Bill Text: CA SB179 | 2013-2014 | Regular Session | Amended

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Bill Title: Mortgage loan originators.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2014-02-03 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB179 Detail]

Download: California-2013-SB179-Amended.html

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BILL NUMBER: SB 179	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 19, 2013

INTRODUCED BY   Senator  Correa   Roth 

                        FEBRUARY 6, 2013

   An act to amend  Section 799.2 of the Civil Code, relating
to mobilehome parks.   Sections 22013 and 50003.5 of
the Financial Code, relating to mortgage loan originators. 


	LEGISLATIVE COUNSEL'S DIGEST


   SB 179, as amended,  Correa   Roth  .
 Mobilehome parks.   Mortgage loan originators.
 
   The California Finance Lenders Law and the California Residential
Mortgage Lending Act define a "mortgage loan originator" as an
individual who, for compensation or gain, or in the expectation of
compensation or gain, takes a residential mortgage loan application
or offers or negotiates terms of a residential mortgage loan. The
acts except certain individuals from the definition of mortgage loan
originator. Existing law requires that mortgage loan originators be
licensed and fulfill certain educational and other requirements.
 
   This bill would except from the definition of mortgage loan
originator an individual who originates 5 or fewer residential
mortgage loans secured by a manufactured home or mobilehome, as
defined, in any 12-consecutive-month period.  
   Existing law provides for the rights of a resident who has an
ownership interest in the subdivision, cooperative, or condominium
for mobilehomes, or a resident-owned mobilehome park in which his or
her mobilehome is located or installed. Existing law prohibits the
ownership or management of the subdivision, cooperative, or
condominium for mobilehomes or a resident-owned mobilehome park from
showing or listing for sale a mobilehome owned by a resident without
first obtaining the resident's written authorization. 

