Definitions, Effect of Law Enforcement Records on Applications for Loan Originator, Mortgage Broker, and Mortgage Lender Licensure., Adoption of Forms, Demonstrating Character, General Fitness, and Financial Responsibility, Application Procedure for ...

DEPARTMENT OF FINANCIAL SERVICES
Finance

Rule No.: RULE TITLE
69V-40.001: Definitions
69V-40.00112: Effect of Law Enforcement Records on Applications for Loan Originator, Mortgage Broker, and Mortgage Lender Licensure.
69V-40.002: Adoption of Forms
69V-40.0113: Demonstrating Character, General Fitness, and Financial Responsibility
69V-40.0312: Application Procedure for Loan Originator License
69V-40.0313: Loan Originator License Renewal
69V-40.0321: Application Procedure for a Mortgage Broker License
69V-40.0611: Application Procedure for a Mortgage Lender License
69V-40.0612: Mortgage Lender License Renewal
69V-40.156: Third-party Fee Accounts
69V-40.170: Books and Records
69V-40.175: Mortgage Brokerage Files
69V-40.260: Mortgage Lender Files
69V-40.285: Noninstitutional Investor Funds Account

NOTICE OF CHANGE

Notice is hereby given that the following changes have been made to the proposed rule in accordance with subparagraph 120.54(3)(d)1., F.S., published in Vol. 36 No. 24, June 18, 2010 issue of the Florida Administrative Weekly.

The rules have been changed to address comments from the staff of the Joint Administrative Procedures Committee. In addition, Rule 69V-40.0113, F.A.C., has been changed to address comments from members of the industry. The changes are as follows:

1 – Rule 69V-40.001, F.A.C., has been changed to remove the new definitions; the rule will be repealed in its entirety.

2 – Subsection 69V-40.00112(1), F.A.C., has been changed to replace the word “may” to “will” in the fifth sentence: “In the event of a question regarding the relevant person’s criminal history, the Office will request additional information from the relevant person to determine the status of a criminal event, the specific facts and circumstances surrounding a criminal event, or to address other issues determined to be relevant to the review of the law enforcement record.”

3 – Subsection 69V-40.00112(2), F.A.C., has been removed.

4 – Subparagraph 69V-49.002(1)(b)5., F.A.C., has been changed to correct the title of the form:

“5. Declaration of Intent to Engage Solely in Loan Processing, Form OFR-494-13, effective________.”

5 – Paragraphs 69V-40.0113(1)(a) and (b), F.A.C., have been changed to clarify provisions relating to collections accounts and charge-off accounts:

“(1) Definitions. As used in this rule, the term:

(a) “Adverse credit history information” means the following:

1. Personal bankruptcy within the previous year.

2. Bankruptcy within the previous year of any organization based on events that occurred while the relevant person was a control person.

3. Outstanding tax lien or other governmental lien.

4. Outstanding judgment based upon grounds of fraud, embezzlement, misrepresentation, or deceit.

5. Open collection account or charged-off account that remains unpaid, except accounts related solely to unpaid medical expenses.

6. Foreclosure on personally owned property within the last 5 years.

(b) “Charged-off” means an account that has been identified by the creditor as an uncollectable debt.

6 – Subparagraph 69V-40.0113(2)(b)4., F.A.C., has been changed to remove the requirement that letters from creditors must be dated within 30 days after the received date of the application:

“4. Copies of account statements or letters from the creditors explaining the current status of accounts. For security purposes, the relevant person may redact all but the last four (4) digits of the account number prior to submitting the document to the Office.”

7 – Paragraph 69V-40.0312(1)(c), F.A.C., has been changed to cross-reference Section 494.00172, F.S.:

“(c) The statutory nonrefundable mortgage guaranty fund assessment fee of $20, if required by Section 494.00172, F.S., filed through the Registry;”

8 – Subparagraph 69V-40.0313(1)(b)2., F.A.C., has been changed to cross-reference Section 494.00172, F.S.:

“2. $20 nonrefundable mortgage broker guaranty fund fee, if required by Section 494.00172, F.S., and”

9 – Paragraph 69V-40.0321(1)(c), F.A.C., has been changed to cross-reference Section 494.00172, F.S.:

“(c) The statutory nonrefundable mortgage guaranty fund assessment fee of $100, if required by Section 494.00172, F.S., filed through the Registry;”

10 – Rule 69V-40.0611(1)(c), F.A.C., has been changed to cross-reference Section 494.00172, F.S.:

“(c) The statutory nonrefundable mortgage guaranty fund assessment fee of $100, if required by Section 494.00172, F.S., filed through the Registry;”

11 – Subparagraph 69V-40.0612(1)(b)2., F.A.C., has been changed to cross-reference Section 494.00172, F.S.:

“2. $100 nonrefundable mortgage broker guaranty fund fee, if required by Section 494.00172, F.S.”

12 – Rule 69V-40.156, F.A.C., has been changed to narrow the scope of the rule to books and records requirements:

69V-40.156 Third-party Fee Accounts.

(1) All third-party fees and refundable application fees received by a mortgage broker shall be recorded brokerage business shall immediately be deposited in a segregated account in a federally insured financial institution located in Florida. The account shall be in the name of the mortgage brokerage business and shall provide for withdrawal of funds without notice. The account shall be used exclusively for third-party fees and refundable application fees. The licensee shall maintain an updated and accurate record of account activity on Form OFR-494-09, Mortgage Brokerage Deposit Account Form, or on a format which is substantially similar to Form OFR-494-09.

(2) For the purposes of this rule “immediately” means within seven (7) business days of receipt of the funds.

(3) The administrative penalty for the failure to comply with this rule shall be $500. Incidental and isolated clerical errors or omissions shall not be considered a violation of this rule. For the purposes of this rule “isolated clerical errors or omissions” shall mean less than three (3), or a percentage less than 20% of the deposit entries examined or reviewed. The penalty for intentional or repeat violations of this rule shall be a $500 fine and suspension or revocation.

(4) For the purposes of this rule, failure to maintain an escrow account is a violation of this rule. Failure to maintain a record of account activity in a current manner is a violation of this rule. Failure to make immediate deposits as required is a violation of this rule. Each of the above shall be considered separate violations with each subject to the penalties provided therein.

(5) For the purposes of Section 120.695, F.S., a violation of the above rule shall not be considered a minor violation.

(6) Form OFR-494-09 is incorporated by reference in subsection 69V-40.002(1), F.A.C.

Proposed Effective Date: October 1, 2010

Rulemaking Authority 494.0011(2), 494.0016(4) FS. Law Implemented 120.695, 494.00255(1)(a), 494.0038, 494.0068 494.0038(5), 494.0041(2)(e), 494.0068(3), 494.0072(2)(e) FS. History–New 12-3-91, Amended 7-25-96, 12-12-99, Formerly 3D-40.156, Amended 3-23-08, 10-1-10.

 

13 – Rule 69V-40.170, F.A.C., has been changed to remove the mandatory penalty of revocation for failure to permit examination of records after a “reasonable” request:

“(5)(6)(a) The penalty for maintaining books, accounts, and records at a location other than the principal place of business, without written notification to the Office of Financial Regulation, shall be the issuance of a “notice of noncompliance” for a first offense. Any subsequent finding of a violation of this rule during an examination or investigation shall be a $500 fine.

(b) The penalty for refusal to permit an investigation or examination of books, accounts, and records, after a reasonable request by the Office of Financial Regulation, shall be revocation of the license. This paragraph shall not apply to a proceeding governed by the rules of civil procedure of any state or federal court.

14 – Paragraph 69V-40.175(2)(c), F.A.C., has been changed to correct a cross-reference;

“(c) A copy of the good faith estimate of costs pursuant to Section 494.0038(3)(c), F.S. subsection 494.0038(2)(c), F.S.”

15 – Paragraph 69V-40.260(8)(d), F.A.C., has been changed to reference the penalties provided in Section 494.00255(2), F.S.:

“(d) Repeat violations of the requirements of this rule shall subject the licensee to the maximum penalties under Section 494.00255(2) the provisions of Sections 494.001-.0074, F.S.”

16 – Rule 69V-40.285, F.A.C., has been changed to narrow the scope of the rule to books and records requirements:

69V-40.285 Noninstitutional Investor Funds Account.

(1) All money received by a mortgage lender or correspondent mortgage lender from a noninstitutional investor for disbursement at a mortgage loan closing shall be recorded and deposited in a trust account in a federally insured financial institution within seven business days of receipt of the funds unless otherwise directed, in writing, by the noninstitutional investor. Such trust account may be used for more than one noninstitutional investor’s funds. Noninstitutional funds may not be commingled with the licensee’s operating account or funds. The account shall be in the name of the mortgage lender or correspondent mortgage lender and shall provide for withdrawal of funds without notice. The licensee shall maintain an updated and accurate record of account activity on Form OFR-494-12 or on a format which is substantially similar to Form OFR-494-12 OFR-MX-555.

(2) In lieu of depositing noninstitutional investor money into a trust account the mortgage lender or correspondent mortgage lender may have noninstitutional investor money intended for mortgage loan closings deposited with and disbursed by an attorney licensed in this state or by a title company duly licensed in this state if such title company is not owned, controlled or affiliated with the licensee.

(3) The administrative penalty for failure to comply with this rule shall be $500. Incidental and isolated clerical errors or omissions shall not be considered a violation of this rule. The penalty for intentional or repeat violations of this rule shall be a $500 fine and suspension or revocation.

(4) For the purposes of Section 120.695, F.S., a violation of the above rule shall not be considered a minor violation.

(5) Form OFR-494-12 is incorporated by reference in subsection 69V-40.002(1), F.A.C.