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14 Hour Mortgage Broker 2009

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14 Hour Mortgage Broker 2009

  1. 1. Welcome to Bert Rodgers Schools! Florida statutes and department rules require all Mortgage Brokers, Loan Originators, and Principal Representatives to complete 14 hours of professional continuing education every 2 years. Mortgage Brokers and Associates deadline is August 31, 2009. Loan Originators and Principal Representatives deadline is August 31, 2010. Take full advantage of the benefits of distance education! Bert Rodgers Schools is permitted and accredited by the Florida Office of Financial Regulation. You can study on your own schedule, at home or work. There is no need to travel to attend class or seminars. This book contains everything you need! You will appreciate the affordability of the Bert Rodgers course. At $34.99 for 14 hours, it is a true value. Optional Module Review Exercises are provided to ensure your comprehension of the course material and the newly-required final examination is included! We have been providing high quality education to Florida professionals since 1958. Rely on our fast, friendly, profes- sional service representatives to help with any questions you may have! We look forward to helping you meet your education needs.It’s Easy to Meet Your Requirement with Bert Rodgers Schools!Let the ease of distance learning work for you. With this book, everything you need is at your fingertips.Step 1 Read the material in this book. There are Module Review Exercises at the end of each Module to help reinforce your knowledge of the material.Step 2 Take the required Final Examination at the end of this book.*Step 3 Submit your Registration Form/Answer Sheet by mail or fax.*A 100-question final examination is now required per Chapter 494.00295(3)(b), F.S. and Florida Office of Financial RegulationRule 69V-40.0271 for correspondence courses.How Do I Receive My Certificate of Completion?Mail: Use the enclosed envelope to send us your Registration Form/Answer Sheet and payment. We will grade your exam and mail your certificate of completion the following business day.Fax or For even faster results, choose one of our convenient Priority Grading Services and receiveEmail: your certificate of completion the same day or the next day.Important Note: Do not send your certificate of completion to the Office of Financial Regulation unless otherwise requested.Retain your certificate of completion for at least 4 years following the end of the renewal period.Need Help?Call us toll-free at 800-432-0320 and talk to a representative who will answer all your administrative questions quickly andprofessionally. For instructional questions, please leave a message for Instructor/Author Janine Spiegelman at ext. 368 andshe will respond within one business day. Florida Mortgage Brokering/Lending 14-Hour Continuing Education Course    i
  2. 2. Frequently Asked Questions Is Continuing Education required before I can renew my Mortgage Broker license? YES. However, Section 494.00295, Florida Statutes, provides for one exception. Requirement: At the time of renewal, you will be required to certify that you have taken at least 14 hours of professional continuing education by August 31, 2009. Exception: Section 494.00295(1), Florida Statutes, states: . . . The requirements for professional continuing edu- cation are waived for the license renewal of a mortgage broker who has completed the 24-hour pre-licensing classroom education requirement of s. 494.0033(3), F.S., within 90 days of the biennial license period immediately following the period in which the person became licensed as a mortgage broker. My mortgage broker license is currently INACTIVE. Is Continuing Education required before I can reactivate my inactive individual Mortgage Broker license? YES. You will need to reactivate your license online via the Office’s REAL system at www.flofr.com/REAL/index. htm upon which you will be required to certify that you have satisfied the continuing education requirement. Completion of this process will only reactivate your license through the end of the current licensing period. Do I submit my certificate to the Office of Financial Regulation? NO. DO NOT send your certificate of continuing education to the Office. You will be required to certify at the time of renewal that you have satisfied the continuing education requirement. In accordance with Rule 69V-40.043(5), F.A.C., a mortgage broker is responsible for maintaining copies of the certificate of completion for all continuing education courses completed and supply them to the Office upon request. Chapter 494.00295(1), F.S., requires that licensees maintain records documenting compliance with this requirement for a period of four (4) years. How do I pay my renewal fee? You can renew your license online via the Office’s REAL system. You must have an authorization code provided by the OFR to enter the system. For more information on the REAL System, see the services guide at www.flofr. com/REAL/Guides.htmii     Bert Rodgers Schools of Real Estate, Inc.
  3. 3. Florida Mortgage Brokering/Lending14-Hour Continuing Education Course 2009 Edition
  4. 4. Acknowledgements Bert Rodgers Schools of Real Estate, Inc. expresses our gratitude and appreciation to the thousands of Mortgage Professionals who have completed our 14-hour course to fulfill their continuing education requirements. We would like to thank the author of the laws and rules module in this edition, Janine Spiegelman. We recognize her expertise and appreciate her participation. We also want the Student Services Department—both the customer contact employees and those “behind the scenes” processing all the paperwork—to know how much we appreciate their hard work, day after day, making sure our valued students are satisfied customers. And we certainly are grateful to our Publications Department staff. No matter what obstacles you encounter in putting together these editions, you always create a product that, year after year, our customers say is by far the best in the industry. Finally, Bert Rodgers Schools would like to thank Mark Mazzuki of Digital Ink Design Group for his cover design of this edition and his design of all our marketing materials. Lori J. Rodgers, President iv     Bert Rodgers Schools of Real Estate, Inc.
  5. 5. Table of Contents 2009 FLORIDA MORTGAGE BROKERING/LENDING 14-Hour PROFESSIONAL Continuing Education Course w CURRENT EVENTS 2008-2009 Mortgage Industry Current Events | vii w MODULE 1 Florida Mortgage Brokerage and Lending Act Laws and Rules | 1 w MODULE 2 Back to Basics: Finance | 33 w MODULE 3 Back to Basics: Types of Mortgages and Sources of Financing | 43 w MODULE 4 Back to Basics: Real Estate Closings | 69 Index | 89 Final Examination | 92 Instructions | 102 Registration Form Answer SheetFlorida Mortgage Brokering/Lending 14-Hour Continuing Education Course    v
  6. 6. Directory Bert Rodgers Schools of Real Estate 1855 Porter Lake Drive, Sarasota, Florida 34240-7893 Tel. (941) 378-2900 • Fax (941) 378-3883 Toll Free (800) 432-0320 Instructor and Administrative Support Telephone Hours: M-F 8:30 a.m. - 5:15 p.m. Email: MBinfo@bertrodgers.com www.bertrodgers.com Florida Office of Financial Regulation Division of Finance 200 East Gaines Street Tallahassee, FL 32399-0376 (850) 410-9895 • Fax: (850) 410-9882 (Initial license or license renewal questions) Telephone Hours: M-F 8:00 a.m. – 5:00 p.m. For additional information, visit the Florida Office of Financial Regulation, Division of Finance website: www.flofr.com/Finance/index.htm Bert Rodgers Schools of Real Estate, Inc. ©2009 All rights reserved, including the right to reproduce this manual or any portion of this manual in any form, or to use it for teaching purposes without the express written consent of the copyright holder. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understand- ing that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Bert Rodgers Schools of Real Estate, Inc. shall not be liable in any way for failure to receive and/or process your Registration/Affidavit Form within any specific time period. It is your responsibility to ensure that you have complied with your license renewal requirements in a timely manner. Bert Rodgers Schools of Real Estate, Inc. recognizes and respects its students’ privacy. Course records are confidential, and the School does not sell or rent students’ names or other information to any company or organization. Cover design: Digital Ink Design Group ISBN: 1-891753-53-3 Printed in the United States of Americavi     Bert Rodgers Schools of Real Estate, Inc.
  7. 7. FROM LORI RODGERS     In March we printed and mailed the 2009 edition of Bert Rodgers Schools Florida Mortgage Brokering/Lending 14 Hour Professional Continuing Education Course.  In May the Florida Legislature passed CS/CS/SB 2226. The bill’s effective date is July 1, 2009.  This new legislation will significantly impact the Florida mortgage profession.  Among the many changes, education and licensing requirements will change.   Nothing has changed for the August 31, 2009 renewal deadline for mortgage broker licensees.  Beginning with your NEXT renewal, you will need to comply with the new statutory requirements.  A copy of the engrossed bill can be reached through this web link:  http://www.myfloridahouse.gov/Sections/Documents/loaddoc.aspx?FileName=_s2226er.DOCX&DocumentType=Bill&BillNumber=2226&Session=2009  We recognize the 2008 and 2009 changes to federal laws have significantly affected your profession.  It is likely that more changes will come as our nation navigates through the challenge of a seriously weakened economy and housing market.  Below is a summary of the most recent federal law changes.  2008‐2009 MORTGAGE INDUSTRY CURRENT EVENTS FEDERAL LAWS/LOAN LIMITS The Federal Housing Finance Agency (FHFA) became the new agency with oversight over Fannie Mae, Freddie Mac, and the 12 Federal Reserve banks with the passage of the Housing and Economic Recovery Act of 2008 (HERA), signed by former President Bush on July 30, 2008.  The FHFA was formed when HERA merged the Office of  Federal  Housing  Enterprise  Oversight,  the  Federal  Housing  Finance  Board,  and  the  U.S.  Department  of Housing and Urban Development government‐sponsored enterprise mission team.  The Economic Stimulus Act of 2008 (ESA), signed by former President Bush on February 13, 2008, increased the conventional  conforming  loan  limit  for  one‐unit  properties  from  $417,000  to  $729,750  in  certain  high‐cost areas in the continental United States.  This applied retroactively to loans that were originated between July 1, 2007, and then expired December 31, 2008.    On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (ARRA).    Loan  limits  for  mortgages  originated  in  2009  are  set  under  the  provisions  of  ARRA.    For  one‐  unit properties  in  Florida,  the  conventional  maximum  mortgage  is  $417,000  except  for  the  following  counties:  Monroe ‐ $729,750; Broward, Miami‐Dade, and Palm Beach ‐ $423,750; Collier ‐ $531,250; and Manatee and Sarasota ‐ $442,500.     The  Federal  Housing  Administration’s  (FHA’s)  floor  and  ceiling  loan  limits  for  2009  under  ARRA  rely  on  the higher  of  HERA  or  ESA.    Under  HERA,  ESA,  and  ARRA,  the  FHA  national  floor  limits  remain  set  at  65%  of  the Freddie Mac national conforming limit.  The floor is $271,050 ($417,000 x 65%) for a one‐unit property.  Any area where the limits exceed the floor is known as a high cost area.  The ESA national ceiling is binding under ARRA for 2009.  The formula to compute the maximum mortgage for a one‐unit property is 175% of the Freddie Mac  national  conforming  limit,  or  $729,750  ($417,000  x  175%).    For  areas  where  the  higher  of  the  ESA‐ determined  loan limits for 2008 and the HERA‐determined loan limits for 2009 is in between the national floor and ceiling, the limit is the higher of those two limits for any loan for which credit is approved in the calendar year 2009 and will remain in effect until December 31, 2009.  For example, in Sarasota county, the new FHA maximum mortgage limit for one‐unit is $442,500; the limit is $423,750 for Palm Beach county.  Under ARRA, Florida Mortgage Brokering/Lending 14-Hour Continuing Education Course vii
  8. 8. the FHA Home Equity Conversion Mortgage (reverse mortgage) will increase the maximum mortgage limit for a one‐unit  property  from  $417,000  to  $625,500.    FHA  Mortgagee  Letter  2009‐07  explains  this  increase  in  loan limits.   The Department of Veterans Affairs (VA) loan limit is unaffected by ARRA legislation.  Therefore, the maximum loan amount for a veteran without a down payment on a one‐unit property remains at $417,000.  ARRA includes a tax credit of up to $8,000 for qualified first‐time home buyers purchasing a principal residence on or after January 1, 2009, and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid as long as the home remains the buyer’s main residence for 36 months after the purchase date.  For the purpose of this credit, a first‐time home buyer is someone who has not owned a home in the past 3 years.    The  Homeowner  Affordability  and  Stability  Plan  (HASP),  signed  by  President  Obama  on  February  17,  2009,  is designed  to  help  borrowers  in  2  ways.    Borrowers  with  high  debt‐to‐income  ratios  or  who  are  at  risk  of foreclosure can restructure their current loan through a loan modification process. Borrowers with an Agency‐secured loan (Fannie Mae or Freddie Mac loan) who are current on their monthly mortgage payments will be eligible  to  refinance  into  a  new  Agency‐secured  loan.  This  is  true  even  for  borrowers  whose  home  value  has declined to the point they may be ineligible to refinance into a standard refinance program and take advantage of  today’s  lower  interest  rates.    On  March  4,  2009,  Fannie  Mae  issued  Announcements  09‐04  and  09‐05  to provide guidance to lenders on their Home Affordable Refinance and Modification Programs.  These programs:  • significantly  relax  mortgage  insurance  coverage  requirements  to  a  assist  borrowers  who  have  experienced home price declines   • offer loan‐to values (LTVs) up to 105%   • provide other underwriting flexibilities    On  March  4,  2009,  Freddie  Mac  came  out  with  their  Relief  Refinance  Mortgage  program  that  is  intended  to help borrowers who are making timely mortgage payments, but have been unable to refinance due to declining property values and tightening credit terms by offering:  • expanded LTV/TLTV/HTLTV (total loan‐to‐value and home equity total loan‐to‐value) ratios  • no post settlement delivery fees, except for the Market Condition delivery fee   • relief from standard mortgage insurance requirements   • simplified appraisal and borrower eligibility requirements   To  participate  in  the  program,  the  borrower’s  first‐lien  conventional  mortgage  must  be  currently  owned  or securitized by Freddie Mac.  In addition, borrowers must be current on their monthly mortgage payments with no 30‐day or more late payments in the most recent 12 months.   APPRAISALS On Dec. 23, 2008, the FHFA announced the details of the Home Valuation Code of Conduct (HVCC) that will go into effect on May 1, 2009. The Code establishes a uniform set of appraisal guidelines to govern all loans sold to Fannie Mae and Freddie Mac.  The lender or any third party specifically authorized by the lender including, but not  limited  to,  appraisal  companies  and  appraisal  management  companies  (AMCs),  shall  be  responsible  for selecting, retaining, and providing for payment of all compensation to the appraiser. The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third party including mortgage brokers and real estate agents.  The lender may accept an appraisal prepared by an appraiser for a different lender, including where a mortgage broker has facilitated the mortgage application (but not ordered the appraisal), provided the lender obtains written assurances that such other lender follows this  Code  of  Conduct  in  connection  with  the  loan  being  originated;  and  determines  that  such  appraisal conforms to its requirements for appraisals and is otherwise acceptable.   viii Bert Rodgers Schools of Real Estate, Inc.
  9. 9.  FLORIDA MORTGAGE BROKERAGE AND LENDING ACT  LAWS AND RULES    LEARNING OBJECTIVES After completing this module, you should be able to:  1. Summarize the changes made to Chapter 494 F.S. since October 1, 2006.  2. List the changes to Chapter 69V‐40 Florida Administrative Code effective in 2008.  3. Summarize the organizational structure of the Florida Department of Financial Services, including  the Financial Services Commission and the Office of Financial Regulation.  4. Explain the powers and duties of the Financial Services Commission and the Office of Financial  Regulation.  5. Explain the penalties, which could be imposed for violations of Chapter 494, F.S. and Chapter  817.545, F.S.  6. Identify the prohibited practices pursuant to Chapter 494.  7. Explain the purpose for the enactment of the Florida Fair Lending Act.  8. Identify the types of transactions covered by the Florida Fair Lending Act.  9. Define a high‐cost home loan.  10. Identify the acts prohibited by the Florida Fair Lending Act.  11. Identify the disclosure requirements of the Florida Fair Lending Act.  12. Explain the enforcement and penalties of any violation of the Florida Fair Lending Act.  INTRODUCTION The  Department  of  Financial  Services  regulates  mortgage  broker  individuals  (MB),  mortgage  brokerage businesses (MBB), mortgage lenders (ML), and correspondent mortgage lenders (CL) by the use of Florida Statutes  (F.S.)  and  the  Florida  Administrative  Code  (F.A.C.).  Chapter  494,  F.S.,  is  known  as  the  Florida Mortgage  Brokerage  and  Mortgage  Lending  Act  Rules  and  Regulations.  Chapter  494  originally  became effective in October 1991, and several significant amendments have been made since 1991. Chapter 69V‐40 of the Florida Administrative Code (formerly Chapter 3D‐40 F.A.C.) is called Rules Regulation Mortgage Brokers.  Certain  minor  changes  to  Chapter  69V‐40  were  made  effective  on  August  2,  2002,  and  a  few minor amendments were made between 2003 and 2004. The purpose of this module is to review Florida mortgage brokerage rules and regulations including major changes effective since October 1, 2006.  In  2002,  legislation  placed  the  regulation  of  banking,  securities,  and  insurance  under  two  appointed officials who are selected by the Financial Services Commission. The Financial Services Commission serves as  agency  head  for  the  Office  of  Financial  Regulation  (OFR  or  Office)  and  the  Office  of  Insurance Regulation (OIR). The commission is composed of the governor and Cabinet. The commission appoints the commissioner of the OFR and the commissioner of the OIR.   Although  both  offices  are  administratively  housed  within  the  Department  of  Financial  Services,  they report  directly  to  the  Financial  Services  Commission,  headed  by  Chief  Financial  Officer,  Alex  Sink.  The Office  of  Financial  Regulation  has  offices  located  in  Miami,  Fort  Lauderdale,  West  Palm  Beach,  Tampa,  1
  10. 10. 2 Module 1Orlando,  Jacksonville,  Pensacola,  and  Fort  Myers.  The  regional  offices  are  primarily  responsible  for conducting  examinations  to  ensure  regulatory  compliance  by  financial  institutions  and  financial  service companies.  The Office is dedicated to safeguarding the private financial interests of the public by licensing, chartering, examining, and regulating financial institutions and financial service companies in the State of Florida. The Office strives to protect consumers from financial fraud while preserving the integrity of Florida’s markets and  financial  service  industries.  This  is  the  Office’s  mission  statement  found  at       www.flofr.com/Director/abouttheoffice.htm  Within  the  Office  are  2  Divisions.  The  first  is  the  Division  of  Financial  Institutions.  This  division  licenses, examines,  and  regulates  all  state‐authorized  or  state‐chartered  financial  institutions  to  ensure  they operate  in  a  safe  and  sound  manner  and  in  compliance  with  applicable  statutes  and  rules.  Those institutions  include  commercial  banks,  credit  card  banks,  credit  unions,  non‐deposit  trust  companies, savings banks, savings and loans, and international bank offices.   The  second  division  within  the  Office  is  the  Division  of  Securities  and  Finance.  Within  this  division  are three Bureaus—the Bureau of Financial Regulation; the Bureau of Securities Regulation; and the Bureau of  Regulatory  Review.  The  Bureau  of  Finance  Regulation  regulates  retail  installment  sales  businesses, consumer  finance  companies,  mortgage  brokers  and  lenders,  collection  agencies,  and  money transmitters. The bureau provides consumer protection from illegal or improper activities performed by these companies. The Bureau of Securities Regulation protects the public from investment and securities fraud. The Bureau of Regulatory Review reviews all applications for a financial services firm or a securities firm, reviews individual applications, and either approves, places licensing restrictions, or denies licensure based upon its findings (See Figure 1.1).    Office of Financial Regulation Flow Chart      Figure 1.1  Source: www.flofr.com/Director/OFRorgchart.pdf      
  11. 11. Florida Mortgage Brokerage and Lending Act Laws and Rules 3  RECENT CHANGES IN FLORIDA STATUTES REGULATING MORTGAGE  BROKERAGE AND MORTGAGE LENDING    NEW FOR 2008  0 0 8 NEW FOR 2Mortgage Broker’s License Under Chapter 494.0033 Effective  July  1,  2008,  the  mortgage  broker  license  test  must  be  available  electronically  no  later  than December 31, 2008. Reduced the maximum exam fee from $100 to $75.  Reduced the maximum fee to review the graded exam from $50 to $35.  Reduced the nonrefundable application fee from $200 to $195 (Chapter 494.0033(2)(b)(c), F.S.).  Mortgages Offered By Land Developers; Requirements; Prohibitions Revised  the  heading  and  content  of  Chapter  494.008  by  deleting  the  reference  to  the  Florida  Uniform Land Sales Practices Law and Chapter 498.  Mortgage Fraud Effective July 1, 2008, any person who violates s. 817.545(2) and the loan value stated on documents used in the mortgage lending process exceeds $100,000, commits a felony of the second degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.  That increases the maximum amount of imprisonment from 5 years to 15 years and the maximum fine from $5,000 to $10,000.  House bill 743 created Section 193.133 F.S. to protect Florida citizens.  Upon the finding of probable cause of any person for the crime of mortgage fraud, as defined in s. 817.545, or any other fraud involving real property  that  may  have  artificially  inflated  or  could  artificially  inflate  the  value  of  property  affected  by such fraud, the arresting agency shall promptly notify the property appraiser of the county in which such property  or  properties  are  located  of  the  nature  of  the  alleged  fraud  and  the  property  or  properties affected.    The  property  appraiser  must  reassess  properties  that  are  found  to  have  artificially  inflated values (http://laws.flrules.org/files/Ch_2008‐080.pdf).  New Foreclosure Rescue Law Chapter  501.1377  F.S.  became  effective  October  1,  2008.    Entitled  “Violations  involving  homeowners during the course of residential foreclosure proceedings”, it is known as the new foreclosure rescue law.  It seeks to protect homeowners who face the threat of foreclosure from individuals who would prey on them by requiring a homeowner to receive information necessary to make an informed decision regarding the  sale  or  transfer  of  his  or  her  home  to  an  equity  purchaser.      Chapter  501.1377(2)(b)6  defines  a foreclosure rescue consultant as a person who directly or indirectly makes a solicitation, representation, or  offer  to  a  homeowner  to  provide  or  perform,  in  return  for  payment  of  money  or  other  valuable consideration,  foreclosure‐related  rescue  services.  The  term  does  not  apply  to  a  licensed  mortgage broker, mortgage lender, or correspondent mortgage lender that provides mortgage counseling or advice regarding  residential  real  property  in  foreclosure,  which  counseling  or  advice  is  within  the  scope  of services set forth in Chapter 494 and is provided without payment of money or other consideration other than a mortgage brokerage fee as defined in s. 494.001.    A foreclosure‐rescue consultant may not solicit, charge, receive, or attempt to collect or secure payment, directly or indirectly, for foreclosure‐related rescue services before completing or performing all services contained in the agreement for foreclosure‐related rescue services.    Now foreclosure‐related rescue services agreements must be expressed in writing at least 1 business day 
