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ACT No. 260
Regular Session, 2014
HOUSE BILL NO. 807
BY REPRESENTATIVE BARRAS
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
The purpose of this Chapter is to promote the safety and welfare of the people of the21
state by providing for regulatory oversight and by establishing educational22 ENROLLEDHB NO. 807
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requirements in a professional field in which unqualified individuals may injure or1
mislead the public.2
§1083. Definitions3
As used in this Chapter:4
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(11.1) "Mortgage servicing" means collecting or remitting payment for6
another, or the right to collect or remit payments for another, of any of the following:7
principal, interest, tax, insurance, or other payment under a mortgage loan.8
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(18) "Residential loan transaction" means any agreement by a consumer with10
a mortgage broker, mortgage loan originator, mortgage loan servicer, or mortgage11
lender in connection with a residential mortgage loan.12
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(20) "Residential mortgage lending activity" means an activity, including14
electronic activity, engaged in for compensation or with the expectation of15
compensation in connection with a residential loan transaction, including the16
origination or funding of a residential mortgage loan and the negotiation and17
placement, or offering to negotiate, place, or fund a residential mortgage loan for18
another person, or servicing a mortgage loan.19
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§1086. Licensure requirement21
A. Except as otherwise provided in Subsection B of this Section, beginning22
on July 31, 2009, and unless otherwise exempt pursuant to this Chapter, no person23
shall engage in any residential mortgage lending activity in this state without first24
obtaining and maintaining annually the following:25
(1) A license and registration as a mortgage loan originator, or a license as26
a mortgage lender or, mortgage broker, or mortgage servicer.27
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§1087. Exemptions; annual registration statement; fees1
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F. The following employers and their employees shall be exempt from the3
provisions of this Part applicable to residential mortgage lenders, and residential4
mortgage brokers, and mortgage servicers:5
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§1088. Application for licensure; surety bond7
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D. To comply with the requirements of this Section, an applicant for a9
mortgage lender, or mortgage broker license, or mortgage servicer license shall10
furnish the required information as to each owner and member if the applicant is a11
partnership or limited liability company, each officer, director, and direct or indirect12
owner of ten percent or more of applicant's outstanding shares if the applicant is a13
corporation, and each settlor, trustee, and beneficiary if the applicant is a trust.14
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F. Notwithstanding any other law to the contrary, the commissioner may not16
issue a mortgage lender license, or a mortgage broker license, or mortgage servicer17
license unless the commissioner makes the minimum findings provided in18
Paragraphs (E)(1), (2), (3), and (4) of this Section, and as to each owner, partner, and19
member if the applicant is a partnership or a limited liability company, each officer,20
director, and direct or indirect owner of ten percent or more of the outstanding shares21
if the applicant is a corporation, and each settlor, trustee, and beneficiary if the22
applicant is a trust.23
G.24
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(3) The required amount of the surety bond shall be determined by26
information in a report submitted by an applicant or licensee as prescribed by the27
commissioner. The total dollar amount of the original outstanding principal balance28
of all residential mortgage loans serviced or originated by the applicant secured by29
immovable property located in this state, including all such loans originated by30 ENROLLEDHB NO. 807
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mortgage loan originators employed by the applicant during the previous calendar1
year and reported pursuant to this Subsection shall be used to determine the amount2
of the bond. The required amount of the bond shall be determined by information3
in a report of total loan volume submitted by the applicant as prescribed by the4
commissioner. Total loan volume of the applicant shall be calculated by adding all5
of the following:6
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(d) The total outstanding principal balance as of the end of the previous8
calendar year for all residential mortgage loans serviced.9
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J. An applicant for a mortgage originator license who is employed by, or is11
an exclusive agent for, a juridical person engaging in residential mortgage lending12
activities as a licensed mortgage broker, or mortgage lender, or mortgage servicer13
may satisfy the requirement of furnishing a surety bond by submitting evidence in14
a form and manner satisfactory to the commissioner that his employer or principal15
has obtained a surety bond which satisfies the requirements of this Section.16
Notwithstanding any provision of law to the contrary, a mortgage originator whose17
license remains in a status of inactive or any other status which would not allow18
them to originate mortgage loans shall not be required to maintain the surety bond19
as required by this Section until such time as their license is returned to a status20
which allows them to originate mortgage loans.21
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§1088.2. Application for licensure; application and renewal fees23