   This bill would make a technical, nonsubstantive changes to these
provisions. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 22013 of the  
Financial Code   is amended to read: 
   22013.  (a) "Mortgage loan originator" means an individual who,
for compensation or gain, or in the expectation of compensation or
gain, takes a residential mortgage loan application or offers or
negotiates terms of a residential mortgage loan.
   (b) Mortgage loan originator does not include any of the
following:
   (1) An individual who performs purely administrative or clerical
tasks on behalf of a person meeting the definition of a mortgage loan
originator, except as provided in subdivision (c) of Section 22014.
The term "administrative or clerical tasks" means the receipt,
collection, and distribution of information common for the processing
or underwriting of a loan in the mortgage industry and communication
with a consumer to obtain information necessary for the processing
or underwriting of a residential mortgage loan, to the extent that
the communication does not include offering or negotiating loan rates
or terms, or counseling consumers about residential mortgage loan
rates or terms.
   (2) An individual who solely renegotiates terms for existing
mortgage loans held or serviced by his or her employer and who does
not otherwise act as a mortgage loan originator, unless the United
States Department of Housing and Urban Development or a court of
competent jurisdiction determines that the SAFE Act requires such an
employee to be licensed as a mortgage loan originator under state
laws implementing the SAFE Act.
   (3) An individual that is solely involved in extensions of credit
relating to timeshare plans, as that term is defined in Section 101
(53D) of Title 11 of the United States Code.
   (4) An individual licensed as a mortgage loan originator pursuant
to the provisions of Article 2.1 (commencing with Section 10166.01)
of Chapter 3 of Part 1 of Division 4 of the Business and Professions
Code and the SAFE Act.
   (5) An individual who is an employee of a federal, state, or local
government agency or housing finance agency and who acts as a loan
originator only pursuant to his or her official duties as an employee
of the federal, state, or local government agency or housing finance
agency.
   (A) For purposes of this paragraph, the term "employee" means an
individual whose manner and means of performance of work are subject
to the right of control of, or are controlled by, a person, and whose
compensation for federal income tax purposes is reported, or
required to be reported, on a W-2 form issued by the controlling
person.
   (B) For purposes of this paragraph, the term "housing finance
agency" means any authority:
   (i) That is chartered by a state to help meet the affordable
housing needs of the residents of the state.
   (ii) That is supervised directly or indirectly by the state
government.
   (iii) That is subject to audit and review by the state in which it
operates.
   (6) (A) An employee of a bona fide nonprofit organization who
exclusively originates residential mortgage loans for a bona fide
nonprofit organization, and who acts as a mortgage loan originator
only with respect to residential mortgage loans with terms that are
favorable to the borrower.
   (B) To qualify for the exemption under this paragraph, the bona
fide nonprofit organization under this paragraph  must
  shall  register with the department on a form
prescribed by the commissioner, along with documentation of all of
the following by December 31 of each year:
   (i) Status of a tax-exempt organization under Section 501(c)(3) of
the Internal Revenue Code of 1986.
   (ii) That the organization promotes affordable housing or provides
home ownership education or similar services.
   (iii) That the organization conducts its activities in a manner
that serves public or charitable purposes, rather than commercial
purposes.
   (iv) That the organization receives funding and revenue, and
charges fees in a manner that does not incentivize the organization
or its employees to act other than in the best interests of its
clients.
   (v) That the organization compensates employees in a manner that
does not incentivize employees to act other than in the best
interests of its clients.
   (vi) That the organization provides to, or identifies for, the
borrower residential mortgage loans with terms favorable to the
borrower and comparable to mortgage loans and housing assistance
provided under government housing assistance programs.
   (vii) That the organization is certified by the United States
Department of Housing and Urban Development as a housing counselor
who engages solely in traditional housing counseling services, if
applicable.
   (C) The commissioner may periodically require reports regarding
the activities of the bona fide nonprofit organization, and shall
examine the nonprofit organization's books and records in accordance
with the regulations of the United States Department of Housing and
Urban Development, or any successor guidance or requirement by the
Consumer Financial Protection Bureau. If the nonprofit organization
fails to provide documentation as required by subparagraph (B), or if
it does not continue to meet the criteria under subparagraph (B),
the commissioner may revoke the nonprofit organization's status as a
registered bona fide nonprofit organization.
   (D) For residential mortgage loans to have terms that are
favorable to the borrower, the terms shall be consistent with loan
origination in a public or charitable context, rather than a
commercial context.
   (E) In making its determinations and examinations, the
commissioner may rely on the receipt and review of:
   (i) Reports filed with federal, state, or local housing agencies
and authorities.
   (ii) Reports and attestations prescribed by the commissioner by
rule or order. 
   (7) An individual who originates five or fewer residential
mortgage loans secured by a manufactured home, as defined in Section
18007 of the Health and Safety Code, or a mobilehome, as defined in
Section 18008 of the Health and Safety Code, in any
12-consecutive-month period. 
   (c) "Registered mortgage loan originator" means any individual who
is all of the following:
   (1) Meets the definition of mortgage loan originator.
   (2) Is an employee of a depository institution, a subsidiary that
is owned and controlled by a depository institution and regulated by
a federal banking agency, or an institution regulated by the Farm
Credit Administration.
   (3) Is registered with, and maintains a unique identifier through,
the Nationwide Mortgage Licensing System and Registry.
   (d) "Loan processor or underwriter" means an individual who
performs clerical or support duties as an employee at the direction
of, and subject to the supervision and instruction of, a mortgage
loan originator licensed by the state or a registered mortgage loan
originator.
   SEC. 2.    Section 50003.5 of the  
Financial Code   is amended to read: 
   50003.5.  (a) "Mortgage loan originator" means an individual who,
for compensation or gain, or in the expectation of compensation or
