Section 1. That sections 1322.01, 1322.02, 1322.03, 1322.04, | 9 |
1322.05, 1322.06, 1322.07, 1322.08, 1322.09, 1322.10, 1322.101, | 10 |
1322.11, 1322.99, and 4712.01 be amended and sections
1322.021, | 11 |
1322.031, 1322.041, 1322.051, 1322.052, 1322.061,
1322.062, | 12 |
1322.071, 1322.072, and 1322.073 of the
Revised
Code be enacted to | 13 |
read as follows: | 14 |
(C)
"Employee" means an individual for whom a mortgage | 24 |
broker, in addition to providing a wage or salary, pays social | 25 |
security and unemployment taxes, provides workers' compensation | 26 |
coverage, and withholds local, state, and federal income taxes. | 27 |
"Employee" also includes any shareholder, member, or partner of a | 28 |
registrant who acts as a loan officer or operations manager of the | 29 |
registrant, but for whom the registrant is prevented by law from | 30 |
making income tax withholdings. | 31 |
(D) "Mortgage banker" means any person that makes,
services, | 42 |
or buys and sells mortgage loans, and is
required to submit | 43 |
audited financial statements to, and is
subject to a possible | 44 |
audit
by, the
United States department of housing and urban | 45 |
development, the
United States department of veterans affairs, the | 46 |
federal
national mortgage association, the federal home loan | 47 |
mortgage
corporation, or the government national mortgage | 48 |
association. | 49 |
(2) A
lender approved by the United States secretary of | 60 |
housing and urban development for participation in a mortgage | 61 |
insurance program under the "National Housing Act," 48 Stat. 1246 | 62 |
(1934), 12 U.S.C.A. 1701, as amendedperson that solicits | 63 |
financial and mortgage information from the public, provides that | 64 |
information to a mortgage broker, and charges or receives from the | 65 |
mortgage broker money or
other valuable consideration readily | 66 |
convertible into money for
providing the information; | 67 |
(3) A
bank, savings bank, savings and loan association,
or | 68 |
subsidiary or affiliate of a bank, savings bank, or
savings and | 69 |
loan association. For purposes of division
(E)(3) of
this | 70 |
section, "affiliate" has the same meaning as in division (A)
of | 71 |
section 1101.01 of the Revised Code, and "bank," as used in | 72 |
division (A) of section 1101.01 of the Revised Code, is deemed to | 73 |
include a savings bank or savings and loan association. | 74 |
(5) A budget and debt counseling service, as defined in | 78 |
division (D) of section 2716.03 of the Revised Code, provided
that | 79 |
the service is a nonprofit organization exempt from taxation
under | 80 |
section 501(c)(3) of the "Internal Revenue Code of 1986,"
100 | 81 |
Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service
is | 82 |
in compliance with Chapter 4710. of the Revised Code; | 83 |
Sec. 1322.02. (A)(1) No person, on the person's own behalf | 124 |
or
on
behalf of any other person, shall act
as a mortgage broker | 125 |
without first having obtained a certificate of
registration from | 126 |
the superintendent of financial
institutions for every
office to | 127 |
be
maintained by the person for the transaction of business as a | 128 |
mortgage broker
in this state.
A registrant
shall maintain an | 129 |
office location in this state for the transaction of
business as a | 130 |
mortgage broker in this state. | 131 |
(1)
Employee means a person who may be required or directed | 146 |
by a
registrant to originate mortgage loans in consideration of | 147 |
direct or indirect
gain or profit. Employee does not include an | 148 |
independent contractor or
any person who has a similar employment | 149 |
relationship with a
mortgage brokerThe following persons are | 150 |
exempt from sections 1322.01 to
1322.12 of the Revised Code only | 151 |
with respect
to business engaged
in or authorized by their | 152 |
charter, license,
authority, approval,
or certificate, or as | 153 |
otherwise authorized by division (C)(1)(g) of this section: | 154 |
(b) A budget and debt counseling service, as defined in | 159 |
division (D) of section 2716.03 of the Revised Code, provided that | 160 |
the service is a nonprofit organization exempt from taxation under | 161 |
section 501(c)(3) of the "Internal Revenue Code of 1986," 100 | 162 |
Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service is | 163 |
in compliance with Chapter 4710. of the Revised Code; | 164 |
(i) The person has been directly approved by the United | 184 |
States department of housing and urban development as a | 185 |
nonsupervised mortgagee with participation in the direct | 186 |
endorsement program, or, provided that the loans in all respects, | 187 |
except loan amounts, comply with the underwriting and | 188 |
documentation requirements of the United States department of | 189 |
housing and urban development, the person makes loans in excess of | 190 |
the applicable loan limit set by the federal national mortgage | 191 |
association. Division (C)(1)(g)(i) of this section does
not | 192 |
include a mortgagee approved as a loan correspondent. | 193 |
(ii) The person has been directly approved by the federal | 194 |
national mortgage association as a seller/servicer, or, provided | 195 |
that the loans in all respects, except loan amounts, comply with | 196 |
the underwriting and documentation requirements of the federal | 197 |
national mortgage association, the person makes loans in excess of | 198 |
the applicable loan limit set by the federal national mortgage | 199 |
association. | 200 |
(iii) The person has been directly approved by the federal | 201 |
home loan mortgage corporation as a seller/servicer, or, provided | 202 |
that the loans in all respects, except loan amounts, comply with | 203 |
the underwriting and documentation requirements of the federal | 204 |
home loan mortgage corporation, the person makes loans in excess | 205 |
of the applicable loan limit set by the federal home loan mortgage | 206 |
