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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)(introductory paragraph) and (b), and (D)(2),4
1089(A), 1090(B)(1), 1092(B)(1)(e), (G), and (K), and 1099(F) and to enact R.S.5
6:1083(11.1) and 1088(G)(3)(d), relative to mortgage servicers; to require that6
mortgage servicers be licensed and regulated pursuant to the Louisiana Secure and7
Fair Enforcement of Mortgage Licensing Act of 2009; and to provide for related8
matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 6:1082, 1083(18) and (20), 1086(A)(1), 1087(F)(introductory11
paragraph), 1088(D), (F), (G)(3)(introductory paragraph), and (J), 1088.2(A)(1) and (3),12
1088.3(A)(1) and (3), (C)(2)(introductory paragraph) and (b), and (D)(2), 1089(A),13
1090(B)(1), 1092(B)(1)(e), (G), and (K), and 1099(F) are hereby amended and reenacted and14
R.S. 6:1083(11.1) and 1088(G)(3)(d) are hereby enacted to read as follows:15
§1082. Purpose16
The Legislature of Louisiana does hereby declare that it is in the best interest17
of the citizens of the state to protect consumers in the most important financial18
investment most will make, the purchase of a home, by requiring the licensing and19
regulation of residential mortgage lenders, brokers, and originators, and servicers.20 HLS 14RS-1230 ENGROSSED
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The purpose of this Chapter is to promote the safety and welfare of the people of the1
state by providing for regulatory oversight and by establishing educational2
requirements in a professional field in which unqualified individuals may injure or3
mislead the public.4
§1083. Definitions5
As used in this Chapter:6
* * *7
(11.1) "Mortgage servicing" means collecting or remitting payment for8
another, or the right to collect or remit payments for another, of any of the following:9
principal, interest, tax, insurance, or other payment under a mortgage loan.10
* * *11
(18) "Residential loan transaction" means any agreement by a consumer with12
a mortgage broker, mortgage loan originator, mortgage loan servicer, or mortgage13
lender in connection with a residential mortgage loan.14
* * *15
(20) "Residential mortgage lending activity" means an activity, including16
electronic activity, engaged in for compensation or with the expectation of17
compensation in connection with a residential loan transaction, including the18
origination or funding of a residential mortgage loan and the negotiation and19
placement, or offering to negotiate, place, or fund a residential mortgage loan for20
another person, or servicing a mortgage loan.21
* * *22
§1086. Licensure requirement23
A. Except as otherwise provided in Subsection B of this Section, beginning24
on July 31, 2009, and unless otherwise exempt pursuant to this Chapter, no person25
shall engage in any residential mortgage lending activity in this state without first26
obtaining and maintaining annually the following:27 HLS 14RS-1230 ENGROSSED
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(1) A license and registration as a mortgage loan originator, or a license as1
a mortgage lender or, mortgage broker, or mortgage servicer.2
* * *3
§1087. Exemptions; annual registration statement; fees4
* * *5
F. The following employers and their employees shall be exempt from the6
provisions of this Part applicable to residential mortgage lenders, and residential7
mortgage brokers, and mortgage servicers:8
* * *9
§1088. Application for licensure; surety bond10
* * *11
D. To comply with the requirements of this Section, an applicant for a12
mortgage lender, or mortgage broker license, or mortgage servicer license shall13
furnish the required information as to each owner and member if the applicant is a14
partnership or limited liability company, each officer, director, and direct or indirect15
owner of ten percent or more of applicant's outstanding shares if the applicant is a16
corporation, and each settlor, trustee, and beneficiary if the applicant is a trust.17
* * *18
F. Notwithstanding any other law to the contrary, the commissioner may not19
issue a mortgage lender license, or a mortgage broker license, or mortgage servicer20
license unless the commissioner makes the minimum findings provided in21
Paragraphs (E)(1), (2), (3), and (4) of this Section, and as to each owner, partner, and22
member if the applicant is a partnership or a limited liability company, each officer,23
director, and direct or indirect owner of ten percent or more of the outstanding shares24
if the applicant is a corporation, and each settlor, trustee, and beneficiary if the25
applicant is a trust.26
G.27
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(3) The required amount of the surety bond shall be determined by1
information in a report submitted by an applicant or licensee as prescribed by the2
commissioner. The total dollar amount of the original outstanding principal balance3
of all residential mortgage loans serviced or originated by the applicant secured by4
immovable property located in this state, including all such loans originated by5
mortgage loan originators employe d by the applicant during the previous calendar6
year and reported pursuant to this Subsection shall be used to determine the amount7
of the bond. The required amount of the bond shall be determined by information8
in a report of total loan volume submitted by the applicant as prescribed by the9
commissioner. Total loan volume of the applicant shall be calculated by adding all10
of the following:11
* * *12
(d) The total outstanding principal balance as of the end of the previous13
calendar year for all residential mortgage loans serviced.14
* * *15
J. An applicant for a mortgage originator license who is employed by, or is16
an exclusive agent for, a juridical person engaging in residential mortgage lending17
activities as a licensed mortgage broker, or mortgage lender, or mortgage servicer18
may satisfy the requirement of furnishing a surety bond by submitting evidence in19
a form and manner satisfactory to the commissioner that his employer or principal20
has obtained a surety bond which satisfies the requirements of this Section.21
Notwithstanding any provision of law to the contrary, a mortgage originator whose22
license remains in a status of inactive or any other status which would not allow23
them to originate mortgage loans shall not be required to maintain the surety bond24
as required by this Section until such time as their license is returned to a status25
which allows them to originate mortgage loans.26
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§1088.2. Application for licensure; application and renewal fees1
A. The application shall be accompanied by the following nonrefundable2
fees as determined by and payable to the commissioner:3
(1) In the case of an application for a license to act as a mortgage lender, a4
mortgage broker, mortgage servicer, or both combination of any, a license fee in an5
amount not to exceed four hundred dollars.6
* * *7
(3) An annual license renewal fee for each person licensed as a mortgage8
broker, or mortgage lender, or mortgage servicer in an amount not to exceed three9
hundred dollars.10
* * *11
§1088.3. Application for renewal of license; restriction; late renewal fees12
A.(1) Each person licensed as a mortgage broker, or mortgage lender, or13
mortgage servicer shall submit an annual license renewal application on or before14
December thirty-first of each year in a manner and form prescribed by the15
commissioner.16
* * *17
(3) An annual renewal application shall be accompanied by the required18
annual license renewal fee pursuant to R.S. 6:1088.1. An annual license renewal19
application submitted after December thirty-first and before March first of the20
following year shall be charged an annual license renewal late fee of two hundred21
dollars for residential mortgage lenders, and brokers, and servicers, and fifty dollars22
for mortgage loan originators, in addition to the annual license renewal fee.23
* * *24
C.25
* * *26
(2) The commissioner shall not renew a residential mortgage broker, or27
lender, or servicer license for which an application for license renewal is submitted28
for the year 2010, and shall not renew any residential mortgage lender or broker29 HLS 14RS-1230 ENGROSSED
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license for which an application for license renewal is submitted for any year1
thereafter, unless the commissioner finds at a minimum:2
* * *3
(b) The applicant for renewal of a residential mortgage lender, or broker, or4
servicer license is in compliance with all final or uncontested orders of, and consent5
agreements with the commissioner, including but not limited to, the payment of all6
fees, penalties, or refunds.7
D.8
* * *9
(2) The license of a mortgage loan broker, or lender, or servicer failing to10
satisfy the minimum standards for annual license renewal in Paragraph (C)(2) of this11
Section shall expire on December thirty-first.12
* * *13
§1089. Name or location changes and closures; fees14
A.(1) No residential mortgage lender, or originator, or servicer shall conduct15
the residential mortgage lending activities provided for in this Chapter under any16
name other than the one stated in its current record of information in the licensing17
system.18
(2) A residential mortgage lender or servicer shall notify the commissioner19
of a change in the location or name of the business or the addition of offices by20
submitting such information to the licensing system prior to the change. A notice of21
change of location or name or addition of offices shall be accompanied by a filing22
fee of one hundred dollars.23
(3) A residential mortgage lender or servicer shall notify the commissioner24
of the closing of any office by submitting such information to the licensing system25
and within thirty days of such closure.26