gain, takes a residential mortgage loan application or offers or
negotiates terms of a residential mortgage loan.
   (b) Mortgage loan originator does not include any of the
following:
   (1) An individual who performs purely administrative or clerical
tasks on behalf of a person meeting the definition of a mortgage loan
originator, except as provided in subdivision (c) of Section
50003.6. The term "administrative or clerical tasks" means the
receipt, collection, and distribution of information common for the
processing or underwriting of a loan in the mortgage industry and
communication with a consumer to obtain information necessary for the
processing or underwriting of a residential mortgage loan, to the
extent that the communication does not include offering or
negotiating loan rates or terms, or counseling consumers about
residential mortgage loan rates or terms.
   (2) An individual who solely renegotiates terms for existing
mortgage loans held or serviced by his or her employer and who does
not otherwise act as a mortgage loan originator, unless the United
States Department of Housing and Urban Development or a court of
competent jurisdiction determines that the SAFE Act requires that
employee to be licensed as a mortgage loan originator under state
laws implementing the SAFE Act.
   (3) An individual that is solely involved in extensions of credit
relating to timeshare plans, as that term is defined in Section 101
(53D) of Title 11 of the United States Code.
   (4) An individual licensed as a mortgage loan originator pursuant
to Article 2.1 (commencing with Section 10166.01) of Chapter 3 of
Part 1 of Division 4 of the Business and Professions Code and the
SAFE Act.
   (5) An individual who is an employee of a federal, state, or local
government agency or housing finance agency and who acts as a loan
originator only pursuant to his or her official duties as an employee
of the federal, state, or local government agency or housing finance
agency.
   (A) For purposes of this paragraph, the term "employee" means an
individual whose manner and means of performance of work are subject
to the right of control of, or are controlled by, a person, and whose
compensation for federal income tax purposes is reported, or
required to be reported, on a W-2 form issued by the controlling
person.
   (B) For purposes of this paragraph, the term "housing finance
agency" means any authority:
   (i) That is chartered by a state to help meet the affordable
housing needs of the residents of the state.
   (ii) That is supervised directly or indirectly by the state
government.
   (iii) That is subject to audit and review by the state in which it
operates.
   (6) (A) An employee of a bona fide nonprofit organization who
exclusively originates residential mortgage loans for a bona fide
nonprofit organization, and who acts as a mortgage loan originator
only with respect to residential mortgage loans with terms that are
favorable to the borrower.
   (B) To qualify for the exemption under this paragraph, the bona
fide nonprofit organization under this paragraph  must
  shall  register with the department on a form
prescribed by the commissioner, along with documentation of all of
the following by December 31 of each year:
   (i) Status of a tax-exempt organization under Section 501(c)(3) of
the Internal Revenue Code of 1986.
   (ii) That the organization promotes affordable housing or provides
home ownership education or similar services.
   (iii) That the organization conducts its activities in a manner
that serves public or charitable purposes, rather than commercial
purposes.
   (iv) That the organization receives funding and revenue, and
charges fees in a manner that does not incentivize the organization
or its employees to act other than in the best interests of its
clients.
   (v) That the organization compensates employees in a manner that
does not incentivize employees to act other than in the best
interests of its clients.
   (vi) That the organization provides to, or identifies for, the
borrower residential mortgage loans with terms favorable to the
borrower and comparable to mortgage loans and housing assistance
provided under government housing assistance programs.
   (vii) That the organization is certified by the United States
Department of Housing and Urban Development as a housing counselor
who engages solely in traditional housing counseling services, if
applicable.
   (C) The commissioner may periodically require reports regarding
the activities of the bona fide nonprofit organization, and shall
examine the nonprofit organization's books and records in accordance
with the regulations of the United States Department of Housing and
Urban Development, or any successor guidance or requirement by the
Consumer Financial Protection Bureau. If the nonprofit organization
fails to provide documentation as required by subparagraph (B), or if
it does not continue to meet the criteria under subparagraph (B),
the commissioner may revoke the nonprofit organization's status as a
registered bona fide nonprofit organization.
   (D) For residential mortgage loans to have terms that are
favorable to the borrower, the terms shall be consistent with loan
origination in a public or charitable context, rather than a
commercial context.
   (E) In making its determinations and examinations, the
commissioner may rely on the receipt and review of:
   (i) Reports filed with federal, state, or local housing agencies
and authorities.
   (ii) Reports and attestations prescribed by the commissioner by
rule or order. 
   (7) An individual who originates five or fewer residential
mortgage loans secured by a manufactured home, as defined in Section
18007 of the Health and Safety Code, or a mobilehome, as defined in
Section 18008 of the Health and Safety Code, in any
12-consecutive-month period. 
   (c) "Registered mortgage loan originator" means any individual who
is all of the following:
   (1) Meets the definition of mortgage loan originator.
   (2) Is an employee of a depository institution, a subsidiary that
is owned and controlled by a depository institution and regulated by
a federal banking agency, or an institution regulated by the Farm
Credit Administration.
   (3) Is registered with, and maintains a unique identifier through,
the Nationwide Mortgage Licensing System and Registry.
   (d) "Loan processor or underwriter" means an individual who
performs clerical or support duties as an employee at the direction
of, and subject to the supervision and instruction of, a mortgage
loan originator licensed by the state or a registered mortgage loan
originator. 
  SECTION 1.    Section 799.2 of the Civil Code is
amended to read:
   799.2.  (a) The ownership or management shall not show or list for
sale a mobilehome owned by a resident without first obtaining the
resident's written authorization. The authorization shall specify the
terms and conditions regarding the showing or listing.
   (b) Nothing contained in this section shall be construed to affect
the provisions of the Health and Safety Code governing the licensing
of a mobilehome salesperson.