What are the 4 factors the Commissioner determins wether to issure or renew a lecense for Mortgage Brokers, Lenders and Servicers of First and Second Mortgages

1.  Character

2.  Business Reputation

3.  General fitness of applicant,

     officers,directors,share holders, partners, or

     affiliates   

4. If the commisioner believes everyone will comply

   with the law 

What are the Licensing Requirements?

(There are six of them)

(No Educational Requirements for brokers, lenders or servicers)

1. Submit Application
2. Pay Application Fee
3. Pay Investigation Fee
4. Provide a ten year personal, and employment history
5. Provide a surety bond or irrevocable letter of credit.
6. Submit a financial statement showing net worth.

Licensing Fee for Broker Application Fee?

(Both first and second mortgage)

First: 450

Second: 150

Licensing Fee for Lender or Lender/Broker Fee?

(First and Second Mortgage)

First: 600

Second: 300

Licensing Fee for Service/Broker, Servicer/Lender or Servicer/Broker/Lender  Application Fee?

(First and Second Mortgage)

First: 750

Second: 450

Investigation Fee for Each Application?

(First and Second Mortgage)

First: 450

Second:450

Lisensing Fee for an Amentment to the Licensing Fee?

(First and Second Mortgage)

First: 50

Second: 50

Mortgage Broker/Lender

• Net Worth Requirement- $25,000
• Bond or irrevocable letter of credit requirement-$25,000

Net worth requirement: $100,000

Bond or irrevocable letter of credit requirement:

    $125,000

January 1, 2009 to December 31, 2009

 (Surety bonds expire December 31)

Mortgage brokers, lenders, or servicers

• Licensed real estate brokers, or liscensed real estate salespersons that:
  • Act as brokers ONE licensee or ONE registrant
  • Act as brokers/lenders/servicers only in connection with ral estate sales in which the real estate broker or affiliated salesperson is engaged and who receives for those services additional compensation beyond the customary commission on real estate sales
• Mortgage brokers/lenders/servicers that are subsidiaries of a depository financial institution or a depository financial institution holding company that does not maintain a main office or a branch office in the State of Michigan
• Morgage brokers/lenders/servicers that are subsidiaries of adepository financial institution or a holding company of a depository financial institution
• Real estate brokers or real estate persons that act as mortgage broekr/lender/servicer in conection with real estates transaction in which he or she is not affiliated.
• Real estate broker or salesperson, in connection with a real estate transaction in which he or she acts as a mortgage broker on ten or fewer deals iwth in 12-month period (btw Jan 1- Dec 31) and recieves compensation beyond customary commission is exempt. If a real estate broker and all sales people broker more than 30 loans iwthin a 12-month period between Jan 1 and Dec 31, they must be licensed and registered. Thestatute does not include language concerning real estate professionals who broker between 11 and 29 loans in a 12-month period.

Registration Application Fees for a broker?

(First and Second Mortgage)

First: 450

Second: 150

Registration Application Fees for a lender or lender/broker/

(First and Second Mortgage)

First: 600

Second:300

Registration Application Fees for a Servicer/broker, servicer/lender or servicer/broker/lender?

(First and Second Mortgage)

First: 750

Second: 450

Registration Application Fee for an amendment to license or registration certificate?

(First and Second Mortgage)

First: 50

Second:50

• Number of mortgage loans closed by the licensee or registrant or brokered to other parties.
• Number of mortgage loans closed by the licensee or registrant during the previous calendar year.
• The dollar amount of loans serviced by the licensee or registrant.

The financial statement required by Licensees and registrants in order to renew their status that is due within 90 days of the close of the fiscal year?

(Registrations and Licenses expire on December 31st of each year unless renewed) 

• Prepared from the licensee's books and records.
• Submitted in a format that is acceptable to the Commissioner.
• Prepared by an independent certified public accountants licensed by the state or a subdivision of the United States.

The penalty free a licensee or regisrant will be subject to?

$25 for each day the fee is delinguent or $1,000, whichever is less.

All fees collected by the Commissioner pursuant to the MBMLMS Act are credited to the MI Department of Treasurey. The money is used by teh Commissioner to administer and enforce theprovisions of the Act and for other regulatory obligations provided by the Act.

State law prohibits a licensee from transferring or assigning its license without consent from the Commissioner.

The sale, transfer, or conveyance of 25% or more of voting stok must be considered a transfer.

In the case of a partnershipt, or other tyupe of unincorporated association a 25% transfer of interest is also considered atransfer.

Licensees, registrants, and loan officers are allowed to surrender their license by submitting their license or registration to the Commissioner.

If a license is surrendered it does not affect any civil or criminal liability for acts committed prior to surrender.

