Bill Text: MI HB4066 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Financial institutions; mortgage brokers and lenders; home loan protection act; require compliance and impose additional duties with respect to borrowers. Amends sec. 22 of 1987 PA 173 (MCL 445.1672) & adds sec. 24a. TIE BAR WITH: HB 4065'09
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2009-01-27 - Printed Bill Filed 01/23/2009 [HB4066 Detail]
Download: Michigan-2009-HB4066-Introduced.html
HOUSE BILL No. 4066
January 22, 2009, Introduced by Rep. Roy Schmidt and referred to the Committee on Banking and Financial Services.
A bill to amend 1987 PA 173, entitled
"Mortgage brokers, lenders, and servicers licensing act,"
by amending section 22 (MCL 445.1672), as amended by 2002 PA 391,
and by adding section 24a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
22. (1) It is a violation of this act for a A licensee
or
registrant
to shall not do any of the following:
(a) Fail to conduct the business in accordance with law, this
act, or a rule promulgated or order issued under this act.
(b) Engage in fraud, deceit, or material misrepresentation in
connection with any transaction governed by this act.
(c) Intentionally or due to gross or wanton negligence,
repeatedly fail to provide borrowers material disclosures of
information as required by law.
(d) Suppress or withhold from the commissioner any information
that the licensee or registrant possesses and that, if submitted,
would have made the licensee or registrant ineligible for licensing
or registration under this act or would have warranted the
commissioner's denial of a license application or refusal to accept
a registration.
(e) Fail to comply with 1966 PA 125, MCL 565.161 to 565.164,
regulating the handling of mortgage escrow accounts by mortgagees.
(f) Until proper disbursement is made, fail to place in a
trust or escrow account held by a federally insured depository
financial institution in a manner approved by the commissioner any
money, funds, deposits, checks, drafts, or other negotiable
instruments received by the licensee that the borrower is obligated
to pay to a third party, including amounts paid to the holder of
the mortgage loan, amounts for property taxes and insurance
premiums, or amounts paid under an agreement that requires if the
mortgage loan is not closed the amounts paid shall be refunded to
the prospective borrower or if the mortgage loan is closed the
amounts paid shall be applied to fees and costs incurred at the
time the mortgage loan is closed. Fees and costs include, but are
not limited to, title insurance premiums and recording fees. Fees
and costs do not include amounts paid to cover costs incurred to
process the mortgage loan application, to obtain an appraisal, or
to receive a credit report.
(g) Refuse to permit an examination or investigation by the
commissioner of the books and affairs of the licensee or
registrant, or has refused or failed, within a reasonable time, to
furnish any information or make any report that may be required by
the commissioner under this act.
(h) To be convicted of a felony, or any misdemeanor of which
an essential element is fraud.
(i) Refuse or fail to pay, within a reasonable time, those
expenses assessed to the licensee or registrant under this act.
(j) Fail to make restitution after having been ordered to do
so by the commissioner or an administrative agency, or fail to make
restitution or pay damages to persons injured by the licensee's or
registrant's business transactions after having been ordered to do
so by a court.
(k) Fail to make a mortgage loan in accordance with a written
commitment to make a mortgage loan issued to, and accepted by, a
person when the person has timely and completely satisfied all the
conditions of the commitment before the expiration of the
commitment.
(l) Require a prospective borrower to deal exclusively with the
licensee or registrant in regard to a mortgage loan application.
(m) Take a security interest in real property before closing
the mortgage loan to secure payment of fees assessed in connection
with a mortgage loan application.
(n) Except as provided under section 18e, knowingly permit a
person to violate an order that has been issued under this act or
any other financial licensing act that prohibits that person from
being employed by, an agent of, or a control person of the licensee
or registrant.
(2) A licensee or registrant shall not fail or neglect to do
any of the following in connection with the brokering, servicing,
or making of any mortgage loan:
(a) Act in good faith and with fair dealing in any
transaction, practice, or course of business.
(b) Safeguard and account for any money handled for the
borrower.
(c) Follow reasonable and lawful instructions from the
borrower.
(d) Use reasonable skill, care, and diligence.
(e) Timely and clearly disclose to the borrower material
information that might reasonably affect the borrower's rights,
interests, or ability to receive the borrower's intended benefit
from the mortgage loan, including, but not limited to, the total
compensation the broker would receive from any of the loan options
the licensee or registrant presents to the borrower.
(f) Make reasonable efforts to secure a mortgage loan that is
reasonably advantageous to the borrower considering all the
circumstances, including, but not limited to, the rates, charges,
and repayment terms of the loan.
(3) The duties and standards of care created in subsection (2)
cannot be waived or modified.
Sec. 24a. (1) The home loan protection act applies to a
licensee or registrant. A licensee or registrant shall comply with
the requirements of that act in connection with any home loans.
(2) In addition to any penalties and remedies provided by this
act, a licensee or registrant is also subject to the remedy and
penalty provisions of the home loan protection act for a violation
of subsection (1).
(3) As used in this section:
(a) "Home loan" means that term as defined in section 2 of the
home loan protection act, MCL 445.1632.
(b) "Home loan protection act" means the home loan protection
act, 2002 PA 660, MCL 445.1631 to 445.1642.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 4065(request no.
00953'09) of the 95th Legislature is enacted into law.
