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H.B. 286

             1     

REGULATION OF LENDING BY THE

             2     
DEPARTMENT OF FINANCIAL

             3     
INSTITUTIONS

             4     
2009 GENERAL SESSION

             5     
STATE OF UTAH

             6     
Chief Sponsor: Kevin S. Garn

             7     
Senate Sponsor: Lyle W. Hillyard

             8     
             9      LONG TITLE
             10      General Description:
             11          This bill modifies the Utah Consumer Credit Code, and mortgage lending and servicing
             12      provisions to address the regulation of consumer and residential mortgage loans by the
             13      Department of Financial Institutions.
             14      Highlighted Provisions:
             15          This bill:
             16          .    clarifies the requirements to file notification with the department under the Utah
             17      Consumer Credit Code;
             18          .    clarifies provisions administered by the department related to a lender, broker, or
             19      servicer of a mortgage loan;
             20          .    enacts the Financial Institution Loan Originator Licensing Act including:
             21              .    providing definitions;
             22              .    establishing the general powers and duties of the commissioner, including
             23      rulemaking authority;
             24              .    establishing when licensure is required;
             25              .    creating qualifications for licensure, including bonding requirements;
             26              .    creating a licensing process;
             27              .    requiring the commissioner to create a process for challenging information in


             28      the nationwide database;
             29              .    addressing education requirements;
             30              .    imposing operational requirements and prohibitions; and
             31              .    providing for enforcement;
             32          .    repeals intent language; and
             33          .    makes technical and conforming amendments.
             34      Monies Appropriated in this Bill:
             35          None
             36      Other Special Clauses:
             37          None
             38      Utah Code Sections Affected:
             39      AMENDS:
             40          9-4-1202, as last amended by Laws of Utah 2003, Chapter 229
             41          41-1a-506, as last amended by Laws of Utah 2006, Chapter 232
             42          58-56-17, as last amended by Laws of Utah 2003, Chapter 229
             43          59-2-1109, as last amended by Laws of Utah 2003, Chapter 229
             44          59-2-1503, as enacted by Laws of Utah 2004, Chapter 243
             45          61-2c-301, as last amended by Laws of Utah 2007, Chapter 325
             46          70C-1-302, as enacted by Laws of Utah 1985, Chapter 159
             47          70C-8-201, as enacted by Laws of Utah 1985, Chapter 159
             48          70C-8-202, as last amended by Laws of Utah 1991, Chapter 241
             49          70C-8-203, as enacted by Laws of Utah 1985, Chapter 159
             50      ENACTS:
             51          70D-1-101, Utah Code Annotated 1953
             52          70D-3-101, Utah Code Annotated 1953
             53          70D-3-102, Utah Code Annotated 1953
             54          70D-3-103, Utah Code Annotated 1953
             55          70D-3-201, Utah Code Annotated 1953
             56          70D-3-202, Utah Code Annotated 1953
             57          70D-3-203, Utah Code Annotated 1953
             58          70D-3-204, Utah Code Annotated 1953


             59          70D-3-205, Utah Code Annotated 1953
             60          70D-3-206, Utah Code Annotated 1953
             61          70D-3-301, Utah Code Annotated 1953
             62          70D-3-302, Utah Code Annotated 1953
             63          70D-3-303, Utah Code Annotated 1953
             64          70D-3-401, Utah Code Annotated 1953
             65          70D-3-402, Utah Code Annotated 1953
             66          70D-3-501, Utah Code Annotated 1953
             67          70D-3-502, Utah Code Annotated 1953
             68      RENUMBERS AND AMENDS:
             69          70D-1-102, (Renumbered from 70D-1-3, as enacted by Laws of Utah 1990, Chapter
             70      172)
             71          70D-2-101, (Renumbered from 70D-1-2, as enacted by Laws of Utah 1990, Chapter
             72      172)
             73          70D-2-102, (Renumbered from 70D-1-19, as last amended by Laws of Utah 2004,
             74      Chapter 75)
             75          70D-2-103, (Renumbered from 70D-1-4, as enacted by Laws of Utah 1990, Chapter
             76      172)
             77          70D-2-104, (Renumbered from 70D-1-21, as enacted by Laws of Utah 2004, Chapter
             78      252)
             79          70D-2-201, (Renumbered from 70D-1-10, as last amended by Laws of Utah 2004,
             80      Chapter 297)
             81          70D-2-202, (Renumbered from 70D-1-11, as enacted by Laws of Utah 1990, Chapter
             82      172)
             83          70D-2-203, (Renumbered from 70D-1-12, as enacted by Laws of Utah 1990, Chapter
             84      172)
             85          70D-2-301, (Renumbered from 70D-1-9, as enacted by Laws of Utah 1990, Chapter
             86      172)
             87          70D-2-302, (Renumbered from 70D-1-5, as enacted by Laws of Utah 1990, Chapter
             88      172)
             89          70D-2-303, (Renumbered from 70D-1-7, as enacted by Laws of Utah 1990, Chapter


             90      172)
             91          70D-2-304, (Renumbered from 70D-1-8, as enacted by Laws of Utah 1990, Chapter
             92      172)
             93          70D-2-305, (Renumbered from 70D-1-6, as enacted by Laws of Utah 1990, Chapter
             94      172)
             95          70D-2-401, (Renumbered from 70D-1-20, as last amended by Laws of Utah 2004,
             96      Chapter 243)
             97          70D-2-501, (Renumbered from 70D-1-13, as enacted by Laws of Utah 1990, Chapter
             98      172)
             99          70D-2-502, (Renumbered from 70D-1-14, as last amended by Laws of Utah 2008,
             100      Chapter 382)
             101          70D-2-503, (Renumbered from 70D-1-15, as enacted by Laws of Utah 1990, Chapter
             102      172)
             103          70D-2-504, (Renumbered from 70D-1-16, as last amended by Laws of Utah 2008,
             104      Chapter 382)
             105          70D-2-505, (Renumbered from 70D-1-17, as last amended by Laws of Utah 2008,
             106      Chapter 382)
             107          70D-2-506, (Renumbered from 70D-1-18, as enacted by Laws of Utah 1990, Chapter
             108      172)
             109      REPEALS:
             110          70D-1-1, as enacted by Laws of Utah 1990, Chapter 172
             111     
             112      Be it enacted by the Legislature of the state of Utah:
             113          Section 1. Section 9-4-1202 is amended to read:
             114           9-4-1202. Legislative policy and purpose.
             115          (1) It is the policy of the state that to promote the general welfare of its citizens it is
             116      necessary to remedy the unsafe and unsanitary housing conditions and the acute shortage of
             117      decent, safe, and sanitary dwellings for families of medium and low income, in urban and rural
             118      areas. These conditions cause an increase and spread of disease and crime, and constitute a
             119      menace to the health, safety, morals, and welfare of the state.
             120          (2) It is the policy of the state:


             121          (a) to make adequate provision of affordable housing for:
             122          (i) persons of medium or low income who are unable to provide themselves with
             123      decent housing including:
             124          (A) elderly persons;
             125          (B) persons with disabilities;
             126          (C) veterans;
             127          (D) special needs populations;
             128          (E) low income persons living on tribal trust lands;
             129          (F) persons receiving public assistance under self-sufficiency programs; or
             130          (G) low income persons living in mobile homes, as defined in Section [ 70D-1-19 ]
             131      70D-2-102 ; and
             132          (ii) during limited periods, for disaster victims; and
             133          (b) that the provision of safe and sanitary dwelling accommodations at rents or prices
             134      that persons of medium and low income can afford will materially assist in developing more
             135      desirable neighborhoods and alleviating the effects of poverty in this state.
             136          (3) The purposes of this part and Part 6, Housing Authorities, are to meet these
             137      problems by:
             138          (a) providing low-cost housing for medium and low income persons; and
             139          (b) encouraging cooperation between political subdivisions and the nonprofit sector to
             140      make available low-cost housing in all areas of the state.
             141          (4) It is in the public interest to use the broad financial resources and technical services
             142      available to government in cooperation with the ingenuity and expertise of private enterprise to
             143      alleviate this lack of safe and sanitary dwellings while stimulating local industry, according to
             144      the following principles:
             145          (a) The private sector, including nonprofit entities, shall be the primary source of
             146      developing and providing affordable housing with state and local incentives to encourage
             147      housing development.
             148          (b) State money used in the development of housing shall:
             149          (i) be heavily leveraged when possible;
             150          (ii) be primarily invested as loans;
             151          (iii) be primarily spent on housing production; and


             152          (iv) give priority to needs of persons of medium or low income who are unable to
             153      provide themselves with decent housing including:
             154          (A) elderly persons;
             155          (B) persons with disabilities;
             156          (C) veterans;
             157          (D) special needs populations;
             158          (E) low income persons living on tribal trust lands;
             159          (F) persons receiving public assistance under self-sufficiency programs; and
             160          (G) low income persons living in mobile homes, as defined in Section [ 70D-1-19 ]
             161      70D-2-102 .
             162          (c) When possible based on economic feasibility and effectiveness, state housing
             163      programs shall encourage:
             164          (i) mixed income developments;
             165          (ii) socio-economic diversity in neighborhoods; and
             166          (iii) new, multifamily construction.
             167          (d) State resources may be used in partnership with political subdivisions or the private
             168      sector to promote affordable housing.
             169          (e) Within appropriations from the Legislature, the state may provide training and
             170      technical assistance to Utah's political subdivision, quasi-governmental, and nonprofit housing
             171      providers.
             172          Section 2. Section 41-1a-506 is amended to read:
             173           41-1a-506. Exceptions to title requirements for manufactured homes or mobile
             174      homes.
             175          (1) [Each] A manufactured home or mobile home in this state is subject to the titling
             176      provisions of this part except:
             177          (a) a manufactured [homes and] home or mobile [homes] home owned and operated by
             178      the federal government; and
             179          (b) a manufactured [homes and] home or mobile [homes] home that [have] has been
             180      converted to real property under Section [ 70D-1-20 ] 70D-2-401 if:
             181          (i) (A) an Affidavit of Mobile Home Affixture [has been] is issued by the division for
             182      that home; and


             183          (B) the home is permanently affixed to real property; or
             184          (ii) (A) the home is permanently affixed to real property;
             185          (B) the home is not registered with the division;
             186          (C) the home is taxed as an improvement to real estate by the county assessor as
             187      permitted under Section 59-2-1503 ; and
             188          (D) the manufacturer's identification number or numbers are included in the deed or
             189      loan document recorded with the county recorder.
             190          (2) A manufactured home or mobile home previously converted to real property but
             191      that has been separated from the real property is subject to the titling provisions of this part
             192      upon separation.
             193          Section 3. Section 58-56-17 is amended to read:
             194           58-56-17. Fees on sale -- Escrow agents -- Sales tax.
             195          (1) [Each] A dealer shall collect and remit a fee of $75 to the division for each factory
             196      built home the dealer sells that [has not], as of the date of the sale, has not been permanently
             197      affixed to real property and converted to real property as provided in Section [ 70D-1-20 ]
             198      70D-2-401 . The fee shall be payable within 30 days following the close of each calendar
             199      quarter for all units sold during that calendar quarter. The fee shall be deposited in a restricted
             200      account as provided in Section 58-56-17.5 .
             201          (2) [Any] A principal real estate broker, associate broker, or sales agent exempt from
             202      registration as a dealer under Section 58-56-16 who sells a factory built home that has not been
             203      permanently affixed to real property shall close the sale only through a qualified escrow agent
             204      in this state registered with the Insurance Department or the Department of Financial
             205      Institutions.
             206          (3) [Each] An escrow agent through which a sale is closed under Subsection (2) shall
             207      remit all required sales tax to the state.
             208          Section 4. Section 59-2-1109 is amended to read:
             209           59-2-1109. Indigent persons -- Deferral or abatement -- Application -- County
             210      authority to make refunds.
             211          (1) A person under the age of 65 years is not eligible for a deferral or abatement
             212      provided for poor people under Sections 59-2-1107 and 59-2-1108 unless:
             213          (a) the county finds that extreme hardship would prevail if the grants were not made; or