corporation. | 207 |
(c) To place, assist in placement, or find a mortgage
loan | 226 |
for a buyerAny individual who is employed by a person exempt from | 227 |
sections 1322.01 to 1322.12 of the Revised Code is also exempt | 228 |
from those sections to the extent the individual is acting within | 229 |
the scope of the individual's employment and within the scope of | 230 |
the exempt person's charter, license, authority, approval, or | 231 |
certificate. | 232 |
Sec. 1322.021. (A) A registrant that is a corporation, | 233 |
limited liability company, partnership, trust, or other business | 234 |
entity or association shall notify the division of financial | 235 |
institutions of every sale, transfer, or hypothecation of any | 236 |
stock, security, membership, partnership, or other equitable, | 237 |
beneficial, or ownership interest in the entity or association, if | 238 |
the interest represents at least a five per cent membership, | 239 |
partnership, or other equitable, beneficial, or ownership interest | 240 |
in the entity or association. | 241 |
(B) Every person that acquires or otherwise receives an | 242 |
interest described in division (A) of this section is subject to | 243 |
sections 1322.01 to 1322.12 of the Revised Code. The division may | 244 |
make any investigation necessary to determine whether any fact or | 245 |
condition exists that, if it had existed at the time of the | 246 |
original application for a certificate of registration, the fact | 247 |
or condition would have warranted the division to deny the | 248 |
application under section 1322.04 of the Revised Code. If such a | 249 |
fact or condition is found, the division may, in accordance with | 250 |
Chapter 119. of the Revised Code, revoke the registrant's | 251 |
certificate. | 252 |
Sec. 1322.03. (A) An application for a certificate of | 253 |
registration as a mortgage broker shall be in writing, under
oath, | 254 |
and in the form prescribed by the superintendent of
financial | 255 |
institutions. The application shall
be accompanied by
ana | 256 |
nonrefundable application fee of three hundred fifty dollars for | 257 |
each
location
of an office to be maintained by the applicant in | 258 |
accordance with
division (A) of section 1322.02 of the Revised | 259 |
Code
and; however, an applicant that is registered under sections | 260 |
1321.51 to 1321.60 of the Revised Code shall not be required to | 261 |
pay an application fee. The application shall
provide all
of the | 262 |
following: | 263 |
(1) The location or locations where the business is to be | 264 |
transacted
and whether any location is a residence. If any | 265 |
location
where the business is to be transacted is a residence, | 266 |
the
application shall be accompanied by a certified copy of a | 267 |
zoning
permit authorizing the use of the residence for commercial | 268 |
purposes, or shall be accompanied by a written opinion or other | 269 |
document issued by the county or political subdivision where the | 270 |
residence is located certifying that the use of the residence to | 271 |
transact business as a mortgage broker is not prohibited by the | 272 |
county or political subdivision. The application also
shall be | 273 |
accompanied by a photograph of
each location at which the business | 274 |
will be transacted. | 275 |
(c) If the applicant iscorporation, limited liability | 295 |
company, or any other
business entity
or association, the | 296 |
applicant
shall designate
a natural person that owns five per
cent | 297 |
or more
of the entity that will transact business as a
mortgage | 298 |
broker as
responsible for managing thean employee or owner of the | 299 |
applicant as the applicant's operations
of
the location or | 300 |
locations where the business is to be
transactedmanager. While | 301 |
acting as the operations manager, the employee or owner shall not | 302 |
be employed by any other mortgage broker. | 303 |
(a) Except as provided in division (D)(2) of this
section, | 309 |
the sole proprietor, partner, shareholder, or
natural person has | 310 |
earned at
least an associate degree in an area
relating to | 311 |
finance, banking, or business administration, and
the degree was | 312 |
earned at an accredited college or university, including an | 313 |
accredited community or technical college. | 314 |
(b) The sole proprietor, partner, shareholder, or natural | 315 |
personapplicable, possesses at
least three years of experience in | 316 |
the
mortgage and
lending field, which experience may include | 317 |
employment with or as a mortgage
broker or with a
financial | 318 |
institution, mortgage lending institution, or other
lending | 319 |
institution, or possesses at least three years of other experience | 320 |
related specifically to the business of mortgage loans
that the | 321 |
superintendent determines meets the requirements of
division | 322 |
(A)(4)(b) of this section.; | 323 |
(7) A statement
thatas to whether the applicant
or, to the | 331 |
best of the applicant's knowledge, any
shareholder, member, | 332 |
partner, operations manager, or
employee of the applicant has
not | 333 |
been convicted
of
or pleaded
guilty to
aany criminal offense, the | 334 |
violation of
which is
a
felonyinvolving theft, receiving stolen | 335 |
property, embezzlement,
forgery, fraud, passing bad checks, money | 336 |
laundering, or drug
trafficking, or any criminal offense involving | 337 |
fraudmoney or
securities; | 338 |
(8)
A statement as to whether the applicant or, to the best | 339 |
of the applicant's knowledge, any
shareholder, member, partner, | 340 |
operations manager, or
employee of the applicant has been subject | 341 |
to any adverse judgment
for conversion, embezzlement, | 342 |
misappropriation of funds, fraud,
misfeasance or malfeasance, or | 343 |
breach of fiduciary duty; | 344 |
(B) Upon the filing of the application and payment of the | 350 |
application fee, the superintendent shall investigate the | 351 |
applicant.
The investigation shall include a criminal records | 352 |
check based on the fingerprints of the applicant and a civil | 353 |
records check. If, in order to issue a certificate of | 354 |
registration
to
an applicant, investigation by the
superintendent | 355 |
outside this
state is necessary, the superintendent may require | 356 |
the applicant
to advance sufficient funds to pay the actual | 357 |
expenses of the
investigation, if it appears that these expenses | 358 |
will exceed three
hundred
fifty dollars. The superintendent shall | 359 |
provide the
applicant
with an itemized statement of the actual | 360 |
expenses that
the
applicant is required to pay. | 361 |
(D)(1) Division (A)(4) of this section does not
apply to any | 368 |
registrant that, on March 4, 1996, is
registered as a
mortgage | 369 |
broker under sections 1322.01 to 1322.12
of
the Revised Code under | 370 |
a certificate of
registration issued pursuant to those sections | 371 |
prior to March 4, 1996,
provided that the certificate
of | 372 |
registration is not surrendered by the registrant or
revoked
or | 373 |
refused renewal by the superintendent of
financial institutions at | 374 |
any time after
March 4, 1996. | 375 |
(2) Except as provided in division (D)(3) of this
section, | 376 |
on and after
the effective date of this
amendment,
evidence of | 377 |
education
provided in division
(A)(4)(a)
of this
section shall not | 378 |
be
accepted on an application of a person
applying as a new | 379 |
applicant for a certificate of registration as a
mortgage
broker. | 380 |
However, on and after
the effective date of this
amendment, a | 381 |
person who, prior to
that date,
submitted evidence
of education as | 382 |
provided for in division
(A)(4)(a)
of this section may renew a | 383 |
certificate of registration
as a
mortgage broker, provided that | 384 |
the person is registered on
that
date as a mortgage broker | 385 |
pursuant to section 1322.04 of the
Revised
Code, and a certificate | 386 |
of
registration as a mortgage
broker is not surrendered by the | 387 |
person or revoked or refused
renewal by the superintendent at
any | 388 |
time after that date. | 389 |
(3) For a period ending three years after
the effective date | 390 |
of this
amendment, evidence that the
person
designated as | 391 |
responsible for managing the
operation of a location
or locations | 392 |
where business is or will be transacted
meets the
educational | 393 |
requirements specified in division
(A)(4)(a) of this
section
shall | 394 |
be acceptable on an application for a certificate of
registration | 395 |
as a
mortgage broker, if the superintendent
determines that both | 396 |
of the following
apply: | 397 |
(b) The person is designated as responsible for
managing the | 404 |
operations of an entity described in division
(A)(2) of this | 405 |
section where the mortgage
broker business is or will be | 406 |
transactedIf an application for a certificate of registration | 407 |
does not contain all of the information required under division | 408 |
(A) of this section, and if that information is not submitted to | 409 |
the superintendent within ninety days after the superintendent | 410 |
requests the information in writing, the superintendent may | 411 |
consider the application withdrawn.
| 412 |
(2) A statement as to whether the applicant has been | 422 |
convicted of
or pleaded guilty to any criminal offense involving | 423 |
theft,
receiving stolen property, embezzlement, forgery, fraud, | 424 |
passing
bad checks, money laundering, or drug trafficking, or any | 425 |
criminal
offense involving money or securities; | 426 |
(B) Upon the filing of the application and payment of the | 433 |
application fee, the superintendent shall investigate the | 434 |
applicant. The investigation shall include a criminal records | 435 |
check based on the fingerprints of the applicant and a civil | 436 |
records check. If, in order to issue a license to an applicant, | 437 |
investigation by the superintendent outside this state is | 438 |
necessary, the superintendent may require the applicant to advance | 439 |
sufficient funds to pay the actual expenses of the investigation, | 440 |
if it appears that these expenses will exceed one hundred dollars. | 441 |
The superintendent shall provide the applicant with an
itemized | 442 |
statement of the actual expenses that the applicant is
required to | 443 |
pay. | 444 |
(E)(1) The business of a loan officer shall principally be | 457 |
transacted at an office of the employing mortgage broker, which | 458 |
office is
registered in accordance with division (A) of section | 459 |
1322.02
of the Revised Code. Each original license shall be | 460 |
deposited
with and maintained by the employing mortgage broker at | 461 |
the
mortgage broker's main office. A copy of the license shall be | 462 |
maintained and displayed at the office where the loan officer | 463 |
principally
transacts business. | 464 |
(2) If a loan officer's employment is terminated, the | 465 |
mortgage
broker shall return the original license to the | 466 |
superintendent
within five business days after the termination. | 467 |
The licensee may
request the transfer of the license to another | 468 |
mortgage broker by
submitting a relocation application, along with | 469 |
a fifteen dollar
fee, to the superintendent or may request the | 470 |
superintendent in
writing to hold the license in escrow for a | 471 |
period not to exceed
one year. Any licensee whose license is held | 472 |
in escrow shall
cease activity as a loan officer. | 473 |
(1)
TheExcept as otherwise provided in division (A) of | 487 |
section 1322.03 of the Revise Code, the application is accompanied | 488 |
by the application fee
of three hundred fifty dollars for each | 489 |
location of an office to be
maintained by the applicant in | 490 |
accordance with division (A) of
section 1322.02 of the Revised | 491 |
Code and complies with division (A) of
section 1322.03 of the | 492 |
Revised Code. If a check or other draft instrument is returned to | 493 |
the superintendent for insufficient funds, the
superintendent | 494 |
shall notify the registrant by certified mail,
return receipt | 495 |
requested, that the certificate of registration
issued in reliance | 496 |
on the check or other draft instrument will be
canceled unless the | 497 |
registrant, within thirty days after receipt
of the notice, | 498 |
submits the application fee and a
one-hundred-dollar penalty to | 499 |
the superintendent. If the
registrant does not submit the | 500 |
application fee and penalty within
that time period, or if any | 501 |
check or other draft instrument used
to pay the fee or penalty is | 502 |
returned to the superintendent for
insufficient funds, the | 503 |
certificate of registration shall be
canceled immediately without | 504 |
a hearing and the registrant shall
cease activity as a mortgage | 505 |
broker. | 506 |
(2) If the application is for a location that is a | 507 |
residence,
that the applicant has obtained a valid zoning permit | 508 |
authorizing the use of the residence for commercial purposes, or | 509 |
has obtained
a valid written opinion or other document
issued by | 510 |
the county or political subdivision where the
residence is located | 511 |
certifying that the use of the residence to
transact business as a | 512 |
mortgage broker is not prohibited by the
county or political | 513 |
subdivision. The
application also is accompanied by a photograph | 514 |
of each
location at which the mortgage broker's business will be | 515 |
transacted. | 516 |
(3)(a) The sole proprietor, partner, shareholder,
or
natural | 517 |
the person designated on
the
application, pursuant to division | 518 |
(A)(3) of section 1322.03 of the Revised
Code, as
responsible for | 519 |
managing the
operation of the location or locations where the | 520 |
business is to be
transactedapplicable, meets the
educational or | 521 |
experience requirements
provided in division
(A)(4) of section | 522 |
1322.03 of the Revised Code. | 523 |
(7)
TheNeither the applicant
nor any shareholder, member, | 538 |
partner, operations manager, or employee of the
applicant has
not | 539 |
pleaded guilty to or been
convicted of
aany
criminal offense, the | 540 |
violation of which is a
felony, or any
criminal offense involving | 541 |
frauddescribed in division (A)(7) of
section 1322.03 of the | 542 |
Revised Code, or, if the applicant or any of those other persons | 543 |
has pleaded guilty to or been convicted of such an offense, the | 544 |
applicant has proven to the superintendent, by a preponderance of | 545 |
the evidence, that the applicant's or other person's activities | 546 |
and employment record since the conviction show that the applicant | 547 |
or other person is honest, truthful, and of good reputation, and | 548 |
there is no basis in fact for believing that the applicant or | 549 |
other person will commit such an offense again. | 550 |
(8)
Neither the applicant nor any shareholder, member, | 551 |
partner, operations manager, or employee of the
applicant has been | 552 |
subject to any adverse judgment for conversion,
embezzlement, | 553 |
misappropriation of funds, fraud, misfeasance or
malfeasance, or | 554 |
breach of fiduciary duty, or, if the applicant or any of those | 555 |
other persons has been subject to such a judgment, the applicant | 556 |
has proven to the superintendent, by a preponderance of the | 557 |
evidence, that the applicant's or other person's activities and | 558 |
employment record since the judgment show that the applicant or | 559 |
other person is honest, truthful, and of good reputation, and | 560 |
there is no basis in fact for believing that the applicant or | 561 |
other person will be subject to such a judgment again. | 562 |
For purposes of determining whether an applicant that is a | 571 |
partnership, corporation, or other
business entity
or association | 572 |
has
met the conditions set forth in
divisiondivisions (A)(7), | 573 |
(A)(8), and (A)(10) of this
section, the superintendent shall | 574 |
determine which partners,
shareholders, or persons named in the | 575 |
application pursuant to
division
(A)(2) of section 1322.03 of
the | 576 |
Revised
Code must meet the conditions set forth in
division | 577 |
divisions (A)(7), (A)(8), and (A)(10) of
this section. This | 578 |
determination shall be based on the extent
and nature of the | 579 |
partner's, shareholder's, or
person's ownership interest
in the | 580 |
partnership, corporation, or
other business entity
or association | 581 |
that
is the applicant. | 582 |
(1) The renewal application is accompanied by a | 587 |
nonrefundable
renewal fee of three hundred
fifty dollars for | 588 |
each location of an office to be maintained
by the applicant in | 589 |
accordance with division (A) of section
1322.02 of the Revised | 590 |
Code
and a finding by the superintendent that the; however, an | 591 |
applicant that is registered under sections 1321.51 to 1321.60 of | 592 |
the Revised Code shall not be required to pay a renewal fee. If a | 593 |
check or other draft instrument is returned to the superintendent | 594 |
for insufficient funds, the superintendent shall notify the | 595 |
registrant by
certified mail, return receipt requested, that the | 596 |
certificate of
registration renewed in reliance on the check or | 597 |
other draft
instrument will be canceled unless the registrant, | 598 |
within thirty
days after receipt of the notice, submits the | 599 |
renewal fee and a
one-hundred-dollar penalty to the | 600 |
superintendent. If the
registrant does not submit the renewal fee | 601 |
and penalty within that
time period, or if any check or other | 602 |
draft instrument used to pay
the fee or penalty is returned to the | 603 |
superintendent for
insufficient funds, the certificate of | 604 |
registration shall be
canceled immediately without a hearing and | 605 |
the registrant shall
cease activity as a mortgage broker. | 606 |
(D) Division (A)(3) of this section does not
apply to any | 626 |
registrant that, on March 4, 1996, is
registered as a
mortgage | 627 |
broker under sections 1322.01 to 1322.12 of
the Revised Code under | 628 |
a certificate of
registration issued pursuant to those sections | 629 |
prior to March 4, 1996,
provided that the certificate
of | 630 |
registration is not surrendered by the registrant or
revoked
or | 631 |
refused renewal by the superintendent of
financial institutions at | 632 |
any time after
March 4, 1996. | 633 |
(1) The application is accompanied by the application fee. | 661 |
If a check or other draft instrument is returned to the | 662 |
superintendent for insufficient funds, the
superintendent shall | 663 |
notify the licensee by certified mail, return
receipt requested, | 664 |
that the license issued in reliance on the
check or other draft | 665 |
instrument will be canceled unless the
licensee, within thirty | 666 |
days after receipt of the notice, submits
the application fee and | 667 |
a one-hundred-dollar penalty to the
superintendent. If the | 668 |
licensee does not submit the application
fee and penalty within | 669 |
that time period, or if any check or other
draft instrument used | 670 |
to pay the fee or penalty is returned to the
superintendent for | 671 |
insufficient funds, the license shall be
canceled immediately | 672 |
without a hearing and the licensee shall
cease activity as a loan | 673 |
officer. | 674 |
(3) The applicant has not been convicted of or pleaded | 677 |
guilty to any criminal offense described in division (A)(2) of | 678 |
section 1322.031 of the Revised Code, or, if the applicant has | 679 |
been convicted of or pleaded guilty to such an offense, the | 680 |
applicant has proven to the superintendent, by a preponderance of | 681 |
the evidence, that the applicant's activities and employment | 682 |
record since the conviction show that the applicant is honest, | 683 |
truthful, and of good reputation, and there is no basis in fact | 684 |
for believing that the applicant will commit such an offense | 685 |
again. | 686 |
(4) The applicant has not been subject to an adverse judgment | 687 |
for conversion, embezzlement, misappropriation of funds, fraud, | 688 |
misfeasance or malfeasance, or breach of fiduciary duty, or, if | 689 |
the applicant has been subject to such a judgment, the applicant | 690 |
has proven to the superintendent, by a preponderance of the | 691 |
evidence, that the applicant's activities and employment record | 692 |
since the judgment show that the applicant is honest, truthful, | 693 |
and of good reputation, and there is no basis in fact for | 694 |
believing that the applicant will be subject to such a judgment | 695 |
again. | 696 |
(1) The renewal application is accompanied by a | 705 |
nonrefundable renewal fee of one hundred dollars. If a check or | 706 |
other draft instrument is returned to the superintendent for | 707 |
insufficient funds, the superintendent shall notify
the licensee | 708 |
by certified mail, return receipt requested, that the
license | 709 |
renewed in reliance on the check or other draft instrument
will be | 710 |
canceled unless the licensee, within thirty days after
receipt of | 711 |
the notice, submits the renewal fee and a
one-hundred-dollar | 712 |
penalty to the superintendent. If the licensee
does not submit | 713 |
the renewal fee and penalty within that time
period, or if any | 714 |
check or other draft instrument used to pay the
fee or penalty is | 715 |
returned to the superintendent for insufficient
funds, the license | 716 |
shall be canceled immediately without a hearing
and the licensee | 717 |
shall cease activity as a loan officer. | 718 |
Sec. 1322.05. (A) No registrant
shall conduct business in | 736 |
this state, unless the registrant has obtained
and maintains in | 737 |
effect at all times a corporate
surety bond issued by a bonding | 738 |
company or insurance company
authorized to do business in this | 739 |
state. The bond shall be in
favor of the superintendent of | 740 |
financial institutions and in the
penal sum of at least | 741 |
twenty-fivefifty thousand dollars and an
additional penal sum of | 742 |
fiveten thousand dollars for each
location, in excess of one, at | 743 |
which the registrant
conducts business.
The term of the bond shall | 744 |
coincide with the term of registration. A copy of the bond shall | 745 |
be filed with the
superintendent. The bond shall be
for the | 746 |
exclusive benefit of any
personbuyer injured by a violation
by an | 747 |
employee, licensee, or registrant of
any provision of sections | 748 |
1322.01 to
1322.12 of the Revised
Code.
The aggregate liability | 749 |
of the corporate
surety for any and all
breaches of the conditions | 750 |
of the bond shall not exceed
the penal
sum of the bond. | 751 |
(B)(1) The registrant
shall give notice to the | 752 |
superintendent by certified mail
of any action that is brought
by | 753 |
a buyer against the registrant
or loan officer of the registrant | 754 |
alleging injury by a violation of any provision of sections | 755 |
1322.01 to 1322.12 of the Revised Code, and of
any judgment that | 756 |
is entered against the registrant
or loan officer of the | 757 |
registrant by a
personbuyer injured by a violation of any | 758 |
provision of sections
1322.01 to 1322.12 of the
Revised
Code. The | 759 |
notice shall provide
details sufficient to identify the action or | 760 |
judgment, and shall be
filed with the superintendent within ten | 761 |
days after the
commencement of the action or notice to the | 762 |
registrant of
entry of a judgment.
The | 763 |
(C) Whenever the
penal sum of the corporate surety bond is | 768 |
reduced by one or
more recoveries or payments, the registrant | 769 |
shall
furnish a new or additional bond under this section, so that | 770 |
the
total or aggregate penal sum of the bond or bonds equals the | 771 |
sum required by this section, or shall furnish an endorsement | 772 |
executed by the corporate surety reinstating the bond to the | 773 |
required penal sum of it. | 774 |
(D) The liability of
the corporate surety on the bond to the | 775 |
superintendent and to
any
personbuyer injured by a violation of | 776 |
any provision of sections
1322.01 to 1322.12 of the
Revised
Code | 777 |
shall not be affected in
any way by any misrepresentation, breach | 778 |
of warranty, or failure
to pay the premium, by any act or omission | 779 |
upon the part of the
registrant, by the insolvency or bankruptcy | 780 |
of the
registrant, or by the insolvency of the registrant's | 781 |
estate. The liability for any act or omission that occurs during | 782 |
the term of
the corporate surety bond shall be maintained and in | 783 |
effect for at least two
years after the date on which the | 784 |
corporate surety bond is terminated or
canceled. | 785 |
Sec. 1322.052. On and after January 1, 2002, each licensee | 805 |
and each person designated under division (A)(3) of section | 806 |
1322.03 of the Revised Code to act as operations manager for a | 807 |
mortgage broker business shall complete at least six hours of | 808 |
continuing education every calendar year. To fulfill this | 809 |
requirement, the six hours of continuing education must be offered | 810 |
in a course or program of study approved by the superintendent of | 811 |
financial institutions. | 812 |
(C) All information obtained by the superintendent or the | 823 |
superintendent's deputies, examiners, assistants, agents, or | 824 |
clerks by reason
of their official position, including information | 825 |
obtained by such persons in
the course of examining a registrant | 826 |
or investigating an applicant for a
certificate of registration, | 827 |
is privileged and confidential. All such
information shall remain | 828 |
privileged and confidential for all purposes except
when it is | 829 |
necessary for the superintendent and the superintendent's | 830 |
deputies,
examiners, assistants, agents, or clerks to take | 831 |
official action regarding the
affairs of the registrant or in | 832 |
connection with criminal proceedings. | 833 |
(2) The information described in division (A)(1) of this | 840 |
section shall remain privileged and confidential for all purposes | 841 |
except when it is necessary for the superintendent of financial | 842 |
institutions to take official action regarding the affairs of a | 843 |
registrant, or in connection with civil or criminal investigations | 844 |
or proceedings conducted by the attorney general or a county | 845 |
prosecutor. The superintendent may share examination and | 846 |
investigation information with any law enforcement agency or any | 847 |
other state or federal regulatory agency. Any information shared | 848 |
with the attorney general, a county prosecutor, or a law | 849 |
enforcement agency or other state or federal regulatory agency | 850 |
shall remain privileged and confidential and shall only be used in | 851 |
connection with an official investigation, proceeding, or action. | 852 |
(B) All application information, except social security | 853 |
numbers, employer identification numbers, financial account | 854 |
numbers, the identity of the institution where financial accounts | 855 |
are maintained, personal financial information, fingerprint cards | 856 |
and the information contained on such cards, and criminal | 857 |
background information, is a public record as defined in section | 858 |
149.43 of the Revised Code. | 859 |
(D) Fail to notify the division of financial
institutions
if | 903 |
within thirty days after the registrant, licensee, or applicant, | 904 |
in a court of competent
jurisdiction of this state or any other | 905 |
state, is convicted of or
pleads
guilty to
aany criminal offense, | 906 |
the violation of which is
a felonyinvolving theft, receiving | 907 |
stolen property, embezzlement,
forgery, fraud, passing bad checks, | 908 |
money laundering, or drug
trafficking, or any
criminal offense | 909 |
involving
fraudmoney or
securities; | 910 |
(E) Knowingly make, propose, or solicit fraudulent, false, | 911 |
or
misleading
statements on any mortgage document or on any | 912 |
document
related to
a mortgage, including a mortgage application, | 913 |
real
estate
appraisal, or real estate settlement or closing | 914 |
document.
For purposes of this division, "fraudulent, false, or | 915 |
misleading
statements" does not include mathematical errors, | 916 |
inadvertent
transposition of numbers, typographical errors, or any | 917 |
other bona
fide error. | 918 |
(B) Except as otherwise provided in this
division, no | 957 |
registrant shall charge or receive, directly or
indirectly, fees | 958 |
for assisting a buyer in obtaining a mortgage,
until all of the | 959 |
services that the registrant has agreed to
perform for the buyer | 960 |
are completed, and the proceeds of the
mortgage loan have been | 961 |
disbursed to or on behalf of the buyer. However,
prior to | 962 |
completion of such services the following fees may be paid for | 963 |
services performed by a bona fide third party in assisting the | 964 |
buyer to obtain a mortgage if the fees are either paid directly
by | 965 |
the buyer to the bona fide third party or, except as provided in | 966 |
division
(A)(6)(B)(5) of this section, the fees are
deposited by | 967 |
the registrant into the registrant's special account
for services | 968 |
performed by the bona fide third party: | 969 |
(B)(C) If fees are paid by a buyer for the performance of | 984 |
any
of the services described in division
(A)(4)(B)(3) of this | 985 |
section and
the registrant is unable to assist in obtaining a | 986 |
mortgage for
the buyer, the registrant shall return to the buyer | 987 |
the original
documents prepared by the bona fide third party at | 988 |
the time that
the request for the mortgage is refused or denied. | 989 |
With respect to any appraisal, however, the registrant may return | 990 |
either the original or a copy.
No registrant
shall fail to comply | 991 |
with
this division. | 992 |
(2) "Special account" means a depository account with a | 998 |
financial institution, the deposits of which are insured by the | 999 |
federal deposit insurance corporation, that is separate and | 1000 |
distinct from any personal or other account of the registrant,
and | 1001 |
that is maintained solely for the holding and payment of fees | 1002 |
described in
division (A) of this section for services performed | 1003 |
by bona fide third parties and received by the registrant from | 1004 |
buyers that the registrant assists in obtaining mortgages. | 1005 |
Sec. 1322.09. A mortgage broker shall disclose in any | 1006 |
printed, televised, broadcast, electronically transmitted, or | 1007 |
published
advertisement relating to the mortgage broker's | 1008 |
services,
including on any electronic site accessible through the | 1009 |
internet, the name and street address of the mortgage broker and | 1010 |
the number
designated on the certificate of registration that is | 1011 |
issued to the mortgage
broker by the superintendent of financial | 1012 |
institutions under sections 1322.01 to 1322.12 of the Revised | 1013 |
Code.
No | 1014 |
(2) Impose a fine of not more than
one thousand dollars, for | 1033 |
each day a violation of a
law or rule is committed, repeated, or | 1034 |
continued. If the
registrant
or licensee engages in a pattern of | 1035 |
repeated violations of
a law or rule, the superintendent may | 1036 |
impose a fine of not more than
two thousand dollars for each day | 1037 |
the violation is committed, repeated, or
continued. All fines | 1038 |
collected
pursuant to this division shall be paid to the treasurer | 1039 |
of
state to the credit of the consumer finance fund created in | 1040 |
section 1321.21 of the Revised
Code. In determining the amount of | 1041 |
a fine to be imposed
pursuant
to this division, the superintendent | 1042 |
shall consider all of the
following: | 1043 |
(B) The superintendent may investigate alleged violations
of | 1053 |
sectionsections 1322.01 to 1322.12 of the Revised Code or
the | 1054 |
rules
adopted under those sections or complaints
concerning any | 1055 |
such violation.
The superintendent may make application to the | 1056 |
court of common pleas for an
order enjoining any such violation, | 1057 |
and, upon a
showing by the superintendent that a person has | 1058 |
committed or is
about to commit such a violation, the court shall | 1059 |
grant an
injunction, restraining order, or other appropriate | 1060 |
relief. | 1061 |
(C) In conducting any investigation pursuant to this | 1062 |
section, the superintendent may compel, by subpoena, witnesses
to | 1063 |
testify in relation to any matter over which the
superintendent | 1064 |
has jurisdiction and may require the production
of any book, | 1065 |
record, or other document pertaining to that
matter. If a person | 1066 |
fails to file any statement or report, obey any
subpoena, give | 1067 |
testimony, produce any book, record, or other
document as required | 1068 |
by a subpoena, or permit photocopying
of any book, record, or | 1069 |
other document subpoenaed, the court of
common pleas of any county | 1070 |
in this state, upon application made
to it by the superintendent, | 1071 |
shall compel obedience by attachment
proceedings for contempt, as | 1072 |
in the case of disobedience of the
requirements of a subpoena | 1073 |
issued from the court or a refusal to
testify therein. | 1074 |
(D) If the superintendent determines that a person is | 1075 |
engaged in or is believed to be engaged in activities that may | 1076 |
constitute a violation of sections 1322.01 to 1322.12 of the | 1077 |
Revised Code, the superintendent, after notice and a hearing | 1078 |
conducted in accordance with Chapter 119. of the Revised Code, may | 1079 |
issue a cease and desist order. Such an order shall be | 1080 |
enforceable in the court of common pleas. | 1081 |
(2) The superintendent may initiate
criminatecriminal | 1106 |
proceedings
under sections 1322.01 to 1322.12 of the Revised Code | 1107 |
by
presenting any evidence of criminal violation to the | 1108 |
prosecuting
attorney of the county in which the offense may be | 1109 |
prosecuted.
If
the prosecuting attorney does not prosecute the | 1110 |
violations, or
at
the request of the prosecuting attorney, the | 1111 |
superintendent
shall
present any evidence of criminal violations | 1112 |
to the attorney
general, who may proceed in the prosecution with | 1113 |
all the rights,
privileges, and powers conferred by law on | 1114 |
prosecuting attorneys,
including the power to appear before grand | 1115 |
juries and to
interrogate witnesses before such grand juries. | 1116 |
These powers of
the attorney general shall be in addition to any | 1117 |
other applicable
powers of the attorney general. | 1118 |
(E) No person shall be deemed to violate sections 1322.01
to | 1125 |
1322.12 of the Revised Code with respect to any act taken or | 1126 |
omission made in reliance on a written notice, written | 1127 |
interpretation, or written report from the superintendent, unless | 1128 |
there is a subsequent amendment to those sections, or rules | 1129 |
promulgated thereunder, that affects the superintendent's notice, | 1130 |
interpretation, or report. | 1131 |
(F) Upon disbursement of mortgage loan proceeds to or on | 1132 |
behalf of the buyer, the registrant that assisted the buyer to | 1133 |
obtain the mortgage loan is deemed to have completed the | 1134 |
performance of the registrant's services for the buyer and owes
no | 1135 |
additional duties or obligations to the buyer with respect to
the | 1136 |
mortgage loan. However, nothing in this division shall be | 1137 |
construed to limit or preclude the civil or criminal liability of | 1138 |
a registrant
for failing to comply with sections 1322.01 to | 1139 |
1322.12 of the Revised Code or
any rule adopted under those | 1140 |
sections, for failing to comply with any
provision of or
duty | 1141 |
arising under an agreement with a buyer or lender under sections | 1142 |
1322.01
to 1322.12 of the Revised Code, or for violating any other | 1143 |
provision of
state or federal law. | 1144 |
(C)(1)
"Credit services organization" means any person
that, | 1163 |
in return for the
payment of money or other
valuable consideration | 1164 |
readily convertible into money for the following
services,
sells, | 1165 |
provides, or performs, or represents that the person can
or will | 1166 |
sell, provide, or perform, one or more of the
following services: | 1167 |
(d) A bank, savings bank, or savings and loan association, | 1189 |
or a subsidiary or an affiliate of a bank, savings bank, or | 1190 |
savings and loan association. For purposes of division (C)(2)(d) | 1191 |
of this section,
"affiliate" has the same meaning as in division | 1192 |
(A) of section 1101.01 of the Revised Code and
"bank," as used in | 1193 |
division (A) of section 1101.01 of the Revised Code, is deemed to | 1194 |
include a savings bank or savings and loan association. | 1195 |
(f) A budget and debt counseling service, as defined
in | 1199 |
division (D) of section 2716.03 of the Revised Code, provided
that | 1200 |
the service is a nonprofit organization exempt from taxation
under | 1201 |
section 501(c)(3) of the
"Internal Revenue Code of 1986,"
100 | 1202 |
Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service
is | 1203 |
in compliance with Chapter 4710. of the Revised Code; | 1204 |
Section 2. That existing sections 1322.01, 1322.02, 1322.03, | 1235 |
1322.04, 1322.05, 1322.06, 1322.07, 1322.08, 1322.09, 1322.10, | 1236 |
1322.101, 1322.11, 1322.99, and 4712.01 of the Revised
Code are | 1237 |
hereby repealed. | 1238 |
Section 4. It is the intent of the General Assembly that the | 1241 |
Superintendent of Financial Institutions take any action necessary | 1242 |
to provide for an orderly transition for those persons who, on the | 1243 |
effective date of this act, perform the functions, duties, or | 1244 |
powers prescribed for registrants and licensees under this act. | 1245 |
Consequently, the Division of Financial Institutions shall accept | 1246 |
registration and license applications submitted by such persons | 1247 |
beginning on the effective date of this act and shall make every | 1248 |
effort possible to act upon such applications within the six-month | 1249 |
period immediately following that date. | 1250 |
Section 5. The prior operation of section 1322.03 of the | 1251 |
Revised Code, which permitted evidence on an application for a | 1252 |
certificate of registration as a mortgage broker that the person | 1253 |
designated as responsible for managing the operations of a | 1254 |
mortgage broker business meets the educational requirements then | 1255 |
in effect if, prior to March 18, 1999, that person was designated | 1256 |
as being responsible for managing the operations of the | 1257 |
registrant's business, shall continue and not be affected by the | 1258 |
enactment of this act until March 18, 2002; except that, all | 1259 |
requirements, except the experience requirements, applicable to | 1260 |
operations managers under this act apply to that person on the | 1261 |
date this act takes effect. On and after March 18, 2002, a person | 1262 |
not meeting the experience requirements provided in division | 1263 |
(A)(4) of section 1322.03 of the Revised Code, as amended by this | 1264 |
act, or any other requirement applicable to an operations manager | 1265 |
under this act shall not be designated as an operations manager on | 1266 |
an application for a certificate of registration as a mortgage | 1267 |
broker. | 1268 |