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§1090. Restrictions1
* * *2
B.(1) No person shall acquire or control a license to make, service, or broker3
residential mortgage loans through the acquisition or control of fifty-one percent or4
more of the ownership interest in a licensee without first having obtained written5
approval from the commissioner, pursuant to an application for a change of control6
in ownership of the licensee, filed in the manner and on a form prescribed by the7
commissioner and accompanied by a fee of three hundred dollars. Any person who8
acquires controlling interest in a licensee without first having filed an application for9
change of control with the commissioner shall be deemed to be operating without10
proper authority under this Chapter and is subject to the penalties of R.S. 6:1092(C).11
* * *12
§1092. Suspension and revocation of licensure; commissioner's interpretations;13
prohibitions14
* * *15
B.(1) Notwithstanding any other law to the contrary, and in addition to any16
other authority conferred upon the commissioner by any other provision of law, the17
commissioner may upon discovery order an immediate suspension of the license of18
any person licensed pursuant to this Chapter who:19
* * *20
(e) Has his license to act as a residential mortgage broker, residential21
mortgage lender, mortgage servicer, or residential mortgage loan originator22
suspended or revoked in this or another jurisdiction.23
* * *24
G. Any person who acts as a mortgage broker, mortgage lender, mortgage25
servicer, or mortgage loan originator without complying with the licensing26
provisions of this Chapter shall be subject to forfeiture of the compensation27
attributable to and received by the mortgage broker, mortgage lender, mortgage28
servicer, or mortgage loan originator in connection with residential mortgage lending29 HLS 14RS-1230 ENGROSSED
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activity occurring on or after August 15, 2001; provided that the forfeiture of such1
compensation by the mortgage broker, mortgage lender, mortgage servicer, or2
mortgage loan originator shall not impair the validity of the note and mortgage.3
* * *4
K. Any residential mortgage lender, or broker, or servicer whose license5
under this Chapter has been revoked for any reason may not reapply for a license6
until at least five years have elapsed from the date of the order of revocation, unless7
the commissioner, in his sole discretion, prescribes an earlier or later date. For8
purposes of this Subsection, the order shall be considered to be the commissioner's9
notification of revocation of the license. For the purposes of this Subsection,10
mortgage lender, or mortgage broker, or mortgage servicer shall include the licensee,11
owners of ten percent or more, and its members if the licensee is a limited liability12
company, its partners if the licensee is a partnership, its officers and directors, if the13
licensee is a corporation, and any other person determined by the commissioner, in14
his sole discretion, to be closely related to the mortgage lender , or broker, or15
servicer.16
* * *17
§1099. Criminal penalties18
* * *19
F. A lender, broker, or originator, or servicer who knowingly operates20
without a license or while not exempt from the provisions of this Chapter shall be21
guilty of a misdemeanor and upon conviction shall be subject to a fine not less than22
five hundred dollars and not more than one thousand dollars, or to imprisonment not23
exceeding one year, or both.24
Section 2. This Act shall become effective January 1, 2015.25
Section 3. Persons required to obtain a license solely as a result of the provisions of26
this Act shall have until June 30, 2015, to obtain the required license.27 HLS 14RS-1230 ENGROSSED
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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.
Proposed law defines "mortgage servicing" as a means of collecting or remitting payment
for another, or the right to collect or remit payments for another, relative to the principal,
interest, tax, insurance, or other payment under a mortgage loan .
Proposed law amends the definition of "residential loan transaction" and "residential
mortgage lending activity" and adds the definition of "mortgage servicing".
Present law provides licensure requirements under the SAFE Act. Proposed law subjects
mortgage servicers to the same licensure requirements.
Present law provides exemptions to proposed law. Proposed law subjects mortgage servicers
to the same exemptions.
Present law provides for the application, renewal, and surety bond requirements of proposed
law. 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 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)(intro. para)
and (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))
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Commerce to the original
bill.
1. Made technical changes.