Bill Text: MI HB5899 | 2013-2014 | 97th Legislature | Introduced

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Bill Title: Financial institutions; mortgage brokers and lenders; requiring a mortgage escrow account for property taxes; prohibit for mortgage of certain exempt property owned by disabled veterans. Amends sec. 22 of 1987 PA 173 (MCL 445.1672).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2014-11-12 - Printed Bill Filed 11/07/2014 [HB5899 Detail]

Download: Michigan-2013-HB5899-Introduced.html

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HOUSE BILL No. 5899

 

November 6, 2014, Introduced by Rep. Shirkey and referred to the Committee on 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.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 22. (1) It is a violation of this act for a licensee or

 

registrant to 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 director 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 director'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

 

director 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 director 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 is required

 

by the commissioner director 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 director 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.

 

     (o) Unless an escrow account is required by law, establish an

 

escrow account for the payment of real property taxes, or require

 

that a mortgagor make payments to a mortgage escrow account for the

 

payment of real property taxes, if the mortgagor is a disabled

 

veteran as defined in section 7b of the general property tax act,

 

1893 PA 206, MCL 211.7b, and the real property securing the

 

mortgage loan is exempt from taxation under section 7b of the

 

general property tax act, 1893 PA 206, MCL 211.7b.

 

     (2) As used in this section, "director" means the director of

 

the department of insurance and financial services.