A. The application shall be accompanied by the following nonrefundable24
fees as determined by and payable to the commissioner:25
(1) In the case of an application for a license to act as a mortgage lender, a26
mortgage broker, mortgage servicer, or both combination of any, a license fee in an27
amount not to exceed four hundred dollars.28
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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
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§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
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(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
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C.18
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(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
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(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 ENROLLEDHB NO. 807
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agreements with the commissioner, including but not limited to the payment of all1
fees, penalties, or refunds.2
D.3
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(2) The license of a mortgage loan broker, or lender, or servicer failing to5
satisfy the minimum standards for annual license renewal in Paragraph (C)(2) of this6
Section shall expire on December thirty-first.7
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§1089. Name or location changes and closures; fees9
A.(1) No residential mortgage lender, or originator, or servicer shall conduct10
the residential mortgage lending activities provided for in this Chapter under any11
name other than the one stated in its current record of information in the licensing12
system.13
(2) A residential mortgage lender or servicer shall notify the commissioner14
of a change in the location or name of the business or the addition of offices by15
submitting such information to the licensing system prior to the change. A notice of16
change of location or name or addition of offices shall be accompanied by a filing17
fee of one hundred dollars.18
(3) A residential mortgage lender or servicer shall notify the commissioner19
of the closing of any office by submitting such information to the licensing system20
and within thirty days of such closure.21
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§1090. Restrictions23
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B.(1) No person shall acquire or control a license to make, service, or broker25
residential mortgage loans through the acquisition or control of fifty-one percent or26
more of the ownership interest in a licensee without first having obtained written27
approval from the commissioner, pursuant to an application for a change of control28
in ownership of the licensee, filed in the manner and on a form prescribed by the29
commissioner and accompanied by a fee of three hundred dollars. Any person who30 ENROLLEDHB NO. 807
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acquires controlling interest in a licensee without first having filed an application for1
change of control with the commissioner shall be deemed to be operating without2
proper authority under this Chapter and is subject to the penalties of R.S. 6:1092(C).3
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§1092. Suspension and revocation of licensure; commissioner's interpretations;5
prohibitions6
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B.(1) Notwithstanding any other law to the contrary, and in addition to any8
other authority conferred upon the commissioner by any other provision of law, the9
commissioner may upon discovery order an immediate suspension of the license of10
any person licensed pursuant to this Chapter who:11
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(e) Has his license to act as a residential mortgage broker, residential13
mortgage lender, mortgage servicer, or residential mortgage loan originator14
suspended or revoked in this or another jurisdiction.15
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G. Any person who acts as a mortgage broker, mortgage lender, mortgage17
servicer, or mortgage loan originator without complying with the licensing18
provisions of this Chapter shall be subject to forfeiture of the compensation19
attributable to and received by the mortgage broker, mortgage lender, mortgage20
servicer, or mortgage loan originator in connection with residential mortgage lending21
activity occurring on or after August 15, 2001; provided that the forfeiture of such22
compensation by the mortgage broker, mortgage lender, mortgage servicer, or23
mortgage loan originator shall not impair the validity of the note and mortgage.24
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K. Any residential mortgage lender, or broker, or servicer whose license26
under this Chapter has been revoked for any reason may not reapply for a license27
until at least five years have elapsed from the date of the order of revocation, unless28
the commissioner, in his sole discretion, prescribes an earlier or later date. For29
purposes of this Subsection, the order shall be considered to be the commissioner's30 ENROLLEDHB NO. 807
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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
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§1099. Criminal penalties9
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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. Persons required to obtain a license solely as a result of the provisions of16
this Act shall obtain the required license on or before June 30, 2015.17
Section 3. This Act shall become effective on June 30, 2014; if vetoed by the18
governor and subsequently approved by the legislature, the Act shall become effective on19
June 30, 2014, or on the day following such approval by the legislature, whichever is later.20
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: