HLS 14RS-1230 ORIGINAL
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Regular Session, 2014
HOUSE BILL NO. 807
BY REPRESENTATIVE BARRAS
FINANCIAL INSTITUTIONS: Makes changes to residential mortgage brokers and lenders
law
AN ACT1
To amend and reenact R.S. 6:1082, 1083(18) and (20), 1086(A)(1), 1087(F)(introductory2
paragraph), 1088(D), (F), (G)(3)(introductory paragraph), and (J), 1088.2(A)(1) and3
(3), 1088.3(A)(1) and (3), (C)(2)(b), and (D)(2), 1089(A), 1090(B)(1),4
1092(B)(1)(e), (G), and (K), and 1099(F) and to enact R.S. 6:1083(11.1) and5
1088(G)(3)(d), relative to mortgage servicers; to require that mortgage servicers be6
licensed and regulated pursuant to the Louisiana Secure and Fair Enforcement of7
Mortgage Licensing Act of 2009; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. R.S. 6:1082, 1083(18) and (20), 1086(A)(1), 1087(F)(introductory10
paragraph), 1088(D), (F), (G)(3)(introductory paragraph), and (J), 1088.2(A)(1) and (3),11
1088.3(A)(1) and (3), (C)(2)(b), and (D)(2), 1089(A), 1090(B)(1), 1092(B)(1)(e), (G), and12
(K), and 1099(F) are hereby amended and reenacted and R.S. 6:1083(11.1) and13
1088(G)(3)(d) are hereby enacted to read as follows:14
§1082. Purpose15
The Legislature of Louisiana does hereby declare that it is in the best interest16
of the citizens of the state to protect consumers in the most important financial17
investment most will make, the purchase of a home, by requiring the licensing and18
regulation of residential mortgage lenders, brokers, and originators, and servicers.19
The purpose of this Chapter is to promote the safety and welfare of the people of the20
state by providing for regulatory oversight and by establishing educational21
requirements in a professional field in which unqualified individuals may injure or22
mislead the public.23 HLS 14RS-1230 ORIGINAL
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§1083. Definitions1
As used in this Chapter:2
* * *3
(11.1) "Mortgage servicing" means collecting or remitting payment for4
another, or the right to collect or remit payments for another, of any of the following:5
principal, interest, tax, insurance, or other payment under a mortgage loan.6
* * *7
(18) "Residential loan transaction" means any agreement by a consumer with8
a mortgage broker, mortgage loan originator, mortgage loan servicer, or mortgage9
lender in connection with a residential mortgage loan.10
* * *11
(20) "Residential mortgage lending activity" means an activity, including12
electronic activity, engaged in for compensation or with the expectation of13
compensation in connection with a residential loan transaction, including the14
origination or funding of a residential mortgage loan and the negotiation and15
placement, or offering to negotiate, place, or fund a residential mortgage loan for16
another person or servicing a mortgage loan.17
* * *18
§1086. Licensure requirement19
A. Except as otherwise provided in Subsection B of this Section, beginning20
on July 31, 2009, and unless otherwise exempt pursuant to this Chapter, no person21
shall engage in any residential mortgage lending activity in this state without first22
obtaining and maintaining annually the following:23
(1) A license and registration as a mortgage loan originator, or a license as24
a mortgage lender or broker, or mortgage servicer.25
* * *26
§1087. Exemptions; annual registration statement; fees27
* * *28 HLS 14RS-1230 ORIGINAL
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F. The following employers and their employees shall be exempt from the1
provisions of this Part applicable to residential mortgage lenders and residential2
mortgage brokers and mortgage servicers:3
* * *4
§1088. Application for licensure; surety bond5
* * *6
D. To comply with the requirements of this Section, an applicant for a7
mortgage lender, or mortgage broker license, or mortgage servicer shall furnish the8
required information as to each owner and member if the applicant is a partnership9
or limited liability company, each officer, director, and direct or indirect owner of10
ten percent or more of applicant's outstanding shares if the applicant is a corporation,11
and each settlor, trustee, and beneficiary if the applicant is a trust.12
* * *13
F. Notwithstanding any other law to the contrary, the commissioner may not14
issue a mortgage lender license, or a mortgage broker license, or a mortgage service15
license unless the commissioner makes the minimum findings provided in16
Paragraphs (E)(1), (2), (3), and (4) of this Section, and as to each owner, partner, and17
member if the applicant is a partnership or a limited liability company, each officer,18
director, and direct or indirect owner of ten percent or more of the outstanding shares19
if the applicant is a corporation, and each settlor, trustee, and beneficiary if the20
applicant is a trust.21
G.22
* * *23
(3) The required amount of the surety bond shall be determined by24
information in a report submitted by an applicant or licensee as prescribed by the25
commissioner. The total dollar amount of the original outstanding principal balance26
of all residential mortgage loans serviced or originated by the applicant secured by27
