To amend sections 1322.01, 1322.02, 1322.03, 1322.04, 1322.06, 1322.07, 1322.08, 1322.09, 1322.10, 1322.101, and 1322.99, to enact new section 1322.05 and section 1322.031, and to repeal section 1322.05 of the Revised Code to require mortgage originators to register with the Superintendent of Financial Institutions and to specify other requirements relative to mortgage originators; to modify the registration requirements of mortgage brokers; to specify requirements about the location of a mortgage broker; to eliminate the net worth requirements of mortgage brokers and to substitute certain surety bond requirements; to modify the examination authority of the Superintendent relative to mortgage brokers; and to specify fines to be charged for a violation of a law or rule adopted under the Mortgage Broker Law.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Sec. 1322.01. As used in sections 1322.01 to 1322.12 of the Revised Code:

(A) "Buyer" means an individual who is solicited to purchase or who purchases the services of a mortgage broker for purposes other than obtaining a business loan as described in division (B)(6) of section 1343.01 of the Revised Code.

(B) "Consumer reporting agency" has the same meaning as in the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A. 1681a, as amended.

(C) "Mortgage" means any indebtedness secured by a deed of trust, security deed, or other lien on real property.

(D) "Mortgage banker" means any person that makes, services, or buys and sells mortgage loans, and is approved as a direct endorsement lender REQUIRED TO SUBMIT AUDITED FINANCIAL STATEMENTS TO, AND IS SUBJECT TO A POSSIBLE AUDIT by, the United States department of housing and urban development, the United States department of veterans affairs, the federal national mortgage association, the federal home loan mortgage corporation, OR the government national mortgage association, or an approved correspondent with the United States department of housing and urban development.

(E) "Mortgage broker" means a person that, in the regular course of business, holds himself, herself, or itself THAT PERSON out as being able to assist a buyer in obtaining a mortgage and charges or receives money or other valuable consideration readily convertible into money for providing this assistance. "Mortgage broker" does not include any of the following:

(1) A person that makes or collects loans, to the extent these activities are subject to licensure or registration by this state;

(2) A lender approved by the United States secretary of housing and urban development for participation in a mortgage insurance program under the "National Housing Act," 48 Stat. 1246 (1934), 12 U.S.C.A. 1701, as amended;

(3) A bank, savings bank, or savings and loan association, or a subsidiary or an affiliate of a bank, savings bank, or savings and loan association. For purposes of division (E)(3) of this section, "affiliate" has the same meaning as in division (A) of section 1101.01 of the Revised Code, and "bank," as used in division (A) of section 1101.01 of the Revised Code, is deemed to include a savings bank or savings and loan association.

(4) A credit union organized and qualified under Chapter 1733. of the Revised Code or the "Federal Credit Union Act," 84 Stat. 994 (1970), 12 U.S.C.A. 1751, as amended;

(5) A budget and debt counseling service, as defined in division (D) of section 2716.03 of the Revised Code, provided that the service is a nonprofit organization exempt from taxation under section 501(c)(3) of the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 501, as amended, and that the service is in compliance with Chapter 4710. of the Revised Code;

(6) A consumer reporting agency that is in substantial compliance with the "Fair Credit Reporting Act," 84 Stat. 1128, 15 U.S.C.A. 1681a, as amended;

(7) A mortgage banker;

(8) Any political subdivision, or any governmental or other public entity, corporation, or agency, in or of the United States or any state of the United States;

(9) A college or university, or controlled entity of a college or university, as defined in section 1713.05 of the Revised Code.

(F) "Registrant MORTGAGE ORIGINATOR" means any person that has been issued a certificate of registration under sections 1322.01 to 1322.12 of the Revised Code EMPLOYED BY A MORTGAGE BROKER TO ORIGINATE MORTGAGE LOANS IN THIS STATE.

(G) "ORIGINATE" MEANS ANY OF THE FOLLOWING:

(1) TO NEGOTIATE OR ARRANGE, OR TO OFFER TO NEGOTIATE OR ARRANGE, A MORTGAGE LOAN BETWEEN A PERSON THAT MAKES OR FUNDS MORTGAGE LOANS AND A BUYER;

(2) TO ISSUE A COMMITMENT FOR A MORTGAGE LOAN TO A BUYER;

(3) TO PLACE, ASSIST IN PLACEMENT, OR FIND A MORTGAGE LOAN FOR A BUYER.

