Wisconsin Amends Provisions Regarding Mortgage Loan Originators

by: Matthew Dailey

The state of Wisconsin recently enacted Senate Bill 534 on April 23 amending its provisions regarding the regulation of mortgage loan originators, mortgage brokers, and mortgage bankers. The bill also touches on branch offices, loan processors or underwriters, independent contractors and loan financing. These provisions are effective after the publication date of April 24, 2014.

The bill revises the definition of a branch office to include a place where a mortgage loan originator engages in mortgage loan business. This expressly eliminates the requirement that the business be with residents of the state of Wisconsin.

Section 34 changed the time period from 30 to 60 days written notice for a bond to be terminated.

Section 37 was amended to say that an individual may not regularly engage in the business of a mortgage loan originator or use that title unless he or she has been issued a license.

Section 40 deals with the applicants’ convictions and ability to be licensed as an originator. If the applicant received a pardon or expungement, then the pardon cannot result in an automatic denial or revocation of a license. The division can review the crime and facts surrounding such act when determining the applicants’ eligibility for licensure.

The bill takes a broader look at the activities of a licensed attorney acting as an originator. Instead of clearly defining when an attorney acts an originator (negotiates the terms of a loan on behalf of client), Section 44 states that the attorney acts as an originator when they undertake activities of an originator.

Section 50 states that any mortgage banker, broker or originator must place their unique identifier on all application forms and advertisements. This is different from prior law which stated that any person originating a residential mortgage loan must produce this information.

Section 54 removes any reference to annual mortgage call reports. There is no time stated for these reports to be made or followed. Section 55 removes all mentions of mortgage brokers and focuses on mortgage bankers.

About the Author
Matthew Dailey, J.D. is Regulatory Compliance Consultant at Bankers Advisory.   He is a graduate of Stonehill College and earned his Juris Doctor at the New England School of Law.   He is admitted to the Massachusetts Bar.   Matthew can be reached at matthew@bankersadvisory.com