otherwise required under this act.

     (6) A real estate broker or real estate salesperson, in

connection with real estate sales in which the real estate broker

or real estate salesperson affiliated with the real estate broker

is engaged, who acts as a mortgage broker on 10 or fewer mortgage

loans in any 12-month period from July January 1 to June 30

December 31 and who receives for such services additional

compensation beyond the customary commission on real estate sales

shall be exempt from the registration or licensing requirements of

this act for that 12-month period. If the broker and all real

estate salespersons affiliated with the broker in aggregate

brokered more than 30 mortgage loans as described in this

subsection in the same 12-month period from July January 1 to June

30 December 31, then such that broker shall obtain a license or

shall register as required by this act.

     (7) A registration accepted by the commissioner under this

section does not approve the use of or indemnify the registrant

against claims for the improper use of the business name stated in

the registration.

     Sec. 7. (1) A registration or license, unless it is renewed,

shall expire June 30 December 31 of each year. A registration or

license may be renewed by filing a registration or an application

for license renewal and paying the annual operating fee for the

succeeding year. The registration or application and payment shall

be received by the commissioner on, or before, June 15 of each year

a date prescribed by the commissioner.

     (2) Not later than 90 days after the close of the fiscal year

of a licensee or registrant, the licensee or registrant shall

annually deliver to the commissioner a financial statement for the

fiscal year prepared from the licensee's or registrant's books and

records. At the licensee's or registrant's option, the financial

statement may be any of the following:

     (a) A form prescribed by the commissioner.

     (b) A report substantially similar to the form prescribed by

the commissioner, which report the licensee or registrant

represents must represent to the commissioner to be true and

complete.

     (c) In a format prepared and certified by an independent

certified public accountant licensed by a regulatory authority of

any state or political subdivision of the United States.

Sec. 8. (1) At the time of making an initial application for a

license under this act, and at the time of making the first

application for a license after the suspension or revocation of a

license, the an applicant for licensure under this act shall pay to

the commissioner a fee for investigating the applicant and the

minimum annual operating fee established by the commissioner under

in subsection (3). To renew a license that has not been is not

suspended or revoked, the applicant shall only pay to the

commissioner the annual operating fee established in subsection

(3). At the time of filing a registration or a renewal of a

registration, a registrant shall pay to the commissioner an annual

operating fee as provided by established in subsection (3).

     (2) If the an initial or renewed license or registration as

provided described in subsection (1) would will have an effective

date within 6 months of the expiration date provided for described

in section 7, the initial or renewal annual operating fee for that

license or registration shall be is 1/2 of the annual operating

fee.

     (3) The commissioner shall annually establish the a schedule

of fees that are sufficient to pay, but not to exceed, the bureau's

office of financial and insurance regulation's reasonably

anticipated costs of administering and enforcing this act. The

Subject to subsection (2), the fees are as follows:

     (a) For the investigation of an applicant for a license, a fee

of not less than $400.00 or more than $1,000.00.

     (b) Except as set forth in subdivision (c), a licensee or

registrant annually shall pay an operating fee based upon the

number of closed mortgage loans the licensee or registrant brokered

to other parties, the number of mortgage loans closed by the

licensee or registrant during the previous calendar year, and the

dollar volume of loans serviced by the licensee or registrant as of

December 31 of the previous calendar year. The In the 1-year period

beginning July 2, 1996, the operating fee during the first year

after enactment of this amendatory language shall be not less than

$250.00 and not more than $2,500.00. Thereafter Beginning July 2,

1997, in the discretion of the commissioner, subject to the

limitation set forth in this subsection, the commissioner may

increase the maximum operating fee may be increased at an annual

rate of not more than 10% in the second, third, and fourth years

following enactment 1-year periods after the 1-year period

beginning July 2, 1996, and in the fifth and subsequent years, at

an annual rate of not more than the annual increase for the

immediately preceding 12-month period in the Detroit consumer price

index as reported by the United States department of labor. For

purposes of this subdivision, "mortgage loan" includes only

mortgage loans subject to this act.

     (c) For amending or reissuing a license, or registration, or

loan officer registration, a fee of not less than $50.00 $15.00 or

more than $200.00.

     (d) A licensee or registrant shall pay the actual travel,

lodging, and meal expenses incurred by bureau employees of the

office of financial and insurance regulation who travel out of

state to examine the records of the licensee or investigate the

licensee or registrant and the cost of independent investigators

employed under section 20(1)(e).

     (e) A loan officer registrant shall pay an annual fee

established by the commissioner. For purposes of this subdivision,

the commissioner shall establish an amount for the annual fee that

is sufficient to defray the estimated cost of administering and

enforcing the loan officer registration provisions of this act.

     (4) Fees received pursuant to under this act are not

refundable.