  12. 12. 4 Module 1prior to entering into a contract in order to safeguard homeowners against deceit and financial hardship; to ensure, foster, and encourage fair dealing in the sale and purchase of homes in foreclosure or default; to prohibit representations that tend to mislead; to prohibit or restrict unfair contract terms; to provide a cooling‐off  period  of  3  business  days  for  homeowners  who  enter  into  written  contracts  for  services related to saving their homes from foreclosure or preserving their rights to possession of their homes; to afford homeowners a reasonable and meaningful opportunity to rescind sales to equity purchasers; and to preserve and protect home equity for the homeowners of Florida.  A  person  who  violates  any  provision  of  this  section  commits  an  unfair  and  deceptive  trade  practice  as defined in Part II of Chapter 501. Violators are subject to the penalties and remedies including a monetary penalty not to exceed $15,000 per violation.  Contact the Florida Attorney General for more information   or visit the Consumer Protection section at http://myfloridalegal.com.    C H 0 7 G HS N R O S 2 0 0 7 20 AN CE A FGE MCHANGES FROM 2007 The revisions, amendments, and additions that became effective October 1, 2007.  Definitions Expands the definition of loan originator to include account executives/wholesale representatives. There‐fore,  these  individuals  are  required  to  be  included  in  the  licensee’s  Quarterly  Reports  and  these  loan originators must complete 14 hours of professional continuing education biennially (Chapter 494.001(2), F.S.).  A mortgage loan application is a submission of the borrower’s financial information in anticipation of a credit decision regarding a specific property. If the submission does not identify a specific property, then the application is for a prequalification and not an application for a mortgage loan. Once a property has been identified, this converts it to an application for a mortgage loan (Chapter 494.001(32), F.S.).  Clarifies that the mortgage brokerage fee includes the total compensation to be received by a mortgage brokerage business for acting as a mortgage broker (Chapter 494.001(33), F.S.).  Business day means any calendar day except for Sunday or a legal holiday (Chapter 494.001(34), F.S.).  Cease and Desist Orders; Administrative Fines; Refund Orders Authorizing  the  Office  to  take  administrative  action  against  mortgage  business  schools  similar  to  other license types.  The maximum fine for a violation is $5,000 for each separate count or offense.  The Office may  suspend,  revoke,  or  place  on  probation  the  permit  of  the  mortgage  business  school.  (Chapters 494.0014(4) and 494.0029(1)(f), F.S.).  Mortgage Business Schools Mortgage  business  schools  must  conduct  classes  on  the  basis  of  a  50‐minute  classroom  hour  (Chapter 494.0029(2)(g), F.S.).  Each  mortgage  business  school  is  responsible  for  developing  procedures  to  confirm  and  for  actually confirming the identity of each student attending any course offering (Chapter 494.0029(2)(h), F.S.).  Professional Continuing Education  Of  the  14  hours  of  required  professional  continuing  education,  a  minimum  of  4  hours  shall  cover  the provisions  of  Chapter  494,  F.S.  and  the  rules  in  Chapter  69V‐40,  F.A.C.  The  professional  continuing education requirements are waived for the license renewal of a mortgage broker who completed the 24‐
  13. 13. Florida Mortgage Brokerage and Lending Act Laws and Rules 5hour  pre‐licensing  classroom  education  requirements  within  90  days  of  the  biennial  license  period immediately following the period in which the person became licensed as a mortgage broker. Previously, the mortgage broker was exempt from professional continuing education for the biennial period in which they  became  licensed.  Now,  the  time  is  reduced  to  90  days  prior  to  the  expiration  of  the  license.  Licensees  shall  maintain  records  documenting  compliance  with  this  subsection  for  a  period  of  4  years (Chapter 494.00295(1), F.S.).   Now the Office can offer professional continuing education programs (Chapter 494.00295(2), F.S.). Electronically  transmitted  professional  continuing  education  courses  shall  require  that  the  course participant  has  logged  the  required  number  of  hours  for  the  particular  timed  module;  has  completed  a test that comprehensively covers the course content for the particular timed module; and has correctly answered all test questions for the particular timed module (Chapter 494.00295(3)(a)1.2.3, F.S.).  All distance education course participants shall successfully complete a 100‐question test with a score of at least 75% in order to receive a certificate of course completion. The test shall comprehensively cover the course content (Chapter 494.00295(3), F.S.).  The commission shall adopt rules pursuant to ss.120.536(1) and 120.54 necessary to administer (Chapters 494.00295 and 494.00295(4), F.S.).  Mortgage Broker’s License  Added the requirement that an applicant for licensure as a mortgage broker needs to have a high school diploma or its equivalent (Chapter 494.0033(2)(a), F.S.).  Added  that  the  commission  may  adopt  rules  prescribing  an  additional  fee  not  to  exceed  $50.00  for  an applicant  to  review  their  completed  and  graded  mortgage  broker  test.  Also  added  that  the  commission may  adopt  rules  regarding  the  administration  of  the  testing  process,  including,  but  not  limited  to, procedures  relating  to  the  pretest  registration,  test  security,  scoring,  content,  result  notification,  retest procedures and fees, post examination review, and challenge provisions (Chapter 494.0033(2)(b), F.S.).  Mortgage Broker Disclosures  The  mortgage  brokerage  business  and  the  borrower  must  sign  and  date  a  written  mortgage  brokerage agreement in order for the mortgage brokerage business to receive a mortgage brokerage fee (Chapter 494.0038(1)(a)1., F.S.).  In  face‐to‐face  interviews,  the  written  mortgage  brokerage  agreement  must  be  completed,  signed,  and dated within 3 business days of receipt of an application. For mail‐away applications, the licensee bears the  burden  of  proving  that  the  borrower  received  and  approved  the  written  mortgage  brokerage agreement  and  the  written  mortgage  brokerage  agreement  was  sent  within  3  business  days  of  the licensee’s acceptance of the application (Chapter 494.0038(1)(a)2., F.S.).  If  the  mortgage  brokerage  business  is  to  receive  any  payment  of  any  kind  from  the  lender,  then  the maximum total dollar amount of the payment must be disclosed to the borrower in the written mortgage brokerage  agreement  as  described  in  494.0038(1)(a)1.2.  Previously,  it  was  disclosed  as  a  percentage range  and  not  a  dollar  amount.  The  mortgage  brokerage  agreement  must  state  the  nature  of  the relationship  with  the  lender,  describe  how  compensation  is  paid  by  the  lender,  and  describe  how  the mortgage  interest  rate  affects  the  compensation  paid  to  the  mortgage  brokerage  business  (Chapter 494.0038(1)(b)1, F.S.).  The exact amount of any payment of any kind by the lender to the mortgage brokerage business must be 
  14. 14. 6 Module 1disclosed  in  writing  to  the  borrower  within  3  business  days  after  the  mortgage  brokerage  business  is made aware of the exact amount of the payment from the lender but not less than 3 business days before the  execution  of  the  closing  or  settlement  statement.  The  licensee  bears  the  burden  of  proving  such notification was provided to the borrower (Chapter 494.0038(1)(b)2., F.S.).  Mortgage Broker Disclosures and Requirements of Licensees Under Chapters 494.006‐494.0077 A good faith estimate signed and dated by the borrower, which discloses the total amount of each of the fees  which  the  borrower  may  reasonably  expect  to  pay  if  the  loan  is  closed,  must  be  given  within  3 business  days  of  receipt  of  the  application  by  the  mortgage  brokerage  business  or  within  a  reasonable time for a correspondent  or mortgage lender. The good faith estimate must identify the recipient of all payments  charged  the  borrower  and,  except  for  all  fees  to  be  received  by  the  mortgage  brokerage business and the mortgage lender or the correspondent lender, may be disclosed in generic terms, such as  but  not  limited  to,  paid  to  lender,  appraiser,  officials,  title  company,  or  any  other  third‐party  service provider.  The  licensee  bears  the  burden  of  proving  such  disclosures  were  provided  to  the  borrower (Chapters 494.0038(2)(c) and 494.0067(8), F.S.).  Within 3 business days of receipt of the application by the broker or lender, complete, written, signed and dated  by  the  borrower,  adjustable  rate  mortgage  loan  disclosures  must  be  provided  in  a  format prescribed  by  ss.  226.18  and  226.19  of  Regulation  Z  of  the  Board  of  Governors  of  the  Federal  Reserve together  with  the  Consumer  Handbook  on  Adjustable  Rate  Mortgages  (CHARM  Booklet).  The  licensee bears the burden of proving such disclosures were provided to the borrower (Chapters 494.0038(3) and 494.0067(11), F.S.).  In every mortgage loan transaction, each licensee under ss. 494.003‐494.0043 or ss. 494.006‐0077, shall notify  a  borrower  of  any  material  changes  in  the  terms  of  a  mortgage  loan  previously  offered  to  the borrower within 3 business days after being made aware of such changes by the lender but not less than 3 business days before the signing of the settlement or closing statement. The licensee bears the burden of proving such notification was provided and accepted by the borrower. A waiver of this requirement can be granted by the borrower to meet a bona fide personal financial emergency. The imminent sale of the borrower’s home at foreclosure during the 3‐day period before the signing of the settlement or closing statement  constitutes  an  example  of  a  bona  fide  personal  financial  emergency.  The  borrower  must provide  the  licensee  with  a  dated  written  statement  that  describes  the  personal  financial  emergency, waives  the  right  to  receive  the  notice,  bears  the  borrower’s  signature,  and  is  not  on  a  printed  form prepared  by  the  licensee  for  the  purpose  of  such  a  waiver  (Chapters  494.004(8)(a)(b)  and 494.0067(12)(a)(b), F.S.).  Renewal of Mortgage Lender’s License; Branch Office License Renewal and Requirements of Licensees under Chapters 494.006‐494.0077 Lenders  must  certify  that  they  currently  meet  the  minimum  net  worth  requirements  and  that  their principal  representative  and  all  of  their  loan  originators  who  are  not  currently  licensed  as  mortgage brokers  have  completed  the  14  hours  of  professional  continuing  education  requirements  in  order  to renew their license (Chapters 494.0064(1) and 494.0067(10)(a), F.S.).  Administrative Penalties, Fines and License Violations  Any violation of the federal Real Estate Settlement Procedures Act or the federal Truth in Lending Act will also be a violation of Chapter 494, F. S. (Chapters  494.0041(2)(v) and 494.0072(2)(v), F.S.).  Now  a  principal  representative  of  a  mortgage  lender  or  correspondent  mortgage  lender  is  subject  to disciplinary  action  for  violations  by  associates  or  employees  in  the  course  of  an  association  or employment  with  the  correspondent  mortgage  lender  or  the  mortgage  lender.  The  principal 
  15. 15. Florida Mortgage Brokerage and Lending Act Laws and Rules 7representative is only subject to suspension or revocation for associate or employee actions if there is a pattern  of  repeated  violations  by  associates  or  employees  or  if  the  principal  broker  or  principal representative had knowledge of the violations (Chapter 494.0072(5), F.S.).  Mortgage Lender or Correspondent Mortgage Lender When Acting As a Mortgage Brokerage Business  Added that when a mortgage lender or correspondent lender acts as a mortgage brokerage business, the provisions of ss. 494.004(8) apply (Chapter 494.0073, F.S.).  Created Florida Statute 817.545, Mortgage Fraud Defined  the  term  “mortgage  lending  process”  to  mean  the  process  through  which  a  person  seeks  or obtains  a  residential  mortgage  loan,  including,  but  not  limited  to,  the  solicitation,  application  or origination,  negotiation  or  terms,  third‐party  provider  services,  underwriting,  signing  and  closing,  and funding of the loan. Documents involved in the mortgage lending process include, but are not limited to, mortgages,  deeds,  surveys,  inspection  reports,  uniform  residential  loan  applications,  or  other  loan applications;  appraisal  reports;  HUD‐1  settlement  statements;  supporting  personal  documentation  for loan  applications  such  as  W‐2  forms,  verifications  of  income  and  employment,  credit  reports,  bank statements, tax returns, and payroll stubs; and any required disclosures.  A person commits the offense of mortgage fraud if, with the intent to defraud, the person knowingly:  • makes  any  material  misstatement,  misrepresentation,  or  omission  during  the  mortgage  lending  process with the intention that the misstatement, misrepresentation, or omission will be relied on  by a mortgage lender, borrower, or any other person or entity involved in the mortgage lending  process; however, omission on a loan application regarding employment, income, or assets for a  loan which does not require this information are not considered a material omission for purposes  of this subsection.   • uses  or  facilitates  the  use  of  any  material  misstatement,  misrepresentation,  or  omission  during  the  mortgage  lending  process  with  the  intention  that  the  material  misstatement,  misrepresentation,  or  omission  will  be  relied  on  by  a  mortgage  lender,  borrower,  or  any  other  person  or  entity  involved  in  the  mortgage  lending  process;  however,  omissions  on  a  loan  application  regarding  employment,  income,  or  assets  for  a  loan  which  does  not  require  this  information are not considered a material omission for purposes of this subsection.  • receives any proceeds or any other funds in connection with the mortgage lending process that  the person knew resulted from a violation of 817.545(2)(a) or 817.545(2)(b).        • files or causes to be filed with the clerk of the circuit court for any county of this state a document  involved  in  the  mortgage  lending  process  which  contains  a  material  misstatement,  misrepresentation, or omission.   An  offense  of  mortgage  fraud  may  not  be  predicated  solely  upon  information  lawfully  disclosed  under federal disclosure laws, regulations, or interpretations related to the mortgage lending process.  For  the  purpose  of  venue  under  817.545  F.S.,  any  violation  of  this  section  is  considered  to  have  been committed in the county in which the real property is located or in any county in which a material act was performed in furtherance of the violation.  Any person who violates 817.545(2) F.S. commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.  NGES FROM 2006  2006 CHANGES Revisions, amendments, and additions that became effective October 1, 2006.  
  16. 16. 8 Module 1Definition Control person means an individual, partnership, corporation, trust, or other organization that possesses the  power,  directly  or  indirectly,  to  direct  the  management  or  policies  of  a  company,  whether  through ownership  of  securities,  by  contract,  or  otherwise.  A  person  is  presumed  to  control  a  company  if,  with respect to a particular company, that person: (a)  Is a director, general partner, or officer exercising executive responsibility or having similar status or  functions; (b)  Directly or indirectly may vote 10 percent or more of a class of voting securities or sell or direct the  sale of 10 percent or more of a class of voting securities; or (c)  In the case of a partnership, may receive upon dissolution or has contributed 10 percent or more of  the capital (Chapter 494.001(9)(a‐c), F.S.).  Powers and Duties of the Commission and Office Allows  the  Office  to  require  the  electronic  filing  of  applications,  renewals,  and  fees,  unless  granted  a waiver by OFR due to a hardship. Prior to this change, the only license type that could file an application online was a mortgage broker (Chapter 494.0011(2)(6), F.S.).  Books, Accounts, and Records; Maintenance; Examinations by the Office Authorizes the commission to adopt rules for the requirements for the destruction of records maintained by licensees after the retention period has expired.  The retention period is 3 years after the date of original entry (Chapter 494.0016(3)(4), F.S.).  Mortgage Business Schools Requires permitted mortgage business schools to electronically report to the Office the names of pupils who have successfully completed required training courses (Chapter 494.0029(4), F.S.).   Licensure as a Mortgage Brokerage Business; Mortgage Broker’s License  Provides  that  applications  are  not  deemed  received  until  all  required  fees  are  received  (Chapters 494.0031(2)(a); 494.0033(2)(c), F.S.).  Renewal of Mortgage Brokerage Business License or Branch Office License The  license  for  a  branch  office  must  be  renewed  in  conjunction  with  the  renewal  of  the  mortgage brokerage business license (Chapter 494.0032(1)).    Mortgage Broker’s License Allows the Office to contract with a third party vendor to administer the mortgage broker test. This will allow  the  test  to  be  conducted  electronically  at  multiple  locations  several  times  a  week  versus  the  old once a month process at limited locations (Chapter 494.0033(2)(b), F.S.).  Mortgage Brokerage Business Branch Offices; Principal Place of Business Requirements Deleted  Chapter  494.0036(3),  F.S.  and  Chapter  494.0039(3),  F.S.  Eliminated  from  the  statute  the requirement to display main office, branch office, and individual licenses.  Requirements of Licensees Provides  that  each  licensee  shall  report  any  change  in  the  principal  broker,  principal  representative, officers,  partners,  members,  joint  venturers,  directors,  control  persons  or  any  individual  who  is  the ultimate equitable owner of 10% or greater interest (Chapter 494.004(6). F.S.).      Provides that a change of control whether through the power to direct management, ownership or otherwise  shall  require  an  application  to  be  submitted  to  the  OFR  unless  a  waiver  has  been 
  17. 17. Florida Mortgage Brokerage and Lending Act Laws and Rules 9granted (Chapter 494.004(6)(a‐d), F.S.).  Administrative Penalties and Fines; License Violations Authorizes  disciplinary  action  if  fees  are  paid  with  a  bad  check  (Chapters  494.0041(2)(s)  and 494.0072(2)(s), F.S.).  Provides grounds for disciplinary action when a final judgment is entered against an applicant or licensee in  a  civil  action  upon  grounds  of  fraud,  embezzlement,  misrepresentation,  or  deceit  (Chapters 494.0041(2)(t) and 494.0072(2)(t), F.S.).  Provides  grounds  for  disciplinary  action  when  action  is  taken  by  other  federal  and  state  regulatory organizations  located  in  or  outside  the  State  of  Florida  involving  securities,  insurance,  real  estate, mortgage  brokers  and  lenders,  or  other  related  or  similar  industries  (Chapters  494.0041(2)(u)1.2.  and 494.0072(2)(u)1.2.,F.S.).   Mortgage  Lender’s  License  Requirements;  Correspondent  Mortgage  Lender’s  License  Requirements; Savings Clause; Branch Offices Provides  that  applications  are  not  deemed  received  until  all  required  fees  are  received  (Chapters 494.0061(2)(b), 494.0062(2)(b), 494.0065(3)(5)(b) and 494.0066(2), F.S.).  Audited financial statements of all licensed lenders have to be in accordance with United States generally accepted accounting principles (Chapters 494.0061(2)(c), 494.0062(2)(c) and 494.0065(2)(5)(c), F.S.).  Provides under certain conditions that existing principal representatives can be grandfathered in without class  or  testing  requirements  (Chapters  494.0061(2)(f)(8‐9)  and  494.0062(2)(f)(11‐12)  and 494.0065(4)(c)1.2.(10), F.S.).  Renewal of Mortgage Lender’s License; Branch Office License Renewal Chapter  494.0064(1)(b),  F.S.  deleted.  Eliminated  the  requirement  to  report  the  continuing  education  of loan associates when renewing a lender’s license.  Requirements of Licensees Under Chapters 494.006‐.0077 Chapter  494.0067(1),  F.S.  deleted.  Eliminated  from  the  statute  the  requirement  to  display  main  and branch office licenses.  Provides  that  each  licensee  shall  report  any  change  in  the  officers,  partners,  members,  joint  venturers, directors, or control persons (Chapter 494.0067(4), F.S). Provides  that  a  change  of  control  whether  through  the  power  to  direct  management,  ownership  or otherwise  shall  require  an  application  to  be  submitted  to  the  OFR  unless  a  waiver  has  been  granted (Chapter 494.0067(4)(a‐d),F.S).  CHANGES BETWEEN 2002 AND 2004 TO THE RULES OF THE FLORIDA ADMINISTRATIVE CODE The most significant changes were that the Rules Regulation Mortgage Brokers were moved from 3D‐40 F.A.C. to a new Chapter 69V‐40 F.A.C. and all references to the Department of Banking and Finance were replaced with the Financial Services Commission and the Office of Financial Regulation, depending upon the specific division of responsibility between the departments.   Table 1.1 summarizes the significant changes to the rules effective in 2008 and Table 1.2 summarizes the forms that have been renamed and readopted since March 23, 2008.
  18. 18. 10 Module 1 Table 1.1 Changes Effective in 2008 to the Rules of the Florida Administrative Code Definitions 69V-40.001 Deleted the definition of Moral Turpitude (11) and renumbered remaining portion of rule. Effective March 23, 2008.Adoption of Forms 69V-40.002 All the forms were readopted by the Office of Financial Regulation (OFR) and are available by mail from the OFR or on their website at www.flofr.com See Table 1.2 All forms were updated on March 23, 2008, and effective December 25, 2008, Form OFR-494-01 Application for Mortgage Brokerage Business and Lender License, Form OFR-494-03 Application for Licensure as a Mortgage Broker again updated .Electronic Filing of Forms and Fees 69V-40.003 Effective October 21, 2008, this ruled was added to define “REAL System” to mean the Office of Financial Regulation’s Regulatory Enforcement and Licensing System, accessible at www.flofr.com Application for Mortgage Brokerage Business and Lender License, Form OFR- 494-01; Application for Branch Office License, Form OFR-494-02; Application for Licensure as a Mortgage Broker, Form OFR-494-03; Application for a Mortgage Business School Permit, Form OFR-494-04; Mortgage Lender License Renewal and Reactivation Form, Form OFR-494-06; and Quarterly Report Form, Form OFR-494- 08 required to be filed with the Office of Financial Regulation through the REAL System. Required all fees to be filed with the Office of Financial Regulation through the REAL System. Any person may petition for a waiver of the electronic filing requirements by filing a petition under Rule 28-106.301, F.A.C. by demonstrating a technical or financial hardship that would require a paper format.Fees and Commissions 69V-40.008 Added that a good faith estimate does not supplant or substitute for the agreement required by Section 494.0038(1) F.S. Effective March 23, 2008.Payment of Guaranty Fund Claims 69V-40.015 Repealed. Effective March 23, 2008.Change of Address 69V-40.020 Repealed. Effective March 23, 2008.Fictitious Name Registration 69V-40.021 Added that a mortgage business school, mortgage brokerage business, or mortgage lender will not be permitted to use a fictitious name unless they provide evidence to the OFR that such fictitious name is duly registered with the Florida Secretary of State pursuant to Section 865.09, F.S. Effective March 23, 2008.Quarterly Report Filing Requirements 69V-40.022 Required the quarterly report to be filed electronically on Form OFR-494-08 at the OFR’s website at www.flofr.com. Added that any person may petition for a waiver of this requirement by filing a petition pursuant to Rule 28-106.301, Florida Administrative Code (F.A.C.). The petition shall demonstrate a technological or financial hardship that entitles the person to file the quarterly report in a paper format. All reports must be filed with the OFR within 30 days after the last day of each calendar quarter. Previously, the rule stated that it must be received within 30 days. If the 30th day is a weekend or official holiday, then the next business day is considered timely filing. Any updates to the Quarterly Report for the quarter ending March 31, 2008, must be filed through the Regulatory Enforcement and Licensing (REAL) System by the filing deadline date of April 30, 2008.Mortgage Broker Examination 69V-40.025 Deleted that an applicant will be provided an official admission notice to sit for the examination. Applicants will be responsible for scheduling their own test and re-test, if necessary, through REAL. Added that specific instructions to complete the examination will be communicated prior to the examination. Added that the OFR or its designee shall be responsible for determining that the student taking the examination is the actual person authorized to take the examination. Added that cheating on an examination or violating test center or examination procedures shall be grounds for denial of licensure by the OFR. Added that candidates who fail the exam shall have right to access the examination questions, their examination responses, and the correct answers. Added that a passing score will be valid for a period of 2 years from the date of passing the examination. Previously it was 365 days. Deleted that only those answers indicated by the candidate on the answer sheet will be used in computing the examination score and added that test scores will be derived from the number of correct responses. Deleted that the notification of examination results will be sent via U.S. Mail within10 business days of the examination date. Effective March 23, 2008. Effective October 21, 2008, “REAL” System means the Office of Financial Regulation Enforcement and Licensing System accessible through the Office of Financial Regulation at www.flofr.com
  19. 19. Florida Mortgage Brokerage and Lending Act Laws and Rules 11Mortgage Broker Pre-licensing 69V-40.027 The full name and social security number of each student who completes the 24Education Requirement hour mortgage broker course along with the school’s license number and the completion date was added to the requirements and also added that this information shall be submitted electronically to the OFR at their website www.flofr.com Effective March 23, 2008. Deleted the wording of 24 hour pre-licensing. Added that an instructor who teaches a pre-licensing course may use it towards the satisfactory completion of the pre-licensing education requirement. Effective March 23, 2008.Professional Continuing Education 69V-40.0271 Added the word “professional” to continuing education requirements. Added theRequirements for Mortgage Brokers, requirement that each loan originator of a mortgage lender, correspondent mortgageLoan Originators, and Principal lender, or mortgage lender pursuant to the savings clause shall satisfactorilyRepresentatives complete 14 hours of professional continuing education. Deleted that the continuing education requirements are waived for the initial license renewal for mortgage brokers and principal representatives. Added the requirement that each permitted school shall submit within 5 days of completion of each professional continuing education course to the OFR at their website www.flofr.com the full name and mortgage broker license number or social security number of each student, the school’s name and license number, the number of hours completed by the student, and the completion date for individuals licensed as mortgage brokers. Increased the retention period of student course completion records from 3 years to 4 years from the date of completion. Effective March 23, 2008.Permit for Mortgage Business School 69V-40.028 Renamed the application for Mortgage Business School Permit to OFR-494-04. Added that an applicant shall file an amendment to a pending application for a Mortgage Business School if the information in the application becomes inaccurate for any reason. The applicant has 30 days from the receipt of the application by the OFR to file the amendment on Form OFR-494-04. Otherwise, prior written permission from the OFR is required. Material changes to the application may be deemed grounds for denial by the OFR and a new application accompanied by the appropriate filing fees may be required. Added that a withdrawal of application will be deemed effective upon receipt by the OFR and that all fees are non-refundable if withdrawn. Also, all fees are non- refundable if the application is denied. Added that Form OFR-494-04 is incorporated by reference in subsection 69V- 40.002(1), F.A.C. Effective March 23, 2008.Mortgage Business Schools 69V-40.0281 Because 494.0029 was renumbered, prohibited practices are now a violation ofProhibited Practices and 494.0029(2)(c) and (d) and (f) Effective March 23, 2008.Advertising/PublicityMortgage Business School Permit 69V-40.029 Because the Mortgage Business School Permit Renewal form was repealed, theRenewal requirement to submit it with a renewal was deleted. Added that schools teaching the 24-hour pre-licensing course submit all training materials that the applicant plans to distribute to course participants including a copy of all teaching aids, such as flash cards, hand-outs, audio/video materials, computer disks/cd’s, and any computer based training. Added the the OFR shall deem a renewal received upon receipt of the requisite fees and training materials at such time as it has been dated stamped by the Cashier’s Office of the Department of Financial Services or the date the renewal process has been completed on the OFR’s website. All renewal fees and training materials must be received by September 30th of the year in which the permit expires. If September 30th falls on a Saturday, Sunday, or legal holiday pursuant to Section 110.117, F.S., the renewals received on the next business day will be considered timely received. Effective March 23, 2008.Application Procedure for Mortgage 69V-40.031 Renamed the Application for Licensure as a Mortgage Broker, Form OFR-494-03.Broker License Gave the Fingerprint card a name, FL921050Z, and increased the fingerprint card processing fee in 2008 to $43.25. It had been increased on March 23, 2008. Added the requirement that the applicant has passed the mortgage broker examination as defined in Rule 69V-40.025 to be included with the Application for Licensure as a Mortgage Broker. If the information in the Application for Licensure as a Mortgage Broker or any amendment thereto becomes inaccurate, the applicant shall file an amendment
  20. 20. 12 Module 1 correcting such information within 30 days of the change on Form OFR-494-03. Previously, it was 10 days. An applicant may amend the application at any time within 30 days from the receipt of the application by the Office. Prior to a determination of the application, an applicant may withdraw their application by written request and is deemed effective upon receipt by the Office of the written request. Except for the fingerprint card, all applications, fees, data, and forms required under this rule shall be filed electronically at www.flofr.com. The Office will issue a confirmation of receipt of submission and payment upon successful submission by the applicant on the website. Any person may petition for waiver of the electronic submission of applications, fees, data and forms by filing a petition pursuant to Rule 28-106.301, F.A.C. Such petition shall demonstrate a technological or financial hardship that entitles the person to file the application, fees, data or form in a paper format. Added that Form OFR-494-03 and Form FL921050Z are incorporated by reference in subsection 69V-40.002(1), F.A.C.Effect of Law Enforcement Records 69V-40.0311 Effective December 2, 2008, this rule was added. It applies to applications foron Applications for Mortgage Broker licensure as a Mortgage Broker for persons who have been found guilty of, or whoLicensure have pled guilty or nolo contendere to, certain crimes. At the time of submitting a mortgage broker application, an applicant for a mortgage broker license shall disclose on the application form any pending criminal charges and all criminal matters in which the applicant has pled guilty or nolo contendere to, or has been convicted or found guilty, regardless of whether adjudication was withheld, of any crime. In addition, the applicant shall supply the Office with required documentation, as specified in this rule, relating to all criminal matters in which the applicant has pled guilty or nolo contendere to, or has been convicted or found guilty, regardless of whether adjudication was withheld, of a class “A”, “B”, “C”, or “D” crime as described in this rule; any pending criminal charges relating to a class “A”, “B”, “C”, or “D” crime as described in this rule; or shall supply evidence that such documentation cannot be obtained. The applicant is not eligible for licensure with a Class "A" crime in their law enforcement record. Class "A" crimes include any type of fraud, including but not limited to fraud, postal fraud, wire fraud, securities fraud, Welfare fraud, defrauding the Government, credit card fraud, defrauding an Innkeeper, passing worthless check(s) with intent to defraud; perjury; armed robbery; robbery; extortion; bribery; embezzlement; grand theft; larceny; burglary; breaking and entering; identity theft; any type of forgery or uttering a forged instrument; misuse of public office; racketeering; buying, receiving, concealing, possessing or otherwise dealing in stolen property; treason against the United States, or a state, district, or territory thereof; altering public documents; witness tampering; tax evasion; impersonating or attempting to impersonate a law enforcement officer; and/or money laundering. A person who has been found guilty of, or who has pled guilty or nolo contendere to, certain other felonies constituting moral turpitude, including but not limited to specified serious violent crimes including murder in all degrees; arson; sale, importation, or distribution of controlled substances (drugs) or possession for sale, importation or distribution; aggravated assault (e.g., as with a deadly weapon); aggravated battery (e.g., as with a deadly weapon); rape; sexually molesting any minor; sexual battery; battery of or threatening a law enforcement officer or public official in the performance of his/her duties; and/or kidnapping is not eligible for licensure as a mortgage broker until 15 years have passed since the trigger date of a single crime. These crimes are classified as Class “B” crimes. Trigger date is defined as the date on which the applicant was found guilty, or pled guilty or pled nolo contendere to a crime. A person who has been found guilty of, or who has pled guilty or nolo contendere to, a felony constituting an act of moral turpitude that is not addressed under Class “A” or “B” crimes is not eligible for licensure as mortgage broker until 7 years have elapsed from the trigger date of a single crime. These crimes are classified as Class “C” crimes. A person who has been found guilty of, or who has pled guilty or nolo contendere to, a misdemeanor involving fraud, dishonest dealing or moral turpitude, is not eligible for licensure as a mortgage broker until 5 years have elapsed since the trigger date of a single crime. These crimes are classified as Class “D” crimes. The omission of any part of a law enforcement record required to be disclosed is a material misrepresentation or material misstatement on the application and the application shall be denied pursuant to Section 494.0041(2)(c), F.S. The Office shall
  21. 21. Florida Mortgage Brokerage and Lending Act Laws and Rules 13 not deny an application for failure to provide documentation when the crime is not a Class “A-D” crime and the applicant has disclosed the crime on the application form. If the Office discovers the applicant’s failure to disclose after a license has been granted, the Office will suspend or revoke each license currently held by the applicant as follows- suspension for 12 months if, had the license application been accurate, the application would have been granted, based on the statutes and licensing rules applicable to the application at the time the Office issued the license, and the documentation in the applicants file at the time the Office issued the license; or revocation if, had the license application been accurate, the application would have been denied, based on the statutes and licensing rules applicable to the application at the time the Office issued the license. The rule provides for mitigating and aggravating factors that may lengthen or shorten the time periods for mortgage broker license applicants. Two or more offenses are considered a single crime if they are triable in the same court and are based on the same act or transaction or on two or more connected acts or transactions.Mortgage Broker License Renewal 69V-40.043 Renamed the Mortgage Broker License Renewal and Reactivation Form toand Reactivation OFR-494-07. All applications, fees, data and forms required to be filed under this rule shall be filed electronically at www.flofr.com Any person may petition for waiver of the electronic submission of applications, fees, data and forms by filing a petition pursuant to Rule 28-106.301, F.A.C. Such petition shall demonstrate a technological or financial hardship that entitles the person to file the application, fees, data or form in a paper format. The Office will issue a confirmation of receipt of submission of renewal payment upon successful submission by the applicant on the website. Added that Form OFR-494-07 is incorporated by reference in subsection 69V- 40.002(1), F.A.C. Effective March 23, 2008.Application Procedure for Mortgage 69V-40.051 Renamed form to Application for Mortgage Brokerage Business and Lender License,Brokerage Business License Form OFR-494-01. Added the requirement for each chief executive officer, each chief financial officer, chief operations officer, chief legal officer, chief compliance officer, control person, member, partner, and/or joint venturer shall submit completed fingerprint card FL921050Z and form OFR-494-01 to the OFR along with the nonrefundable fee unless they already hold an active mortgage broker’s license with the OFR. The fee was $42.25 effective March 23, 2008 and on December 25, 2008, the fee was increased to $43.25. If an entity holds an active license under Chapter 494, F.S. it is exempt from these provisions when it applies for a different type of license under Chapter 494 F.S. unless there has been a change of control of 25% or more of the ownership interest or in the controlling interest since the initial license was approved by the OFR. Previously the change in control was 50%. If any information contained in the Application for Licensure or any amendment thereto becomes inaccurate for any reason, then the applicant shall file an amendment correcting such information within 30 days of the change on Form OFR- 494-01. Previously, it was 10 days. An applicant may amend the application at any time within 30 days from the receipt of the application by the Office. Prior to a determination of the application, an applicant may withdraw their application by written request and is deemed effective upon receipt by the Office of the written request. Deleted Restoration of Civil Rights. Added that Form OFR-494-01 and Form FL921050Z are incorporated by reference in subsection 69V-40.002(1), F.A.C.Effect of Law Enforcement Records 69V-40.0511 Effective December 2, 2008, this rule was added. It applies to applications foron Applications for Mortgage licensure for Mortgage Brokerage Business Licensure. For purposes of this rule eachBrokerage Business Licensure officer, director, control person, member, partner, or joint venturer of a Mortgage Brokerage Business License applicant, and each ultimate equitable owner with a 10% or greater interest in the applicant shall be referred to collectively as “relevant persons.” If the applicant is a natural person, he or she is a relevant person under this rule. At the time of submitting a Mortgage Brokerage Business Application, the applicant shall disclose on the application form any pending criminal charges and all criminal matters in which a relevant person has pled guilty or nolo contendere to, or has been convicted or found guilty, regardless of whether adjudication was withheld, of any crime. The omission of any part of a law enforcement record required to be
  22. 22. 14 Module 1 disclosed is a material misrepresentation or material misstatement on the application and the application shall be denied pursuant to Section 494.0041(2)(c), F.S. The Office shall not deny applications for failure to provide documentation when the crime is not a Class "A-C" crime and the applicant has disclosed the crime on the application form. Class “A” crimes include the following felonies which involve fraud, dishonest dealing, or moral turpitude any type of fraud, including but not limited to fraud, postal fraud, wire fraud, securities fraud, welfare fraud, defrauding the Government, credit Card fraud, defrauding an Innkeeper, passing worthless check(s) with intent to defraud; perjury; armed robbery; robbery; extortion; bribery; embezzlement; grand theft; larceny; burglary; breaking and entering; identity theft; any type of forgery or uttering a forged instrument; misuse of public office; racketeering; buying, receiving, concealing, possessing or otherwise dealing in stolen property; treason against the United States, or a state, district, or territory thereof; altering public documents; witness tampering; tax evasion; impersonating or attempting to impersonate a law enforcement officer; money laundering; murder in all degrees; arson; sale, importation, or distribution of controlled substances (drugs); or possession for sale, importation or distribution; aggravated assault (e.g., as with a deadly weapon); aggravated battery (e.g., as with a deadly weapon); rape; sexually molesting any minor; sexual battery; battery of or threatening a law enforcement officer or public official in the performance of his/her duties; kidnapping. This list is representative only and shall not be construed to constitute a complete or exclusive list all of crimes that are Class “A” crimes. No inference should be drawn from the absence of any crime from this list. The applicant will not be granted a license until 15 years have passed since the trigger date. Class "B" crimes include all felonies that involve any other act of moral turpitude and are not Class “A” crimes. The applicant will not be granted a license until 7 years have passed since the trigger date a single crime and longer for multiple crimes. Class "C" crimes include any misdemeanor that involves fraud, dishonest dealing or any other act of moral turpitude. The applicant will not be granted licensure until 5 years have passed since the trigger date for a single crime and longer for multiple crimes. The rule provides for mitigating and aggravating factors that may lengthen or shorten the time periods for mortgage broker license applicants. The Office finds it necessary that a longer disqualifying period be utilized in such instances, before licensure can safely be granted. Where the relevant person has been found guilty or pled guilty or pled nolo contendere to more than one crime, the Office shall add 5 years to the disqualifying period for each additional crime when the relevant persons whose law enforcement record includes multiple Class B or Class C crimes, or any combination thereof. Two or more offenses are considered a single crime if they are triable in the same court and are based on the same act or transaction or on two or more connected acts or transactions.Mortgage Brokerage Business 69V-40.053 Effective March 23, 2008. Deleted the requirement to submit a completed renewalLicense and Branch Office License and reactivation form.Renewal and Reactivation A renewal fee filed electronically on the Office’s website shall be considered received on the date the Office issues a confirmation of payment to the licensee via the Office’s website. A confirmation is issued by the Office upon successful submission of the renewal payment. All applications, fees, data and forms required to be filed under this rule shall be filed electronically at www.flofr.com Any person may petition for waiver of the electronic submission of applications, fees, data and forms by filing a petition pursuant to Rule 28-106.301, F.A.C. Such petition shall demonstrate a technological or financial hardship that entitles the person to file the application, fees, data or form in a paper format. If the renewal payment is received in a paper format, then the received date shall be the date stamped on the payment when received by the Department of Financial Services’ Cashier’s Office in Tallahassee, Florida.Application Procedure for Mortgage 69V-40.058 Added to operate a branch, the applicant must complete Form OFR-494-02,Brokerage Business Branch Office Application for Branch Office License. Added that amendments to pendingLicense applications shall be filed within 30 days of the change and within 30 days from receipt of the application by the Office on Form OFR-494-02. Previously, it was 10 days to notify the Office of an amendment. Prior to a determination of the application, an applicant may withdraw their application by written request and is deemed effective upon receipt by the Office of the written request.

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