Term
| What is Net Branch Activity |
|
Definition
Unauthorized net branching occurs when a person who is not a licensed broker, lender or servicer, makes or services a loan by entering in to an affilitated business arrangement with a license or registrant. |
|
|
Term
| Net Branch Activity Part 2 |
|
Definition
Licensees and registrants can not pay compensation or commissions to unlicensed independent contractors that assist consumers with obtaining loans at their location. If a licensee or registrant operates a branch location in which an independent contractor or someone performs services for multiple entities then both the licensee/registrant and person operating the net branch is in violation of state licensing laws. |
|
|
Term
Persons engaging in Prohibited Net Branch Activity may be subject to the following: |
|
Definition
- Civil Fines
- A cease and desist order
- Restitution
- A denial of Application
- Censure
- Suspension
- Revocation
- Referral to Attorney General or Prosecuting Attorney for criminal Penalties
|
|
|
Term
Net Branch Activity 3 This is what is used in determining whether the net branch is a valid operation: |
|
Definition
- W-2 compensation of staff performing work
- Whether the licensee or registrant provides training, supervision, and control of staff
- Advertising and promotions used
- Names listed on Contracts for the use of branch office's facilities, services, supplies.
- Benefits paid by the licensee or registrant
- Whether licensee pays unemployment or workers compensation insurance for staff
|
|
|
Term
Trust-Escrow Accounting State law requires that any money, funds, deposits, checks, drafts and other funds received by licensees from borrowers for payments to third parties are placed in a trust or escrow account. This includes funds held for the following: |
|
Definition
- To pay mortgage holders
- To pay property taxes
- To pay insurance premiums
- To pay pursuant to an agreement
- To pay recording Fees
- To pay for appraisal
- To pay Processing Fees
- Any other Third Party
|
|
|
Term
| Diciplinary Actions administered by Commissioner if Licensees and Registrants violate Escorw and Accounting Requirements |
|
Definition
The commissioner is required to give a licensee, registrant or loan officer registrant notice of the following: - Intention to issue an order, suspension or revocation
- Intention to refuse the issuance of a license, registration or loan officer registration.
After receiving the notice, a licensee, registrant or loan officer registrant must request a hearing within 30 days after the order. If a hearing is not requested, the order of suspension or revocation becomes final. |
|
|
Term
Complaints and Investigations- Commissioner has authority to suspend licensee, registrant or loan officer registrant for any Complaint of violation of state law.
How long do you have to settle a complaint? |
|
Definition
| Once served, the licensee, registrant or loan officer registrant has 15 days from the date of the service to settle the complaint via an informal conference. |
|
|
Term
| An informal conference regarding complaint and Investigations may result in: |
|
Definition
A Settlement
A consent order
A waiver, default, or other method of settlement agreed upon by the person complained against and the commissioner
A settlement may include:
License or registration revocation or suspension
Restitution
Penalty provided by the Act |
|
|
Term
| Hearings are conducted according to Michigan's Administrative Procedures Act |
|
Definition
| When a case is referred to the commissioner for a final decision,the commissioner renders a decision within 30 days of notification. |
|
|
Term
| What happens if there is a VIOLATION OF A FINAL ORDER? |
|
Definition
Civil and criminal penalties may be instituted against a person who violates a final order issued by the commissioner. Any current or former exexutive officers, directors, agents, or control person who violate a final may be subject to the following:
Conviction of a misdemeanor
Fines up to $5,000
Imprisonment for up to one Year
Both Fines and Imprisionment |
|
|
Term
| What is Predatory Lending? |
|
Definition
Predatory Lending is the use of abusive lending practices and the inclusion of oppressive lending terms in mortgage loan transactions. Most predatory loans are made in the subprime lending market.
Subprime lending becomes predatory lending when mortgage brokers and lenders offer high interest loans to borrowers who qualify for prime loans, or when they encourage borrowers to sign lending agreements with terms that are so oppressive that default on the loan and foreclosure on the home securing the debt are inevitable. |
|
|
Term
|
Definition
In 1994, Congress addressed the problem of predatory lending with the enactment of the HOME OWNERSHIP and EQUITY PROTECTION ACT (HOEPA). THe purposes of HOEPA are:
TO provide consumers with sufficient information to make informed choices about high-cost home loans.
TO discourage the use of predatory lending practices associated with the high cost home loans
HOEPA also imposes restrictions on the use of particular lending terms and practices when originating loans that meet the interest rate or points and fees thresholds. |
|
|