     (5) If any fees or penalties provided for in this act are not

paid when required, the attorney general may maintain an action

against the delinquent licensee or registrant for the recovery of

the fees or penalties together with interest and costs.

     (6) A licensee or registrant who fails to submit to the

commissioner a report required by under section 7 or section 21 is

subject to a penalty of $25.00 for each day the report is

delinquent or $1,000.00, whichever is less.

     (7) A licensee or registrant whose license or registration

renewal fee is not received on or before June 30 December 31 is

subject to a penalty of $25.00 for each day the fee is delinquent

or $1,000.00, whichever is less.

     (8) Money received under this act shall be deposited in the

state treasury and credited to the financial institutions bureau to

be used only for the operation of the financial institutions

bureau. The department of treasury shall establish and administer a

restricted account in the general fund named the MBLSLA fund. The

department of treasury shall credit to the account all fees

collected under this act or under the commissioner's authority

under this act and money appropriated or received from any source.

The department of treasury shall use the money in the account only

to provide money to the commissioner, to administer and enforce

this act and other costs associated with the commissioner's

regulatory obligations. Money in the account at the end of a state

fiscal year shall not revert to the general fund but shall be

carried over in the account to the next state fiscal year.

     (9) The annual operating fee set by the commissioner under

subsection (3)(b) shall be based upon information in reports filed

under section 21.

     Sec. 25. This act does not apply to any of the following:

     (a) A depository financial institution whether or not the

depository financial institution is acting in a capacity of a

trustee or fiduciary.

     (b) A salesperson acting as an agent for a residential builder

or residential maintenance and alteration contractor, or a

residential builder or residential maintenance and alteration

contractor licensed under article 24 of the occupational code, 1980

PA 299, MCL 339.2401 to 339.2412, when if a mortgage is made or

negotiated in connection with the sale or financing of a

residential structure or improvement constructed or improved by

that residential builder or residential maintenance and alteration

contractor.

     (c) A real estate broker or real estate salesperson who is not

a mortgage broker, mortgage lender, or mortgage servicer, or who

only acts as a mortgage broker in connection with a real estate

sale or lease and acts without additional compensation beyond the

customary commission on the sales or leases.

     (d) A real estate salesperson who acts for a real estate

broker as a mortgage broker, mortgage lender, or mortgage servicer

and who receives for the services compensation only from the real

estate broker for which the salesperson is an agent or employee.

     (e) A person licensed under the secondary mortgage loan act,

1981 PA 125, MCL 493.51 to 493.81, not making, brokering, or

servicing mortgage loans as described in this act in a 12-month

period from July January 1 to June 30 December 31.

     (f) Agencies or corporate instrumentalities of the United

States and of this state and its political subdivisions, including

the public employees' retirement system.

     (g) A mortgage lender that in the aggregate with any

affiliates makes 10 or fewer mortgage loans in a 12-month period

from July January 1 to June 30 December 31.

     (h) A mortgage servicer that in the aggregate with any

affiliates services 10 or fewer mortgage loans in a 12-month period

from July January 1 to June 30 December 31.

     (i) A mortgage servicer that in the aggregate with any

affiliates services only 75 or fewer land contracts, of which 10 or

fewer require the collection of money for the payment of taxes or

insurance. This subdivision and subdivision (h) do not exempt a

mortgage servicer who collects money for the payment of taxes or

insurance from the provisions of 1966 PA 125, MCL 565.161 to

565.164. All fees shall be returned to any mortgage servicer

described in this subdivision who applied for a license and paid

the fees required by this act and who on December 27, 1988 is

exempted from licensing.

     (j) An individual licensed to practice law in this state and

not engaged in the business of negotiating loans secured by real

property, when if the individual renders services in the course of

his or her practice as an attorney-at-law.

     (k) A person who makes mortgage loans exclusively for the

benefit of employees of that person if the proceeds of the loan are

used to assist the employee in meeting his or her housing needs.

     (l) A person acting as a fiduciary with respect to any employee

pension benefit plan qualified under the internal revenue code who

makes mortgage loans solely to plan participants from plan assets.

     (m) A mortgage broker, mortgage lender, or a mortgage servicer

which that is a subsidiary or affiliate of a depository financial

institution or a subsidiary or affiliate of a holding company of a

depository financial institution, which if the depository financial

institution maintains its main office or a branch office in this

state.

     (n) A nonprofit corporation that makes, brokers, or services

mortgage loans in connection with a neighborhood housing program

assisted under the neighborhood reinvestment corporation act, title

VI of Public Law 95-557, 42 U.S.C. USC 8101 to 8107.

     (o) A person determined by the commissioner to meet the

qualifications established under section 25a.

     Enacting section 1. This amendatory act takes effect January

1, 2009.