(H) "Superintendent of financial institutions" includes the deputy superintendent for consumer finance as provided in section 1181.21 of the Revised Code.

Sec. 1322.02. (A) No person, on the person's own behalf or on behalf of any other person, shall act as a mortgage broker without first having obtained a certificate of registration AS A MORTGAGE BROKER from the superintendent of financial institutions for the person's main office and for every other office to be maintained by the person for the transaction of business as a mortgage broker in this state. A PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 of the Revised Code SHALL MAINTAIN A MAIN OFFICE LOCATION IN THIS STATE FOR THE TRANSACTION OF BUSINESS AS A MORTGAGE BROKER IN THIS STATE.

(B) NO PERSON SHALL ACT AS A MORTGAGE ORIGINATOR WITHOUT FIRST HAVING OBTAINED A MORTGAGE ORIGINATOR CERTIFICATE OF REGISTRATION FROM THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS. THE MORTGAGE ORIGINATOR CERTIFICATE OF REGISTRATION SHALL BE MAINTAINED IN THIS STATE.

Sec. 1322.03. (A) An application for a certificate of registration as a mortgage broker shall be in writing, under oath, and in the form prescribed by the superintendent of financial institutions. The application shall be accompanied by an application fee of three hundred fifty dollars for each location of an office to be maintained by the applicant IN ACCORDANCE WITH DIVISION (A) OF SECTION 1322.02 of the Revised Code and shall provide all of the following:

(1) The location or locations where the business is to be transacted and whether any location is a residence. If any location where the business is to be transacted is a residence, the application shall be accompanied by a certified copy of a zoning permit authorizing the use of the residence for commercial purposes, or shall be accompanied by a written opinion or other document issued by the county or political subdivision where the residence is located certifying that the use of the residence to transact business as a mortgage broker is not prohibited by the county or political subdivision, WHICH SHALL BE ZONED FOR COMMERCIAL USE. THE APPLICATION SHALL BE ACCOMPANIED BY A PHOTOGRAPH OF EACH LOCATION AT WHICH THE BUSINESS WILL BE TRANSACTED.

(2)(a) In the case of a sole proprietor, the name and address of the sole proprietor;

(b) In the case of a partnership, the name and address of each partner;

(c) In the case of a corporation, the name and address of each shareholder owning five per cent or more of the corporation.

(3)(a) If the applicant is a partnership, the applicant shall designate one of the partners named in the application pursuant to division (A)(2)(b) of this section as responsible for managing the operations of the location or locations where THE business is to be transacted.

(b) If the applicant is a corporation, the applicant shall designate one of the shareholders named in the application pursuant to division (A)(2)(c) of this section as responsible for managing the operations of the location or locations where THE business is to be transacted.

(4) Evidence that at least one of the following applies to the sole proprietor, partner, or shareholder designated on the application pursuant to division (A)(3) of this section as responsible for managing the operations of the location or locations where the business is to be transacted:

(a) The EXCEPT AS PROVIDED IN DIVISION (D)(2) OF THIS SECTION, THE sole proprietor, partner, or shareholder has earned at least an associate's ASSOCIATE degree in an area relating to finance, banking, or business administration, and the degree was earned at an accredited college or university, including an accredited community or technical college.

(b) The sole proprietor, partner, or shareholder possesses at least three years of experience in the mortgage and lending field, which experience may include employment with or as a mortgage broker or with a financial institution, mortgage lending institution, or other lending institution, or possesses at least three years of other experience that the superintendent determines meets the requirements of division (A)(4)(b) of this section. Evidence of experience submitted with the application may include letters of employment from present or prior employers.

(5) Evidence of compliance with the financial SURETY BOND requirements of section 1322.05 of the Revised Code and with sections 1322.01 to 1322.12 of the Revised Code;

(6) In the case of a foreign corporation, evidence that it maintains a license pursuant to Chapter 1703. of the Revised Code to transact business in this state;

(7) A statement that the applicant has not been convicted of or pleaded guilty to a criminal offense, the violation of which is a felony, or any criminal offense involving fraud;

(8) Any further information that the superintendent requires.

(B) Upon the filing of the application and payment of the application fee, the superintendent shall investigate the applicant. If, in order to issue a certificate of registration AS A MORTGAGE BROKER to an applicant, investigation by the superintendent outside this state is necessary, the superintendent may require the applicant to advance sufficient funds to pay the actual expenses of the investigation, if it appears that these expenses will exceed three hundred fifty dollars. The superintendent shall provide the applicant with an itemized statement of the actual expenses that the applicant is required to pay.

(C) All funds advanced and application and renewal fees paid to the superintendent under this section and section SECTIONS 1322.031 AND 1322.04 of the Revised Code shall be paid by the superintendent to the treasurer of state to the credit of the consumer finance fund created in section 1321.21 of the Revised Code.

(D)(1) Division (A)(4) of this section does not apply to any registrant PERSON that, on the effective date of this amendment MARCH 4, 1996, is registered AS A MORTGAGE BROKER under sections 1322.01 to 1322.12 SECTION 1322.04 of the Revised Code under a certificate of registration issued pursuant to those sections THAT SECTION prior to the effective date of this amendment MARCH 4, 1996, provided that the certificate of registration is not surrendered by the registrant PERSON or revoked or refused renewal by the superintendent of consumer finance FINANCIAL INSTITUTIONS at any time after the effective date of this amendment MARCH 4, 1996.

(2) AFTER THE EFFECTIVE DATE OF THIS AMENDMENT, EVIDENCE OF EDUCATION AS PROVIDED FOR IN DIVISION (A)(4)(a) OF THIS SECTION SHALL NOT BE ACCEPTED ON AN APPLICATION OF A PERSON APPLYING AS AN APPLICANT FOR A CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER. HOWEVER, AFTER THE EFFECTIVE DATE OF THIS AMENDMENT, A PERSON WHO, PRIOR TO THAT DATE, SUBMITTED EVIDENCE OF EDUCATION AS PROVIDED FOR IN DIVISION (A)(4)(a)OF THIS SECTION MAY RENEW A CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER, PROVIDED THAT THE PERSON IS REGISTERED ON THAT DATE AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 OF THE REVISED CODE, AND A CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER IS NOT SURRENDERED BY THE PERSON OR REVOKED OR REFUSED RENEWAL BY THE SUPERINTENDENT AT ANY TIME AFTER THAT DATE.

Sec. 1322.031. (A) THE APPLICATION FOR A MORTGAGE ORIGINATOR CERTIFICATE OF REGISTRATION SHALL BE IN WRITING, UNDER OATH, AND IN A FORM PRESCRIBED BY THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS. THE APPLICATION SHALL INCLUDE THE NAME OF THE MORTGAGE BROKER REGISTERED PURSUANT TO SECTION 1322.04 OF THE REVISED CODE THAT IS THE EMPLOYER OF THE APPLICANT AND ALSO SHALL INDICATE THE NAMES OF ALL PREVIOUS EMPLOYERS OF THE APPLICANT.

(B) THE APPLICATION FOR A MORTGAGE ORIGINATOR CERTIFICATE OF REGISTRATION SHALL BE ACCOMPANIED BY A NONREFUNDABLE APPLICATION FEE OF FIFTY DOLLARS.

(C) THE SUPERINTENDENT SHALL ISSUE A CERTIFICATE UPON RECEIPT OF AN APPLICATION COMPLETED IN ACCORDANCE WITH DIVISION (A) OF THIS SECTION AND THE APPLICATION FEE IN ACCORDANCE WITH DIVISION (B) OF THIS SECTION.

(D) A MORTGAGE ORIGINATOR SHALL BE AN EMPLOYEE, AS THAT TERM IS DEFINED IN SECTION 4101.01 OF THE REVISED CODE, OF THE MORTGAGE BROKER NAMED ON THE MORTGAGE ORIGINATOR'S CERTIFICATE OF REGISTRATION APPLICATION. NO PERSON SHALL ORIGINATE MORTGAGE LOANS FOR ANY MORTGAGE BROKER AS AN INDEPENDENT CONTRACTOR OR IN THE COURSE OF A SIMILAR EMPLOYMENT RELATIONSHIP WITH THE MORTGAGE BROKER.

(E) THE MORTGAGE BROKER EMPLOYING THE MORTGAGE ORIGINATOR SHALL HOLD THE MORTGAGE ORIGINATOR CERTIFICATE OF REGISTRATION AND SHALL MAKE THE CERTIFICATE AVAILABLE UPON REQUEST.

(F) A MORTGAGE ORIGINATOR MAY SURRENDER A MORTGAGE ORIGINATOR CERTIFICATE OF REGISTRATION.

(G) UPON THE DEPARTURE OF A MORTGAGE ORIGINATOR FROM EMPLOYMENT WITH THE MORTGAGE BROKER NAMED IN THE MORTGAGE ORIGINATOR'S CERTIFICATE OF REGISTRATION APPLICATION, BOTH OF THE FOLLOWING APPLY:

(1) THE MORTGAGE ORIGINATOR'S CERTIFICATE OF REGISTRATION AS A MORTGAGE ORIGINATOR IS VOID;

(2) THE MORTGAGE BROKER SHALL SUBMIT NOTIFICATION IN WRITING TO THE SUPERINTENDENT WITHIN TEN DAYS AFTER THE MORTGAGE ORIGINATOR'S DEPARTURE FROM EMPLOYMENT. NO MORTGAGE BROKER SHALL FAIL TO COMPLY WITH DIVISION (G)(2) OF THIS SECTION.

Sec. 1322.04. (A) Upon the conclusion of the investigation required under division (B) of section 1322.03 of the Revised Code, the superintendent of financial institutions shall issue a certificate of registration AS A MORTGAGE BROKER to the applicant if the superintendent finds that the following conditions are met:

(1) The application is accompanied by the application fee of three hundred fifty dollars for each location of an office to be maintained by the applicant IN ACCORDANCE WITH DIVISION (A) OF SECTION 1322.02 of the Revised Code and complies with division (A) of section 1322.03 of the Revised Code.

(2) If the application is for a location that is a residence, that the applicant has obtained a valid zoning permit authorizing the use of the residence for commercial purposes, or has obtained a valid written opinion or other document issued by the county or political subdivision where the residence is located certifying that the use of the residence to transact business as a mortgage broker is not prohibited by the county or political subdivision THE APPLICATION IS ACCOMPANIED BY A PHOTOGRAPH OF EACH LOCATION AT WHICH THE MORTGAGE BROKER'S BUSINESS WILL BE TRANSACTED.

(3)(a) The sole proprietor, partner, or shareholder designated on the application, pursuant to division (A)(3) of section 1322.03 of the Revised Code, as responsible for managing the operation of the location or locations where THE business is to be transacted meets the educational or experience requirements described in division (A)(4) of section 1322.03 of the Revised Code.

(b) IF A PARTNER OR SHAREHOLDER DESIGNATED PURSUANT TO DIVISION (A)(3) OF SECTION 1322.03 OF THE REVISED CODE CEASES TO BE RESPONSIBLE FOR MANAGING THE OPERATION OF THE LOCATION OR LOCATIONS WHERE THE BUSINESS IS TO BE TRANSACTED, THE APPLICANT SHALL DESIGNATE ANOTHER PARTNER OR SHAREHOLDER AS RESPONSIBLE FOR MANAGING THE OPERATION OF THE LOCATION OR LOCATIONS WHERE BUSINESS IS TO BE TRANSACTED AND IMMEDIATELY SHALL NOTIFY THE SUPERINTENDENT IN WRITING OF THE NEW DESIGNATION. THE NEWLY DESIGNATED PARTNER OR SHAREHOLDER SHALL COMPLY WITH THE EDUCATION OR EXPERIENCE REQUIREMENTS DESCRIBED IN DIVISION (A)(4) OF SECTION 1322.03 OF THE REVISED CODE, AND THE APPLICANT SHALL SUBMIT ANY ADDITIONAL INFORMATION THAT THE SUPERINTENDENT REQUIRES TO ESTABLISH THAT THE NEWLY DESIGNATED PARTNER OR SHAREHOLDER COMPLIES WITH THE EDUCATION OR EXPERIENCE REQUIREMENTS DESCRIBED IN THAT DIVISION.

(4) In the case of a foreign corporation, the applicant maintains a license pursuant to Chapter 1703. of the Revised Code to transact business in this state.

(5) The applicant complies with the financial SURETY BOND requirements of section 1322.05 of the Revised Code.

(6) The applicant complies with sections 1322.01 to 1322.12 of the Revised Code.

(7) The applicant has not pleaded guilty to or been convicted of a criminal offense, the violation of which is a felony, or any criminal offense involving fraud.

(8) The applicant's financial responsibility, experience, character, and general fitness command the confidence of the public and warrant the belief that the business will be operated honestly and fairly in compliance with the purposes of sections 1322.01 to 1322.12 of the Revised Code.

For purposes of determining whether an applicant that is a partnership or corporation has met the conditions set forth in division (A)(8) of this section, the superintendent shall determine which partners or shareholders named in the application pursuant to division (A)(2) of section 1322.03 of the Revised Code must meet the conditions set forth in division (A)(8) of this section. This determination shall be based on the extent and nature of the partner's or shareholder's ownership interest in the partnership or corporation that is the applicant.

(B) The certificate of registration issued pursuant to division (A) of this section may be renewed annually on or before the thirtieth day of April upon payment of a renewal fee of three hundred fifty dollars for each location of an office to be maintained by the applicant IN ACCORDANCE WITH DIVISION (A) OF SECTION 1322.02 of the Revised Code and a finding by the superintendent that the applicant meets the conditions set forth in divisions (A)(2) to (8) of this section and that the applicant's certificate of registration is not subject to an order of suspension or revocation by the superintendent. If a renewal fee is submitted to RECEIVED BY the superintendent after the thirtieth day of April but prior to the first day of June, the fee shall be accompanied by a late renewal fee of one hundred dollars for each location of an office maintained by the applicant for which the renewal fee is late, THE CERTIFICATE OF REGISTRATION SHALL NOT BE CONSIDERED RENEWED, AND THE APPLICANT SHALL CEASE ACTIVITY AS A MORTGAGE BROKER AND APPLY FOR A CERTIFICATE OF REGISTRATION AS A MORTGAGE BROKER.

(C) No application, OR renewal, or late renewal fee required by division (A) or (B) of this section shall be returned after a certificate of registration has been issued or renewed by the superintendent.

(D) Division (A)(3) of this section does not apply to any registrant PERSON that, on the effective date of this amendment MARCH 4, 1996, is registered AS A MORTGAGE BROKER under sections 1322.01 to 1322.12 of the Revised Code THIS SECTION under a certificate of registration issued pursuant to those sections THIS SECTION prior to the effective date of this amendment MARCH 4, 1996, provided that the certificate of registration is not surrendered by the registrant PERSON or revoked or refused renewal by the superintendent of consumer finance FINANCIAL INSTITUTIONS at any time after the effective date of this amendment MARCH 4, 1996.

(E) IF A PARTNER OR SHAREHOLDER DESIGNATED PURSUANT TO DIVISION (A)(3) OF SECTION 1322.03 OF THE REVISED CODE IS NO LONGER RESPONSIBLE FOR MANAGING THE OPERATION OF THE LOCATION OR LOCATIONS WHERE BUSINESS IS TO BE TRANSACTED, THE PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 OF THE REVISED CODE SHALL DO ALL OF THE FOLLOWING:

(1) DESIGNATE ANOTHER PARTNER OR SHAREHOLDER AS RESPONSIBLE FOR MANAGING THE OPERATION OF THE LOCATION OR LOCATIONS WHERE BUSINESS IS TO BE TRANSACTED;

(2) WITHIN TEN DAYS AFTER THE DESIGNATION DESCRIBED IN DIVISION (B)(2)(a) OF THIS SECTION, NOTIFY THE SUPERINTENDENT IN WRITING OF THE DESIGNATION;

(3) SUBMIT ANY ADDITIONAL INFORMATION THAT THE SUPERINTENDENT REQUIRES TO ESTABLISH THAT THE NEWLY DESIGNATED PARTNER OR SHAREHOLDER COMPLIES WITH THE EDUCATION OR EXPERIENCE REQUIREMENTS SET FORTH IN DIVISION (A)(4) OF SECTION 1322.03 OF THE REVISED CODE.

Sec. 1322.05. (A) NO PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 OF THE REVISED CODE SHALL CONDUCT BUSINESS IN THIS STATE, UNLESS THE MORTGAGE BROKER HAS OBTAINED A CORPORATE SURETY BOND ISSUED BY A BONDING COMPANY OR INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THIS STATE. THE BOND SHALL BE IN FAVOR OF THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS AND IN THE PRINCIPAL SUM OF AT LEAST TWENTY-FIVE THOUSAND DOLLARS AND AN ADDITIONAL PRINCIPAL SUM OF FIVE THOUSAND DOLLARS FOR EACH LOCATION, IN EXCESS OF ONE, AT WHICH THE MORTGAGE BROKER CONDUCTS BUSINESS. A COPY OF THE BOND SHALL BE FILED WITH THE SUPERINTENDENT. THE PROCEEDS OF THE BOND SHALL CONSTITUTE A TRUST FUND FOR THE EXCLUSIVE BENEFIT OF ANY PERSON INJURED BY A VIOLATION OF ANY PROVISION OF SECTIONS 1322.01 TO 1322.12 OF THE REVISED CODE.

(B) THE MORTGAGE BROKER SHALL GIVE NOTICE TO THE SUPERINTENDENT BY CERTIFIED MAIL OF ANY ACTION THAT IS BROUGHT AGAINST THE MORTGAGE BROKER AND OF ANY JUDGMENT THAT IS ENTERED AGAINST THE MORTGAGE BROKER BY A PERSON INJURED BY A VIOLATION OF ANY PROVISION OF SECTIONS 1322.01 TO 1322.12 OF THE REVISED CODE. THE NOTICE SHALL PROVIDE DETAILS SUFFICIENT TO IDENTIFY THE ACTION OR JUDGMENT, AND SHALL BE FILED WITH THE SUPERINTENDENT WITHIN TEN DAYS AFTER THE COMMENCEMENT OF THE ACTION OR NOTICE TO THE MORTGAGE BROKER OF ENTRY OF A JUDGMENT. THE CORPORATE SURETY, WITHIN TEN DAYS AFTER IT PAYS ANY CLAIM OR JUDGMENT, SHALL GIVE NOTICE TO THE SUPERINTENDENT BY CERTIFIED MAIL OF THE PAYMENT, WITH DETAILS SUFFICIENT TO IDENTIFY THE PERSON AND THE CLAIM OR JUDGMENT PAID.

(C) WHENEVER THE PRINCIPAL SUM OF THE CORPORATE SURETY BOND IS REDUCED BY ONE OR MORE RECOVERIES OR PAYMENTS, THE MORTGAGE BROKER SHALL FURNISH A NEW OR ADDITIONAL BOND UNDER THIS SECTION, SO THAT THE TOTAL OR AGGREGATE PRINCIPAL SUM OF THE BOND OR BONDS EQUALS THE SUM REQUIRED BY THIS SECTION, OR SHALL FURNISH AN ENDORSEMENT EXECUTED BY THE CORPORATE SURETY REINSTATING THE BOND TO THE REQUIRED PRINCIPAL SUM OF IT.

(D) THE LIABILITY OF THE CORPORATE SURETY ON THE BOND TO THE SUPERINTENDENT AND TO ANY PERSON INJURED BY A VIOLATION OF ANY PROVISION OF SECTIONS 1322.01 TO 1322.12 OF THE REVISED CODE SHALL NOT BE AFFECTED IN ANY WAY BY ANY MISREPRESENTATION, BREACH OF WARRANTY, OR FAILURE TO PAY THE PREMIUM, BY ANY ACT OR OMISSION UPON THE PART OF THE MORTGAGE BROKER, BY THE INSOLVENCY OR BANKRUPTCY OF THE MORTGAGE BROKER, OR BY THE INSOLVENCY OF THE MORTGAGE BROKER'S ESTATE. THE LIABILITY FOR ANY ACT OR OMISSION THAT OCCURS DURING THE TERM OF THE CORPORATE SURETY BOND SHALL BE MAINTAINED AND IN EFFECT FOR AT LEAST TWO YEARS AFTER THE DATE ON WHICH THE CORPORATE SURETY BOND IS TERMINATED OR CANCELED.

(E) THE CORPORATE SURETY BOND SHALL NOT BE CANCELED BY THE MORTGAGE BROKER OR THE CORPORATE SURETY EXCEPT UPON NOTICE TO THE SUPERINTENDENT BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED. THE CANCELLATION SHALL NOT BE EFFECTIVE PRIOR TO THIRTY DAYS AFTER THE SUPERINTENDENT RECEIVES THE NOTICE.

(F) NO PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 OF THE REVISED CODE SHALL FAIL TO COMPLY WITH THIS SECTION.

Sec. 1322.06. (A) As often as the superintendent of financial institutions considers it necessary, the superintendent may examine the registrant's records pertaining to business transacted pursuant to sections 1322.01 to 1322.12 of the Revised Code. EVERY PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 OF THE REVISED CODE SHALL BE UNDER THE SUPERVISION OF THE SUPERINTENDENT OF FINANCIAL INSTITUTIONS. THE SUPERINTENDENT SHALL DEVELOP AND IMPLEMENT A SYSTEM FOR EXAMINING MORTGAGE BROKERS. MORTGAGE BROKERS SHALL BE SUBJECT TO PERIODIC EXAMINATIONS BY THE SUPERINTENDENT, AND THE BOOKS AND RECORDS OF A MORTGAGE BROKER SHALL BE OPEN TO INSPECTION BY THE SUPERINTENDENT AT ALL TIMES. IN CARRYING OUT THE DUTIES REQUIRED BY THIS DIVISION, THE SUPERINTENDENT MAY SUBPOENA WITNESSES, ADMINISTER OATHS, RECEIVE TESTIMONY, AND ORDER THE SUBMISSION OF DOCUMENTS.

(B) A registrant PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 of the Revised Code shall maintain records pertaining to business transacted pursuant to sections 1322.01 to 1322.12 of the Revised Code for two years or more after the final entry on such THOSE records. No registrant PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 of the Revised Code shall fail to comply with this division.

(C) All information obtained by the superintendent or the superintendent's deputies, examiners, assistants, agents, or clerks by reason of their official position, including information obtained by such THOSE persons in the course of examining a registrant PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 of the Revised Code or investigating an applicant for a certificate of registration AS A MORTGAGE BROKER, is privileged and confidential. All such information shall remain privileged and confidential for all purposes except when it is necessary for the superintendent and the superintendent's deputies, examiners, assistants, agents, or clerks to take official action regarding the affairs of the registrant PERSON REGISTERED AS A MORTGAGE BROKER or in connection with criminal proceedings.

Sec. 1322.07. No registrant PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 of the Revised Code or applicant for a certificate of registration AS A MORTGAGE BROKER under sections 1322.01 to 1322.12 SECTION 1322.04 of the Revised Code shall do any of the following:

(A) Obtain a certificate of registration through any false or fraudulent representation or make any substantial misrepresentation in any registration application;

(B) Make false promises through advertising or other means or engage in a continued course of misrepresentations;

(C) Engage in conduct that constitutes improper, fraudulent, or dishonest dealings;

(D) Fail to notify the division of financial institutions if the registrant PERSON or applicant, in a court of competent jurisdiction of this state or any other state, is convicted of or pleads guilty to a criminal offense, the violation of which is a felony, or any criminal offense involving fraud;

(E) EMPLOY ANY PERSON TO ORIGINATE MORTGAGE LOANS THAT IS NOT PROPERLY REGISTERED AS A MORTGAGE ORIGINATOR PURSUANT TO SECTION 1322.031 OF THE REVISED CODE.

Sec. 1322.08. (A) Except as otherwise provided in this division, no registrant PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 of the Revised Code shall charge or receive, directly or indirectly, fees for assisting a buyer in obtaining a mortgage, until all of the services that the registrant MORTGAGE BROKER has agreed to perform for the buyer are completed, and the proceeds of the mortgage loan have been disbursed to or on behalf of the buyer. However, prior to completion of such THOSE services, the following fees may be paid for services performed by a bona fide third party in assisting the buyer to obtain a mortgage if the fees are either paid directly by the buyer to the bona fide third party or, except as provided in division (A)(6) of this section, the fees are deposited by the registrant MORTGAGE BROKER into the registrant's MORTGAGE BROKER'S special account for services performed by the bona fide third party:

(1) Fees to obtain a report from a credit reporting agency;

(2) Fees for notary services;

(3) Fees authorized by law to record, file, or release a security interest or mortgage;

(4) Fees for the performance of a title search, appraisal of the real estate, or survey of the real estate;

(5) Fees charged by a lender for locking in an interest rate in connection with obtaining or refinancing a mortgage, provided that the fees do not exceed an amount equal to one and one-half per cent of the mortgage loan amount;

(6) Fees not exceeding five hundred dollars paid directly by the buyer to a state or federal government agency or instrumentality for purposes of processing a mortgage application relating to a government sponsored or guaranteed mortgage program.

(B) If fees are paid by a buyer for the performance of any of the services described in division (A)(4) of this section and the registrant PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 of the Revised Code is unable to assist in obtaining a mortgage for the buyer, the registrant MORTGAGE BROKER shall return to the buyer the original documents prepared by the bona fide third party at the time that the request for the mortgage is refused or denied. No registrant MORTGAGE BROKER shall fail to comply with this division.

(C) For purposes of this section:

(1) "Bona fide third party" means a person that is not an employee of, related to, or affiliated with, the registrant PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 of the Revised Code, and that is not used for the purpose of circumvention or evasion of this section.

(2) "Special account" means a depository account with a financial institution, the deposits of which are insured by the federal deposit insurance corporation, that is separate and distinct from any personal or other account of the registrant PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 of the Revised Code, and that is maintained solely for the holding and payment of fees described in division (A) of this section for services performed by bona fide third parties and received by the registrant MORTGAGE BROKER from buyers that the registrant MORTGAGE BROKER assists in obtaining mortgages.

Sec. 1322.09. A mortgage broker shall disclose in any printed or published advertisement relating to the mortgage broker's services, the number designated on the certificate of registration that is issued to the mortgage broker by the superintendent of financial institutions under sections 1322.01 to 1322.12 SECTION 1322.04 of the Revised Code. No mortgage broker shall fail to comply with this section.

Sec. 1322.10. (A) After notice and opportunity for a hearing conducted in accordance with Chapter 119. of the Revised Code, the superintendent of financial institutions may suspend DO THE FOLLOWING:

(1) SUSPEND, revoke, or refuse to issue or renew a certificate of registration PURSUANT TO SECTION 1322.04 of the Revised Code if the superintendent finds a violation of division (B) of section 1322.06, or section 1322.05, 1322.07, 1322.08, or 1322.09 of the Revised Code or the rules adopted thereunder;

(2) IMPOSE A FINE OF NOT LESS THAN ONE HUNDRED DOLLARS, BUT NOT MORE THAN ONE THOUSAND DOLLARS, FOR EACH DAY A VIOLATION OF A LAW OR RULE IS COMMITTED, REPEATED, OR CONTINUED. IF THE MORTGAGE BROKER ENGAGES IN A PATTERN OF REPEATED VIOLATIONS OF A LAW OR RULE, THE SUPERINTENDENT MAY IMPOSE A FINE OF NOT MORE THAN TWO THOUSAND DOLLARS FOR EACH DAY THE VIOLATION IS COMMITTED, REPEATED, OR CONTINUED. ALL FINES COLLECTED PURSUANT TO THIS DIVISION SHALL BE PAID TO THE TREASURER OF STATE TO THE CREDIT OF THE CONSUMER FINANCE FUND CREATED IN SECTION 1321.21 OF THE REVISED CODE.

(B) The superintendent may investigate alleged violations of section 1322.01 to 1322.12 of the Revised Code, or the rules adopted thereunder, UNDER THOSE SECTIONS or complaints concerning any such violation. The superintendent may make application to the court of common pleas for an order enjoining any such violation, and, upon a showing by the superintendent that a person has committed, or is about to commit, such a violation, the court shall grant an injunction, restraining order, or other appropriate relief.

(C) In conducting any investigation pursuant to this section, the superintendent may compel, by subpoena, witnesses, to testify in relation to any matter over which the superintendent has jurisdiction, and may require the production of any book, record, or other document pertaining to such THAT matter. If a person fails to file any statement or report, obey any subpoena, give testimony, produce any book, record, or other document as required by such a subpoena, or permit photocopying of any book, record, or other document subpoenaed, the court of common pleas of any county in this state, upon application made to it by the superintendent, shall compel obedience by attachment proceedings for contempt, as in the case of disobedience of the requirements of a subpoena issued from the court or a refusal to testify therein.

(D) If the superintendent determines that a person is engaged in, or is believed to be engaged in, activities that may constitute a violation of sections 1322.01 to 1322.12 of the Revised Code, the superintendent may, after notice and a hearing conducted in accordance with Chapter 119. of the Revised Code, MAY issue a cease and desist order. Such an order shall be enforceable in the court of common pleas.

Sec. 1322.101. On receipt of a notice pursuant to section 2301.373 of the Revised Code, the division of consumer finance FINANCIAL INSTITUTIONS shall comply with that section with respect to a certificate issued pursuant to this chapter.

Sec. 1322.99. (A) Whoever violates DIVISION (A) OR (B) OF section 1322.02 or, SECTION 1322.07, or division (A) or (B) of section 1322.08 of the Revised Code is guilty of a felony of the fifth degree.

(B) A PERSON REGISTERED AS A MORTGAGE BROKER PURSUANT TO SECTION 1322.04 OF THE REVISED CODE THAT FAILS TO COMPLY WITH DIVISION (G)(2) OF SECTION 1322.031 OF THE REVISED CODE IS SUBJECT TO A FORFEITURE OF FIFTY DOLLARS FOR EACH DAY A VIOLATION IS COMMITTED, REPEATED, OR CONTINUED.