             214          (b) the person is disabled.
             215          (2) (a) An application for the deferral or abatement shall be filed on or before
             216      September 1 with the county in which the property is located.
             217          (b) The application shall include a signed statement setting forth the eligibility of the
             218      applicant for the deferral or abatement.
             219          (c) Both husband and wife shall sign the application if the husband and wife seek a
             220      deferral or abatement on a residence:
             221          (i) in which they both reside; and
             222          (ii) which they own as joint tenants.
             223          (d) A county may extend the deadline for filing under Subsection (2)(a) until December
             224      31 if the county finds that good cause exists to extend the deadline.
             225          (3) (a) For purposes of this Subsection (3):
             226          (i) "Property taxes due" means the taxes due on a person's property:
             227          (A) for which an abatement is granted by a county under Section 59-2-1107 ; and
             228          (B) for the calendar year for which the abatement is granted.
             229          (ii) "Property taxes paid" is an amount equal to the sum of:
             230          (A) the amount of the property taxes the person paid for the taxable year for which the
             231      person is applying for the abatement; and
             232          (B) the amount of the abatement the county grants under Section 59-2-1107 .
             233          (b) A county granting an abatement to a person under Section 59-2-1107 shall refund
             234      to that person an amount equal to the amount by which the person's property taxes paid exceed
             235      the person's property taxes due, if that amount is $1 or more.
             236          (4) For purposes of this section:
             237          (a) a poor person is any person:
             238          (i) whose total household income as defined in Section 59-2-1202 is less than the
             239      maximum household income certified to a homeowner's credit under Subsection 59-2-1208 (1);
             240          (ii) who resides for not less than ten months of each year in the residence for which the
             241      tax relief, deferral, or abatement is requested; and
             242          (iii) who is unable to meet the tax assessed on the person's residential property as the
             243      tax becomes due; and
             244          (b) "residence" includes a mobile home as defined under Section [ 70D-1-19 ]


             245      70D-2-401 .
             246          (5) If the claimant is the grantor of a trust holding title to real or tangible personal
             247      property on which an abatement or deferral is claimed, the claimant may claim the portion of
             248      the abatement or deferral under Section 59-2-1107 or 59-2-1108 and be treated as the owner of
             249      that portion of the property held in trust for which the claimant proves to the satisfaction of the
             250      county that:
             251          (a) title to the portion of the trust will revest in the claimant upon the exercise of a
             252      power:
             253          (i) by:
             254          (A) the claimant as grantor of the trust;
             255          (B) a nonadverse party; or
             256          (C) both the claimant and a nonadverse party; and
             257          (ii) regardless of whether the power is a power:
             258          (A) to revoke;
             259          (B) to terminate;
             260          (C) to alter;
             261          (D) to amend; or
             262          (E) to appoint;
             263          (b) the claimant is obligated to pay the taxes on that portion of the trust property
             264      beginning January 1 of the year the claimant claims the abatement or deferral; and
             265          (c) the claimant meets the requirements under this part for the abatement or deferral.
             266          (6) The commission shall adopt rules to implement this section.
             267          (7) Any poor person may qualify for:
             268          (a) the deferral of taxes under Section 59-2-1108 ;
             269          (b) if the person meets the requisites of this section, for the abatement of taxes under
             270      Section 59-2-1107 ; or
             271          (c) both:
             272          (i) the deferral described in Subsection (7)(a); and
             273          (ii) the abatement described in Subsection (7)(b).
             274          Section 5. Section 59-2-1503 is amended to read:
             275           59-2-1503. Property tax treatment of transportable factory-built housing units.


             276          Regardless of whether a transportable factory-built housing unit is considered to be real
             277      property or personal property under Section [ 70D-1-20 ] 70D-2-401 , for purposes of this
             278      chapter:
             279          (1) a transportable factory-built housing unit that is located in a transportable
             280      factory-built housing unit park:
             281          (a) except as provided in Subsection (1)(b), is considered to be personal property; and
             282          (b) notwithstanding Subsection (1)(a), is considered to be real property if the owner of
             283      the transportable factory-built housing unit owns the real property upon which the transportable
             284      factory-built housing unit is located; and
             285          (2) a transportable factory-built housing unit that is not located in a transportable
             286      factory-built housing unit park:
             287          (a) except as provided in Subsection (2)(b), is considered to be personal property; and
             288          (b) notwithstanding Subsection (2)(a), is considered to be real property if the
             289      transportable factory-built housing unit is an improvement.
             290          Section 6. Section 61-2c-301 is amended to read:
             291           61-2c-301. Prohibited conduct -- Violations of the chapter.
             292          (1) An individual or entity transacting the business of residential mortgage loans in this
             293      state may not:
             294          (a) give or receive compensation or anything of value in exchange for a referral of
             295      residential mortgage loan business;
             296          (b) charge a fee in connection with a residential mortgage loan transaction:
             297          (i) that is excessive; or
             298          (ii) if the individual or entity does not comply with Section [ 70D-1-6 ] 70D-2-305 ;
             299          (c) give or receive compensation or anything of value in exchange for a referral of
             300      settlement or loan closing services related to a residential mortgage loan transaction;
             301          (d) do any of the following to induce a lender to extend credit as part of a residential
             302      mortgage loan transaction:
             303          (i) make a false statement or representation;
             304          (ii) cause false documents to be generated; or
             305          (iii) knowingly permit false information to be submitted by any party;
             306          (e) give or receive compensation or anything of value, or withhold or threaten to


             307      withhold payment of an appraiser fee, to influence the independent judgment of an appraiser in
             308      reaching a value conclusion in a residential mortgage loan transaction, except that it is not a
             309      violation of this section for a licensee to withhold payment because of a bona fide dispute
             310      regarding a failure of the appraiser to comply with the licensing law or the Uniform Standards
             311      of Professional Appraisal Practice;
             312          (f) violate or not comply with:
             313          (i) this chapter;
             314          (ii) an order of the commission or division; or
             315          (iii) a rule made by the division;
             316          (g) fail to respond within the required time period to:
             317          (i) a notice or complaint of the division; or
             318          (ii) a request for information from the division;
             319          (h) make false representations to the division, including in a licensure statement;
             320          (i) for any residential mortgage loan transaction beginning on or after January 1, 2004,
             321      engage in the business of residential mortgage loans with respect to the transaction if the
             322      individual or entity also acts in any of the following capacities with respect to the same
             323      residential mortgage loan transaction:
             324          (i) appraiser;
             325          (ii) escrow agent;
             326          (iii) real estate agent;
             327          (iv) general contractor; or
             328          (v) title insurance agent;
             329          (j) order a title insurance report or hold a title insurance policy unless the individual or
             330      entity provides to the title insurer a copy of a valid, current license under this chapter;
             331          (k) engage in unprofessional conduct as defined by rule;
             332          (l) engage in an act or omission in transacting the business of residential mortgage
             333      loans that constitutes dishonesty, fraud, or misrepresentation;
             334          (m) engage in false or misleading advertising;
             335          (n) (i) fail to account for [all funds] monies received in connection with a residential
             336      mortgage loan;
             337          (ii) use [funds] monies for a different purpose from the purpose for which the [funds


             338      were] monies are received; or
             339          (iii) except as provided in Subsection (4), retain [funds] monies paid for services if the
             340      services [were] are not [actually] performed;
             341          (o) fail, within 90 calendar days of a request from a borrower who has paid for an
             342      appraisal, to give a copy of an appraisal ordered and used for a transaction to the borrower;
             343          (p) engage in an act that is performed to:
             344          (i) evade this chapter; or
             345          (ii) assist another person to evade this chapter;
             346          (q) recommend or encourage default [or], delinquency, or continuation of an existing
             347      default or delinquency, by a mortgage applicant on an existing indebtedness prior to the closing
             348      of a residential mortgage loan that will refinance all or part of the indebtedness;
             349          (r) in the case of the principal lending manager of an entity or a branch office of an
             350      entity, fail to exercise reasonable supervision over the activities of:
             351          (i) [any] unlicensed staff; and
             352          (ii) [any mortgage officers who are] a mortgage officer who is licensed with the
             353      principal lending manager;
             354          (s) pay or offer to pay an individual who does not hold a license under this chapter for
             355      work that requires the individual to hold a license under this chapter; or
             356          (t) in the case of a dual licensed title licensee as defined in Section 31A-2-402 :
             357          (i) provide a title insurance product or service without the approval required by Section
             358      31A-2-405 ; or
             359          (ii) knowingly provide false or misleading information in the statement required by
             360      Subsection 31A-2-405 (2).
             361          (2) Whether or not the crime is related to the business of residential mortgage loans, it
             362      is a violation of this chapter for a licensee or a person who is a certified education provider to
             363      do any of the following with respect to a criminal offense which involves moral turpitude:
             364          (a) be convicted;
             365          (b) plead guilty or nolo contendere;
             366          (c) enter a plea in abeyance; or
             367          (d) be subjected to a criminal disposition similar to the ones described in Subsections
             368      (2)(a) through (c).


