Section 224.725. Licensing of mortgage loan originators.

 

(1)   License required. Except as provided in sub. (1m) , an individual may not regularly engage in the business of a mortgage loan originator with respect to a residential mortgage loan, or use the title “mortgage loan originator," advertise, or otherwise portray himself or herself as a mortgage loan originator in this state, unless the individual has been issued by the division, and thereafter maintains, a license under this section. Each licensed mortgage loan originator shall register with, and maintain a valid unique identifier issued by, the nationwide mortgage licensing system and registry.

(1m)   License exemptions. The following individuals are not required to be licensed under this section:

(a) A registered mortgage loan originator.

(b) An employee of a federal, state, or local government agency or housing finance agency who acts as a mortgage loan originator only pursuant to his or her official duties as an employee of the federal, state, or local government agency or housing finance agency.

(c) An individual engaged solely as a loan processor or underwriter, unless the individual is an independent contractor or represents to the public, through advertising or another means of communication such as the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that the individual can or will perform any of the activities of a mortgage loan originator.

(d) An individual who performs real estate brokerage activities only and is licensed under s. 452.03 , unless the individual is compensated by a lender, mortgage broker, or another mortgage loan originator or by any agent of a lender, mortgage broker, or another mortgage loan originator.

(e) An individual solely involved in extensions of credit relating to time-share plans, as defined in 11 USC 101 (53D).

(f) An employee of a bona fide nonprofit organization who acts as a mortgage loan originator only in connection with his or her work duties to the bona fide nonprofit organization and only with respect to residential mortgage loans with terms that are favorable to the borrower.

(g) A licensed attorney who undertakes activities described in s. 224.71 (6) if all of the following apply:

1. These activities are considered by the Wisconsin Supreme Court to be part of the authorized practice of law within Wisconsin.

2. These activities are carried out within an attorney-client relationship.

3. The attorney carries out the activities in compliance with all applicable laws, rules, and ethics standards.

(2)   License applications.

(a) Applicants for a mortgage loan originator license shall apply to the division, on forms and in the manner prescribed by the division, and shall pay the fee specified in rules promulgated under sub. (8) . The division shall require mortgage loan originators to be licensed and registered through the nationwide mortgage licensing system and registry. Forms prescribed by the division under this paragraph may contain any content or requirement that the division, in its discretion, determines necessary and these forms may be modified or updated as necessary by the division to carry out the purposes of this subchapter.

(b)

1. Except as provided in subd. 2. , an application shall include the individual's social security number. The division may not disclose the individual's social security number to any person except as follows:

a. The division may disclose the social security number to the department of revenue for the sole purpose of requesting certifications under s. 73.0301 and to the department of workforce development for the sole purpose of requesting certifications under s. 108.227 .

b. The division may disclose the social security number to the department of children and families in accordance with a memorandum of understanding under s. 49.857 .

2. If an individual does not have a social security number, the individual, as a condition of applying for, or applying to renew, a license under this section, shall submit a statement made or subscribed under oath or affirmation to the division that the individual does not have a social security number. The form of the statement shall be prescribed by the department of children and families. Any license issued or renewed in reliance upon a false statement submitted by an applicant under this subdivision is invalid.

(c) Any applicant for a license under this section shall furnish to the nationwide mortgage licensing system and registry information concerning the applicant's identity, including all of the following:

1. Fingerprints for submission to the federal bureau of investigation and to any governmental agency or entity authorized to receive this information, for purposes of a state, national, and international criminal history background check.

2. Personal history and experience in a form prescribed by the nationwide mortgage licensing system and registry, including the submission of authorization for the nationwide mortgage licensing system and registry and the division to obtain all of the following:

a. An independent credit report from a consumer reporting agency, as defined in s. 100.54 (1) (c) .

b. Any information related to any administrative, civil, or criminal findings by any governmental jurisdiction.

(3)   Issuance of license. Except as provided in sub. (6) , upon the filing of an application for a mortgage loan originator license and the payment of the fee specified in rules promulgated under sub. (8) , the division may issue to the applicant a mortgage loan originator license if the division finds that all of the following apply:

(a) The applicant has never had a mortgage loan originator license revoked in any governmental jurisdiction, unless the revocation was subsequently and formally vacated.

