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8 LONG TITLE
9 General Description:
10 This bill modifies provisions related to licensing under the Utah Residential Mortgage
11 Practices Act Amendments.
12 Highlighted Provisions:
13 This bill:
14 . modifies definitions;
15 . provides that a principal lending manager may act as a mortgage officer;
16 . requires the Division of Real Estate to make rules providing a combined licensing
17 process related to a principal lending manager maintaining a license as an entity if
18 certain conditions are met; and
19 . makes technical and conforming amendments.
20 Monies Appropriated in this Bill:
22 Other Special Clauses:
24 Utah Code Sections Affected:
26 61-2c-102, as last amended by Laws of Utah 2007, Chapter 325
27 61-2c-103, as last amended by Laws of Utah 2005, Chapter 199
29 Be it enacted by the Legislature of the state of Utah:
30 Section 1. Section 61-2c-102 is amended to read:
31 61-2c-102. Definitions.
32 (1) As used in this chapter:
33 (a) "Affiliate" means an individual or an entity that directly, or indirectly through one
34 or more intermediaries, controls or is controlled by, or is under common control with, a
35 specified individual or entity.
36 (b) "Applicant" means an individual or entity applying for a license under this chapter.
37 (c) "Associate lending manager" means a person who:
38 (i) [
39 (ii) works by or on behalf of another principal lending manager in transacting the
40 business of residential mortgage loans.
41 (d) "Branch office" means a licensed entity's office:
42 (i) for the transaction of the business of residential mortgage loans regulated under this
43 chapter; and
44 (ii) other than the main office of the licensed entity.
45 (e) (i) "Business of residential mortgage loans" means for compensation to:
46 (A) make or originate a residential mortgage loan;
47 (B) directly or indirectly solicit, place, or negotiate a residential mortgage loan for
48 another; or
49 (C) render services related to the origination of a residential mortgage loan including:
50 (I) taking [
51 (II) communicating with the borrower and lender.
52 (ii) "Business of residential mortgage loans" does not include:
53 (A) the performance of a clerical [
54 (I) gathering information related to a residential mortgage loan on behalf of the
55 prospective borrower or a person licensed under this chapter; or
56 (II) [
58 this chapter[
59 (Aa) requesting or gathering information;
60 (Bb) word processing;
61 (Cc) sending correspondence; or
62 (Dd) assembling files;
63 (B) ownership of an entity that engages in the business of residential mortgage loans if
64 the owner does not personally perform the acts listed in Subsection (1)(e)(i);
65 (C) acting as a loan wholesaler;
66 (D) acting as an account executive for a loan wholesaler;
67 (E) acting as a loan underwriter;
68 (F) acting as a loan closer; or
69 (G) funding a loan.
70 (f) "Closed-end" means a loan:
71 (i) with a fixed amount borrowed; and [
72 (ii) that does not permit additional borrowing secured by the same collateral.
73 (g) "Commission" means the Residential Mortgage Regulatory Commission created in
74 Section 61-2c-104 .
75 (h) "Compensation" means anything of economic value that is paid, loaned, granted,
76 given, donated, or transferred to an individual or entity for or in consideration of:
77 (i) services;
78 (ii) personal or real property; or
79 (iii) [
80 (i) "Control," as used in Subsection (1)(a), means the power to directly or indirectly:
81 (i) direct or exercise a controlling interest over:
82 (A) the management or policies of an entity; or
83 (B) the election of a majority of the directors, officers, managers, or managing partners
84 of an entity;
85 (ii) vote 20% or more of [
87 (iii) vote more than 5% of [
88 another entity.
89 (j) "Depository institution" is as defined in Section 7-1-103 .
90 (k) "Director" means the director of the division.
91 (l) "Division" means the Division of Real Estate.
92 (m) "Dwelling" means a residential structure attached to real property that contains one
93 to four units including any of the following if used as a residence:
94 (i) a condominium unit;
95 (ii) a cooperative unit;
96 (iii) a manufactured home; or
97 (iv) a house.
98 (n) "Entity" means [
99 (i) a corporation[
100 (ii) a limited liability company[
101 (iii) a partnership[
102 (iv) a company[
103 (v) an association[
104 (vi) a joint venture[
105 (vii) a business trust[
106 (viii) a trust[
107 (ix) another organization.
108 (o) "Executive director" means the executive director of the Department of Commerce.
109 (p) "Inactive status" means a dormant status into which an unexpired license is placed
110 when the holder of the license is not currently engaging in the business of residential mortgage
115 means an individual who is licensed with the division to transact the business of residential
116 mortgage loans through a principal lending manager.
119 person licensed as a principal lending manager under Section 61-2c-206 [
120 business of residential mortgage loans.
121 (ii) A person licensed as a principal lending manager may transact the business of
122 residential mortgage loans as a mortgage officer.
123 (t) "Record" means information that is:
124 (i) prepared, owned, received, or retained by an individual or entity; and
125 (ii) (A) inscribed on a tangible medium; or
126 (B) (I) stored in an electronic or other medium; and
127 (II) retrievable in perceivable form.
128 (u) "Residential mortgage loan" means a closed-end, first mortgage loan or extension
129 of credit, if:
130 (i) the loan or extension of credit is secured by a:
131 (A) mortgage;
132 (B) deed of trust; or
133 (C) lien interest; and
134 (ii) the mortgage, deed of trust, or lien interest described in Subsection (1)(u)(i):
135 (A) is on a dwelling located in the state; and
136 (B) created with the consent of the owner of the residential real property.
137 (v) "State" means:
138 (i) a state, territory, or possession of the United States;
139 (ii) the District of Columbia; or
140 (iii) the Commonwealth of Puerto Rico.
141 (2) (a) If a term not defined in this section is defined by rule, the term shall have the
142 meaning established by the division by rule made in accordance with Title 63, Chapter 46a,
143 Utah Administrative Rulemaking Act.
144 (b) If a term not defined in this section is not defined by rule, the term shall have the
145 meaning commonly accepted in the business community.
146 Section 2. Section 61-2c-103 is amended to read:
147 61-2c-103. Powers and duties of the division.
148 (1) The division shall administer this chapter.
149 (2) In addition to any power or duty expressly provided in this chapter, the division
151 (a) receive and act on [
152 (i) taking action designed to obtain voluntary compliance with this chapter; or
153 (ii) commencing an administrative or judicial [
154 division's own initiative;
155 (b) establish one or more programs for the education of consumers with respect to
156 residential mortgage loans;
157 (c) (i) make one or more studies appropriate to effectuate the purposes and policies of
158 this chapter; and
159 (ii) make the results of the studies described in Subsection (2)(c)(i) available to the
161 (d) visit and investigate an entity licensed under this chapter, regardless of whether the
162 entity is located in Utah; and
163 (e) employ [
164 other employees and agents.
165 (3) The division shall make rules for the administration of this chapter in accordance
166 with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, including:
167 (a) licensure procedures for:
168 (i) [
169 license with the division; and
170 (ii) the establishment of a branch office by an entity;
171 (b) proper handling of funds received by [
172 (c) record-keeping requirements by [
173 (d) standards of conduct for [
174 (4) The division may make available to the public a list of the names and mailing
175 addresses of all licensees:
176 (a) either directly or through a third party; and
177 (b) at a reasonable cost.
178 (5) The division shall:
179 (a) certify an education [
180 (i) prelicensing education to candidates for licensure under this chapter; or
181 (ii) continuing education to individuals licensed under this chapter; and
182 (b) make available to the public, licensees, and candidates for licensure a list of the
183 names and addresses of all education providers certified under this Subsection (5).
184 (6) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
185 division shall make rules establishing:
186 (a) certification criteria and procedures for [
187 education and continuing education; and
188 (b) standards of conduct for a certified education [
189 (7) The division may charge a fee established in accordance with Section 63-38-3.2 for
190 processing [
191 report to the division.
192 (8) (a) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act,
193 and this Subsection (8), the division shall make rules establishing a licensure procedure for
194 obtaining both a principal lending manager license and an entity license at the same time that
195 applies if the principal lending manager is the only individual that transacts the business of
196 residential mortgage loans on behalf of the entity, including as an employee or agent of the
198 (b) A rule made under this Subsection (8) shall require that to obtain or renew both a
199 principal lending manager license and an entity license, an individual described in Subsection
200 (8)(a) is required to only:
201 (i) complete one licensing process for the term of a license; and
202 (ii) pay one licensing fee for the term of a license.
Legislative Review Note
as of 12-11-07 10:06 AM