             369          (3) A principal lending manager does not violate Subsection (1)(r) if:
             370          (a) in contravention of the principal lending manager's written policies and
             371      instructions, an affiliated licensee of the principal lending manager violates:
             372          (i) this chapter; or
             373          (ii) rules made by the division under this chapter;
             374          (b) the principal lending manager established and followed reasonable procedures to
             375      ensure that affiliated licensees receive adequate supervision;
             376          (c) upon learning of a violation by an affiliated licensee, the principal lending manager
             377      attempted to prevent or mitigate the damage;
             378          (d) the principal lending manager did not participate in or ratify the violation by an
             379      affiliated licensee; and
             380          (e) the principal lending manager did not attempt to avoid learning of the violation.
             381          (4) Notwithstanding Subsection (1)(n)(iii), a licensee may, upon compliance with
             382      Section [ 70D-1-6 ] 70D-2-305 , charge a reasonable cancellation fee for work done originating a
             383      mortgage if the mortgage is not closed.
             384          Section 7. Section 70C-1-302 is amended to read:
             385           70C-1-302. Definitions.
             386          As used in this title:
             387          (1) "Agreement" means the bargain of the parties in fact as stated in a written contract
             388      or otherwise as found in the parties' language or by implication from other circumstances,
             389      including[, but not limited to,]:
             390          (a) course of dealing[,];
             391          (b) usage of trade[,]; or
             392          (c) course of performance.
             393          (2) "Contract" means a document containing written terms and conditions of a credit
             394      agreement.
             395          (3) (a) "Creditor" means:
             396          [(a)] (i) a party [(i)]:
             397          (A) who regularly extends consumer credit that is subject to a finance charge or is
             398      payable by written agreement in more than four installments, not including a down payment[,
             399      and (ii)]; and


             400          (B) to whom the obligation is initially payable, either on the face of the note or
             401      contract, or by agreement when there is no note or contract[. For purposes of this definition, a
             402      party is deemed to extend consumer credit regularly only if it extended credit more than 25
             403      times, or more than five times for transactions secured by a dwelling, in the preceding calendar
             404      year. If a person did not meet these numerical standards in the preceding calendar year, the
             405      numerical standards shall be applied to the current calendar year];
             406          [(b) any] (ii) an issuer of a credit [cards] card that extends either open-end credit or
             407      credit that:
             408          (A) is not subject to a finance charge; and
             409          (B) is not payable by written agreement in more than four installments; and
             410          [(c) any credit card issuer]
             411          (iii) an issuer of a credit card that extends closed-end credit that:
             412          (A) is subject to a finance charge; or
             413          (B) is payable by written agreement in more than four installments.
             414          (b) (i) For purposes of this Subsection (3), a party is considered to extend consumer
             415      credit regularly only if the party extends credit in the preceding calendar year:
             416          (A) more than 25 times; or
             417          (B) more than five times for a transaction secured by a dwelling.
             418          (ii) If a person does not meet the numerical standards described in Subsection (3)(b)(i)
             419      in the preceding calendar year, the numerical standards shall be applied to the current calendar
             420      year.
             421          (4) "Dwelling" means a residential structure attached to real property that contains one
             422      to four units including any of the following if used as a residence:
             423          (a) a condominium unit;
             424          (b) a cooperative unit;
             425          (c) a manufactured home; or
             426          (d) a house.
             427          [(4)] (5) "Earnings" means compensation paid or payable to an individual or for [his]
             428      the individual's account for personal services rendered or to be rendered by [him] the individual
             429      whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic
             430      payments pursuant to a pension, retirement, or disability program.


             431          [(5)] (6) "Installment" means a payment upon a debt that is part of a series of
             432      payments, each of which is less than the original amount of the debt and scheduled as to a
             433      specific amount and due date by agreement of the parties for the purpose of repaying the debt.
             434          [(6)] (7) "Party" means [any] an individual [person] and any other entity legally
             435      capable of entering into a binding contract.
             436          Section 8. Section 70C-8-201 is amended to read:
             437           70C-8-201. Applicability.
             438          [This] (1) Except as provided in Subsection (2), this part applies to [all creditors]:
             439          (a) a creditor that is subject to this title; and [to all parties having]
             440          (b) a party who:
             441          (i) has an office or place of business in this state [which take assignments of and
             442      undertake]; and
             443          (ii) takes an assignment of or undertakes direct collection of [payments] a payment
             444      from or enforcement of [rights against debtors] a right against a debtor arising from a consumer
             445      credit [transactions] transaction.
             446          (2) Except where otherwise indicated, the following are exempt from this part:
             447          (a) a depository [institutions] institution as defined in Section 7-1-103 [which are
             448      regulated as such by the state of Utah or the United States are exempt from this part.] that is
             449      federally insured; and
             450          (b) a wholly owned subsidiary of a depository institution described in Subsection
             451      (2)(a).
             452          Section 9. Section 70C-8-202 is amended to read:
             453           70C-8-202. Notification.
             454          (1) [Parties] (a) A party who is subject to this part shall file notification with the
             455      department at least 30 days before commencing business in this state[, and, thereafter,].
             456          (b) After filing the notification required by Subsection (1)(a), a party shall file a
             457      notification on or before January 31 of each year. [All parties subject to this title which are
             458      extending credit to consumers on July 1, 1985, need not file an initial notification but shall file
             459      notification on or before the next January 31. The notification shall state:]
             460          (c) A notification required by this Subsection (1) shall state:
             461          [(a)] (i) the name of the party;


             462          [(b)] (ii) the name in which the business is transacted if different from that required in
             463      Subsection [(a)](1)(c)(i);
             464          [(c)] (iii) the address of the party's principal office, which may be outside this state;
             465          [(d)] (iv) the address of [all offices or retail stores]:
             466          (A) each office or retail store, if any, in this state at which credit is offered or extended
             467      to [consumers,] a consumer; or
             468          (B) in the case of a party taking [assignments of obligations, the offices or places] an
             469      assignment of an obligation, each office or place of business within this state at which business
             470      is transacted;
             471          [(e)] (v) if credit is extended to [consumers] a consumer other than at an office or retail
             472      store in this state, a brief description of the manner in which the credit [transactions occur]
             473      transaction occurs;
             474          [(f)] (vi) the name and address in this state of a designated agent upon whom service of
             475      process may be made; and
             476          [(g)] (vii) any other information [deemed] considered pertinent by the department.
             477          (2) If information in a notification becomes inaccurate after filing, [no] a party is not
             478      required to file further notification [is required] until [the following January 31] required to
             479      renew the party's notification.
             480          (3) (a) A party [which has not filed the] who fails to file a notification [and paid the
             481      fees] or pay a fee required by this part may not extend [any] credit to [consumers] a consumer
             482      in this state until [it has] the party fully [complied] complies with [the requirements of] this
             483      part. [Any]
             484          (b) A party who willfully violates this Subsection (3) is guilty of a class B
             485      misdemeanor.
             486          Section 10. Section 70C-8-203 is amended to read:
             487           70C-8-203. Fees -- Examinations.
             488          (1) A party required to file notification under Section 70C-8-202 shall, on or before
             489      January 31 of each year, pay to the department an annual fee equal to the sum of:
             490          (a) $25 [plus]; and
             491          (b) $7 for each $100,000 or part thereof in excess of $100,000, of the original principal
             492      balance of all consumer credit [it] the party extended during the preceding calendar year.


             493          (2) In addition to filing notification, [any] a party subject to this part, and [any] a
             494      depository institution subject to this title[,]:
             495          (a) may be required to make [any or all of its books and records] a book or record
             496      relating to a consumer credit [transactions] transaction available to the department or its
             497      authorized representative for examination[,]; and
             498          (b) shall pay to the department a fee to be set by the department based on an hourly rate
             499      per each examiner.
             500          (3) No portion of [any fees] a fee paid or owed to the department under this part [are] is
             501      refundable because [the] a party voluntarily or involuntarily ceases to extend credit to
             502      consumers:
             503          (a) during the period covered by the fee; or [prior to]
             504          (b) before the time of an examination by the department of [records] a book or record
             505      pertaining to a preceding consumer credit [transactions] transaction.
             506          Section 11. Section 70D-1-101 is enacted to read:
             507     
TITLE 70D. FINANCIAL INSTITUTION MORTGAGE

             508     
FINANCING REGULATION ACT

             509     
CHAPTER 1. GENERAL PROVISIONS

             510          70D-1-101. Title.
             511          This title is known as the "Financial Institution Mortgage Financing Regulation Act."
             512          Section 12. Section 70D-1-102 , which is renumbered from Section 70D-1-3 is
             513      renumbered and amended to read:
             514           [70D-1-3].     70D-1-102. Definitions.
             515          As used in this [chapter] title:
             516          (1) "Commissioner" means the commissioner of the department.
             517          [(1)] (2) "Department" means the Department of Financial Institutions.
             518          (3) "Depository institution" is as defined in Section 7-1-103 .
             519          (4) "Dwelling" means a residential structure attached to real property that contains one
             520      to four units including any of the following if used as a residence:
             521          (a) a condominium unit;
             522          (b) a cooperative unit;
             523          (c) a manufactured home; or


             524          (d) a house.
             525          [(2)] (5) "Mortgage" means a mortgage or deed of trust affecting real property located
             526      in this state.
             527          [(3) "Mortgage lender" or "lender" means any person who in the regular course of
             528      business originates loans secured by mortgages. A person shall not be considered to be a
             529      mortgage lender, however, solely because the person, as seller, receives one or more mortgages
             530      as security for a purchase money obligation, or because the person receives mortgages as
             531      security for an obligation payable on an installment or deferred payment basis and arising out
             532      of materials furnished or services rendered in the improvement of real property.]
             533          [(4)] (6) (a) "Mortgage loan" means [any] a loan [for a term longer than two years]:
             534          (i) secured by a mortgage; and
             535          (ii) made for personal, family, or household purposes.
             536          (b) "Mortgage loan" does not include a loan:
             537          (i) made by an individual to a member of [his] the individual's family; or [a loan]
             538          (ii) subject to Title 70C, Utah Consumer Credit Code.
             539          [(5) "Mortgage loan broker" or "broker" means any person who in the regular course of
             540      business assists a person in obtaining a mortgage loan for a fee or other consideration paid
             541      directly or indirectly. A person shall not be considered to be a mortgage loan broker, however,
             542      solely because of his activities as:]
             543          [(a) a real estate broker or agent who, for a normal and customary real estate sales
             544      commission, assists a buyer in obtaining a mortgage loan in order to buy real property; or]
             545          [(b) an attorney licensed to practice law in this state who, in the course of his practice
             546      as an attorney, assists a person in obtaining a mortgage loan.]
             547          [(6) "Mortgage loan servicer" or "servicer" means any person who in the regular course
             548      of business assumes responsibility for servicing and accepting payments for a mortgage loan.]
             549          (7) "Mortgagor" means [any] a person who:
             550          (a) executes a mortgage; or
             551          (b) is obligated to pay a mortgage loan.
             552          [(8) "Regular course of business" as used in this chapter does not include a casual
             553      lender who makes less than five mortgage loans per year.]
             554          (8) "Record" means information that is:


             555          (a) inscribed on a tangible medium; or
             556          (b) stored in an electronic or other medium and is retrievable in perceivable form.
             557          (9) "Real estate brokerage activity" means an act that involves offering or providing
             558      real estate brokerage services to the public, including:
             559          (a) acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee
             560      of real property;
             561          (b) bringing together parties interested in the sale, purchase, lease, rental, or exchange
             562      of real property;
             563          (c) negotiating, on behalf of a party, a portion of a contract relating to the sale,
             564      purchase, lease, rental, or exchange of real property, other than in connection with providing
             565      financing with respect to a the transaction;
             566          (d) engaging in an act for which a person engaged in the activity is required to be
             567      registered or licensed as a real estate agent or real estate broker under applicable law; and
             568          (e) offering to engage in an activity, or act in a capacity, described in Subsections (9)(a)
             569      through (d).
             570          (10) "State" means:
             571          (a) a state, territory, or possession of the United States;
             572          (b) the District of Columbia; or
             573          (c) the Commonwealth of Puerto Rico.
             574          Section 13. Section 70D-2-101 , which is renumbered from Section 70D-1-2 is
             575      renumbered and amended to read:
             576     
CHAPTER 2. MORTGAGE LENDING AND SERVICING ACT

             577     
Part 1. General Provisions

             578           [70D-1-2].     70D-2-101. Short title.
             579          This chapter is known as the "Mortgage Lending and Servicing Act."
             580          Section 14. Section 70D-2-102 , which is renumbered from Section 70D-1-19 is
             581      renumbered and amended to read:
             582           [70D-1-19].     70D-2-102. Definitions.
             583          As used in this chapter:
             584          (1) (a) Except as provided in Subsection (1)(b), "broker" means a person who in the
             585      regular course of business assists a person in obtaining a mortgage loan for a fee or other