immovable property located in this state, including all such loans originated by28
mortgage loan originators employed by the applicant during the previous calendar29 HLS 14RS-1230 ORIGINAL
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year and reported pursuant to this Subsection shall be used to determine the amount1
of the bond. The required amount of the bond shall be determined by information2
in a report of total loan volume submitted by the applicant as prescribed by the3
commissioner. Total loan volume of the applicant shall be calculated by adding all4
of the following:5
* * *6
(d) The total outstanding principal balance as of the end of the previous7
calendar year for all residential mortgage loans serviced.8
* * *9
J. An applicant for a mortgage originator license who is employed by, or is10
an exclusive agent for, a juridical person engaging in residential mortgage lending11
activities as a licensed mortgage broker, or mortgage lender, or mortgage servicer12
may satisfy the requirement of furnishing a surety bond by submitting evidence in13
a form and manner satisfactory to the commissioner that his employer or principal14
has obtained a surety bond which satisfies the requirements of this Section.15
Notwithstanding any provision of law to the contrary, a mortgage originator whose16
license remains in a status of inactive or any other status which would not allow17
them to originate mortgage loans shall not be required to maintain the surety bond18
as required by this Section until such time as their license is returned to a status19
which allows them to originate mortgage loans.20
* * *21
§1088.2. Application for licensure; application and renewal fees22
A. The application shall be accompanied by the following nonrefundable23
fees as determined by and payable to the commissioner:24
(1) In the case of an application for a license to act as a mortgage lender, a25
mortgage broker, mortgage servicer, or both, a license fee in an amount not to exceed26
four hundred dollars.27
* * *28 HLS 14RS-1230 ORIGINAL
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(3) An annual license renewal fee for each person licensed as a mortgage1
broker, or mortgage lender, or mortgage servicer in an amount not to exceed three2
hundred dollars.3
* * *4
§1088.3. Application for renewal of license; restriction; late renewal fees5
A.(1) Each person licensed as a mortgage broker, or mortgage lender, or6
mortgage servicer shall submit an annual license renewal application on or before7
December thirty-first of each year in a manner and form prescribed by the8
commissioner.9
* * *10
(3) An annual renewal application shall be accompanied by the required11
annual license renewal fee pursuant to R.S. 6:1088.1. An annual license renewal12
application submitted after December thirty-first and before March first of the13
following year shall be charged an annual license renewal late fee of two hundred14
dollars for residential mortgage lenders, and brokers, and servicers, and fifty dollars15
for mortgage loan originators, in addition to the annual license renewal fee.16
* * *17
C.18
* * *19
(2) The commissioner shall not renew a residential mortgage broker, or20
lender, or servicer license for which an application for license renewal is submitted21
for the year 2010, and shall not renew any residential mortgage lender or broker22
license for which an application for license renewal is submitted for any year23
thereafter, unless the commissioner finds at a minimum:24
* * *25
(b) The applicant for renewal of a residential mortgage, lender or broker, or26
servicer license is in compliance with all final or uncontested orders of, and consent27
agreements with the commissioner, including but not limited to, the payment of all28
fees, penalties, or refunds.29 HLS 14RS-1230 ORIGINAL
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D.1
* * *2
(2) The license of a mortgage loan broker, or lender, or servicer failing to3
satisfy the minimum standards for annual license renewal in Paragraph (C)(2) of this4
Section shall expire on December thirty-first.5
* * *6
§1089. Name or location changes and closures; fees7
A.(1) No residential mortgage lender, or originator, or servicer shall conduct8
the residential mortgage lending activities provided for in this Chapter under any9
name other than the one stated in its current record of information in the licensing10
system.11
(2) A residential mortgage lender or servicer shall notify the commissioner12
of a change in the location or name of the business or the addition of offices by13
submitting such information to the licensing system prior to the change. A notice of14
change of location or name or addition of offices shall be accompanied by a filing15
fee of one hundred dollars.16
(3) A residential mortgage lender or servicer shall notify the commissioner17
of the closing of any office by submitting such information to the licensing system18
and within thirty days of such closure.19
* * *20
§1090. Restrictions21
* * *22
B.(1) No person shall acquire or control a license to make, service, or broker23
residential mortgage loans through the acquisition or control of fifty-one percent or24
more of the ownership interest in a licensee without first having obtained written25
approval from the commissioner, pursuant to an application for a change of control26
in ownership of the licensee, filed in the manner and on a form prescribed by the27
commissioner and accompanied by a fee of three hundred dollars. Any person who28
acquires controlling interest in a licensee without first having filed an application for29 HLS 14RS-1230 ORIGINAL
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change of control with the commissioner shall be deemed to be operating without1
proper authority under this Chapter and is subject to the penalties of R.S. 6:1092(C).2
* * *3
§1092. Suspension and revocation of licensure; commissioner's interpretations;4
prohibitions5
* * *6
B.(1) Notwithstanding any other law to the contrary, and in addition to any7
other authority conferred upon the commissioner by any other provision of law, the8
commissioner may upon discovery order an immediate suspension of the license of9
any person licensed pursuant to this Chapter who:10
* * *11
(e) Has his license to act as a residential mortgage broker, residential12
mortgage lender, mortgage servicer, or residential mortgage loan originator13
suspended or revoked in this or another jurisdiction.14
* * *15
G. Any person who acts as a mortgage broker, mortgage lender, mortgage16
servicer, or mortgage loan originator without complyi ng with the licensing17
provisions of this Chapter shall be subject to forfeiture of the compensation18
attributable to and received by the mortgage broker, mortgage lender, mortgage19
servicer, or mortgage loan originator in connection with residential mortgage lending20
activity occurring on or after August 15, 2001; provided that the forfeiture of such21
compensation by the mortgage broker, mortgage lender, mortgage servicer, or22
mortgage loan originator shall not impair the validity of the note and mortgage.23
* * *24
K. Any residential mortgage lender, or broker, or servicer whose license25
under this Chapter has been revoked for any reason may not reapply for a license26
until at least five years have elapsed from the date of the order of revocation, unless27
the commissioner, in his sole discretion, prescribes an earlier or later date. For28
purposes of this Subsection, the order shall be considered to be the commissioner's29 HLS 14RS-1230 ORIGINAL
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notification of revocation of the license. For the purposes of this Subsection,1
mortgage lender, or mortgage broker, or mortgage servicer shall include the licensee,2
owners of ten percent or more, and its members if the licensee is a limited liability3
company, its partners if the licensee is a partnership, its officers and directors, if the4
licensee is a corporation, and any other person determined by the commissioner, in5
his sole discretion, to be closely related to the mortgage lender, or broker, or6
servicer.7
* * *8
§1099. Criminal penalties9
* * *10
F. A lender, broker, or originator, or servicer who knowingly operates11
without a license or while not exempt from the provisions of this Chapter shall be12
guilty of a misdemeanor and upon conviction shall be subject to a fine not less than13
five hundred dollars and not more than one thousand dollars, or to imprisonment not14
exceeding one year, or both.15
Section 2. This Act shall become effective January 1, 2015.16
Section 3. Persons required to obtain a license solely as a result of the provisions of17
this Act shall have until June 30, 2015 to obtain the required license.18
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Barras HB No. 807
Abstract: Adds licensure requirement for persons engaged in residential mortgage
servicing.
Present law provides for the purpose of the La. Secure and Fair Enforcement of Mortgage
Licensing Act of 2009 (SAFE Act).
Proposed law retains present law and makes the purpose applicable to mortgage servicers.
Present law defines certain terms in present law.
Proposed law amends the definition of "residential loan transaction" and "residential
mortgage lending activity" and adds the definition of "mortgage servicing". HLS 14RS-1230 ORIGINAL
HB NO. 807
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Present law provides licensure requirements under the SAFE Act. Proposed law subjects
mortgage servicers to the same licensure requirements.
Present law provides exemptions to the act. Proposed law subjects mortgage servicers to
the same exemptions.
Present law provides for the application, renewal, and surety bond requirements of the act.
Proposed law subjects mortgage servicers to the requirements.
Proposed law requires persons engaged in residential mortgage servicing to the Louisiana
SAFE Mortgage Licensing Act.
Persons required to obtain a license solely because of the provisions of the proposed law
shall have until June 30, 2015, to do so.
Effective January 1, 2015.
(Amends R.S. 6:1082, 1083(18) and (20), 1086(A)(1), 1087(F)(intro. para.), 1088(D), (F),
(G)(3)(intro. para.), and (J), 1088.2(A)(1) and (3), 1088.3(A)(1) and (3), (C)(2)(b), and
(D)(2), 1089(A), 1090(B)(1), 1092(B)(1)(e), (G), and (K), and 1099(F); Adds R.S.
6:1083(11.1) and 1088(G)(3)(d))