First Substitute S.B. 178

This document includes Senate Committee Amendments incorporated into the bill on Fri, Feb 20, 2004 at 3:38 PM by rday. --> This document includes House Floor Amendments incorporated into the bill on Tue, Mar 2, 2004 at 6:45 PM by chopkin. -->

Senator Michael G. Waddoups proposes the following substitute bill:

1 MORTGAGE BROKER AMENDMENTS
2 2004 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Michael G. Waddoups
5
6 LONG TITLE
7 General Description:
8 This bill modifies the Utah Residential Mortgage Practices Act.
9 Highlighted Provisions:
10 This bill:
11 . defines terms;
12 . enacts provisions related to records inspections conducted by the Division of Real
13 Estate;
14 . modifies the duties of the Residential Mortgage Regulatory Commission;
15 . modifies the scope of the Utah Residential Mortgage Practices Act;
16 . allows an individual exempt from the chapter to voluntarily obtain a license;
17 . exempts certain individuals with an ownership interest in a licensed entity from the
18 requirements of the chapter;
19 . establishes license categories of mortgage officer and principal lending manager,
20 and enacts provisions related to those license categories;
21 . modifies certain provisions related to obtaining and revoking a license;
22 . enacts prelicensing education requirements;
23 . repeals provisions related to requirements for bonding, letter of credit, and deposit
24 of assets;
25 . makes certain actions of the Residential Mortgage Regulatory Commission subject

Text Box
- 2 - 26 to the concurrence of the division;
27 . modifies the scope of the Utah Residential Mortgage Practices Act;
28 . allows reciprocal licensure for applicants licensed in another state;
29 . enacts provisions related to activation and inactivation of a license;
30 . modifies certain operational restrictions;
31 . modifies the persons subject to an investigation by the Division of Real Estate;
32 . enacts provisions related to record retention requirements;
33 . enacts provisions governing civil actions;
34 . provides for the establishment and operation of the Residential Mortgage Loan
35 Education, Research, and Recovery Fund to pay certain claims under this chapter;
36 . provides uses for excess monies in the Residential Mortgage Loan Education,
37 Research, and Recovery Fund, including:
38 . providing educational courses and materials;
39 . contracting for research projects; and
40 . funding salaries and training expenses for certain Division of Real Estate staff;
41 and
42 . makes technical changes.
43 Monies Appropriated in this Bill:
44 None
45 Other Special Clauses:
46 This bill provides an effective date.
47 Utah Code Sections Affected:
48 AMENDS:
49 61-2c-102, as last amended by Chapter 243, Laws of Utah 2003
50 61-2c-103, as last amended by Chapter 243, Laws of Utah 2003
51 61-2c-104 (Superseded 07/01/04), as last amended by Chapter 243, Laws of Utah 2003
52 61-2c-104 (Effective 07/01/04), as last amended by Chapters 145 and 243, Laws of
53 Utah 2003
54 61-2c-105, as last amended by Chapters 159 and 204, Laws of Utah 2002
55 61-2c-106, as last amended by Chapter 243, Laws of Utah 2003
56 61-2c-201, as last amended by Chapter 243, Laws of Utah 2003

Text Box
- 3 - 57 61-2c-202, as last amended by Chapter 243, Laws of Utah 2003
58 61-2c-203, as last amended by Chapter 243, Laws of Utah 2003
59 61-2c-205, as last amended by Chapter 243, Laws of Utah 2003
60 61-2c-301, as last amended by Chapter 243, Laws of Utah 2003
61 61-2c-302, as last amended by Chapter 243, Laws of Utah 2003
62 61-2c-401, as last amended by Chapter 243, Laws of Utah 2003
63 61-2c-402, as last amended by Chapter 243, Laws of Utah 2003
64 61-2c-403, as last amended by Chapter 204, Laws of Utah 2002
65 70D-1-10, as last amended by Chapter 204, Laws of Utah 2002
66 ENACTS:
67 61-2c-206, Utah Code Annotated 1953
68 61-2c-207, Utah Code Annotated 1953
69 61-2c-208, Utah Code Annotated 1953
70 61-2c-404, Utah Code Annotated 1953
71 61-2c-501, Utah Code Annotated 1953
72 61-2c-502, Utah Code Annotated 1953
73 61-2c-503, Utah Code Annotated 1953
74 61-2c-504, Utah Code Annotated 1953
75 61-2c-505, Utah Code Annotated 1953
76 61-2c-506, Utah Code Annotated 1953
77 61-2c-507, Utah Code Annotated 1953
78 61-2c-508, Utah Code Annotated 1953
79 61-2c-509, Utah Code Annotated 1953
80 61-2c-510, Utah Code Annotated 1953
81 REPEALS:
82 61-2c-204, as last amended by Chapter 243, Laws of Utah 2003
83
84 Be it enacted by the Legislature of the state of Utah:
85 Section 1. Section 61-2c-102 is amended to read:
86 61-2c-102. Definitions.
87 As used in this chapter:

Text Box
- 4 - 88 (1) "Affiliate" means an individual or an entity that directly, or indirectly through one
89 or more intermediaries, controls or is controlled by, or is under common control with, a
90 specified individual or entity.
91 (2) "Applicant" means an individual or entity applying for a license under this chapter.
92 (3) "Associate lending manager" means a person who:
93 (a) has qualified under this chapter as a principal lending manager; and
94 (b) works by or on behalf of another principal lending manager in transacting the
95 business of residential mortgage loans.
96 (4) "Branch office" means a licensed entity's office:
97 (a) for the transaction of the business of residential mortgage loans regulated under this
98 chapter; and
99 (b) other than the main office of the licensed entity.
100 [(3)] (5) (a) "Business of residential mortgage loans" means for compensation to:
101 (i) make or originate a residential mortgage loan;
102 (ii) directly or indirectly solicit, place, or negotiate a residential mortgage loan for
103 another; or
104 (iii) render services related to the origination or funding of a residential mortgage loan
105 including:
106 (A) taking applications; and
107 (B) communicating with the borrower and lender.
108 (b) "Business of residential mortgage loans" does not include:
109 (i) the performance of clerical functions such as:
110 [(i)] (A) gathering information related to a residential mortgage loan on behalf of the
111 prospective borrower or a person licensed under this chapter; or
112 [(ii)] (B) requesting or gathering information, word processing, sending
113 correspondence, or assembling files by an individual who works under the instruction of a
114 person licensed under this chapter[.]; or
115 (ii) ownership of an entity that engages in the business of residential mortgage loans if
116 the owner does not personally perform the acts listed in Subsection (5)(a).
117 [(4)] (6) "Closed-end" means a loan with a fixed amount borrowed and which does not
118 permit additional borrowing secured by the same collateral.

Text Box
- 5 - 119 [(5)] (7) "Commission" means the Residential Mortgage Regulatory Commission
120 created in Section 61-2c-104 .
121 [(6)] (8) "Compensation" means anything of economic value that is paid, loaned,
122 granted, given, donated, or transferred to an individual or entity for or in consideration of:
123 (a) services;
124 (b) personal or real property; or
125 (c) other thing of value.
126 [(7) "Control" means the power, directly or indirectly, to:]
127 [(a) direct or exercise a controlling influence over:]
128 [(i) the management or policies of an entity; or]
129 [(ii) the election of a majority of the directors, officers, managers, or managing partners
130 of an entity;]
131 [(b) vote 20% or more of any class of voting securities of an entity by an individual; or]
132 [(c) vote more than 5% of any class of voting securities of an entity by another entity.]
133 [(8)] (9) "Control person" means [any] an individual [or] who is designated by an
134 entity [which] as the individual who directly manages or controls [another] the entity's
135 transaction of the business of residential mortgage loans secured by Utah dwellings.
136 [(9)] (10) "Depository institution" is as defined in Section 7-1-103 .
137 [(10)] (11) "Director" means the director of the division.
138 [(11)] (12) "Division" means the Division of Real Estate.
139 [(12)] (13) "Dwelling" means a residential structure attached to real property that
140 contains one to four units including any of the following if used as a residence:
141 (a) a condominium unit;
142 (b) a cooperative unit;
143 (c) a manufactured home; or
144 (d) a house.
145 [(13)] (14) "Entity" means any corporation, limited liability company, partnership,
146 company, association, joint venture, business trust, trust, or other organization.
147 [(14)] (15) "Executive director" means the executive director of the Department of
148 Commerce.
149 (16) "Inactive status" means a dormant status into which an unexpired license is placed

Text Box
- 6 - 150 when the holder of the license is not currently engaging in the business of residential mortgage
151 loans.
152 (17) "Lending manager" or "principal lending manager" means a person licensed as a
153 principal lending manager under Section 61-2c-206 .
154 [(15)] (18) "Licensee" means an individual or entity licensed with the division under
155 this chapter.
156 (19) (a) Except as provided in Subsection (19)(b), "mortgage officer" means an
157 individual who is licensed with the division to transact the business of residential mortgage
158 loans through a principal lending manager.
159 (b) "Mortgage officer" does not include a principal lending manager.
160 [(16)] (20) "Record" means information that is:
161 (a) prepared, owned, received, or retained by an individual or entity; and
162 (b) (i) inscribed on a tangible medium; or
163 (ii) (A) stored in an electronic or other medium; and
164 (B) retrievable in perceivable form.
165 [(17)] (21) "Residential mortgage loan" means a closed-end, first mortgage loan or
166 extension of credit, if:
167 (a) the loan or extension of credit is secured by a:
168 (i) mortgage;
169 (ii) deed of trust; or
170 (iii) lien interest; and
171 (b) the mortgage, deed of trust, or lien interest described in Subsection [(17)] (21)(a):
172 (i) is on a dwelling located in the state; and
173 (ii) created with the consent of the owner of the residential real property.
174 [(18)] (22) "State" means:
175 (a) a state, territory, or possession of the United States;
176 (b) the District of Columbia; or
177 (c) the Commonwealth of Puerto Rico.
178 Section 2. Section 61-2c-103 is amended to read:
179 61-2c-103. Powers and duties of the division.
180 (1) The division shall administer this chapter.

Text Box
- 7 -

Senate Committee Amendments 2-20-2004 rd/tcl 181

(2) In addition to any power or duty expressly provided in this chapter, the division
182 may:
183 (a) receive and act on complaints including:
184 (i) taking action designed to obtain voluntary compliance with this chapter; or
185 (ii) commencing administrative or judicial proceedings on the division's own initiative;
186 (b) establish programs for the education of consumers with respect to residential
187 mortgage loans;
188 (c) (i) make studies appropriate to effectuate the purposes and policies of this chapter;
189 and
190 (ii) make the results of the studies described in Subsection (2)(c)(i) available to the
191 public; [and]
192 (d) S [ (i) ] s visit and investigate an entity licensed under this chapter, regardless of whether
193 the entity is located in Utah; and
194 S [ (ii) assess investigation fees established under Section 63-38-3.2 to a licensee for the
195 reasonable costs, including reasonable travel costs, incurred by the division in conducting a
196 records inspection; ] s
197 [(d)] (e) employ any necessary hearing examiners, investigators, clerks, and other
198 employees and agents.
199 (3) The division shall make rules for the administration of this chapter in accordance
200 with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, including:
201 (a) licensure procedures for:
202 (i) individuals and entities required by this chapter to obtain a license with the division;
203 and
204 (ii) the establishment of a branch office by an entity;
205 (b) proper handling of funds received by licensees;
206 (c) record-keeping requirements by licensees; and
207 (d) standards of conduct for licensees.
208 (4) (a) The division shall make available to the public a list of the names and addresses
209 of all licensees.
210 (b) The division may charge a fee established by the division in accordance with
211 Section 63-38-3.2 for obtaining the list described in Subsection (4)(a).

Text Box
- 8 - 212 (5) The division shall:
213 (a) certify education providers who offer:
214 (i) prelicensing education to candidates for licensure under this chapter; or
215 (ii) continuing education to individuals licensed under this chapter; and
216 (b) make available to the public, licensees, and candidates for licensure a list of the
217 names and addresses of all education providers certified under this Subsection (5).
218 (6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
219 division shall make rules establishing:
220 (a) certification criteria and procedures for providers of prelicensing education and
221 continuing education; and
222 (b) standards of conduct for certified education providers.
223 Section 3. Section 61-2c-104 (Superseded 07/01/04) is amended to read:
224 61-2c-104 (Superseded 07/01/04). Residential Mortgage Regulatory Commission.
225 (1) There is created within the division the Residential Mortgage Regulatory
226 Commission consisting of:
227 (a) the following members appointed by the executive director with the approval of the
228 governor:
229 (i) three members having at least three years of experience in transacting the business of
230 residential mortgage loans and who are currently licensed under this chapter; and
231 (ii) one member from the general public; and
232 (b) the commissioner of the Department of Financial Institutions or the commissioner's
233 designee.
234 (2) (a) Except as required by Subsection (2)(b), the executive director shall appoint
235 each new member or reappointed member subject to appointment by the executive director to a
236 four-year term ending June 30.
237 (b) Notwithstanding the requirements of Subsection (2)(a), the executive director shall,
238 at the time of appointment or reappointment, adjust the length of terms to ensure that the terms
239 of commission members are staggered so that approximately half of the commission is
240 appointed every two years.
241 (c) If a vacancy occurs in the membership of the commission for any reason, the
242 replacement shall be appointed for the unexpired term.

Text Box
- 9 - 243 (3) Members of the commission shall annually select one member to serve as chair.
244 (4) (a) The commission shall meet at least quarterly.
245 (b) The director may call a meeting in addition to the meetings required by Subsection
246 (4)(a):
247 (i) at the discretion of the director;
248 (ii) at the request of the chair of the commission; or
249 (iii) at the written request of three or more commission members.
250 (5) (a) Three members of the commission constitute a quorum for the transaction of
251 business.
252 (b) The action of a majority of a quorum present is an action of the commission.
253 (6) (a) (i) Members who are not government employees shall receive no compensation
254 or benefits for their services, but may receive per diem and expenses incurred in the
255 performance of the member's official duties at the rates established by the Division of Finance
256 under Sections 63A-3-106 and 63A-3-107 .
257 (ii) Members who are not government employees may decline to receive per diem and
258 expenses for their service.
259 (b) (i) State government officer and employee members who do not receive salary, per
260 diem, or expenses from their agency for their service may receive per diem and expenses
261 incurred in the performance of their official duties from the commission at the rates established
262 by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
263 (ii) State government officer and employee members may decline to receive per diem
264 and expenses for their service.
265 (7) The commission shall:
266 (a) concur in the licensure or denial of licensure of individuals and entities under this
267 chapter in accordance with Part 2, Licensure;
268 (b) take disciplinary action with the concurrence of the director in accordance with Part
269 4, Enforcement;
270 (c) advise the division concerning matters related to the administration and
271 enforcement of this chapter; and
272 (d) with the concurrence of the division, determine the requirements for:
273 (i) the examination required under Section 61-2c-202 , covering at least:

Text Box
- 10 -

Senate Committee Amendments 2-20-2004 rd/tcl 274

(A) the fundamentals of the English language;
275 (B) arithmetic;
276 (C) the provisions of this chapter;
277 (D) rules adopted by the division;
278 (E) basic residential mortgage principles and practices; and
279 (F) any other aspect of Utah law the commission determines is appropriate; [and]
280 (ii) with the concurrence of the division, the continuing education requirements under
281 Section 61-2c-205 , including:
282 (A) except as provided in Subsection 61-2c-206 (2)(c) S AND SUBSECTION
282a 61-2c-202(4)(a)(i)(C) s , the appropriate number of hours
283 of required prelicensing education and continuing education; and
284 (B) the subject matter of courses the division may accept for continuing education
285 purposes[.];
286 (iii) with the concurrence of the division, the prelicensing education required under
287 Sections 61-2c-202 and 61-2c-206 ; and
288 (iv) the examination required under Section 61-2c-206 covering:
289 (A) advanced residential mortgage principles and practices; and
290 (B) other aspects of Utah law the commission, with the concurrence of the division,
291 determines appropriate.
292 (8) The commission may appoint a committee to make recommendations to the
293 commission concerning approval of prelicensing and continuing education courses.
294 (9) The commission and the division shall make the examination and prelicensing and
295 continuing education requirements described in this section available through the Internet or
296 other distance education methods approved by the commission and division when reasonably
297 practicable.
298 (10) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
299 the commission shall make rules establishing procedures under which a licensee may be
300 exempted from continuing education requirements:
301 (a) for a period not to exceed four years; and
302 (b) upon a finding of reasonable cause.
303 Section 4. Section 61-2c-104 (Effective 07/01/04) is amended to read:
304 61-2c-104 (Effective 07/01/04). Residential Mortgage Regulatory Commission.

Text Box
- 11 - 305 (1) There is created within the division the Residential Mortgage Regulatory
306 Commission consisting of:
307 (a) the following members appointed by the executive director with the approval of the
308 governor:
309 (i) three members having at least three years of experience in transacting the business of
310 residential mortgage loans and who are currently licensed under this chapter; and
311 (ii) one member from the general public; and
312 (b) the commissioner of the Department of Financial Institutions or the commissioner's
313 designee.
314 (2) (a) Except as required by Subsection (2)(b), the executive director shall appoint
315 each new member or reappointed member subject to appointment by the executive director to a
316 four-year term ending June 30.
317 (b) Notwithstanding the requirements of Subsection (2)(a), the executive director shall,
318 at the time of appointment or reappointment, adjust the length of terms to ensure that the terms
319 of commission members are staggered so that approximately half of the commission is
320 appointed every two years.
321 (c) If a vacancy occurs in the membership of the commission for any reason, the
322 replacement shall be appointed for the unexpired term.
323 (3) Members of the commission shall annually select one member to serve as chair.
324 (4) (a) The commission shall meet at least quarterly.
325 (b) The director may call a meeting in addition to the meetings required by Subsection
326 (4)(a):
327 (i) at the discretion of the director;
328 (ii) at the request of the chair of the commission; or
329 (iii) at the written request of three or more commission members.
330 (5) (a) Three members of the commission constitute a quorum for the transaction of
331 business.
332 (b) The action of a majority of a quorum present is an action of the commission.
333 (6) (a) (i) Members who are not government employees shall receive no compensation
334 or benefits for their services, but may receive per diem and expenses incurred in the
335 performance of the member's official duties at the rates established by the Division of Finance

Text Box
- 12 - 336 under Sections 63A-3-106 and 63A-3-107 .
337 (ii) Members who are not government employees may decline to receive per diem and
338 expenses for their service.
339 (b) (i) State government officer and employee members who do not receive salary, per
340 diem, or expenses from their agency for their service may receive per diem and expenses
341 incurred in the performance of their official duties from the commission at the rates established
342 by the Division of Finance under Sections 63A-3-106 and 63A-3-107 .
343 (ii) State government officer and employee members may decline to receive per diem
344 and expenses for their service.
345 (7) The commission shall:
346 (a) concur in the licensure or denial of licensure of individuals and entities under this
347 chapter in accordance with Part 2, Licensure;
348 (b) take disciplinary action with the concurrence of the director in accordance with Part
349 4, Enforcement;
350 (c) advise the division concerning matters related to the administration and
351 enforcement of this chapter; and
352 (d) with the concurrence of the division, determine the requirements for:
353 (i) the examination required under Section 61-2c-202 , covering at least:
354 (A) the fundamentals of the English language;
355 (B) arithmetic;
356 (C) the provisions of this chapter;
357 (D) rules adopted by the division;
358 (E) basic residential mortgage principles and practices; and
359 (F) any other aspect of Utah law the commission determines is appropriate; [and]
360 (ii) with the concurrence of the division, the continuing education requirements under
361 Section 61-2c-205 , including:
362 (A) except as provided in Subsection 61-2c-206 (2)(c), the appropriate number of hours
363 of prelicensing education and required continuing education; and
364 (B) the subject matter of courses the division may accept for continuing education
365 purposes[.];
366 (iii) with the concurrence of the division, the prelicensing education required under

Text Box
- 13 -

House Floor Amendments 3-2-2004 ch/tcl 367

Sections 61-2c-202 and 61-2c-206 H INCLUDING ON LINE EDUCATION OR DISTANCE LEARNING
367a OPTIONS h ; and
368 (iv) the examination required under Section 61-2c-206 covering:
369 (A) advanced residential mortgage principles and practices; and
370 (B) other aspects of Utah law the commission, with the concurrence of the division,
371 determines appropriate.
372 (8) The commission may appoint a committee to make recommendations to the
373 commission concerning approval of prelicensing education and continuing education courses.
374 (9) The commission and the division shall make the examination and prelicensing
375 education and continuing education requirements described in this section available through
376 the Internet or other distance education methods approved by the commission and division
377 when reasonably practicable.
378 (10) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
379 the commission shall make rules establishing procedures under which a licensee may be
380 exempted from continuing education requirements:
381 (a) for a period not to exceed four years; and
382 (b) upon a finding of reasonable cause.
383 Section 5. Section 61-2c-105 is amended to read:
384 61-2c-105. Scope of chapter.
385 (1) (a) This chapter applies to a closed-end residential mortgage loan secured by a first
386 lien or equivalent security interest on a one to four unit dwelling.
387 (b) This chapter does not apply to a transaction covered by Title 70C, Utah Consumer
388 Credit Code.
389 (2) The following are exempt from this chapter:
390 (a) the federal government;
391 (b) a state;
392 (c) a political subdivision of a state;
393 (d) an agency of or entity created by a governmental entity described in Subsections
394 (2)(a) through (c) including:
395 (i) the Utah Housing Corporation created in Title 9, Chapter 4, Part 9, Utah Housing
396 Corporation Act;
397 (ii) the Federal National Mortgage Corporation;

Text Box
- 14 - 398 (iii) the Federal Home Loan Mortgage Corporation;
399 (iv) the Federal Deposit Insurance Corporation;
400 (v) the Resolution Trust Corporation;
401 (vi) the Government National Mortgage Association;
402 (vii) the Federal Housing Administration;
403 (viii) the National Credit Union Administration;
404 (ix) the Farmers Home Administration; and
405 (x) the Department of Veterans Affairs;
406 (e) a depository institution;
407 (f) an affiliate of a depository institution;
408 (g) an employee or agent of an entity described in Subsections (2)(a) through (f) when
409 that person acts on behalf of the entity described in Subsections (2)(a) through (f);
410 (h) an individual or entity:
411 (i) that makes a loan:
412 (A) secured by an interest in real property;
413 (B) with the individual's or the entity's own money; and
414 (C) for the individual's or entity's own investment; and
415 (ii) that does not engage in the business of making loans secured by an interest in real
416 property;
417 (i) an individual or entity who receives a mortgage, deed of trust, or lien interest on real
418 property if the individual or entity:
419 (i) is the seller of real property; and
420 (ii) receives the mortgage, deed of trust, or lien interest on real property as security for
421 a separate money obligation;
422 (j) an individual or entity who receives a mortgage, deed of trust, or lien interest on real
423 property if:
424 (i) the individual or entity receives the mortgage, deed of trust, or lien interest as
425 security for an obligation payable on an installment or deferred payment basis;
426 (ii) the obligation described in Subsection (2)(j)(i) arises from an individual or entity
427 providing materials or services used in the improvement of the real property that is the subject
428 of the mortgage, deed of trust, or lien interest; and

Text Box
- 15 - 429 (iii) the mortgage, deed of trust, or lien interest was created without the consent of the
430 owner of the real property that is the subject of the mortgage, deed of trust, or lien interest;
431 (k) a nonprofit corporation that:
432 (i) is exempt from paying federal income taxes;
433 (ii) is certified by the United States Small Business Administration as a small business
434 investment company;
435 (iii) is organized to promote economic development in this state; and
436 (iv) has as its primary activity providing financing for business expansion;
437 (l) a court appointed fiduciary; or
438 (m) an attorney admitted to practice law in this state:
439 (i) if the attorney is not principally engaged in the business of negotiating residential
440 mortgage loans; and
441 (ii) when the attorney renders services in the course of the attorney's practice as an
442 attorney.
443 (3) (a) Notwithstanding Subsection (2)(m), an attorney exempt from this chapter may
444 not engage in conduct described in Section 61-2c-301 when transacting business of residential
445 mortgage loans.
446 (b) If an attorney exempt from this chapter violates Subsection (3)(a), the attorney:
447 (i) is not subject to enforcement by the division under Part 4, Enforcement; and
448 (ii) is subject to disciplinary action generally applicable to an attorney admitted to
449 practice law in this state.
450 (c) If the division receives a complaint alleging an attorney exempt from this chapter is
451 in violation of Subsection (3)(a), the division shall forward the complaint to the Utah State Bar
452 for disciplinary action.
453 (4) (a) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
454 the division shall, by rule, determine a date, on or after December 31, 2004, after which an
455 individual who is exempt under Subsection (2) may voluntarily obtain a license pursuant to
456 Subsection (4)(b).
457 (b) (i) After the date described in Subsection (4)(a), an individual who is exempt under
458 Subsection (2) may voluntarily obtain a license under this chapter by complying with Part 2,
459 Licensure.

Text Box
- 16 - 460 (ii) An individual who voluntarily obtains a license pursuant to this Subsection (4)(b)
461 shall comply with all the provisions of this chapter.
462 Section 6. Section 61-2c-106 is amended to read:
463 61-2c-106. Addresses provided the division.
464 (1) In providing an address to the division under this chapter, a physical location or
465 street address shall be provided.
466 (2) An individual or entity licensed under this chapter will be considered to have
467 received any notification that is mailed to the last address furnished to the division by the
468 individual, or by [a control person] the principal lending manager of the entity, licensed under
469 this chapter.
470 Section 7. Section 61-2c-201 is amended to read:
471 61-2c-201. Licensure required of individuals and entities engaged in the business
472 of residential mortgage loans -- Mortgage officer -- Principal lending manager.
473 (1) Unless exempt from this chapter under Section 61-2c-105 , an individual or entity
474 may not transact the business of residential mortgage loans, as defined in Section 61-2c-102 ,
475 without obtaining a license under this chapter.
476 (2) For purposes of this chapter, an individual or entity transacts business in this state
477 if:
478 (a) (i) the individual or entity engages in an act that constitutes the business of
479 residential mortgage loans; and
480 (ii) (A) the act described in Subsection (2)(a)(i) is directed to or received in this state;
481 and
482 (B) the real property that is the subject of the act described in Subsection (2)(a)(i) is
483 located in this state; or
484 (b) a representation is made by the individual or entity that the individual or entity
485 transacts the business of residential mortgage loans in this state.
486 (3) An individual who has an ownership interest in an entity required to be licensed
487 under this chapter is not required to obtain an individual license under this chapter unless the
488 individual transacts the business of residential mortgage loans.
489 [(3)] (4) Unless otherwise exempted under this chapter, licensure under this chapter is
490 required of both:

Text Box
- 17 -

Senate Committee Amendments 2-20-2004 rd/tcl 491

(a) the individual who directly transacts the business of residential mortgage loans; and
492 (b) if the individual transacts business as an employee or agent of an entity or
493 individual, the entity or individual for whom the employee or agent transacts the business of
494 residential mortgage loans.
495 (5) (a) On or after January 1, S [2005] 2006 s , a license issued under this chapter to an individual
496 who has not obtained a license as a principal lending manager automatically converts to a
497 mortgage officer license.
498 (b) A mortgage officer license issued pursuant to Subsection (5)(a) shall be placed on
499 inactive status until the holder of the license has submitted to the division the forms required to
500 activate the license with a principal lending manager.
501 [(4)] (6) (a) An individual licensed under this chapter may not engage in the business
502 of residential mortgage loans on behalf of more than one entity at the same time.
503 (b) This Subsection (6) does not restrict the number of:
504 (i) different lenders an individual or entity may use as a funding source for residential
505 mortgage loans; or
506 (ii) entities in which an individual may have an ownership interest, regardless of
507 whether the entities are:
508 (A) licensed under this chapter; or
509 (B) exempt under Section 61-2c-105 .
510 (7) An individual licensed under this chapter may not transact the business of
511 residential mortgage loans for the following at the same time:
512 (a) an entity licensed under this chapter; and
513 (b) an entity that is exempt from licensure under Section 61-2c-105 .
514 (8) On or after January 1, S [ 2005 ] 2006 s , except as provided under Title 16, Chapter 11,
515 Professional Corporation Act or under Title 48, Chapter 2c, Utah Revised Limited Liability
516 Company Act, a mortgage officer may not receive consideration for transacting the business of
517 residential mortgage loans from any person or entity except the principal lending manager with
518 whom the mortgage officer is licensed.
519 (9) On or after January 1, S [ 2005 ] 2006 s , a mortgage officer shall conduct all business of
520 residential mortgage loans:
521 (a) through the principal lending manager with which the individual is licensed;

Text Box
- 18 -

Senate Committee Amendments 2-20-2004 rd/tcl 522

(b) in the business name under which the principal lending manager is authorized by
523 the division to do business.
524 (10) (a) (i) If an individual who is authorized by this chapter to transact the business of
525 residential mortgage loans as an individual transacts the business of residential mortgage loans
526 under an assumed business name, the individual shall:
527 (A) register the assumed business name with the division; and
528 (B) furnish to the division proof that the assumed business name has been filed with
529 the Division of Corporations and Commercial Code pursuant to Title 42, Chapter 2,
530 Conducting Business Under Assumed Name.
531 (ii) This Subsection (10)(a) does not apply to an individual who transacts the business
532 of residential mortgage loans as an employee or agent of another individual or entity.
533 (b) The division may charge a fee established in accordance with Section 63-38-3.2 for
534 registering an assumed name pursuant to this Subsection (10).
535 (11) (a) A licensee whose license is in inactive status may not transact the business of
536 residential mortgage loans.
537 (b) On or after January 1, S [ 2005 ] 2006 s , a mortgage officer whose license has been
537a placed in
538 inactive status may not transact the business of residential mortgage loans until the mortgage
539 officer has licensed with a principal lending manager by following the procedures established
540 by the division by rule made in accordance with Title 63, Chapter 46a, Utah Administrative
541 Rulemaking Act, including submission of all required forms and payment of all required
542 activation fees.
543 (12) (a) On or after May 3, 2004 and before January 1, S [ 2005 ] 2006 s , if a licensed entity
544 terminates its control person, or if the control person of a licensed entity resigns, dies, or
545 becomes unable to act as control person due to disability, the entity shall cease all business of
546 residential mortgage loans until the entity has submitted all forms and fees to the division that
547 are required to affiliate another control person with the licensed entity.
548 (b) On or after January 1, S [ 2005 ] 2006 s , if a licensed entity terminates its principal lending
549 manager, or if the principal lending manager of a licensed entity resigns, dies, or becomes
550 unable to act as a principal lending manager due to disability, the entity may not transact the
551 business of residential mortgage loans until the entity has submitted all forms and fees to the
552 division that are required to affiliate another principal lending manager with the entity.

Text Box
- 19 -

Senate Committee Amendments 2-20-2004 rd/tcl 553

Section 8. Section 61-2c-202 is amended to read:
554 61-2c-202. Licensure procedures.
555 (1) To apply for licensure under this chapter an [individual or entity] applicant shall:
556 (a) submit to the division a licensure statement that:
557 (i) lists any name under which the individual or entity will transact business in this
558 state;
559 (ii) lists the address of the principal business location of the applicant;
560 (iii) on or after May 3, 2004 and before January 1, S [2005] 2006 s , if the applicant is an entity[,]:
561 (A) lists the control [persons] person of the applicant; and
562 (B) contains the signature of the control person;
563 (iv) on or after January 1, S [ 2005 ] 2006 s , if the applicant is an entity:
564 (A) lists the principal lending manager of the entity; and
565 (B) contains the signature of the principal lending manager;
566 [(iv)] (v) demonstrates to the satisfaction of the division with the concurrence of the
567 commission that the applicant meets the qualifications listed in Section 61-2c-203 ; [and]
568 (vi) if the applicant is an entity, lists:
569 (A) all jurisdictions in which the entity is registered, licensed, or otherwise regulated in
570 the business of residential mortgage loans; and
571 (B) the history of any disciplinary action or adverse administrative action taken against
572 the entity by any regulatory agency within the ten years preceding the application; and
573 [(v)] (vii) includes any information required by the division by rule;
574 (b) pay to the division:
575 (i) an application fee established by the division in accordance with Section 63-38-3.2 ;
576 and
577 (ii) the reasonable expenses incurred in processing the application for licensure
578 including the costs incurred by the division under Subsection (4); and
579 [(c) meet the requirements under Section 61-2c-204 for:]
580 [(i) obtaining a surety bond;]
581 [(ii) depositing assets; or]
582 [(iii) providing a letter of credit; and]
583 [(d)] (c) comply with Subsection (4).

Text Box
- 20 -

Senate Committee Amendments 2-20-2004 rd/tcl 584

(2) The division, with the concurrence of the commission, shall grant a license to an
585 applicant if the division finds that the applicant:
586 (a) meets the qualifications of [Sections] Section 61-2c-203 [and 61-2c-204 ]; and
587 (b) complies with this section.
588 (3) In accordance with Title 63, Chapter 46b, Administrative Procedures Act, an
589 applicant who is denied licensure under this chapter may submit a request for agency review to
590 the executive director within 30 days following the issuance of the order denying the licensure.
591 (4) (a) (i) An individual applying for a license under this chapter and any control
592 person of the applicant shall:
593 (A) submit a fingerprint card in a form acceptable to the division at the time the
594 licensure statement is filed;
595 (B) consent to a fingerprint background check by:
596 (I) the Utah Bureau of Criminal Identification; and
597 (II) the Federal Bureau of Investigation; [and]
598 (C) on or after January 1, 2005, provide proof using methods approved by the division
599 of having successfully completed S [ the number of ] 20 s hours of approved prelicensing education
600 required by the commission under Section 61-2c-104 ; and
601 [(C)] (D) provide proof using methods approved by the division of having successfully
602 [completed] passed an examination approved by the commission under Section 61-2c-104 .
603 (ii) Notwithstanding [Subsection] Subsections (4)(a)(i)(C) and (4)(a)(i)(D), an
604 individual who was registered with the division under this chapter prior to January 1, 2004 may
605 engage in the business of residential mortgage loans until January 1, 2005 [without having
606 passed the examination described in Subsection (4)(a)(i)(C).] without having:
607 (A) completed the prelicensing education described in Subsection (4)(a)(i)(C); and
608 (B) passed the examination described in Subsection (4)(a)(i)(D).
609 (b) The division shall request the Department of Public Safety to complete a Federal
610 Bureau of Investigation criminal background check for each applicant and each control person
611 of an applicant through a national criminal history system.
612 (c) The applicant shall pay the cost of:
613 (i) the fingerprinting required by this section; and
614 (ii) the background check required by this section.

Text Box
- 21 - 615 (d) (i) A license under this chapter is conditional pending completion of the criminal
616 background check required by this Subsection (4).
617 (ii) If a criminal background check discloses that an applicant or an applicant's control
618 person failed to accurately disclose a criminal history, the license shall be immediately and
619 automatically revoked.
620 (iii) An individual or entity whose conditional license is revoked under Subsection
621 (4)(d)(ii) may appeal the revocation in a hearing conducted:
622 (A) after the revocation; and
623 (B) in accordance with Title 63, Chapter 46b, Administrative Procedures Act.
624 (iv) Relief from a revocation may be granted only if:
625 (A) the criminal history upon which the division based the revocation:
626 (I) did not occur; or
627 (II) was the criminal history of another person;
628 (B) (I) the revocation was based on a failure to accurately disclose a criminal history;
629 and
630 (II) the applicant had a reasonable good faith belief at the time of application that there
631 was no criminal history to be disclosed; or
632 (C) the division failed to follow the prescribed procedure for the revocation.
633 Section 9. Section 61-2c-203 is amended to read:
634 61-2c-203. Qualifications for licensure.
635 (1) To qualify for licensure under this chapter, an individual [shall]:
636 (a) shall have good moral character and the competency to transact the business of
637 residential mortgage loans;
638 (b) shall demonstrate honesty, integrity, and truthfulness;
639 [(b)] (c) may not have been convicted of a felony or misdemeanor involving moral
640 turpitude in the [ten] five years preceding the date the individual applies for a license, except as
641 provided in Subsection (3);
642 [(c)] (d) may not have had a license or registration suspended, revoked, surrendered,
643 canceled, or denied in the five years preceding the date the individual applies for licensure
644 except as provided in Subsection (3), if:
645 (i) the registration or license is issued by this state or another jurisdiction; and

Text Box
- 22 -

Senate Committee Amendments 2-20-2004 rd/tcl 646

(ii) the suspension, revocation, surrender, probation, fine, cancellation, or denial is
647 based on misconduct in a professional capacity that relates to [good] moral character, honesty,
648 integrity, truthfulness, or the competency to transact the business of residential mortgage
649 loans[.];
650 (e) except as provided in Subsection (3), may not have been the subject of a bar by the
651 Securities and Exchange Commission, the New York Stock Exchange, or the National
652 Association of Securities Dealers within the five years preceding the date the individual applies
653 for registration; and
654 (f) may not have had any temporary or permanent injunction entered against the
655 individual:
656 (i) by a court or licensing agency; and
657 (ii) based on:
658 (A) conduct or a practice involving the business of residential mortgage loans; or
659 (B) conduct involving fraud, misrepresentation, or deceit.
660 (2) To qualify for licensure under this chapter an entity may not have:
661 (a) any of the following individuals in management who fails to meet the requirements
662 of Subsection (1):
663 (i) a manager or a managing partner;
664 (ii) a director;
665 (iii) an executive officer; or
666 (iv) an individual occupying a position or performing functions similar to those
667 described in Subsections (2)(a)(i) through (iii); [and] or
668 [(b) a control person who fails to meet the requirements of Subsection (1).]
669 (b) (i) before January 1, S [ 2005 ] 2006 s , a control person who fails to meet the
669a requirements of
670 Subsection (1); or
671 (ii) on or after January 1, S [ 2005 ] 2006 s , a principal lending manager who fails to meet the
672 requirements of Subsection (1).
673 (3) [If] Notwithstanding the failure to meet the requirements of Subsections (1)(c)
674 through (f), the division may permit an individual or [a control person of an] entity to be
675 licensed under this chapter if the individual applicant or a person listed in Subsection (2):
676 (a) fails to meet the requirements of [Subsection (1)(b) or (c), but] Subsections (1)(c)

Text Box
- 23 - 677 through (f);
678 (b) otherwise meets the qualifications for licensure[,]; and
679 (c) provides evidence satisfactory to the division with the concurrence of the
680 commission that the individual applicant or [control] person [has] described in Subsection (2):
681 (i) is of good moral character [and];
682 (ii) is honest;
683 (iii) has integrity;
684 (iv) is truthful; and
685 (v) has the competency to transact the business of residential mortgage loans[,
686 notwithstanding the failure to meet the requirements of Subsection (1)(b) or (c) the division
687 may permit that individual or entity to be licensed under this chapter].
688 Section 10. Section 61-2c-205 is amended to read:
689 61-2c-205. Term of licensure -- Renewal -- Reporting of changes.
690 (1) (a) A license under this chapter is valid for a two-year period.
691 (b) Notwithstanding Subsection (1)(a), the time period of a license may be extended or
692 shortened by as much as one year to maintain or change a renewal cycle established by rule by
693 the division.
694 (2) To renew a license, no later than [30 days before] the date the license expires, a
695 licensee shall:
696 (a) file a licensure statement meeting the requirements of Section 61-2c-202 ;
697 (b) pay a fee to the division established by the division in accordance with Section
698 63-38-3.2 ; and
699 (c) if the licensee is an individual and the individual's license is in active status at the
700 time of application for renewal, submit proof using forms approved by the division of having
701 completed during the two years prior to application the continuing education required by the
702 commission under Section 61-2c-104 .
703 (3) (a) A licensee under this chapter shall amend its licensure statement filed with the
704 division within ten days of the date on which there is a change in:
705 (i) a name under which the licensee transacts the business of residential mortgage loans
706 in this state;
707 (ii) (A) if the licensee is an entity, the business location of the licensee; or

Text Box
- 24 -

Senate Committee Amendments 2-20-2004 rd/tcl 708

(B) if the licensee is an individual, the home and business addresses of the individual;
709 (iii) (A) on or after May 3, 2004 and before January 1, S [ 2005 ] 2006 s , the control [persons]
710 person of the licensee; or
711 (B) on or after January 1, S [ 2005 ] 2006 s , the principal lending manager of the entity; or
712 (iv) any other information that is defined as material by rule made by the division.
713 (b) Failure to notify the division of a change described in Subsection (3)(a) is separate
714 grounds for disciplinary action against a licensee.
715 (4) A licensee shall notify the division by sending the division a signed statement
716 within ten business days of:
717 (a) (i) a conviction of any criminal offense;
718 (ii) the entry of a plea in abeyance to any criminal offense; or
719 (iii) the potential resolution of any criminal case by:
720 (A) a diversion agreement; or
721 (B) any other agreement under which criminal charges are held in suspense for a period
722 of time;
723 (b) filing a personal bankruptcy or bankruptcy of a business that transacts the business
724 of residential mortgage loans; [or]
725 (c) the suspension, revocation, surrender, cancellation, or denial of a professional
726 license or professional registration of the licensee, whether the license or registration is issued
727 by this state or another jurisdiction[.]; or
728 (d) the entry of a cease and desist order or a temporary or permanent injunction:
729 (i) against the licensee by a court or licensing agency; and
730 (ii) based on:
731 (A) conduct or a practice involving the business of residential mortgage loans; or
732 (B) conduct involving fraud, misrepresentation, or deceit.
733 (5) (a) A license under this chapter expires if the licensee does not apply to renew the
734 license on or before the expiration date of the license.
735 (b) Within 30 calendar days after the expiration date, a licensee whose license has
736 expired may apply to reinstate the expired license upon:
737 (i) payment of a renewal fee and a late fee determined by the division under Section
738 63-38-3.2 ; and

Text Box
- 25 -

Senate Committee Amendments 2-20-2004 rd/tcl 739

(ii) if the licensee is an individual and is applying to reinstate a license to active status,
740 providing proof using forms approved by the division of having completed, during the two
741 years prior to application, the continuing education required by the commission under Section
742 61-2c-104 .
743 (c) After the 30 calendar days described in Subsection (5)(b) and within six months
744 after the expiration date, a licensee whose license has expired may apply to reinstate an expired
745 license upon:
746 (i) payment of a renewal fee and a late fee determined by the division under Section
747 63-38-3.2 ;
748 (ii) if the licensee is an individual and is applying to reinstate a license to active status,
749 providing proof using forms approved by the division of having completed, during the two
750 years prior to application, the continuing education required by the commission under Section
751 61-2c-104 ; and
752 (iii) in addition to the continuing education required for a timely renewal, completing
753 an additional 12 hours of continuing education approved by the commission under Section
754 61-2c-104 .
755 (d) A licensee whose license has been expired for more than [one year may apply to
756 reinstate an expired license upon:] six months shall be relicensed as prescribed for an original
757 application under Section 61-2c-202 .
758 [(i) satisfying the requirements of Subsection (5)(c); and]
759 [(ii) passing the examination approved by the commission under Section 61-2c-104 .]
760 Section 11. Section 61-2c-206 is enacted to read:
761 61-2c-206. Lending manager licenses.
762 S [ (1) On or after January 1, 2005 and before January 1, 2006, to qualify as a principal
763 lending manager under this chapter, an individual shall, in addition to meeting the standards in
764 Section 61-2c-203 :
765 (a) submit an application on a form approved by the division;
766 (b) pay fees determined by the division under Section 63-38-3.2 ; and
767 (c) if the individual is not licensed under this chapter at the time of application, submit
768 to the criminal background check required by Subsection 61-2c-202 (4).
769 (2) ] (1) s Except as provided in Subsection (3), on or after S [ January 1, 2006 ] SEPTEMBER
769a 1, 2005 s , to qualify as a

Text Box
- 26 -

Senate Committee Amendments 2-20-2004 rd/tcl 770

principal lending manager under this chapter, an individual shall, in addition to meeting the
771 standards in Section 61-2c-203 :
772 (a) submit an application on a form approved by the division;
773 (b) pay fees determined by the division under Section 63-38-3.2 ;
774 (c) submit proof of having successfully completed S [ 80 ] 40 s hours of prelicensing
774a education
775 approved by the commission under Section 61-2c-104 ;
776 (d) submit proof of having successfully completed the principal lending manager
777 examination approved by the commission under Section 61-2c-104 ;
778 (e) submit proof on forms approved by the division of three years of full-time active
779 experience as a mortgage officer, or its equivalent as approved by the commission; and
780 (f) if the individual is not licensed under this chapter at the time of application, submit
781 to the background check required by Subsection 61-2c-202 (4).
782 S [ (3) ] (2) s (a) Notwithstanding Subsection (2), an individual described in Subsection (3)(b)
783 may qualify as a principal lending manager without:
784 (i) meeting the requirements of Subsection (2)(c); and
785 (ii) completing the portions of the principal lending manager examination described in
786 Subsection (3)(d) that:
787 (A) relate to federal law; and
788 (B) do not relate to Utah law.
789 (b) An individual may qualify as a principal lending manager pursuant to Subsection
790 (3)(a) if the individual:
791 (i) submits to the division an affidavit that the individual has five years of experience
792 in the business of residential mortgage loans;
793 (ii) establishes that the individual's experience described in Subsection (3)(a)(i) was
794 under requirements substantially equivalent to the licensing requirements of this chapter; and
795 (iii) provides any other information required by the division by rule under Subsection
796 (3)(c).
797 (c) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
798 division shall define the information an individual shall provide to the division pursuant to
799 Subsection (3)(b).
800 S [ (4) On or after January 1, 2006, the principal lending manager license of an individual ] s

Text Box
- 27 -

Senate Committee Amendments 2-20-2004 rd/tcl 801

S [ who has not submitted proof to the division of successful completion of the education,
802 examination, and experience requirements of Subsection (2) shall be automatically inactivated
803 by the division until the individual provides proof of having successfully completed the
804 education, examination, and experience requirements of Subsection (2).
805 (5) ] (3) s A principal lending manager may not engage in the business of residential
806 mortgage loans on behalf of more than one entity at the same time.
807 Section 12. Section 61-2c-207 is enacted to read:
808 61-2c-207. Reciprocal licensure.
809 (1) The division may enter into a reciprocity agreement with another state and issue a
810 reciprocal license to a licensee of that state if the division determines that the:
811 (a) state has substantially equivalent licensing laws;
812 (b) state requires a licensing examination that is substantially equivalent to the
813 examination required by this chapter; and
814 (c) licensee has not had:
815 (i) formal charges alleging a violation of state mortgage laws filed against the licensee;
816 or
817 (ii) disciplinary action or license restriction taken by the licensee's state of domicile.
818 (2) The division may issue a reciprocal license to a licensee of a state with which the
819 division does not have a reciprocity agreement if the individual:
820 (a) submits to the division an affidavit that the individual has five years of experience
821 in the business of residential mortgage loans;
822 S [ (ii) ] (b) s establishes that the individual's experience described in Subsection (2)(a) was
823 under requirements substantially equivalent to the licensing requirements of this chapter; and
824 S [ (iii) ] (c) s provides any other information required by the division by rule under
824a Subsection
825 (3).
826 (3) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
827 division shall define the information an individual shall provide to the division pursuant to
828 Subsection (2).
829 Section 13. Section 61-2c-208 is enacted to read:
830 61-2c-208. Activation and inactivation of license.
831 (1) (a) A licensee may request that the division place the license on inactive status by

Text Box
- 28 -

Senate Committee Amendments 2-20-2004 rd/tcl 832

submitting an inactivation form approved by the division.
833 (b) On or after January 1, S [ 2005 ] 2006 s , if the license of a principal lending manager is
834 revoked, suspended, or expires, the license of any mortgage officer licensed with that principal
835 lending manager shall automatically convert to inactive status.
836 (2) To activate a license that has been placed on inactive status, a licensee shall:
837 (a) submit an activation form approved by the division;
838 (b) pay an activation fee established by the division under Section 63-38-3.2 ; and
839 (c) if the licensee is an individual whose license was in inactive status at the time of the
840 previous renewal, the licensee shall supply the division with proof of the successful completion
841 of the number of hours of continuing education that the licensee would have been required to
842 complete under Section 61-2c-205 (2)(c) if the licensee's license had been on active status, up to
843 a maximum of the number of hours required for two licensing periods.
844 (3) On or after January 1, S [ 2005 ] 2006 s , in addition to the requirements of Subsection (2), a
845 mortgage officer whose license has been placed on inactive status shall obtain the signature of
846 the principal lending manager with whom the mortgage officer will be actively licensed on the
847 form required by the division.
848 (4) (a) On or after May 3, 2004 and before January 1, S [ 2005 ] 2006 s , in addition to the
849 requirements of Subsection (2), an entity whose license has been placed on inactive status
850 because of the termination, death, disability, or departure of its control person shall submit the
851 forms required by the division to affiliate the license of another control person with the entity.
852 (b) On or after January 1, S [ 2005 ] 2006 s , in addition to the requirements of Subsection
852a (2), an
853 entity whose license has been placed on inactive status because of the termination, death,
854 disability, or departure of its principal lending manager shall submit the forms required by the
855 division to affiliate the license of another principal lending manager with the entity.
856 Section 14. Section 61-2c-301 is amended to read:
857 61-2c-301. Prohibited conduct -- Violations of the chapter.
858 (1) An individual or entity transacting the business of residential mortgage loans in this
859 state may not:
860 (a) give or receive compensation or anything of value in exchange for a referral of
861 residential mortgage loan business [unless the compensation or thing of value is de minimis as
862 defined by the division];

Text Box
- 29 - 863 (b) charge a fee in connection with a residential mortgage loan transaction:
864 (i) that is excessive; or
865 (ii) if the individual or entity does not comply with Section 70D-1-6 ;
866 (c) give or receive compensation or anything of value in exchange for a referral of
867 settlement or loan closing services related to a residential mortgage loan transaction;
868 (d) [make a false statement or representation for purposes of inducing] do any of the
869 following to induce a lender to extend credit as part of a residential mortgage loan
870 transaction[;]:
871 (i) make a false statement or representation;
872 (ii) cause false documents to be generated; or
873 (iii) knowingly permit false information to be submitted by any party;
874 (e) (i) give or receive compensation or anything of value, or withhold or threaten to
875 withhold payment of an appraiser fee, to influence the independent judgment of an appraiser in
876 reaching a value conclusion in a residential mortgage loan transaction, except that it is not a
877 violation of this section for a licensee to withhold payment because of a bona fide dispute
878 regarding a failure of the appraiser to comply with the licensing law or the Uniform Standards
879 of Professional Appraisal Practice;
880 (f) violate or not comply with:
881 (i) this chapter;
882 (ii) an order of the commission or division; or
883 (iii) a rule made by the division;
884 (g) fail to respond within the required time period to:
885 (i) a notice or complaint of the division; or
886 (ii) a request for information from the division;
887 (h) make false representations to the division, including in a licensure statement;
888 (i) for any residential mortgage loan transaction beginning on or after January 1, 2004,
889 engage in the business of residential mortgage loans with respect to the transaction if the
890 individual or entity also acts in any of the following capacities with respect to the same
891 residential mortgage loan transaction:
892 (i) appraiser;
893 (ii) escrow agent;

Text Box
- 30 -

Senate Committee Amendments 2-20-2004 rd/tcl 894

(iii) real estate agent; or
895 (iv) general contractor;
896 (j) order a title insurance report or hold a title insurance policy unless the individual or
897 entity provides to the title insurer a copy of a valid, current license under this chapter;
898 (k) engage in unprofessional conduct as defined by rule; [or]
899 (l) engage in an act or omission in transacting the business of residential mortgage
900 loans that constitutes dishonesty, fraud, or misrepresentation[.];
901 (m) engage in false or misleading advertising;
902 (n) (i) fail to account for all funds received in connection with a residential mortgage
903 loan;
904 (ii) use funds for a different purpose from the purpose for which the funds were
905 received; or
906 (iii) (A) except as provided in Subsection (1)(n)(iii)(B), retain funds paid for services if
907 the services were not actually performed;
908 (B) notwithstanding Subsection (1)(n)(iii)(A), a licensee may, upon compliance with
909 Section 70D-1-6 , charge a reasonable cancellation fee for work done originating a mortgage if
910 the mortgage is not closed;
911 (o) fail, within S [ 30 ] 90 s calendar days of a request from a borrower who has paid for an
912 appraisal, to give a copy of an appraisal ordered and used for a transaction to the borrower;
913 (p) engage in an act that is performed to:
914 (i) evade this chapter; or
915 (ii) assist another person to evade this chapter;
916 (q) recommend or encourage default or delinquency, or continuation of an existing
917 default or delinquency, by a mortgage applicant on an existing indebtedness prior to the closing
918 of a residential mortgage loan that will refinance all or part of the indebtedness;
919 (r) in the case of a control person of an entity, fail to exercise reasonable supervision
920 over the activities of:
921 (i) the individuals engaged in the business of residential mortgage loans on behalf of
922 the entity; or
923 (ii) any unlicensed staff;
924 (s) on or after January 1, S [ 2005 ] 2006 s , in the case of the principal lending manager of an
924a entity

Text Box
- 31 - 925 or a branch office of an entity, fail to exercise reasonable supervision over the activities of the
926 mortgage officers who are licensed with the principal lending manager; or
927 (t) pay or offer to pay an individual who does not hold a license under this chapter for
928 work that requires the individual to hold a license under this chapter.
929 (2) Whether or not the crime is related to the business of residential mortgage loans, it
930 is a violation of this chapter for a licensee [or], a control person of a licensee, or a person who
931 is a certified education provider to do any of the following with respect to a criminal offense
932 which involves moral turpitude:
933 (a) be convicted;
934 (b) plead guilty or nolo contendere;
935 (c) enter a plea in abeyance; or
936 (d) be subjected to a criminal disposition similar to the ones described in Subsections
937 (2)(a) through (c).
938 (3) A principal lending manager does not violate Subsection (1)(s) if:
939 (a) in contravention of the principal lending manager's written policies and
940 instructions, an affiliated licensee of the principal lending manager violates a provision of:
941 (i) this chapter; or
942 (ii) rules made by the division under this chapter;
943 (b) the principal lending manager established and followed reasonable procedures to
944 ensure that affiliated licensees receive adequate supervision;
945 (c) upon learning of a violation by an affiliated licensee, the principal lending manager
946 attempted to prevent or mitigate the damage;
947 (d) the principal lending manager did not participate in or ratify the violation by an
948 affiliated licensee; and
949 (e) the principal lending manager did not attempt to avoid learning of the violation.
950 Section 15. Section 61-2c-302 is amended to read:
951 61-2c-302. Record requirements.
952 (1) For the time period specified in Subsection (2), a licensee shall make or possess any
953 record required for that licensee by a rule made by the division.
954 (2) A licensee shall maintain in its possession a record described in Subsection (1) until
955 the later of four years from the last to occur of the following:

Text Box
- 32 - 956 (a) the final entry on a residential mortgage loan is made by that licensee;
957 (b) if the residential mortgage loan is serviced by the licensee:
958 (i) the residential mortgage loan is paid in full; or
959 (ii) the licensee ceases to service the residential mortgage loan; or
960 (c) if the residential mortgage loan is not serviced by the licensee, the residential
961 mortgage loan is closed.
962 (3) A licensee shall:
963 (a) make available to the division for inspection during normal business hours all
964 records required to be maintained under this chapter; and
965 (b) upon reasonable notice from the division to a licensee, produce all records
966 described in Subsection (3)(a) that are related to an investigation being conducted by the
967 division at the division office for inspection and copying by the division.
968 (4) A licensed entity shall maintain and produce for inspection by the division a current
969 list of all individuals whose licenses are affiliated with the entity.
970 Section 16. Section 61-2c-401 is amended to read:
971 61-2c-401. Investigations -- Subpoena power of division.
972 (1) The division may investigate or cause to be investigated the actions of:
973 (a) (i) a licensee [and the control persons of any licensee]; or
974 (ii) the following with respect to an entity that is a licensee:
975 (A) a control person;
976 (B) a manager;
977 (C) a managing partner;
978 (D) a director;
979 (E) an executive officer; or
980 (F) an individual who performs a function similar to an individual listed in this
981 Subsection (1)(a)(ii);
982 (b) (i) an applicant for licensure under this chapter[, and the control persons of any
983 applicant]; or
984 (ii) the following with respect to an entity that has applied for a license under this
985 chapter:
986 (A) a control person;

Text Box
- 33 - 987 (B) a manager;
988 (C) a managing partner;
989 (D) a director;
990 (E) an executive officer; or
991 (F) an individual who performs a function similar to an individual listed in this
992 Subsection (1)(b)(ii); or
993 (c) any individual or entity that transacts the business of residential mortgage loans
994 within this state, and the control persons of any such entity.
995 (2) In conducting investigations, records inspections, and adjudicative proceedings, the
996 division may:
997 (a) subpoena witnesses;
998 (b) take evidence;
999 (c) require by subpoena duces tecum the production of books, papers, contracts,
1000 records, other documents, or information considered relevant to an investigation; and
1001 (d) serve a subpoena by certified mail.
1002 (3) A failure to respond to a subpoena served by the division is considered as a separate
1003 violation of this chapter.
1004 (4) The division may inspect all records related to the business of residential mortgage
1005 loans by a licensee under this chapter, regardless of whether the records are maintained at a
1006 business location in Utah, in conducting:
1007 (a) investigations of complaints; or
1008 (b) inspections of the records required to be maintained under:
1009 (i) this chapter; or
1010 (ii) rules adopted by the division under this chapter.
1011 (5) (a) If a licensee maintains the records required by this chapter and the rules adopted
1012 by the division under this chapter outside Utah, the licensee is responsible for all reasonable
1013 costs, including reasonable travel costs, incurred by the division in inspecting those records.
1014 (b) Upon receipt of notification from the division that records maintained outside Utah
1015 are to be examined in connection with an investigation or an examination, the licensee shall
1016 deposit with the division a deposit of $500 to cover the division's expenses in connection with
1017 the examination of the records.

Text Box
- 34 - 1018 (c) If the deposit described in Subsection (5)(b) is insufficient to meet the estimated
1019 costs and expenses of examination of the records, the licensee shall make an additional deposit
1020 to cover the estimated costs and expenses of the division.
1021 (d) (i) All deposits under this Subsection (5) shall be deposited in the General Fund as
1022 a dedicated credit to be used by the division under Subsection (5)(a).
1023 (ii) The division, with the concurrence of the executive director, may use the deposit
1024 monies deposited in the General Fund under this Subsection (5)(d) as a dedicated credit for the
1025 records inspection costs under Subsection (5)(a).
1026 (iii) A deposit under this Subsection (5) shall be refunded to the licensee to the extent it
1027 is not used, together with an itemized statement from the division of all amounts it has used.
1028 (e) All deposits under this Subsection (5) shall be nonlapsing.
1029 (6) Failure to deposit with the division a deposit required to cover the costs of
1030 examination of records that are maintained outside Utah shall result in automatic suspension of
1031 a license until the deposit is made.
1032 Section 17. Section 61-2c-402 is amended to read:
1033 61-2c-402. Disciplinary action -- Reinstatement.
1034 (1) Subject to the requirements of this section, if an individual or entity required to be
1035 licensed under this chapter violates this chapter, or an education provider certified under this
1036 chapter, the commission, with the concurrence of the director, may:
1037 (a) impose a civil penalty against the individual or entity in an amount not to exceed
1038 $2,500 per violation;
1039 (b) do any of the following to a license under this chapter:
1040 (i) suspend;
1041 (ii) revoke;
1042 (iii) place on probation;
1043 (iv) deny renewal; or
1044 (v) deny reinstatement; or
1045 (c) do both Subsections (1)(a) and (b).
1046 (2) (a) Before the commission and the division may take an action described in
1047 Subsection (1), the division shall:
1048 (i) give notice to the individual or entity; and

Text Box
- 35 - 1049 (ii) schedule an adjudicative proceeding.
1050 (b) If after the adjudicative proceeding scheduled under Subsection (2)(a), the
1051 commission and the director determine that an individual or entity required to be licensed
1052 under this chapter has violated this chapter, the commission may take an action described in
1053 Subsection (1) by written order.
1054 (3) In accordance with Title 63, Chapter 46b, Administrative Procedures Act, an
1055 individual or entity against whom disciplinary action is taken under this section may seek
1056 review by the executive director of the disciplinary action.
1057 (4) If an individual or entity prevails in a judicial appeal and the court finds that the
1058 state action was undertaken without substantial justification, the court may award reasonable
1059 litigation expenses to that individual or entity as provided under Title 78, Chapter 27a, Small
1060 Business Equal Access to Justice Act.
1061 (5) (a) An order issued under this section takes effect 30 days after the service of the
1062 order unless otherwise provided in the order.
1063 (b) If an appeal of an order issued under this section is taken by an individual or entity,
1064 the division may stay enforcement of the commission's order in accordance with Section
1065 63-46b-18 .
1066 (6) If ordered by the court of competent jurisdiction, the division shall promptly take an
1067 action described in Subsection (1)(b) against a license granted under this chapter.
1068 (7) (a) If a license under this chapter is revoked, the individual or entity may apply to
1069 have the license reinstated by complying with the requirements of Section 61-2c-202 for
1070 licensure.
1071 (b) Notwithstanding Subsection (7)(a), if a license under this chapter is revoked, the
1072 individual or entity may not apply for reinstatement of the license sooner than five years after
1073 the date the license is revoked in accordance with this section.
1074 (c) If an individual or entity whose license has been revoked applies for reinstatement
1075 in accordance with Subsection (7)(b), the commission and the division may grant the
1076 application for reinstatement if they find that:
1077 (i) there has been good conduct on the part of the applicant subsequent to the events
1078 that led to the revocation, and that the subsequent good conduct outweighs the events which led
1079 to the revocation; and

Text Box
- 36 - 1080 (ii) the interest of the public is not likely to be harmed by the granting of the license.
1081 Section 18. Section 61-2c-403 is amended to read:
1082 61-2c-403. Cease and desist orders.
1083 (1) (a) The director may issue and serve by certified mail, or by personal service, on an
1084 individual or entity an order to cease and desist if:
1085 (i) the director has reason to believe that the individual or entity has been or is
1086 engaging in acts constituting a violation of this chapter; and
1087 (ii) it appears to the director that it would be in the public interest to stop the acts.
1088 (b) Within ten days after service of the order, the party named in the order may request
1089 an adjudicative proceeding to be held in accordance with Title 63, Chapter 46b, Administrative
1090 Procedures Act.
1091 (c) Pending the hearing, the cease and desist order shall remain in effect.
1092 (2) (a) After the hearing described in Subsection (1), if the director finds that the acts
1093 of the individual or entity violate this chapter, the director shall issue an order making the cease
1094 and desist order permanent.
1095 (b) (i) The director may file suit in the name of the division to enjoin and restrain an
1096 individual or entity on whom an order is served under this section from violating this chapter
1097 if:
1098 (A) (I) the individual or entity did not request a hearing under Subsection (1); or
1099 (II) a permanent cease and desist order is issued against the individual or entity
1100 following a hearing or stipulation; and
1101 (B) (I) the individual or entity fails to cease the acts; or
1102 (II) after discontinuing the acts, the individual or entity again commences the acts.
1103 (ii) The suit described in Subsection (2)(b)(i) shall be filed in the district court in the
1104 county:
1105 (A) in which the acts occurred;
1106 (B) where the individual resides; or
1107 (C) where the individual or entity carries on business.
1108 (3) The cease and desist order issued under this section may not interfere with or
1109 prevent the prosecution of a remedy or action enforcement under this chapter.
1110 (4) An individual [or a control person of an entity] who violates a cease and desist order

Text Box
- 37 -

Senate Committee Amendments 2-20-2004 rd/tcl 1111

issued under this section is guilty of a class A misdemeanor.
1112 Section 19. Section 61-2c-404 is enacted to read:
1113 61-2c-404. Civil actions.
1114 (1) (a) A person who violates this chapter is liable for an additional penalty, as
1115 determined by the court, of at least the amount the person received in consequence of a
1116 violation of this chapter as:
1117 (i) commission;
1118 (ii) compensation; or
1119 (iii) profit.
1120 (b) A person aggrieved by a violation of this chapter may:
1121 (i) bring an action for a penalty described in Subsection (1)(a); and
1122 (ii) use a penalty obtained under Subsection (1)(a) for the person's own use and benefit.
1123 (2) A person who is not licensed under this chapter at the time of an act or service that
1124 requires a license under this chapter may not bring an action in court for the recovery of a
1125 commission, fee, or compensation for that act or service.
1126 (3) On or after January 1, S [ 2005 ] 2006 s :
1127 (a) a mortgage officer may not bring an action in the mortgage officer's own name for
1128 the recovery of a fee, commission, or compensation for transacting the business of residential
1129 mortgage loans unless the action is brought against the principal lending manager with whom
1130 the mortgage officer was licensed at the time of the act or service that is the subject of the
1131 action; and
1132 (b) an action by an entity for the recovery of a fee, commission, or other compensation
1133 shall be brought by:
1134 (i) an entity; or
1135 (ii) the principal lending manager of an entity on behalf of the entity.
1136 (4) On or after January 1, S [ 2005 ] 2006 s , a principal lending manager who transacts the
1136a business
1137 of residential mortgage loans on the principal lending manager's own behalf may sue in the
1138 principal lending manager's own name for the recovery of a fee, commission, or compensation
1139 for transacting the business of residential mortgage loans.
1140 Section 20. Section 61-2c-501 is enacted to read:
1141 Part 5. Residential Mortgage Loan Education, Research, and Recovery Fund

Text Box
- 38 - 1142 61-2c-501. Fund created -- Minimum balance.
1143 (1) There is created a restricted special revenue fund known as the "Residential
1144 Mortgage Loan Education, Research, and Recovery Fund."
1145 (2) The interest earned on the fund shall be deposited into the fund.
1146 (3) At the beginning of each state fiscal year, $100,000 shall remain available in the
1147 fund to satisfy judgments rendered against individuals and entities licensed under this chapter.
1148 Section 21. Section 61-2c-502 is enacted to read:
1149 61-2c-502. Additional license fee.
1150 (1) An individual who applies for or renews a license shall pay, in addition to the
1151 application or renewal fee, a reasonable annual fee:
1152 (a) determined by the division with the concurrence of the commission; and
1153 (b) not to exceed $18.
1154 (2) An entity that applies for or renews an entity license shall pay, in addition to the
1155 application or renewal fee, a reasonable annual fee:
1156 (a) determined by the division with the concurrence of the commission; and
1157 (b) not to exceed $25.
1158 (3) Notwithstanding Section 13-1-2 , the fees provided in this section shall be paid into
1159 the fund to be used as provided in this part.
1160 (4) If the balance in the fund that is available to satisfy judgments against licensees
1161 decreases to less than $100,000, the division may make additional assessments to licensees to
1162 maintain the balance available at $100,000 to satisfy judgments.
1163 Section 22. Section 61-2c-503 is enacted to read:
1164 61-2c-503. Notice to division -- Judgment against mortgage licensee -- Fraud,
1165 misrepresentation, or deceit -- Verified petition for order directing payment from fund --
1166 Limitations and procedure.
1167 (1) (a) A person may bring a claim against the fund if the person sends a signed
1168 notification to the division at the time the person files an action:
1169 (i) against a licensee; and
1170 (ii) alleging fraud, misrepresentation, or deceit.
1171 (b) Within 30 calendar days of receipt of the notice described in Subsection (1)(a), the
1172 division may intervene in the action.

