CHAPTER 234
HB 1279-FN-A – FINAL VERSION
03Mar2010… 0659h
04/21/10 1416s
02Jun2010… 2154eba
2010 SESSION
08/03
HOUSE BILL 1279-FN-A
COMMITTEE: Commerce and Consumer Affairs
This bill makes various changes relative to the licenses of mortgage bankers and mortgage brokers.
This bill is a request of the banking department.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
03Mar2010… 0659h
04/21/10 1416s
02Jun2010… 2154eba
10-2369
08/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Ten
AN ACT relative to the licenses of mortgage bankers and mortgage brokers.
Be it Enacted by the Senate and House of Representatives in General Court convened:
234:1 Definitions. Amend RSA 397-A:1, XIX to read as follows:
XIX. “Principal” of the applicant or licensee means an owner with 10 percent or more ownership interest, corporate officer, director, member, general or limited liability partner, limited partner with 10 percent or more ownership interest, trustee, beneficiary of 10 percent or more of the trust that owns the applicant or licensee, indirect owner, senior manager, [New Hampshire] branch manager of a location required to be licensed as a branch office under this chapter, and any person occupying similar status or performing similar functions.
234:2 License Application, Investigation. Amend RSA 397-A:5, IV-a to read as follows:
IV-a. To be considered for originator licensing, the applicant shall complete and file with the department, through the Nationwide Mortgage Licensing System and Registry, one verified application prescribed by the commissioner. The application shall be signed under oath by both the originator applicant and the licensed mortgage banker or mortgage broker for whom the individual will originate mortgage loans. Each licensed mortgage originator shall register with and maintain a valid unique identifier issued by the Nationwide Mortgage Licensing System and Registry. At a minimum, the application shall state the primary business address of the applicant and the applicant’s social security number and shall authorize the commissioner to conduct a background check. The applicant shall submit any other information that the commissioner and the Nationwide Mortgage Licensing System and Registry may require including, but not limited to, the applicant’s residential and employment history. The applicant shall disclose his or her financial, criminal, regulatory civil, arbitration, civil litigation, and employment termination history, including but not limited to, whether the applicant has ever been issued or been the subject of an injunction or administrative order or has ever been charged with or convicted of a misdemeanor or any felony. Each license application shall be accompanied by a nonrefundable license fee of $100. If, in connection with an application for licensure as a mortgage loan originator, the banking department does not receive a response to an inquiry or request for further information within 60 days from the date of such inquiry or request, the department may withdraw as abandoned the application. A mortgage originator’s license may be transferred during a calendar year from one mortgage banker or mortgage broker to another upon payment of a $50 fee and approval by the commissioner. Sums collected under this chapter shall be payable to the state treasurer as restricted revenue and credited to the appropriation for the commissioner, consumer credit administration division.
234:3 License Grant; Mortgage Bankers and Brokers. Amend RSA 397-A:6, I to read as follows:
I. If the commissioner determines that the applicant meets the requirements of this chapter, then the commissioner shall forthwith issue a license or licenses permitting the applicant to engage in the business of originating, making, or brokering mortgage loans in accordance with the laws of this state. The commissioner may, by order, restrict or impose conditions for a license. Each branch office license and originator license is only in effect when the associated mortgage banker or mortgage broker is licensed in this state. Each branch manager of a location required to be licensed as a branch office under this chapter shall be licensed as a mortgage loan originator. Licensees shall ensure that the Nationwide Mortgage License System and Registry unique identifier of any person originating a residential mortgage loan shall be clearly shown on all residential mortgage loan application forms, solicitations or advertisements, including business cards or websites, and any other documents as established by rule, regulation, or order of the commissioner. Licensees shall be responsible for the supervision of their employees, agents, loan originators, and branch offices. Licensees shall conduct background checks, including checking the list of entities issued by the Office of Foreign Assets Control (OFAC) whose assets were frozen by executive order, on all of their loan originators.
234:4 Borrowers Rights; Mortgage Bankers and Brokers. Amend RSA 397-A:15, IX(a) to read as follows:
IX.(a) Every field on the United States Department of Housing and Urban Development’s Good Faith Estimate (GFE) form shall be completed before it is given to a borrower. The [mortgage originator shall complete the] Tradeoff Table on the instruction page of the GFE shall be completed where a yield spread premium is to be paid in connection with a mortgage transaction.
234:5 New Paragraph; Branch Office; Definitions. Amend RSA 397-B:1 by inserting after paragraph I-d the following new paragraph:
I-e. “Branch office” means a location within or without this state of a person required to be registered under this chapter that is identified by any means to the public as a location at which a mortgage servicing company conducts New Hampshire mortgage business. Branch office does not include a person’s principal office location.
234:6 New Paragraph; Principal Office; Definitions. Amend RSA 397-B:1 by inserting after paragraph V the following new paragraph:
V-a. “Principal office” means the main office location of a person required to be registered under this chapter.
234:7 New Paragraph; Real Property; Definitions. Amend RSA 397-B:1 by inserting after paragraph VI the following new paragraph:
VI-a. “Real property” shall have the same meaning as provided in RSA 397-A:1, XXI.
234:8 Application of Chapter. Amend RSA 397-B:2, I to read as follows:
I. This chapter shall provide for the banking department’s regulation of mortgage servicing companies that engage in the business of servicing [first or second] mortgage loans secured by real property located in the state of New Hampshire[, which is or shall be occupied in whole or in part as a primary domicile or place of residence by the mortgagor and which consists of not more than 4 living units]. Persons registered under this chapter shall be responsible for the supervision of their employees, agents, originators, and branch offices. Each branch manager of a location required to be registered as a branch office under this chapter shall be licensed under RSA 397-A as a mortgage loan originator. Branch office registrations and originator licenses are only effective when the mortgage servicing company is registered in this state.
234:9 Registration; Fees; Term; Renewal. Amend RSA 397-B:4, I(a) to read as follows:
(a) Any mortgage servicing company which services [first or second] mortgage loans secured by real property located in the state of New Hampshire shall be required to register with the banking department by filing a registration statement on a form prescribed by the commissioner and paying an original registration fee of $500 for the principal office and $500 for each branch office. Each such registration shall expire on December 31 of each calendar year. A registration may be renewed by filing a renewal statement on a form prescribed by the commissioner and paying a renewal registration fee of $500 for the principal office and $500 for each branch office, on or before, December 1 for registration for the ensuing year. Sums collected under this chapter shall be payable to the state treasurer as restricted revenue and credited to the appropriation of the commissioner, consumer credit administration division.
234:10 Registration; Fees; Term; Renewal. Amend RSA 397-B:4, V(c) to read as follows:
(c) License its mortgage loan originators on or before July 31, [2010] 2011 through the Nationwide Mortgage Licensing System and Registry in accordance with all of the licensing provisions of RSA 397-A; and
234:11 Definitions. Amend RSA 399-D:2, IV(c) to read as follows
(c) Negotiating with one or more creditors on behalf of [consumers] a consumer for direct or indirect compensation; or
234:12 License Application; Requirements; Investigation. Amend RSA 399-D:5, II(a) to read as follows:
(a) Each application shall be accompanied by a current financial statement, certified by a certified public accountant or a public accountant[,] and a nonrefundable license fee of $500 for the principal office and $500 for each branch office.
234:13 License Application; Investigation. Amend RSA 397-A:5, IV-c(a)(2)(A) to read as follows:
(A) During the [7-year] 10-year period preceding the date of the application for licensing and registration; or
234:14 License Grant. Amend RSA 397-A:6, VI to read as follows:
VI. A license issued under this chapter shall not be transferable or assignable between persons [unless, in the case of mortgage bankers and mortgage brokers, the approval of the commissioner is first secured at least 10 calendar days prior to said assignment or transfer].
234:15 Confidentiality. Amend RSA 397-A:12-a, I to read as follows:
I. In order to promote more effective regulation and reduce regulatory burden through supervisory information sharing and except as otherwise provided in the S.A.F.E. Mortgage Licensing Act of 2008, Public Law 110-289, Title V, section 1512, the requirements under any federal law or RSA 383:10-b, [RSA 383:10-c] RSA 383:10-e, RSA 397-A:12, X, and RSA 91-A regarding the privacy or confidentiality of any information or material provided to the Nationwide Mortgage Licensing System and Registry, and any privilege arising under federal or state law, including the rules of any federal or state court, with respect to such information or material, shall continue to apply to such information or material after the information or material has been disclosed to the Nationwide Mortgage Licensing System and Registry. Such information and material may be shared with all state and federal regulatory officials with mortgage industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by federal law or RSA 383:10-b, [RSA 383:10-c] RSA 383:10-e, RSA 397-A:12, X, and RSA 91-A.
234:16 Confidentiality. Amend RSA 397-A:12-a, V to read as follows:
V. RSA 383:10-b, [RSA 383:10-c] RSA 383:10-e, RSA 397-A:12, X, and RSA 91-A, relating to the disclosure of confidential supervisory information or any information or material described in paragraph I of this section that is inconsistent with paragraph I shall be superseded by the requirements of this section.
234:17 Definitions; Mortgage Servicing Company. Amend RSA 397-B:1, III to read as follows:
III. “Mortgage servicing company” means an individual, partnership, corporation, association, or other entity however organized and wherever located which, for itself or on behalf of the holder of a [first or second] mortgage loan, holds the servicing rights or records such payments on its books and records and performs such other administrative functions as may be necessary to properly carry out the mortgage holders obligations under the mortgage agreement including, when applicable, the receipt of funds from the mortgagor to be held in escrow for payment of real estate taxes and insurance premiums and the distribution of such funds to the taxing authority and insurance company.
234:18 Examinations and Investigations. Amend RSA 399-A:10, II to read as follows:
II. Every person being examined, and all of the officers, directors, employees, agents, and representatives of such person shall make freely available to the commissioner or the commissioner’s examiners the accounts, records, documents, files, information, assets, and matters in their possession or control relating to the subject of the examination and shall facilitate the examination. The expense of such examination shall be chargeable to and paid by the licensee or person being examined. The [procedure for such] payment shall be calculated by the same method as for payments by institutions for cost of examinations under RSA 383:11, except when the principal office of the licensee or person is located outside of this state and the department has determined that the examination must be conducted at that out-of-state location, the actual cost of travel, lodging, meals, and other expenses of examination personnel making the examination, shall be chargeable to and paid by such licensee or person in addition to the per diem charge for examination personnel set forth in RSA 383:11.
234:19 Records and Filings. Amend RSA 399-A:17, I to read as follows:
I. A document is filed when it is received by the commissioner. Examination expenses, fines, penalties, and other moneys obliged to be paid to the department shall be paid within 14 days of receipt of notice by the licensee or other person or such later time as determined by the commissioner. If any filing deadline date falls on a weekend or on a New Hampshire state or federal legal holiday, the due date shall be automatically extended to the next business day following such weekend or holiday.
234:20 New Paragraphs; License Required; Governmental and Certain Nonprofit Entities Licensing. Amend RSA 397-A:3 by inserting after paragraph IV the following new paragraphs:
V.(a) In this paragraph, “governmental entities” means federal, New Hampshire state, and New Hampshire municipal governments, and the agencies, instrumentalities, and corporations thereof.
(b)(1) In this paragraph, “exempt nonprofit entities” means nonprofit agencies or persons which have a tax exempt status granted under the provisions of section 501(c)(3) or 501(c)(4) of the Internal Revenue Code; and
(A) Exclusively make or issue commitments for mortgage loans on residential property to be financed by a governmental entity with public funds, or negotiate, place, assist in placement of, find, or offer to negotiate, place, assist in placement of, or find mortgage loans on residential property to be financed with public funds exclusively under a contract with a governmental entity; or
(B) Make or issue commitments for mortgage loans on residential property and are determined by the commission to be organized exclusively for benevolent or charitable purposes for the benefit of New Hampshire consumers.
(2) For purposes of this definition, the making of a mortgage loan includes being named as the lender or mortgagee on the note, mortgage, or other loan documents.
(c) Governmental entities and exempt nonprofit entities may not be required to obtain a mortgage banker or mortgage broker license when such entity:
(1) Is authorized to conduct mortgage banker or mortgage broker business in this state by an order of the commissioner or is authorized by New Hampshire statute to do mortgage lending;
(2) Files as an exempt entity on the Nationwide Mortgage Licensing System and Registry;
(3) Conforms to the requirements of the Nationwide Mortgage Licensing System and Registry including but not limited to the reporting requirements;
(4) Files and maintains a bond in accordance with RSA 397-A:5, III(c) to cover the business conducted by its originators; and
(5) Licenses its originators in this state through the Nationwide Mortgage Licensing System and Registry.
VI. Governmental entities, as defined in subparagraph V(a), may not be required to obtain a mortgage banker or mortgage broker license when such entity only provides the funds and the residential mortgage loan is originated and effected exclusively by a New Hampshire licensed mortgage broker and its duly licensed originators.
234:21 Fees of Licensee. Amend RSA 399-D:14, I to read as follows:
I. The fees of the licensee shall be agreed upon in advance and stated in the contract, and provision for settlement in case of cancellation or prepayment shall be clearly stated in the contract. Fees shall be amortized equally each month over the length of the contract and no licensee shall be entitled to any fee until the contract has been in full force for 30 days and thereafter the monthly amortized amount may be applied to charges at 30-day intervals, while the contract is in full force and effect, except in the event of prepayment or cancellation. No licensee shall be entitled to any fee against the debtor, upon any contract, until the debt adjustment program is arranged and approved by the debtor. A contract shall not be effective until a debtor has made a payment to the licensee for distribution to his creditors or the debtor has otherwise made a payment to a creditor in accordance with the contract. The licensee may request a deposit not to exceed $25 upon the signing of the contract. Said deposit shall be held in escrow by the licensee. In the event that the debtor fulfills the conditions of the contract, the deposit shall be returned. In the event that the debtor fails to make payment in accordance with the contract for a period in excess of 60 days, the deposit shall be forfeited.
234:22 License or Registration Term; Renewal. Amend RSA 399-G:8, III to read as follows:
III. A renewal fee of $500 for the principal office license and $25 for each authorized delegate registration, up to a maximum annual fee of [$4,000] $5,000, shall be submitted with the application for license renewal.
234:23 New Paragraph; Examinations. Amend RSA 399-G:13 by inserting after paragraph XI the following new paragraph:
XII. The commissioner may require books and records to be translated into English and may require an interpreter to facilitate an examination at the expense of the licensee or registrant.
234:24 Effective Date. This act shall take effect July 1, 2010.
Approved: July 1, 2010
Effective Date: July 1, 2010