             586      consideration paid directly or indirectly.
             587          (b) "Broker" does not include a person solely because of the person's:
             588          (i) real estate brokerage activities; or
             589          (ii) activities as an attorney licensed to practice law in this state who, in the course of
             590      the attorney's practice as an attorney, assists a person in obtaining a mortgage loan.
             591          (2) "Business as a lender, broker, or servicer" means a person who engages in an act for
             592      compensation or in the expectation of compensation that makes the person a lender, broker, or
             593      servicer.
             594          (3) (a) Except as provided in Subsection (3)(b), "lender" means a person who in the
             595      regular course of business originates a loan secured by a mortgage.
             596          (b) "Lender" does not include a person who:
             597          (i) as seller only receives one or more mortgages as security for a purchase money
             598      obligation; or
             599          (ii) only receives a mortgage as security for an obligation:
             600          (A) payable on an installment or deferred payment basis; and
             601          (B) arising out of materials furnished or services rendered in the improvement of real
             602      property.
             603          [(1)] (4) "Manufactured home" means a transportable factory built housing unit that:
             604          (a) is constructed:
             605          (i) on or after June 15, 1976, according to the National Manufactured Housing
             606      Construction and Safety Standards Act of 1974[,]; and
             607          (ii) in one or more sections, which[,]:
             608          (A) in the traveling mode, is eight body feet or more in width or 40 body feet or more
             609      in length[,]; or
             610          (B) when erected on site, is 400 or more square feet[, and which];
             611          (b) is built on a permanent chassis [and];
             612          (c) is designed to be used as a dwelling with or without a permanent foundation when
             613      connected to the required utilities[,]; and
             614          (d) includes the plumbing, heating, air-conditioning, and electrical systems.
             615          [(2)] (5) "Mobile home" means a transportable factory built housing unit built [prior to]
             616      before June 15, 1976, in accordance with a state mobile home code [which] that existed [prior


             617      to] before the National Manufactured Housing Construction and Safety Standards Act of 1974.
             618          [(3)] (6) "Permanently affixed" means anchored to, and supported by, a permanent
             619      foundation or installed in accordance with the manufactured housing installation standard code
             620      referred to in Section 58-56-4 .
             621          (7) "Servicer" means a person who in the regular course of business assumes
             622      responsibility for servicing and accepting payments for a mortgage loan.
             623          Section 15. Section 70D-2-103 , which is renumbered from Section 70D-1-4 is
             624      renumbered and amended to read:
             625           [70D-1-4].     70D-2-103. Exemptions.
             626          [The provisions of this] This chapter [do] does not apply to:
             627          (1) a bona fide nonprofit [corporations granting] corporation that grants a first
             628      mortgage [loans] loan to promote home ownership for low and moderate income borrowers;
             629      [and]
             630          (2) an agency of the following that grants a first mortgage loan under a specific federal
             631      or state law:
             632          [(2) agencies of] (a) the federal government [or of any];
             633          (b) a state, county, or municipal government; or [any]
             634          (c) a quasi-governmental agency [granting first mortgage loans under the specific
             635      authority of the laws of any state or the United States.];
             636          (3) a casual lender that makes less than five mortgage loans a year; or
             637          (4) a mortgage loan of two years or less.
             638          Section 16. Section 70D-2-104 , which is renumbered from Section 70D-1-21 is
             639      renumbered and amended to read:
             640           [70D-1-21].     70D-2-104. Ordinance or law by political subdivision prohibited.
             641          (1) [No] A county subject to Title 17, Counties, and [no] a municipality subject to Title
             642      10, [shall] Utah Municipal Code, may not enact [any] an ordinance or law that [regulates the
             643      terms of home loans or that]:
             644          (a) regulates a term of a mortgage loan on a dwelling; or
             645          (b) makes the eligibility of [any] a person to do business with the county or
             646      municipality dependent upon [the terms of home loans] a term of a mortgage loan on a
             647      dwelling originated or serviced by [such] the person.


             648          (2) [The prohibition in] Subsection (1) does not apply to [terms of loans] a term or loan
             649      funded in whole or in part with money provided or administered by the county or municipality.
             650          Section 17. Section 70D-2-201 , which is renumbered from Section 70D-1-10 is
             651      renumbered and amended to read:
             652     
Part 2. Notification to Commissioner

             653           [70D-1-10].     70D-2-201. Notification -- Exemptions.
             654          (1) Except as provided in Subsection (2), [no] a person may not engage in [the business
             655      of making mortgage loans nor may any person engage in the business of being a mortgage loan
             656      broker or servicer, without first filing] business as a lender, broker, or servicer in this state
             657      before the day on which the person:
             658          (i) files written notification with the [department and paying the fees required by this
             659      chapter.] commissioner in accordance with Section 70D-2-202 ; and
             660          (ii) pays a fee required by Section 70D-2-203 .
             661          (2) The following persons are exempt from [the notification requirements contained in
             662      this chapter and from the annual fee imposed in Subsection 70D-1-12 (1)] this part, except for a
             663      reimbursement or fee described in Subsection 70D-2-203 (2):
             664          (a) [all persons authorized under Utah law or under federal law to do business as] a
             665      federally insured depository institution in this state;
             666          (b) [all] a wholly owned [subsidiaries] subsidiary of a depository [institutions]
             667      institution described in Subsection (2)(a); and
             668          [(c) all persons that:]
             669          (c) a person who:
             670          (i) [are] is required to [license] be licensed with the [Utah] Division of Real Estate
             671      pursuant to Title 61, Chapter 2c, Utah Residential Mortgage Practices Act; and
             672          [(ii) are not engaged in the business of being a mortgage loan servicer.]
             673          (ii) is not a servicer.
             674          Section 18. Section 70D-2-202 , which is renumbered from Section 70D-1-11 is
             675      renumbered and amended to read:
             676           [70D-1-11].     70D-2-202. Form of notice.
             677          (1) (a) [Persons subject to the notification requirements of Section 70D-1-10 ] A person
             678      required to file notification with the commissioner under Section 70D-2-201 shall file


             679      notification with the [department] commissioner:
             680          (i) at least 30 days before commencing business as a [mortgage] lender, broker, or
             681      servicer in this state[,]; and [thereafter]
             682          (ii) on or before January 31 of each year[. All persons subject to the notification
             683      requirement which are engaged in business as a mortgage lender, broker, or servicer on July 1,
             684      1990, need not file an initial notification but shall file notification on or before January 31,
             685      1991. The] after filing the notification required under Subsection (1)(a)(i).
             686          (b) A notification required by this Subsection (1) shall state:
             687          [(a)] (i) the name of the person;
             688          [(b)] (ii) the name in which the business will be transacted if different from [that
             689      required] the name in Subsection [(a)](1)(b)(i);
             690          [(c)] (iii) the address of the person's principal business office, which may be outside
             691      this state;
             692          [(d)] (iv) the addresses of [all offices] each office in this state at which the person
             693      conducts business as a [mortgage] lender, broker, or servicer;
             694          [(e)] (v) if the person conducts business as a [mortgage] lender, broker, or servicer but
             695      does not maintain an office in this state, a brief description of the manner in which the business
             696      is conducted;
             697          [(f)] (vi) the name and address in this state of a designated agent upon whom service of
             698      process may be made; and
             699          [(g)] (vii) any other information required by the rules of the [department]
             700      commissioner.
             701          (2) If information in a notification becomes inaccurate after filing, [no further
             702      notification is required until January 31 the following year, unless the department] a person is
             703      not required to notify the commissioner until the earlier of when:
             704          (a) the person is required to renew the person's notification; or
             705          (b) the commissioner specifically requests earlier notification.
             706          Section 19. Section 70D-2-203 , which is renumbered from Section 70D-1-12 is
             707      renumbered and amended to read:
             708           [70D-1-12].     70D-2-203. Fees -- Examination.
             709          (1) (a) [Each] A person required to file notification under this part shall pay to the


             710      commissioner:
             711          (i) a fee of $200 [to the department] with [its] the person's initial notification[,]; and
             712      [shall thereafter pay to the department, on or before January 31 of each year,]
             713          (ii) an annual fee, on or before January 31 of each year, in an amount to be set by rule
             714      of the [department] commissioner subject to Subsection (1)(b).
             715          [(b) The department]
             716          (b) The commissioner:
             717          (i) subject to Subsection (1)(b)(ii) shall set the annual renewal fee at an amount [which
             718      will generate] that generates sufficient revenue to cover the department's costs of administering
             719      this chapter[, but in no event shall the fee exceed]; and
             720          (ii) may not set an annual renewal fee that exceeds $100 per renewal.
             721          (2) (a) If the [department] commissioner has probable cause to believe that a
             722      [mortgage] lender, broker, or servicer has violated [the provisions of] this chapter, the
             723      [department] commissioner may require the lender, broker, or servicer to make [any or all of its
             724      books and records] a record of the lender, broker, or servicer relating to its activities as a
             725      lender, broker, or servicer available to the [department or its] commissioner or the
             726      commissioner's authorized representative for examination[, and to].
             727          (b) A lender, broker, or servicer described in Subsection (2)(a) shall:
             728          (i) reimburse the department for [any] travel and other reasonable and necessary costs
             729      incurred in the examination[,] described in Subsection (2)(a); and
             730          (ii) pay to the [department] commissioner a fee set by the [department] commissioner
             731      based on an hourly rate per each examiner, not to exceed [$320 per day per] $55 per hour for
             732      each examiner.
             733          (3) No portion of [any fees] a fee paid or owed to the [department] commissioner under
             734      this section [are] is refundable because a person voluntarily or involuntarily ceases to do
             735      business as a [mortgage] lender, broker, or servicer:
             736          (a) during the period covered by the fee; or [prior to]
             737          (b) before the time of an examination by the [department of records pertaining to
             738      preceding transactions] commissioner of a record pertaining to a transaction preceding the day
             739      on which the person ceases to do business as a lender, broker, or servicer.
             740          Section 20. Section 70D-2-301 , which is renumbered from Section 70D-1-9 is


             741      renumbered and amended to read:
             742     
Part 3. Operational Requirements

             743           [70D-1-9].     70D-2-301. Record retention.
             744          [Every mortgage] A lender, broker, [and] or servicer shall keep and maintain at all
             745      times in its principal place of business the records of [its] a mortgage loan [transactions]
             746      transaction of the lender, broker, or servicer as required by the rules of the [department]
             747      commissioner.
             748          Section 21. Section 70D-2-302 , which is renumbered from Section 70D-1-5 is
             749      renumbered and amended to read:
             750           [70D-1-5].     70D-2-302. Notice required with loan application.
             751          [Every mortgage] (1) If the following is the case, a lender and [mortgage loan] broker
             752      shall [give, to each] notify in writing a person from whom [it] the lender or broker receives or
             753      for whom [it] the lender or broker prepares a written application for a mortgage loan[, a written
             754      notice disclosing, if such is the case,] that:
             755          (a) the mortgage loan applied for may be sold or assigned[, or];
             756          (b) the servicing of the loan may be sold or assigned[,]; and [that]
             757          (c) the mortgage loan will not necessarily be held or serviced by the lender [which] that
             758      originates [it. The] the mortgage loan.
             759          (2) A lender and broker shall provide a written notice required by this section [shall be
             760      provided] at the time of receipt or preparation of the written application for a mortgage loan.
             761          Section 22. Section 70D-2-303 , which is renumbered from Section 70D-1-7 is
             762      renumbered and amended to read:
             763           [70D-1-7].     70D-2-303. Notice upon closing -- Ongoing duty to notify --
             764      Statements required.
             765          (1) At the time of closing of [any] a mortgage loan [the], a lender shall notify the
             766      mortgagor in writing of:
             767          (a) the name of the initial servicer [which will be servicing] that will service the loan;
             768      and
             769          (b) the address at which a loan [payments] payment should be made.
             770          (2) (a) [In the event](i) If the servicing of a mortgage loan is assigned, the servicer
             771      [which assigned] that assigns the servicing and the successor servicer shall each mail, at least


             772      ten days before the due date of the first mortgage payment due after the assignment, a written
             773      notice to the mortgagor[, at his last known address contained in the assigning servicer's
             774      records,] notifying the mortgagor of:
             775          (A) the assignment of servicing; and [of]
             776          (B) the address at which future loan payments should be made.
             777          (ii) A notice required by this Subsection (2)(a) shall be mailed to the mortgagor's last
             778      known address contained in the assigning servicer's records.
             779          (b) Unless [the] an assigning servicer regularly provides the information in a monthly
             780      [statements to mortgagors] statement to a mortgagor, the notice from the assigning servicer
             781      shall [also] include the following information in addition to the information required by
             782      Subsection (2)(a):
             783          (i) the date and amount of [all] the payments credited to the account within the
             784      previous 12-month period;
             785          (ii) the balance in any escrow [accounts] account held by the servicer; and
             786          (iii) the total unpaid balance of the mortgage loan.
             787          (c) The [servicers] servicer that assigns the servicing and the successor servicer may, at
             788      their option, comply with the requirements of this Subsection (2) by both signing one notice
             789      and [causing it to be mailed] mailing the notice to the mortgagor.
             790          (d) [The signatures on any] A signature on a notice required by this section may be
             791      printed, stamped, or [other] in another facsimile [signatures].
             792          (e) [The] A lender and [any] a subsequent servicer of [the] a mortgage loan shall
             793      comply with [the requirements of] Section 7-17-6 .
             794          (3) (a) [Inadvertent errors in the notices] An inadvertent error in a notice required in
             795      Subsection (2) [shall] may not be construed to waive [any payments which] a payment that
             796      would otherwise be due from [the] a mortgagor.
             797          (b) [No] A late payment penalty may not be assessed against a mortgagor with respect
             798      to a payment [which] that is misdirected because of [errors in the notices]:
             799          (i) an error in a notice required in Subsection (2); or
             800          (ii) a failure to timely mail [the notices] a notice required in Subsection (2).
             801          (4) A lender or servicer [of a mortgage loan] must credit to the mortgagor's account
             802      [any] a payment received as of the [date it was received] day on which the payment is received


             803      or by the next banking day, unless:
             804          (a) the payment is insufficient to pay the principal, interest, late charges, and [the]
             805      reserves then due;
             806          (b) the mortgage loan [has been] is referred to an attorney because of default; or
             807          (c) the payment is received at an address other than the address for payment specified
             808      in writing to the mortgagor.
             809          Section 23. Section 70D-2-304 , which is renumbered from Section 70D-1-8 is
             810      renumbered and amended to read:
             811           [70D-1-8].     70D-2-304. Statement to be provided.
             812          (1) Unless a [mortgage loan] servicer regularly provides the information described in
             813      [Subsections (a), (b), and (c) in monthly statements to mortgagors] this Subsection (1) in a
             814      monthly statement to a mortgagor, the servicer shall deliver to a mortgagor, within 15 days
             815      after receipt of a written request, a statement of the mortgagor's account including the
             816      following information:
             817          (a) the date and amount of [all] the payments credited to the account within the
             818      previous 12-month period;
             819          (b) the balance in any escrow [accounts] account held by the servicer; and
             820          (c) the total unpaid balance of the mortgage loan.
             821          (2) [The] A servicer shall provide the first two statements requested for an account in
             822      [any] a 12-month period [shall be provided] without charge. If more than two statements are
             823      requested for the same account in a 12-month period, the servicer may charge a reasonable fee
             824      for [the] an additional [statements] statement.
             825          Section 24. Section 70D-2-305 , which is renumbered from Section 70D-1-6 is
             826      renumbered and amended to read:
             827           [70D-1-6].     70D-2-305. Fee restrictions.
             828          [No mortgage] A lender or broker may not accept [any] a fee or deposit from an
             829      applicant for a mortgage loan unless at the time the lender or broker accepts the fee or deposit
             830      there is a written statement:
             831          (1) signed by the applicant;
             832          (2) stating whether or not the fee or deposit is refundable; and
             833          (3) describing the conditions, if any, under which all or a portion of the fee or deposit


             834      will be refunded to the applicant.
             835          Section 25. Section 70D-2-401 , which is renumbered from Section 70D-1-20 is
             836      renumbered and amended to read:
             837     
Part 4. Manufactured and Mobile Homes

             838           [70D-1-20].     70D-2-401. Qualification of manufactured home or mobile home as
             839      improvement to real property -- Requirements -- Removal from property.
             840          (1) Except as provided in this section, for purposes of this chapter, a manufactured
             841      home or mobile home [shall be] is considered personal property.
             842          (2) Notwithstanding Subsection (1), for purposes of this chapter, if the requirements of
             843      this section are met, a manufactured home or mobile home [shall be] is:
             844          (a) considered to be an improvement to real property; and
             845          (b) considered as real property.
             846          (3) A manufactured home or mobile home [shall be] is considered to be an
             847      improvement to real property if:
             848          (a) the manufactured home or mobile home is permanently affixed to real property;
             849          (b) the person seeking to have the manufactured home or mobile home considered to
             850      be an improvement to real property:
             851          (i) owns the manufactured home or mobile home; [and]
             852          (ii) (A) owns the real property to which the manufactured home or mobile home is
             853      permanently affixed; or
             854          (B) leases the real property to which the manufactured home or mobile home is
             855      permanently affixed and the real property is financed in accordance with Subsection (4); and
             856          (iii) meets the requirements of Subsections (5) and (6); and
             857          (c) in accordance with Subsection (7), the following are recorded by the county
             858      recorder:
             859          (i) the affidavit of affixture described in Subsection (7); and
             860          (ii) the receipt of surrender described in Subsection (7).
             861          (4) For purposes of Subsection (3)(b)(ii)(B), a manufactured home or mobile home
             862      shall be financed in accordance with the guidelines established by:
             863          (a) the Federal Home Loan Mortgage Corporation;
             864          (b) the Federal National Mortgage Association;


             865          (c) the United States Department of Agriculture; or
             866          (d) another entity that requires as part of the entity's financing program restrictions:
             867          (i) on:
             868          (A) ownership; and
             869          (B) actions affecting title and possession; and
             870          (ii) if the restrictions described in Subsection (4)(d)(i) are similar to restrictions
             871      imposed by one or more of the entities described in Subsections (4)(a) through (c).
             872          (5) (a) An owner of a manufactured home or mobile home seeking to have the
             873      manufactured home or mobile home considered to be an improvement to real property and
             874      considered real property shall complete an affidavit of affixture.
             875          (b) An affidavit of affixture described in Subsection (5)(a) shall contain:
             876          (i) the vehicle identification numbers of the manufactured home or mobile home;
             877          (ii) the legal description of the real property to which the manufactured home or mobile
             878      home is permanently affixed;
             879          (iii) a statement certified by the assessor of the county in which the manufactured home
             880      or mobile home is located that the owner of the manufactured home or mobile home:
             881          (A) is not required to pay personal property tax in this state on the manufactured home
             882      or mobile home; or
             883          (B) if the manufactured home or mobile home is subject to personal property tax in this
             884      state, has paid all current and prior year personal property taxes assessed on the manufactured
             885      home or mobile home;
             886          (iv) a description of any security interests in the manufactured home or mobile home;
             887      and
             888          (v) a receipt of surrender issued by the Motor Vehicle Division of the State Tax
             889      Commission in accordance with Subsection (6).
             890          (6) (a) The Motor Vehicle Division of the State Tax Commission shall issue a receipt
             891      of surrender under Subsection (5)(b)(v) if an owner described in Subsection (5) surrenders to
             892      the Motor Vehicle Division the:
             893          (i) manufacturer's original certificate of origin; or
             894          (ii) title to the manufactured home or mobile home.
             895          (b) After issuing the receipt of surrender in Subsection (6)(a), the Motor Vehicle


             896      Division shall maintain a permanent record of:
             897          (i) the receipt of surrender; and
             898          (ii) the certificate or title described in Subsection (6)(a)(ii).
             899          (7) (a) An owner shall present to the county recorder:
             900          (i) the affidavit of affixture described in Subsection (5); and
             901          (ii) the receipt of surrender described in Subsection (6).
             902          (b) A county recorder who receives an affidavit of affixture and receipt of surrender
             903      described in Subsection (7)(a) shall record the receipt of surrender and affidavit of affixture.
             904          (c) An owner of property described in Subsection (5) shall provide a copy of the
             905      recorded affidavit of affixture to:
             906          (i) the Motor Vehicle Division of the Tax Commission; and
             907          (ii) the assessor of the county in which the manufactured home or mobile home is
             908      located.
             909          (8) A lien on the manufactured home or mobile home that is considered to be an
             910      improvement to real property shall be perfected in the manner provided for the perfection of a
             911      lien on real property.
             912          (9) If a manufactured home or mobile home owner separates the manufactured home or
             913      mobile home from the real property, the owner may acquire a new title by submitting to the
             914      Motor Vehicle Division of the State Tax Commission:
             915          (a) a recorded affidavit that the manufactured home or mobile home [has been] is
             916      removed from the real property; and
             917          (b) an application for a new title.
             918          (10) The determination of whether a manufactured home or mobile home is considered
             919      real property or personal property under this section may not be considered in determining
             920      whether the manufactured home or mobile home is real property or personal property for
             921      purposes of taxation under Title 59, Chapter 2, Property Tax Act.
             922          Section 26. Section 70D-2-501 , which is renumbered from Section 70D-1-13 is
             923      renumbered and amended to read:
             924     
Part 5. Remedies and Enforcement

             925           [70D-1-13].     70D-2-501. Civil liability -- Misdemeanor.
             926          (1) (a) A [mortgage] lender, broker, or servicer who violates [any of the provisions of]


             927      this chapter is liable to [any] an injured party for actual damages.
             928          (b) In [any] an action filed to determine the liability of a [mortgage] lender, broker, or
             929      servicer for damages under [the provisions of] this chapter, the prevailing party is entitled to
             930      court costs and [attorney's] attorney fees.
             931          (2) [Any] A person who wilfully violates [any of the provisions of] this chapter is
             932      guilty of a class A misdemeanor.
             933          Section 27. Section 70D-2-502 , which is renumbered from Section 70D-1-14 is
             934      renumbered and amended to read:
             935           [70D-1-14].     70D-2-502. Enforcement -- Rulemaking -- Federal law.
             936          [(1) The department has the power, within the limitations provided by]
             937          (1) The commissioner may:
             938          (a) in accordance with Title 63G, Chapter 4, Administrative Procedures Act[, to]:
             939          [(a)] (i) receive and act on [complaints] a complaint;
             940          (ii) take action designed to obtain voluntary compliance with this chapter; or
             941          (iii) commence [proceedings on its] a proceeding on the commissioner's own initiative
             942      to enforce compliance with this chapter;
             943          (b) counsel [persons and groups on their] a person or group on the person's or group's
             944      rights and duties under this chapter;
             945          (c) [adopt, amend, and repeal] make rules in accordance with Title 63G, Chapter 3,
             946      Utah Administrative Rulemaking Act, to:
             947          (i) restrict or prohibit a lending or servicing [practices which are] practice that is
             948      misleading, unfair, or abusive;
             949          (ii) promote or assure fair and full disclosure of the terms and conditions of
             950      [agreements and communications between mortgage lenders or servicers and borrowers; or] an
             951      agreement or communication between:
             952          (A) a lender or servicer; and
             953          (B) a borrower; or
             954          (iii) promote or assure uniform application of or to resolve ambiguities in applicable
             955      state or federal laws or federal regulations; and
             956          (d) employ hearing examiners, clerks, and other employees and agents as necessary to
             957      perform [its] the commissioner's duties under this chapter.


             958          [(2) A rule or any part of a rule adopted by the department pursuant to this chapter may
             959      not be determined by any judicial or other authority to be invalid in whole or in part unless the
             960      judicial or other authority expressly finds that the rule or a part of it:]
             961          [(a) is arbitrary, capricious, constitutes an abuse of discretion;]
             962          [(b) exceeds the authority granted to the department by this chapter; or]
             963          [(c) is otherwise unlawful.]
             964          [(3)] (2) (a) A person subject to this chapter violates this chapter if the person violates
             965      a federal law:
             966          (i) that is applicable to the person because of the activities that make the person subject
             967      to this chapter; and
             968          (ii) pursuant to the terms of the federal law in effect on the day the person violates the
             969      federal law.
             970          (b) The [department] commissioner shall by rule, made in accordance with Title 63G,
             971      Chapter 3, Utah Administrative Rulemaking Act, and consistent with this chapter, designate
             972      which one or more federal laws are applicable to a person described in Subsection [(3)] (2)(a).
             973          (c) (i) Notwithstanding the other provisions of this chapter, only the [department]
             974      commissioner may enforce or bring an action under this chapter for a violation described in this
             975      Subsection [(3)] (2).
             976          (ii) The [department] commissioner may bring an action under this Subsection [(3)] (2)
             977      in state court.
             978          Section 28. Section 70D-2-503 , which is renumbered from Section 70D-1-15 is
             979      renumbered and amended to read:
             980           [70D-1-15].     70D-2-503. Investigation.
             981          (1) (a) If the [department] commissioner has probable cause to believe that a
             982      [mortgage] lender, broker, or servicer has violated [any] a law, rule, or [regulations] federal
             983      regulation relating to its business or [any] an obligation to a mortgagor, [it] the commissioner
             984      may [make an investigation] investigate to determine if a violation has been committed.
             985          (b) To the extent necessary for [this purpose, the department may administer oaths or
             986      affirmations] an investigation under this section, the commissioner may:
             987          (i) administer an oath or affirmation under penalty of perjury[,]; and[,]
             988          (ii) upon [its] the commissioner's own motion or upon request of any person[, may]:


             989          (A) subpoena [witnesses,] a witness;
             990          (B) compel [their] the attendance[,] of a witness;
             991          (C) adduce evidence under penalty of perjury[,]; and
             992          (D) require the production of [any] a matter [which] that is relevant to the
             993      investigation, including:
             994          (I) the existence, description, nature, custody, condition, and location of [any books,
             995      documents, or other tangible things] a record or other tangible thing of any kind or nature; and
             996          (II) the identity and location of [persons] a person having knowledge of a relevant
             997      [facts] fact, or any other matter reasonably calculated to lead to the discovery of admissible
             998      evidence.
             999          (2) (a) If the [department] commissioner requires a person to produce [records which
             1000      are] a record that is located outside this state, the person shall [either]:
             1001          (i) make [them] the record available to the [department] commissioner at a convenient
             1002      location within this state; or
             1003          (ii) pay the reasonable and necessary expenses for the department to examine [them]
             1004      the record at the place where [they are] the record is maintained.
             1005          (b) The [department] commissioner may designate one or more representatives,
             1006      including [officials] an official of the state in which [the records are] a record is located, to
             1007      inspect [them] the record on [its] behalf of the commissioner.
             1008          (3) Upon failure without lawful excuse to obey a subpoena or give testimony, and upon
             1009      reasonable notice to [all] affected persons, the [department] commissioner may apply to the
             1010      Third District Court or to any other district court for an order compelling compliance.
             1011          (4) Unless otherwise required by law, the [department] commissioner may not make
             1012      public:
             1013          (a) the name or identity of a person whose acts or conduct [it] the commissioner
             1014      investigates pursuant to this section; or
             1015          (b) the facts disclosed in the investigation.
             1016          (5) Subsection (4) does not apply to [disclosures] a disclosure in an enforcement
             1017      [proceedings] proceeding conducted pursuant to this chapter.
             1018          Section 29. Section 70D-2-504 , which is renumbered from Section 70D-1-16 is
             1019      renumbered and amended to read:


             1020           [70D-1-16].     70D-2-504. Orders.
             1021          (1) If the [department] commissioner determines that [any] a person engaging in
             1022      business as a [mortgage] lender, broker, or servicer is violating, has violated, or the
             1023      [department] commissioner has reasonable cause to believe is about to violate [any provision
             1024      of] this chapter or [any] a rule of the [department] commissioner made under this chapter, the
             1025      [department] commissioner may:
             1026          (a) order the person to cease and desist from committing [any further violations,] a
             1027      further violation; and
             1028          (b) in the most serious instances may prohibit the person from continuing to engage in
             1029      business as a [mortgage] lender, broker, or servicer.
             1030          [(2) The department shall afford an opportunity for hearing upon request of any person
             1031      alleged to have violated this chapter if the request is filed with the department within 30 days
             1032      after the person requesting the hearing first receives notice of the allegations.]
             1033          [(3)] (2) (a) If the [department] commissioner determines that a practice [which it has
             1034      alleged] that the commissioner alleges is unlawful should be enjoined during the pendency of
             1035      [any proceedings] a proceeding incident to [that] an allegation, [it] the commissioner may issue
             1036      a temporary order in accordance with Section 63G-4-502 :
             1037          (i) at the commencement of the proceedings; or [at any time thereafter which is fully
             1038      binding on the person to whom the temporary order is directed until the proceedings are
             1039      concluded or the temporary order is modified or dissolved by the department.]
             1040          [(b) Any person to whom a temporary order is directed may request a hearing
             1041      concerning the order, which shall be held at the earliest mutually convenient time, but in no
             1042      event more that ten days after the person's request is received by the department unless the
             1043      department and the person requesting the hearing mutually agree to a later time.]
             1044          [(c) Every temporary order shall include findings and conclusions in support of it.]
             1045          (ii) at any time after the proceeding commences.
             1046          [(d)] (b) For purposes of Section 63G-4-502 , an immediate and significant danger to
             1047      the public health, safety, or welfare exists if the [department] commissioner finds from specific
             1048      facts supported by sworn statement or the records of a person subject to the order that loan
             1049      applicants or mortgagors are otherwise likely to suffer immediate and irreparable injury, loss,
             1050      or damage before [proceedings] a proceeding incident to a final order can be completed.


             1051          [(4)] (3) The [department] commissioner may not award damages or penalties under
             1052      this chapter against a [mortgage] lender, broker, or servicer.
             1053          [(5)] (4) (a) [Any] An order issued by the [department] commissioner under [authority
             1054      of] this chapter shall:
             1055          (i) be in writing[,];
             1056          (ii) be delivered to or served upon the person affected[,]; and
             1057          (iii) specify [its] the order's effective date, which may be immediate or at a later date.
             1058          (b) [Orders shall remain] An order remains in effect until:
             1059          (i) withdrawn by the [department] commissioner; or [until]
             1060          (ii) terminated by a court order. [The]
             1061          (c) An order of the [department] commissioner, upon application made on or after [its]
             1062      the order's effective date to the Third District Court, or in any other district court, may be
             1063      enforced ex parte and without notice by an order to comply entered by the court.
             1064          Section 30. Section 70D-2-505 , which is renumbered from Section 70D-1-17 is
             1065      renumbered and amended to read:
             1066           [70D-1-17].     70D-2-505. Relief from order.
             1067          [Any] A person aggrieved by [any] a rule, order, temporary order, decision, ruling, or
             1068      other act or failure to act by the [department] commissioner under this chapter is entitled to
             1069      judicial review as provided under Title 63G, Chapter 4, Administrative Procedures Act.
             1070          Section 31. Section 70D-2-506 , which is renumbered from Section 70D-1-18 is
             1071      renumbered and amended to read:
             1072           [70D-1-18].     70D-2-506. Civil liability.
             1073          Nothing in this chapter [is intended to limit] limits any civil liability [which] that may
             1074      exist against a [mortgage] lender, broker, or servicer for breach of contract or other [wrongs]
             1075      wrong committed against a mortgagor.
             1076          Section 32. Section 70D-3-101 is enacted to read:
             1077     
CHAPTER 3. FINANCIAL INSTITUTION LOAN ORIGINATOR LICENSING ACT

             1078     
Part 1. General Provisions

             1079          70D-3-101. Title.
             1080          This chapter is known as the "Financial Institution Loan Originator Licensing Act."
             1081          Section 33. Section 70D-3-102 is enacted to read:


             1082          70D-3-102. Definitions.
             1083          As used in this chapter:
             1084          (1) "Administrative or clerical tasks" means:
             1085          (a) the receipt, collection, and distribution of information common for the process or
             1086      underwriting of a loan in the mortgage industry; and
             1087          (b) a communication with a consumer to obtain information necessary for the
             1088      processing or underwriting of a residential mortgage loan.
             1089          (2) "Affiliate" shall be defined by the commissioner by rule made in accordance with
             1090      Title 63G, Chapter 3, Utah Administrative Rulemaking Act.
             1091          (3) "Applicant" means an individual applying for a license under this chapter.
             1092          (4) "Approved examination provider" means a person approved by the nationwide
             1093      database as an approved test provider.
             1094          (5) "Business as a loan originator" means for compensation or in the expectation of
             1095      compensation to engage in an act that makes an individual a loan originator.
             1096          (6) "Clerical or support duties" includes after the receipt of an application for a
             1097      residential mortgage loan:
             1098          (a) the receipt, collection, distribution, and analysis of information common for the
             1099      processing or underwriting of a residential mortgage loan; and
             1100          (b) communicating with a consumer to obtain the information necessary for the
             1101      processing or underwriting of the residential mortgage loan, to the extent that the
             1102      communication does not include:
             1103          (i) offering or negotiating a residential mortgage loan rate or term; or
             1104          (ii) counseling a consumer about a residential mortgage loan rate or term.
             1105          (7) "Compensation" means anything of economic value that is paid, loaned, granted,
             1106      given, donated, or transferred to an individual or entity for or in consideration of:
             1107          (a) services;
             1108          (b) personal or real property; or
             1109          (c) another thing of value.
             1110          (8) "Continuing education" means education taken by an individual licensed under this
             1111      chapter in order to meet the education requirements imposed by Section 70D-3-303 to renew a
             1112      license under this chapter.


             1113          (9) "Covered subsidiary" means a subsidiary that is:
             1114          (a) owned and controlled by a depository institution; and
             1115          (b) regulated by a federal banking agency.
             1116          (10) "Federal banking agency" means:
             1117          (a) the Board of Governors of the Federal Reserve System;
             1118          (b) the Comptroller of the Currency;
             1119          (c) the Director of the Office of Thrift Supervision;
             1120          (d) the National Credit Union Administration; or
             1121          (e) the Federal Deposit Insurance Corporation.
             1122          (11) "Licensee" means an individual licensed under this chapter.
             1123          (12) (a) Except as provided in Subsection (12)(b), "loan originator" means an
             1124      individual who for compensation or in the expectation of compensation:
             1125          (i) takes a residential mortgage loan application; or
             1126          (ii) offers or negotiates a term of a residential mortgage loan.
             1127          (b) "Loan originator" does not include:
             1128          (i) an individual who is engaged solely as a loan processor or underwriter;
             1129          (ii) unless compensated by a lender, broker, other loan originator, or an agent of a
             1130      lender, broker, or other loan originator, a person who:
             1131          (A) only performs real estate brokerage activities; and
             1132          (B) is licensed under Title 61, Chapter 2, Division of Real Estate;
             1133          (iii) a person who is solely involved in extension of credit relating to a timeshare plan,
             1134      as defined in 11 U.S.C. Sec. 101(53D); or
             1135          (iv) an attorney licensed to practice law in this state who, in the course of the attorney's
             1136      practice as an attorney, assists a person in obtaining a residential mortgage loan.
             1137          (13) "Loan processor or underwriter" means an individual who as an employee
             1138      performs clerical or support duties:
             1139          (a) at the direction of and subject to the supervision and instruction of:
             1140          (i) a licensee; or
             1141          (ii) a registered loan originator; and
             1142          (b) as an employee of:
             1143          (i) the licensee; or


             1144          (ii) a registered loan originator.
             1145          (14) "Nationwide database" means the Nationwide Mortgage Licensing System and
             1146      Registry, authorized under Secure and Fair Enforcement for Mortgage Licensing, 12 U.S.C.
             1147      Sec. 5101, et seq.
             1148          (15) "Nontraditional mortgage product" means a mortgage product other than a 30-year
             1149      fixed rate mortgage.
             1150          (16) "Owned and controlled by a depository institution" may be defined by rule made
             1151      by the commissioner in accordance with Title 63G, Chapter 3, Utah Administrative
             1152      Rulemaking Act.
             1153          (17) "Prelicensing education" means education taken by an individual seeking to be
             1154      licensed under this chapter in order to meet the education requirements imposed by Section
             1155      70D-3-301 for an individual to obtain a license under this chapter.
             1156          (18) "Registered loan originator" means an individual who:
             1157          (a) engages in an act as a loan originator only as an employee of:
             1158          (i) a depository institution;
             1159          (ii) a covered subsidiary; or
             1160          (iii) an institution regulated by the Farm Credit Administration; and
             1161          (b) is registered with, and maintains a unique identifier through, the nationwide
             1162      database.
             1163          (19) (a) Subject to Subsection (19)(b), "residential mortgage loan" means:
             1164          (i) a mortgage loan; or
             1165          (ii) a loan that is:
             1166          (A) secured by a mortgage; and
             1167          (B) subject to Title 70C, Utah Consumer Credit Code.
             1168          (b) A loan described in Subsection (19)(a) is a "residential mortgage loan" only if the
             1169      mortgage securing the loan is on:
             1170          (i) a dwelling located in the state; or
             1171          (ii) real property located in the state, upon which is constructed or intended to be
             1172      constructed a dwelling.
             1173          (20) "Unique identifier" is as defined in 12 U.S.C. Sec. 5102.
             1174          Section 34. Section 70D-3-103 is enacted to read:


             1175          70D-3-103. General powers and duties of commissioner.
             1176          Subject to this chapter:
             1177          (1) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             1178      commissioner may make rules authorized by this chapter, including:
             1179          (a) providing for an interim procedure for:
             1180          (i) licensing; and
             1181          (ii) acceptance of an application; and
             1182          (b) coordination between filings required under this chapter and:
             1183          (i) Title 70C, Utah Consumer Credit Code; or
             1184          (ii) Chapter 2, Mortgage Lending and Servicing Act.
             1185          (2) The commissioner may enter into a relationship or contract with the nationwide
             1186      database or another entity designated by the nationwide database to do the following related to
             1187      a licensee or other person subject to this chapter:
             1188          (a) collect or maintain a record; and
             1189          (b) process a transaction fee or other fee.
             1190          (3) The commissioner shall regularly report the following to the nationwide database:
             1191          (a) a violation of this chapter;
             1192          (b) disciplinary action under Section 70D-3-501 ; and
             1193          (c) other information relevant to this chapter.
             1194          Section 35. Section 70D-3-201 is enacted to read:
             1195     
Part 2. Licensing Requirements and Procedures

             1196          70D-3-201. Licensing required -- Exemptions.
             1197          (1) (a) On or after January 1, 2011, except as provided in Subsection (2), an individual
             1198      described in Subsection (1)(b) may not engage in the business of a loan originator unless that
             1199      individual:
             1200          (i) is licensed under this chapter; or
             1201          (ii) is a registered loan originator.
             1202          (b) This Subsection (1) applies to an employee or agent of:
             1203          (i) a depository institution;
             1204          (ii) a subsidiary of a depository institution; or
             1205          (iii) an affiliate of a depository institution.


             1206          (2) An individual described in Subsection (1)(b) may engage in the business of a loan
             1207      originator without being licensed under this chapter or a registered loan originator when acting
             1208      as a loan processor or underwriter.
             1209          Section 36. Section 70D-3-202 is enacted to read:
             1210          70D-3-202. Qualifications for licensure.
             1211          To qualify for a license under this chapter an individual shall comply with all of the
             1212      following, the individual:
             1213          (1) shall comply with 12 U.S.C. Sec. 5104 to register with and maintain a unique
             1214      identifier through the nationwide database;
             1215          (2) may not have had a loan originator license revoked in a governmental jurisdiction;
             1216          (3) may not have been convicted of, or pled guilty or no contest to, a felony:
             1217          (a) during the seven years preceding the day on which the individual files an
             1218      application; or
             1219          (b) at any time, if the felony involves an act of:
             1220          (i) fraud;
             1221          (ii) dishonesty;
             1222          (iii) breach of trust; or
             1223          (iv) money laundering;
             1224          (4) shall demonstrate financial responsibility, character, and general fitness such as to:
             1225          (a) command the confidence of the community; and
             1226          (b) warrant a determination that the individual will operate as a loan originator
             1227      honestly, fairly, and efficiently within the purposes of this chapter;
             1228          (5) shall be covered by a surety bond posted in accordance with Section 70D-3-205 ;
             1229          (6) shall complete the prelicensing education required by Section 70D-3-301 ; and
             1230          (7) shall pass the written examination required by Section 70D-3-302 .
             1231          Section 37. Section 70D-3-203 is enacted to read:
             1232          70D-3-203. Initial licensure procedure.
             1233          (1) To apply for licensure under this chapter an individual shall:
             1234          (a) file an application with the commissioner in a form prescribed by the commissioner
             1235      in rule;
             1236          (b) demonstrate that the individual provided the information to the nationwide database


             1237      required by 12 U.S.C. Sec. 5104;
             1238          (c) provide the commissioner the individual's unique identifier;
             1239          (d) consent to the commissioner receiving information obtained by the nationwide
             1240      database under 12 U.S.C. Sec. 5104, including the results of a criminal history background
             1241      check; and
             1242          (e) notwithstanding the requirements applicable to a regulatory fee under Section
             1243      63J-1-303 , pay a fee of $200.
             1244          (2) The commissioner shall grant an individual a license if the commissioner finds that
             1245      the individual complies with:
             1246          (a) Subsection (1); and
             1247          (b) the qualifications for a license under Section 70D-3-202 .
             1248          (3) Subject to this chapter, the commissioner may make rules in accordance with Title
             1249      63G, Chapter 3, Utah Administrative Rulemaking Act, concerning:
             1250          (a) the form of an application under this chapter;
             1251          (b) the content of an application under this chapter; and
             1252          (c) the procedures for filing an application under this chapter.
             1253          Section 38. Section 70D-3-204 is enacted to read:
             1254          70D-3-204. Renewal of license.
             1255          (1) A license issued under this chapter expires on December 31 of each year.
             1256          (2) To qualify to renew a license under this chapter an individual shall:
             1257          (a) meet the requirements of Section 70D-3-202 ; and
             1258          (b) complete the annual continuing education requirements of Section 70D-3-303 .
             1259          (3) To renew a license under this chapter an individual shall:
             1260          (a) file an application with the commissioner in a form prescribed by the commissioner
             1261      in rule;
             1262          (b) demonstrate that the individual continues to meet the requirements related to the
             1263      nationwide database under 12 U.S.C. Sec. 5104;
             1264          (c) demonstrate completion of the continuing education requirements; and
             1265          (d) notwithstanding the requirements applicable to a regulatory fee under Section
             1266      63J-1-303 , pay a fee of $100.
             1267          Section 39. Section 70D-3-205 is enacted to read:


             1268          70D-3-205. Surety bond requirements.
             1269          (1) (a) To be licensed under this chapter an individual shall be covered by a surety
             1270      bond that meets the minimum surety bonding requirements required by rule.
             1271          (b) If an action is brought against a bond under this chapter, the commissioner may
             1272      require that another bond be posted.
             1273          (2) The commissioner shall by rule made in accordance with Title 63G, Chapter 3,
             1274      Utah Administrative Rulemaking Act, establish minimum surety bonding requirements under
             1275      this section, except that the requirements shall:
             1276          (a) reflect the dollar amount of residential mortgage loans originated by a loan
             1277      originator; and
             1278          (b) ensure that if in accordance with this chapter a surety bond is posted by an
             1279      employer or other entity on behalf of an individual, the bond covers the activities of the
             1280      individual regulated by this chapter.
             1281          Section 40. Section 70D-3-206 is enacted to read:
             1282          70D-3-206. Challenging information in the nationwide database.
             1283          The commissioner shall by rule made in accordance with Title 63G, Chapter 3, Utah
             1284      Administrative Rulemaking Act, provide a process under which an individual may challenge
             1285      information contained in the nationwide database.
             1286          Section 41. Section 70D-3-301 is enacted to read:
             1287     
Part 3. Education Requirements

             1288          70D-3-301. Prelicensing education.
             1289          (1) Before an individual may be licensed under this chapter, the individual shall
             1290      complete the number of hours of prelicensing education required by rule made by the
             1291      commissioner.
             1292          (2) (a) The commissioner shall make the rules described in Subsection (1):
             1293          (i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
             1294          (ii) subject to the requirements of this Subsection (2).
             1295          (b) The rules described in Subsection (1) shall require that an individual complete:
             1296          (i) at least 20 hours of prelicensing education approved by the nationwide database;
             1297      and
             1298          (ii) as part of the 20 hours required by Subsection (2)(b)(i):


             1299          (A) 3 hours of federal law and regulations;
             1300          (B) 3 hours of ethics that include instruction on:
             1301          (I) fraud;
             1302          (II) consumer protection; and
             1303          (III) fair lending issues; and
             1304          (C) 2 hours of training related to lending standards for the nontraditional mortgage
             1305      product marketplace.
             1306          Section 42. Section 70D-3-302 is enacted to read:
             1307          70D-3-302. Examination.
             1308          (1) Before an individual may be licensed under this chapter, the individual shall pass a
             1309      written examination that:
             1310          (a) meets the requirements of 12 U.S.C. Sec. 5104(d);
             1311          (b) is developed by the nationwide database; and
             1312          (c) is administered by an approved examination provider.
             1313          (2) The commissioner shall make rules made in accordance with Title 63G, Chapter 3,
             1314      Utah Administrative Rulemaking Act, that:
             1315          (a) require that an individual comply at a minimum with the standards of 12 U.S.C.
             1316      Sec. 5104(d); and
             1317          (b) address:
             1318          (i) what constitutes passing a written examination;
             1319          (ii) the ability of an individual to retake a written examination if the individual fails the
             1320      written examination; and
             1321          (iii) when an individual is required to retake a written examination if an individual fails
             1322      to maintain a valid license under this chapter after taking the written examination.
             1323          Section 43. Section 70D-3-303 is enacted to read:
             1324          70D-3-303. Continuing Education.
             1325          (1) A licensee shall annually complete at least the number of hours of continuing
             1326      education required by rule made by the commissioner.
             1327          (2) (a) The commissioner shall make the rules described in Subsection (1):
             1328          (i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act; and
             1329          (ii) subject to the requirements of this Subsection (2).


             1330          (b) The rules described in Subsection (1) shall require that an individual complete each
             1331      calendar year:
             1332          (i) eight hours of continuing education approved by the nationwide database;
             1333          (ii) as part of the eight hours required by Subsection (2)(b)(i):
             1334          (A) three hours of federal law and regulations; and
             1335          (B) two hours of ethics that include instruction on:
             1336          (I) fraud;
             1337          (II) consumer protection; and
             1338          (III) fair lending issues; and
             1339          (iii) two hours of training related to lending standards for the nontraditional mortgage
             1340      product marketplace.
             1341          (3) The commissioner shall by rule made in accordance with Title 63G, Chapter 3,
             1342      Utah Administrative Rulemaking Act, provide for the calculation of continuing education
             1343      hours, except that the rules shall be consistent with 12 U.S.C. Sec. 5105.
             1344          Section 44. Section 70D-3-401 is enacted to read:
             1345     
Part 4. Operational Requirements and Prohibitions

             1346          70D-3-401. Record requirements -- Reports of condition.
             1347          (1) An individual required to be licensed under this chapter shall create a record
             1348      required by rule made by the commissioner in accordance with Title 63G, Chapter 3, Utah
             1349      Administrative Rulemaking Act.
             1350          (2) An individual required to be licensed under this chapter shall maintain and produce
             1351      for inspection a record required to be maintained by a rule made by the commissioner in
             1352      accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, for four years
             1353      from the last to occur of the following:
             1354          (a) the final entry on a residential mortgage loan is made by that licensee;
             1355          (b) if the residential mortgage loan is serviced by the licensee:
             1356          (i) the residential mortgage loan is paid in full; or
             1357          (ii) the licensee ceases to service the residential mortgage loan; or
             1358          (c) if the residential mortgage loan is not serviced by the licensee, the residential
             1359      mortgage loan is closed.
             1360          (3) An individual required to be licensed under this chapter shall maintain and produce


             1361      for inspection by the commissioner a report of condition submitted to the nationwide database
             1362      as required by 12 U.S.C. Sec. 5104(e) for at least four years from the day on which the
             1363      individual submits the report of condition to the nationwide database.
             1364          Section 45. Section 70D-3-402 is enacted to read:
             1365          70D-3-402. Prohibited acts.
             1366          (1) An individual transacting the business of a loan originator in this state may not:
             1367          (a) violate or not comply with:
             1368          (i) this chapter;
             1369          (ii) an order of the commissioner under this chapter;
             1370          (iii) a rule made by the commissioner under this chapter;
             1371          (iv) Title 70C, Utah Consumer Credit Code, if subject to that title; or
             1372          (v) Chapter 2, Mortgage Lending and Servicing Act, if subject to that chapter;
             1373          (b) engage in an act that is performed to:
             1374          (i) evade this chapter; or
             1375          (ii) assist another person to evade this chapter;
             1376          (c) do any of the following to induce a lender to extend credit as part of a residential
             1377      mortgage loan transaction:
             1378          (i) make a false statement or representation;
             1379          (ii) cause a false document to be generated; or
             1380          (iii) knowingly permit false information to be submitted by a person in a transaction;
             1381          (d) fail to respond within the required time period to:
             1382          (i) a notice or complaint of the commissioner; or
             1383          (ii) a request for information from the commissioner;
             1384          (e) make a false representation to the commissioner, including in a licensure
             1385      application;
             1386          (f) engage in the business of a loan originator with respect to a residential mortgage
             1387      loan transaction if the individual also acts in any of the following capacities with respect to the
             1388      same residential mortgage loan transaction:
             1389          (i) appraiser;
             1390          (ii) escrow agent;
             1391          (iii) real estate agent;


             1392          (iv) general contractor; or
             1393          (v) title insurance agent;
             1394          (g) engage in an act or omission in transacting the business of a loan originator that
             1395      constitutes dishonesty, fraud, or misrepresentation;
             1396          (h) engage in false or misleading advertising;
             1397          (i) (i) fail to account for monies received in connection with a residential mortgage
             1398      loan;
             1399          (ii) use monies for a different purpose than the purpose for which the monies are
             1400      received; or
             1401          (iii) subject to Subsection (3), retain monies paid for services if the services are not
             1402      performed;
             1403          (j) fail, within 90 calendar days of a request from a borrower who has paid for an
             1404      appraisal, to give a copy of an appraisal ordered and used for a residential mortgage loan to the
             1405      borrower;
             1406          (k) recommend or encourage default, delinquency, or continuation of an existing
             1407      default or delinquency, by a mortgage applicant on an existing indebtedness before the closing
             1408      of a residential mortgage loan that will refinance all or part of the indebtedness; or
             1409          (l) pay or offer to pay an individual who does not hold a license under this chapter for
             1410      services that require the individual to hold a license under this chapter.
             1411          (2) (a) An individual engaging solely in loan processor or underwriter activities, may
             1412      not represent to the public that the individual can or will perform any act of a loan originator.
             1413          (b) A representation prohibited under this Subsection (2) includes an advertisement or
             1414      other means of communicating or providing information including the use of:
             1415          (i) a business card;
             1416          (ii) stationery;
             1417          (iii) a brochure;
             1418          (iv) a sign;
             1419          (v) a rate list; or
             1420          (vi) another promotional item.
             1421          (3) Notwithstanding Subsection (1)(i)(iii), if a licensee complies with Section
             1422      70D-2-305 , the licensee may charge a reasonable cancellation fee for services completed to


             1423      originate a residential mortgage loan if the residential mortgage loan is not closed.
             1424          Section 46. Section 70D-3-501 is enacted to read:
             1425     
Part 5. Enforcement

             1426          70D-3-501. Disciplinary action.
             1427          (1) The commissioner may through an adjudicative proceeding subject to Title 63G,
             1428      Chapter 4, Administrative Procedures Act, impose a sanction described in Subsection (2)
             1429      against an individual if the individual:
             1430          (a) is licensed or required to be licensed under this chapter; and
             1431          (b) violates this chapter.
             1432          (2) The commissioner may against an individual described in Subsection (1) who
             1433      violates this chapter:
             1434          (a) impose an educational requirement;
             1435          (b) impose a civil penalty against the individual in an amount not to exceed the greater
             1436      of:
             1437          (i) $2,500 for each violation; or
             1438          (ii) the amount equal to any gain or economic benefit derived from each violation;
             1439          (c) deny an application for an initial license;
             1440          (d) do any of the following to a license under this chapter:
             1441          (i) suspend;
             1442          (ii) revoke;
             1443          (iii) place on probation;
             1444          (iv) deny renewal;
             1445          (v) deny reinstatement;
             1446          (vi) in the case of a denial of a license, set a waiting period for an individual to apply
             1447      for a license under this chapter; or
             1448          (vii) issue a cease and desist order; or
             1449          (e) impose a combination of sanctions described in this Subsection (2).
             1450          (3) (a) If the commissioner determines that a practice that the commissioner alleges is
             1451      unlawful should be enjoined during the pendency of a proceeding incident to an allegation, the
             1452      commissioner may issue a temporary order in accordance with Section 63G-4-502 :
             1453          (i) at the commencement of the proceedings; or


             1454          (ii) at any time after the proceeding commences.
             1455          (b) For purposes of Section 63G-4-502 , an immediate and significant danger to the
             1456      public health, safety, or welfare exists if the commissioner finds from specific facts supported
             1457      by sworn statement or the records of a person subject to the order that loan applicants or
             1458      mortgagors are otherwise likely to suffer immediate and irreparable injury, loss, or damage
             1459      before a proceeding incident to a final order can be completed.
             1460          Section 47. Section 70D-3-502 is enacted to read:
             1461          70D-3-502. Investigations.
             1462          (1) The commissioner may investigate the actions of:
             1463          (a) a licensee; or
             1464          (b) an individual required to be licensed under this chapter.
             1465          (2) In conducting an investigation or adjudicative proceeding, the commissioner may:
             1466          (a) administer an oath or affirmation under penalty of perjury;
             1467          (b) subpoena a witness;
             1468          (c) compel the attendance of a witness
             1469          (d) take evidence;
             1470          (e) require the production of a record or information relevant to an investigation from
             1471      any person including:
             1472          (i) the existence, description, nature, custody, condition, and location of a record or
             1473      other tangible thing of any kind or nature; and
             1474          (ii) the identity and location of a person having knowledge of a relevant fact or any
             1475      other matter reasonably calculated to lead to the discovery of admissible evidence; and
             1476          (f) serve a subpoena.
             1477          (3) A failure to respond to a request by the commissioner in an investigation authorized
             1478      under this chapter is considered as a separate violation of this chapter, including:
             1479          (a) failing to respond to a subpoena;
             1480          (b) withholding evidence; or
             1481          (c) failing to produce a record or other information.
             1482          (4) In conducting an investigation the commissioner may inspect and copy a record
             1483      related to the business of a loan originator, regardless of whether the record is maintained at a
             1484      business location in Utah.


             1485          (5) Regardless of whether the commissioner takes action pursuant to an investigation
             1486      under this chapter, an individual investigated under this section shall pay to the commissioner
             1487      the amounts that would be assessed to a financial institution for an examination under
             1488      Subsection 7-1-401 (7) including:
             1489          (a) a per diem assessment at the rate calculated under Subsection 7-1-401 (7); and
             1490          (b) if the investigation requires one or more representatives of the commissioner to
             1491      travel out of state, the reasonable travel, lodging, and other expenses incurred by each
             1492      representative while conducting the investigation.
             1493          Section 48. Repealer.
             1494          This bill repeals:
             1495          Section 70D-1-1, Intent statement.




Legislative Review Note
    as of 1-28-09 2:24 PM


Office of Legislative Research and General Counsel


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