Text Box
- 39 - 1173 (c) If a person making a claim against the fund obtains a final judgment in a court of
1174 competent jurisdiction in Utah against a licensee based on fraud, misrepresentation, or deceit in
1175 a residential mortgage loan transaction, the person making the claim may, upon termination of
1176 all proceedings including appeals, file a verified petition in the court where the judgment was
1177 entered for an order directing payment from the fund for the uncollected actual damages
1178 included in the judgment.
1179 (d) A recovery from the fund may not include punitive damages, interest, or court
1180 costs.
1181 (e) Regardless of the number of claimants or number of loans involved in a transaction,
1182 the liability of the fund may not exceed:
1183 (i) $15,000 for a single transaction;
1184 (ii) $45,000 for an individual licensee; or
1185 (iii) $45,000 for an entity.
1186 (2) A person making a claim against the fund shall:
1187 (a) serve a copy of the petition on the division; and
1188 (b) file a copy of the affidavit of the service of the petition described in Subsection
1189 (2)(a) with the court.
1190 (3) (a) The court shall conduct a hearing on the petition within 30 calendar days after
1191 service.
1192 (b) The petitioner shall recover from the fund only if the petitioner shows:
1193 (i) that the petitioner is not:
1194 (A) the spouse of the judgment debtor; or
1195 (B) the personal representative of the spouse of the judgment debtor;
1196 (ii) that the petitioner has complied with this chapter;
1197 (iii) that the petitioner has obtained a final judgment in the manner prescribed under
1198 this section, indicating the amount of the judgment awarded;
1199 (iv) that the petitioner has proved the amount still owing on the judgment at the date of
1200 the petition;
1201 (v) (A) that:
1202 (I) the petitioner has a writ of execution issued upon the judgment; and
1203 (II) the officer executing the writ has made a return showing that no property subject to

Text Box
- 40 - 1204 execution in satisfaction of the judgment could be found; and
1205 (B) if execution is levied against the property of the judgment debtor, that:
1206 (I) the amount realized was insufficient to satisfy the judgment; and
1207 (II) a balance remains on the judgment after application of the amount realized; and
1208 (vi) that the petitioner has:
1209 (A) made reasonable searches and inquiries to ascertain whether the judgment debtor
1210 has any interest in property, real or personal, that may satisfy the judgment; and
1211 (B) has exercised reasonable diligence to secure payment of the judgment from the
1212 assets of the judgment debtor.
1213 (4) If the petitioner satisfies the court that it is not practicable for the petitioner to
1214 comply with one or more of the requirements in Subsections (3)(b)(v) and (3)(b)(vi), the court
1215 may waive those requirements.
1216 (5) (a) A judgment that is the basis for a claim against the fund may not have been
1217 discharged in bankruptcy.
1218 (b) In the case of a bankruptcy proceeding that is open or that is commenced during the
1219 pendency of the claim, the claimant shall, prior to obtaining a claim against the fund, obtain an
1220 order from the bankruptcy court declaring the judgment and debt to be nondischargeable.
1221 Section 23. Section 61-2c-504 is enacted to read:
1222 61-2c-504. Authority to act on receipt of petition.
1223 (1) Upon receipt of a petition meeting the requirements of Section 61-2c-503 , the
1224 division may answer, initiate review proceedings, or appear in a proceeding:
1225 (a) in the name of the defendant to the action; or
1226 (b) on behalf of the fund.
1227 (2) The division may settle a claim subject to:
1228 (a) the application of a petitioner; and
1229 (b) court approval.
1230 Section 24. Section 61-2c-505 is enacted to read:
1231 61-2c-505. Court determination and order.
1232 If the court determines that a claim should be levied against the portion of the fund
1233 allocated to carry out the provisions of this chapter, the court shall enter an order requiring the
1234 division to pay from the fund the portion of the petitioner's judgment that is payable from the

Text Box
- 41 - 1235 fund under Section 61-2c-503 .
1236 Section 25. Section 61-2c-506 is enacted to read:
1237 61-2c-506. Insufficient funds to satisfy judgment -- Procedure and interest.
1238 If the money deposited in the fund and allotted for satisfying judgments against
1239 licensees is insufficient to satisfy an authorized claim for payment, the division shall, when
1240 sufficient money has been deposited in the fund, satisfy the unpaid claims in the order they
1241 originally were filed, together with accumulated interest at the rate allowable on judgments
1242 under Section 15-1-4 .
1243 Section 26. Section 61-2c-507 is enacted to read:
1244 61-2c-507. Division subrogated to judgment creditor -- Authority to revoke
1245 license.
1246 (1) If the division pays a judgment creditor from the fund:
1247 (a) the division is subrogated to the rights of the judgment creditor for the amounts
1248 paid out of the fund; and
1249 (b) any amount and interest recovered by the division shall be deposited in the fund.
1250 (2) The license of a licensee for whom payment from the fund is made under this part
1251 is automatically revoked.
1252 (3) A licensee whose license is revoked pursuant to Subsection (2) may not apply for a
1253 new license until the licensee has paid into the fund:
1254 (a) the amount paid out of the fund on behalf of the licensee; and
1255 (b) interest at a rate determined by the division with the concurrence of the
1256 commission.
1257 Section 27. Section 61-2c-508 is enacted to read:
1258 61-2c-508. Failure to comply.
1259 The failure of a person to comply with this part is a waiver of any right provided under
1260 this part.
1261 Section 28. Section 61-2c-509 is enacted to read:
1262 61-2c-509. Disciplinary actions.
1263 (1) This part does not limit the authority of the director to take disciplinary action
1264 against a licensee for a violation of:
1265 (a) this chapter; or

Text Box
- 42 - 1266 (b) rules made by the division under this chapter.
1267 (2) The repayment in full of all obligations to the fund by a licensee does not nullify or
1268 modify the effect of a disciplinary proceeding brought under:
1269 (a) this chapter; or
1270 (b) rules made by the division under this chapter.
1271 Section 29. Section 61-2c-510 is enacted to read:
1272 61-2c-510. Moneys accumulated -- Purpose.
1273 The division may use monies accumulated in the fund in excess of the amount
1274 necessary to satisfy claims to advance education and research in the field of residential
1275 mortgage loans, including:
1276 (1) courses sponsored by the division;
1277 (2) courses offered by the division in conjunction with a university or college in Utah;
1278 (3) contracting for a research project for the state in the field of residential mortgage
1279 loans;
1280 (4) funding the salaries and training expenses of division staff members who are
1281 employed in positions related to the education of mortgage licensees;
1282 (5) funding the training expenses of division staff members who are employed in
1283 positions conducting investigations of complaints under this chapter; and
1284 (6) publishing and distributing educational materials to:
1285 (a) licensees; and
1286 (b) applicants for licensure.
1287 Section 30. Section 70D-1-10 is amended to read:
1288 70D-1-10. Notification of department -- Exemptions.
1289 (1) Except as provided in Subsection (2), no person may engage in the business of
1290 making mortgage loans nor may any person engage in the business of being a mortgage loan
1291 broker or servicer, without first filing written notification with the department and paying the
1292 fees required by this chapter.
1293 (2) The following persons are exempt from the notification requirements contained in
1294 this chapter and from the annual fee imposed in Subsection 70D-1-12 (1):
1295 (a) all persons authorized under Utah law or under federal law to do business as a
1296 depository institution in this state;

Text Box
- 43 -

Senate Committee Amendments 2-20-2004 rd/tcl 1297

(b) all wholly-owned subsidiaries of depository institutions described in Subsection
1298 (2)(a); and
1299 (c) all persons that:
1300 (i) are required to [register] license with the Utah Division of Real Estate pursuant to
1301 Title 61, Chapter 2c, Utah Residential Mortgage Practices Act; and
1302 (ii) are not engaged in the business of being a mortgage loan servicer.
1303 Section 31. Repealer.
1304 This bill repeals:
1305 Section 61-2c-204, Requirements for bonding, letter of credit, or deposit of assets.
1306 Section 32. Effective date.
1307 This bill takes effect on May 3, 2004, except that:
1308 (1) the amendments to Section 61-2c-106 take effect on January 1, S [ 2005 ] 2006 s ; and
1309 (2) the amendments to Section 62-2c-104 (Effective 07/01/04) take effect on July 1,
1310 2004.

Legislative Review Note
as of 2-16-04 7:44 AM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel