HB 382 -- Mortgage Brokers

Sponsor:  Cox

This bill repeals the Residential Mortgage Brokers License Act
and establishes in its place the Missouri Secure and Fair
Enforcement or Mortgage Licensing and Residential Mortgage
Brokers Licensing Act.  It its main provisions, the bill:

(1)  Requires an individual engaging in the business of a
mortgage loan originator to be licensed, employed, and acting
under the supervision of a single, Missouri-licensed residential
mortgage broker, except certain specified individuals.  Each
licensed mortgage loan originator must register with and maintain
a valid unique identifier issued by the Nationwide Mortgage
Licensing System and Registry (NMLSR).  The unique identifier
must be clearly shown on all residential mortgage loan
applications, forms, solicitations, or advertisements, including
business cards, web sites, and any other documents as required by
the Director of the Division of Finance within the Department of
Insurance, Financial Institutions and Professional Registration
(Section 443.777, RSMo);

(2)  Requires an independent contractor who is engaged in the
activities of a loan processor or underwriter for a Missouri
residential real estate loan to be licensed and maintain a valid
unique identifier issued by the NMLSR.  The independent
contractor must certify annually under oath to the division
director that he or she will not engage in the activities of a
mortgage loan originator absent full compliance with the
provisions regarding mortgage loan originators (Section 443.778);

(3)  Allows the division director to establish licensing rules or
regulations and interim procedures for the licensing and
acceptance of applications and to establish expedited review and
licensing procedures for individuals previously licensed as or
who were previously an ultimate equitable owner of a residential
mortgage loan broker (Section 443.779);

(4)  Authorizes the division director to establish relationships
or contracts with the NMLSR or other entities designated by the
NMLSR to collect and maintain records and process fees related to
licensees or other persons subject to the act.  An applicant for
licensing as a mortgage loan originator must provide, at a
minimum, the following information concerning his or her identity
to the NMLSR:

(a)  Fingerprints for submission to the Federal Bureau of
Investigation and any governmental agency for a state, national,
and international criminal history background check; and

(b)  Personal history and experience including an independent
credit report and information related to any administrative,
civil, or criminal findings by any governmental jurisdiction
(Section 443.780);

(5)  Prohibits the division director from issuing or renewing a
mortgage loan originator license until he or she makes, at a
minimum, the following findings that the applicant:

(a)  Has never had a mortgage loan originator license revoked;

(b)  Has not been convicted of or pled guilty or nolo contendere
to a felony in a domestic, foreign, or military court in the
preceding seven-year period or at any time if the felony involved
fraud, dishonesty, a breach of trust, or money laundering;

(c)  Has demonstrated financial responsibility, character, and
general fitness to command confidence of the community;

(d)  Has completed the prelicensing education requirements;

(e)  Has passed a written test meeting the requirements of the
act; and

(f)  Has met the Missouri surety bond requirements of the act or
the requirements have been met by the applicant's employer
(Section 443.781);

(6)  Allows the division director to issue a 60-day provisional
mortgage loan originator license to an applicant who has
completed and filed with the NMLSR all of the requirements for
licensure if the residential mortgage loan broker employing the
applicant certifies to the division director that he or she is
not aware of anything that would disqualify the applicant from
licensure.  The division director may issue successive
provisional licenses which will terminate upon the issuance or
denial of a license (Section 443.782);

(7)  Requires the division director to establish a process
whereby mortgage loan originators can challenge information
entered into the NMLSR by the division director (Section
443.788);

(8)  Allows the division director to deny, suspend, revoke,
condition, or decline to renew a licence for violations against
the act or for withholding information or making material
misstatements in a license or renewal application.  The division
director can order restitution and impose fines on any person
violating the provisions of the act (Section 443.789);

(9)  Authorizes the division director to conduct investigations
and examinations regarding compliance with the provisions of the
act (Section 443.792);

(10)  Prohibits any person or individual subject to the act from:

(a)  Directly or indirectly employing any scheme, device, or
artifice to defraud or mislead borrowers or lenders or to defraud
any person;

(b)  Engaging in any unfair or deceptive practice toward any
person;

(c)  Obtaining property by fraud or misrepresentation;

(d)  Soliciting or entering into a contract with a borrower that
allows the person or individual to earn a fee or commission when
no loan is actually obtained by the borrower;

(e)  Soliciting, advertising, or entering into a contract for
specific interest rates, points, or other financing terms unless
the terms are actually available at the time of soliciting,
advertising, or contracting;

(f)  Conducting business or assisting, aiding, or abetting any
person in conducting business without holding a valid license or
having the required employment;

(g)  Requiring a borrower to obtain property insurance coverage
that exceeds the replacement cost of improvements; and

(h)  Failing to truthfully account for moneys belonging to a
party to a residential mortgage loan transaction (Section
443.793); and

(11)  Requires mortgage loan brokers to disclose all fees and
compensation with the borrower (Section 443.867).

The provisions regarding Section 443.777.1 become effective
July 31, 2010, or a later date approved by the Secretary of the
United States Department of Housing and Urban Development.

The bill contains an emergency clause.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:24 am