Once a year a Commissioner examines records and conducts investigations. Circumstances may warrant additional examinations. Information obtained is considered confidential and is not made avaliable to the public (IS avaliable to the Attorney General, regulatory agencies, law enforcement, persons authorized by the Ingham County Circuit Court).

All records relating to morgage loans must be maintained for a minimum of three years from the date that the mortgage loan is transferred, assigned or closed.

Record Retention, documents that MUST be maintaines as part of mortgage loan files?

• Promissory note
• Mortgage
• Land Contract (if applicable)
• Truth-in-Lending disclosure statement
• HUD-1 Settlement Statement

• Borrower's name and address
• Loan Number
• Loan Amount
• Loan Date
• Rate of Charge
• Description of Security
• Names of Endorsers, co-makers, or sureties on the loan.
• Amount of filing or discharge fees collected from the borrower.
• Marital status if the loan is secured by household goods.
• Any amount received or witheld fromteh borrower as a premium for insurance in connection iwth the loan, and the period covered by the insurance policy or policies.
• The date and amounts of all principal payments received, interest charges received, and cash disbursements pertainign to the loan, including court coss.
• The date to which interest charges are paid and the unpaid balance due on the principal.
• If a note is reduced to judgment, the records must clearly indicate that it is a judgment account.

Records Related to Second Mortgages, documents that must be preserved?

• Application
• Credit Report
• Employment Verification
• Loan disclosure statement
• HUD-1 Settlement Statement

Must be maintained for 2 years after the end of the fiscal year.

• Promissory Note
• Mortgage
• Truth-in-Lending disclosure statement
• HUD-1 Settlement Statement.

Must be maintained for 2 years after the ending of the fiscal year.

• Required to be filed by licensees and registrants.
• Those who fail to file are subject to a penalty of $25 for each day teh report is delinquent or $1,000
• Those who make and affirm a false report may be imprisoned up to 15 years.

• Fail to conduct business according to state law and morgage lending laws.
• Engagin in activity that is fraudulent, deceitful, or behavior that is a material misrepresntation in connection w/any mortgage transaction governed by mortgage lending laws.
• Repeatedly fail to provide borrowers material disclosures of information as required by law.
• Suppress or withold from the commissioner any material info that the licensee or registrant possesses and that, if submitted, would have made the licensee or registrant licensing or registration denied or refused.
• Failure to compl iwth the laws regulating mortgage escrow accounts.
• Fail to place money or funds in a trust or escrow accoutn held by a federally insured depository financial institution that is received by the licensee adn that is to be paid to a third party on behalf of a borrower.
• Refuse to allow the Commissioner to examine its boka and affiars or failure to provide the Commissioner with info required under the law iwthin a reasonable time.
• Be convicted of a felony or any misdemeanor of which an essential element is fraud.
• Refuse or failure to pay fees or expensed assessed ot them as a licensee or registration pursuant to Michigan law.
• Failure to pay restitution pursuant to an administrative order, court order or an order issued by the Commissioner.
• Failure ot honor a written commitment or failure to extend a mortgage loan to some who has completely satisfied all the conditions of the commitment before its expiration.
• Require a prospective borrower to deal exclusively with the licensee or registrant in regard to amortgage loan application.
• Take a security interest in raly property prior to closing a mortgage loan in oder to secure fees.
• Knowingly allow a person to violate an order that prohibit that person from being employed by, and agent of, or controlled by a licensee or registrant.

• An owner, partner, member, officer, director, trustee, empmloyee, agent, broker, or other person, or a representative to act on the authority of a mortgage broker, lender or servicer without a license or registration.
• Violations are considered a misdemeanor and are punishable by a fine up to $15,000 or imprisonment for up to one year (or both)

Engaging in second mortgage loan activity without a license as required under the Secondary Mortgage Lending Act is prohibited by sate law.

Violations are considered a misdemeanor and are subject up to fines up to $5,000, imprisonment for up to three years (or both)

Those who violate the Secondary Mortage Lending Act, or assists in the violation is subject to a civil fine up to $1,000 for each offense.

• False
• Misleading
• Deceptive
• Misrepresents the avaliability of mortgage loans

• The size of a laon
• The security required for a loan
• Loan rate
• Other conditions or terms iwthout full intent of making loans to qualified based on teh terms advertised.

• Copies of all direct mail advertising marketed to residents are required to be maintained.
• The date of the mailed advertisement must be indicated on the material.
• If a licensee operates two or more licensed offices located in Micigan, the licensee must maintain one record of the advertising material at a centrally located office.
• All advertising must be made avaliable for inspection for a period of three years.
• The only address that can appear in an advertisement is the licensed office or home office.