SB-0828, As Passed House, February 13, 2008

SUBSTITUTE FOR

SENATE BILL NO. 828

     A bill to amend 1987 PA 173, entitled

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

by amending the title and section 1a (MCL 445.1651a), section 1a as

amended by 2002 PA 391.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

     An act to define and regulate mortgage brokers, mortgage

lenders, and mortgage servicers and their loan officers; to

prescribe the powers and duties of the financial institutions

bureau and certain public officers and agencies; to provide for the

promulgation of rules; and to provide remedies and penalties.

     Sec. 1a. As used in this act: , unless the context requires

otherwise:

     (a) "Affiliate" means a person or group of persons that

directly or indirectly through 1 or more intermediaries controls,

is controlled by, or is under common control with another person

and engaged in a business or transaction regulated by this act.

     (b) "Board" means the mortgage industry advisory board created

in section 33.

(c) (b) "Commissioner" means the commissioner of the office of

financial and insurance services of the department of consumer and

industry services labor and economic growth or his or her

authorized agent.

(d) (c) "Construction loan" means a mortgage loan for the

purpose of constructing to construct a 1-to-4 family dwelling,

which loan that is approved and closed before completion of the

construction of the improvement on the real property.

(e) (d) "Control person" means a director or executive officer

of a licensee or registrant or a person who has the authority to

participate in the direction, directly or indirectly through 1 or

more other persons, of the management or policies of a licensee or

registrant.

(f) (e) "Depository financial institution" means a state or

nationally chartered bank, a state or federally chartered savings

and loan association, savings bank, or credit union, or an entity

of the federally chartered farm credit system.

(g) (f) "Executive officer" means an officer, member, or

partner of a licensee or registrant. , including The term includes

the chief executive officer, president, vice president, chief

financial officer, controller, or compliance officer , or an

individual holding any other similar position.

(h) (g) "Financial licensing act" means the consumer financial

services act, 1988 PA 161, MCL 487.2051 to 487.2072, and any of the

acts listed in section 2 of the consumer financial services act,

1988 PA 161, MCL 487.2052.

(i) (h) "Firm commitment" means an underwriting in which a

broker-dealer commits to buy the mortgage loan or the entire issue

of securities based upon or backed by 1 or more mortgage loans and

assumes all financial responsibility for any unsold securities.

(j) (i) "Individual investor" means a person residing that

resides in this state or having has its principal place of business

in this state. , other than The term does not include a bank,

savings bank, savings and loan association, credit union, trust

company, insurance company, investment company as defined in the

investment company act of 1940, title I of chapter 686, 54 Stat.

789, 15 U.S.C. USC 80a-1 to 80a-3 and 80a-4 to 80a-64, pension or

profit sharing plan , if the assets of which the plan are managed

by a bank or trust company or other institutional manager,

financial institution, institutional manager, broker-dealer that is

a member of the New York stock exchange or registered under the

uniform securities act, 1964 PA 265, MCL 451.501 to 451.818, the

federal national mortgage association, the government national

mortgage association, the federal home loan mortgage corporation,

or a mortgage lender or mortgage servicer.

(k) (j) "License" means a license issued under this act.

(l) (k) "Licensee" means a person licensed or required to be

licensed under this act.

     (m) "Loan officer" means an individual who is an employee or

agent of a mortgage broker, mortgage lender, or mortgage servicer;

who originates mortgage loans; and who is not an employee or agent

of a depository financial institution or a subsidiary or affiliate

of a depository financial institution.

     (n) "Loan officer registrant" means an individual who is

currently registered under section 2a.

(o) (l) "Mortgage broker" means a person who, directly or

indirectly, does 1 or both of the following:

     (i) Serves or offers to serve as an agent for a person in an

attempt to obtain a mortgage loan.

     (ii) Serves or offers to serve as an agent for a person who

makes or offers to make mortgage loans.

(p) (m) "Mortgage lender" means a person who, directly or

indirectly, makes or offers to make mortgage loans.

(q) (n) "Mortgage loan" means a loan secured by a first

mortgage on real property located in this state and used, or

improved to be used for use, as a dwelling and designed for

occupancy by 4 or fewer families or a land contract covering real

property located in this state used, or improved to be used for

use, as a dwelling and designed for occupancy by 4 or fewer

families. A mortgage loan does not include a home improvement

installment contract under the home improvement finance act, 1965

PA 332, MCL 445.1101 to 445.1431.

(r) (o) "Mortgage servicer" means a person who, directly or

indirectly, services or offers to service mortgage loans.

     (s) "Originate" means any of the following:

     (i) To negotiate, arrange, or offer to negotiate or arrange a

mortgage loan between a mortgage lender and 1 or more individuals.

     (ii) To place, assist in placing, or find a mortgage loan for 1

or more individuals.

(t) (p) "Person" means an individual, corporation, limited

liability company, partnership, association, governmental entity,

or any other legal entity.

(u) (q) "Real estate broker" means a broker or associate

broker licensed under article 25 of the occupational code, 1980 PA

299, MCL 339.2501 to 339.2518.

(v) (r) "Real estate salesperson" means a salesperson licensed

under article 25 of the occupational code, 1980 PA 299, MCL

339.2501 to 339.2518.

(w) (s) "Register" means filing a notice with the commissioner

on a form prescribed by the commissioner that notifies the

commissioner of the intent to engage in the activities of a

mortgage broker, mortgage lender, or mortgage servicer, or loan

officer in this state and the payment of any fees required under

this act, along with the other documents, proofs, and fees required

by the commissioner.

(x) (t) "Registrant" means a person that is registered under

section 6 or required to be registered register under this act

section 6. The term does not include a loan officer registrant.

(y) (u) "Service" means the collection or remittance, or the

right or obligation to collect or remit, for a lender, noteowner,

noteholder, mortgage servicer, or the licensee's or registrant's

own account of 4 or more installment payments of the principal,

interest, or an amount placed in escrow under a mortgage loan,

mortgage servicing agreement, or an agreement with the mortgagor.

     Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law:

(a) Senate Bill No. 826.

     (b) Senate Bill No. 827.

     (c) Senate Bill No. 829.

     (d) Senate Bill No. 830.

     (e) Senate Bill No. 831.

     (f) Senate Bill No. 832.

     (g) Senate Bill No. 833.

     (h) House Bill No. 5287.

     (i) House Bill No. 5288.

     (j) House Bill No. 5289.

     (k) House Bill No. 5290.

     (l) House Bill No. 5291.