(b) The applicant has not been convicted of, or pled guilty or no contest to, a felony in a domestic, foreign, or military court during the 7-year period preceding the date of the application or, for a felony involving an act of fraud, dishonesty, breach of trust, or money laundering, at any time preceding the date of the application. With respect to any conviction for which the applicant has received a pardon or expungement of the conviction, the pardoned or expunged conviction shall not result in an automatic denial or revocation of a mortgage loan originator license. The division may consider the underlying crime, facts, or circumstances of a pardoned or expunged felony conviction when determining the eligibility of an applicant for licensure under this paragraph and par. (c) .

(c) The applicant has demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the mortgage loan originator will operate honestly, fairly, and efficiently within the purposes of this subchapter. For purposes of this paragraph, an individual has shown that he or she is not financially responsible if he or she has shown a disregard in the management of his or her own financial condition. In making a finding related to an applicant's financial responsibility for purposes of this paragraph, the division may consider whether the applicant has current outstanding judgments other than those resulting from medical expenses, has current outstanding tax liens or other government liens and filings, or has, within the past 3 years, any pattern of seriously delinquent accounts.

(d) The applicant has satisfied the education requirements under s. 224.755 (1) .

(e) The applicant has passed a written test that meets the requirements under s. 224.755 (4) .

(f) The applicant has met the surety bond requirement under sub. (4) .

(4)   Surety bond.

(a) Each mortgage loan originator shall be covered by a surety bond in accordance with this subsection. A surety bond of a mortgage banker, mortgage broker, or registered entity meeting the requirements of par. (b) and s. 224.72 (4) (a) 2. or 224.722 (1) may satisfy the requirement under this paragraph for a mortgage loan originator who is sponsored by the mortgage banker, mortgage broker, or registered entity.

(b) The penal sum of the surety bond shall provide coverage for each mortgage loan originator in an amount that reflects the dollar amount of residential mortgage loans originated by the mortgage loan originator, as determined by the division.

(c) The surety bond shall be in a form prescribed, and satisfy all requirements established, by rule of the division.

(d) When an action is commenced on a mortgage loan originator's surety bond, the division may require the filing of a new surety bond. If an action results in recovery on a mortgage loan originator's surety bond, the mortgage loan originator shall immediately file a new surety bond.

(5)   License renewal.

(a) A mortgage loan originator may apply to renew a license issued under this section by timely submitting, on forms and in the manner prescribed by the division, a completed renewal application and all required renewal fees. The division may not renew a license issued under this section unless the division finds that all of the following apply:

1. The mortgage loan originator continues to meet the minimum standards for license issuance under sub. (3) .

2. The mortgage loan originator has satisfied the annual continuing education requirements under s. 224.755 (2) .

(b) The license of a mortgage loan originator who fails to satisfy the minimum standards for license renewal shall expire. The division may, by rule, provide for the reinstatement of expired licenses consistent with the standards established by the nationwide mortgage licensing system and registry.

(6)   Denial of application for certain reasons. The division may not issue or renew a license under this section if any of the following applies:

(a) The applicant for the issuance or renewal has failed to provide the information required under sub. (2) (b) .

(b) The department of revenue has certified under s. 73.0301 that the applicant is liable for delinquent taxes. An applicant whose application for issuance or renewal of a license is denied under this paragraph for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section.

(bm) The department of workforce development has certified under s. 108.227 that the applicant is liable for delinquent unemployment insurance contributions. An applicant whose application for issuance or renewal of a license is denied under this paragraph for delinquent unemployment insurance contributions is entitled to a notice under s. 108.227 (2) (b) 1. b. and hearing under s. 108.227 (5) (a) but is not entitled to any other notice or hearing under this section.

(c) The applicant for the issuance or renewal has failed to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857 . An applicant whose license is not issued or renewed under this paragraph for delinquent payments is entitled to a notice and hearing under s. 49.857 but is not entitled to any other notice or hearing under this section.

(8)   License period; fees. The division shall promulgate rules establishing the license period and the license fees for mortgage loan originators. The fees shall be no less than $250 annually. The rules may not require a license fee for an individual who is eligible for the veterans fee waiver program under s. 45.44 .

2009 a. 2 ss. 607 , 621 , 634 ; 2009 a. 386 ; 2011 a. 209 ; 2013 a. 36 ; 2013 a. 360 ss. 19 to 21 , 37 to 41 , 44 . Cross-reference: See also chs. DFI-Bkg 40 and 41 , Wis. adm. code.