CHAPTER 290
HB 610-FN – FINAL VERSION
04Mar2009… 0358h
05/13/09 1551s
24Jun2009… 2340eba
2009 SESSION
08/03
HOUSE BILL 610-FN
AN ACT relative to consumer protection from certain practices of mortgage bankers, mortgage brokers, and mortgage loan originators and implementing the S.A.F.E. mortgage licensing act.
SPONSORS: Rep. Reardon, Merr 11
COMMITTEE: Commerce and Consumer Affairs
This bill:
I. Modifies certain definitions as required to match S.A.F.E. (the Secure and Fair Enforcement for Mortgage Licensing Act).
II. Includes mobile homes and trailers under first mortgage laws if the intended purpose is to be used as a dwelling.
III. Requires licensing of out-of-state branches of mortgage bankers and brokers.
IV. Modifies exemptions to include financial institutions as defined by S.A.F.E.
V. Requires the use of the Nationwide Mortgage Licensing System and Registry for all mortgage licensees.
VI. Modifies the bond and financial requirements.
VII. Requires criminal records checks, credit checks, education, and testing for originators prior to licensing and requires ongoing continuing education for originators once the Nationwide Mortgage Licensing System and Registry provides the facilities for such procedures.
VIII. Authorizes the bank commissioner to issue orders and rules and interpretations for implementation of the S.A.F.E. Act requirements.
IX. Requires home state license or registration before a New Hampshire license is issued.
X. Requires non-federally insured credit unions to register their loan originators through the Nationwide Mortgage Licensing System and Registry.
XI. Amends examination requirements to comply with S.A.F.E. and prohibits destruction of certain documents.
XII. Expands information sharing to include the Nationwide Mortgage Licensing System and Registry and law enforcement.
XIII. Requires the bank commissioner to report violations to the Nationwide Mortgage Licensing System and Registry.
XIV. Establishes annual reporting requirements through the Nationwide Mortgage Licensing System and Registry.
XV. Establishes requirements for reverse mortgage transactions.
XVI. Authorizes the bank commissioner to bar individuals from the mortgage lending industry.
XVII. Authorizes the bank commissioner to order disgorgement of profits and restitution.
XVIII. Authorizes the bank commissioner to assess a penalty of $25,000 for violation of the S.A.F.E. Act.
XIX. Creates new positions in the banking department.
XX. Makes an appropriation for new positions in the banking department.
This bill was requested by the banking department.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
04Mar2009… 0358h
05/13/09 1551s
24Jun2009… 2340eba
09-0741
08/03
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nine
AN ACT relative to consumer protection from certain practices of mortgage bankers, mortgage brokers, and mortgage loan originators and implementing the S.A.F.E. mortgage licensing act.
Be it Enacted by the Senate and House of Representatives in General Court convened:
290:1 Findings. The general court finds that:
I. The activities of mortgage lenders, mortgage brokers, and mortgage loan originators (collectively “providers”) and the origination or offering of financing for residential real property have a direct, valuable, and immediate impact upon New Hampshire’s consumers, New Hampshire’s economy, the neighborhoods and communities of New Hampshire, and the housing and real estate industry.
II. Accessibility to mortgage credit is vital to New Hampshire’s citizens and it is essential for the protection of the citizens of New Hampshire and the stability of New Hampshire’s economy that reasonable standards for licensing and regulation of the business practices of mortgage loan providers be imposed.
III. The obligations of mortgage loan providers to consumers in connection with originating, brokering, or making residential mortgage loans are such as to warrant the regulation of the mortgage lending process.
IV. The purpose of this act is to protect consumers seeking mortgage loans and to ensure that the mortgage lending industry is operating without unfair, deceptive, and fraudulent practices on the part of mortgage loan originators and the mortgage industry.
290:2 Definitions. Amend RSA 397-A:1, IV to read as follows:
IV. “Branch office” means a location within or without this state of a person required to be licensed under this chapter that is identified by any means to the public as a location at which a mortgage banker or mortgage broker conducts New Hampshire mortgage business. Branch office does not include:
(a) A person’s principal office location.
(b) A location identified solely in a telephone directory line listing or on a business card or letterhead if:
(1) The listing, card, or letterhead also sets forth the address and telephone number of a New Hampshire licensed office of the mortgage banker or mortgage broker from which all individuals conducting mortgage business from such identified location are directly supervised[.], provided that such supervisory office is located within 100 miles of the identified location; and
(2) No more than one agent, employee, originator, or other representative transacts business on behalf of the mortgage banker or broker from such identified location.
(c) Any other location not within the intent of this paragraph as the commissioner may determine.
290:3 New Paragraphs; Definitions. Amend RSA 397-A:1 by inserting after paragraph VI-a the following new paragraphs:
VI-b. “Depository institution” has the same definition as in section 3 of the Federal Deposit Insurance Act, and includes any insured credit union.
VI-c. “Dwelling” means a residential structure or mobile or manufactured home which contains one to 4 family housing units located in New Hampshire whether or not attached to real property, or individual units of condominiums or cooperatives. The term includes manufactured housing, a mobile home, and a trailer if it is used or intended to be used as a residence.
VI-d. “Federal banking agency” means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the National Credit Union Administration, or the Federal Deposit Insurance Corporation.
VI-e. “Financial services” or “financial services-related” means securities, commodities, banking, insurance, consumer lending, or real estate, including, but not limited to, acting as or being associated with a bank or savings association, credit union, mortgage lender, mortgage broker, mortgage servicer, real estate salesperson or agent, closing agent, title company, or escrow agent.
290:4 New Paragraphs; Definitions. Amend RSA 397-A:1 by inserting after paragraph VIII-a the following new paragraphs:
VIII-b. “Individual” means a natural person.
VIII-c. “Immediate family member” means a spouse, child, sibling, parent, grandparent, or grandchild. “Immediate family member” includes stepparents, stepchildren, stepsiblings, and adoptive relationships.
290:5 Definitions. Amend RSA 397-A:1, X to read as follows:
X. “Licensee” means a person, whether mortgage banker [or], mortgage broker, or mortgage originator, duly licensed by the commissioner pursuant to the provisions of this chapter.
290:6 New Paragraphs; Definitions. Amend RSA 397-A:1 by inserting after paragraph XI the following new paragraphs:
XI-a.(a) “Loan processor” or “underwriter” means an individual who performs clerical or support duties as an employee of and at the direction of and subject to the supervision and instruction of a licensed mortgage banker, licensed mortgage broker, or registered mortgage servicer.
(b) For purposes of this paragraph, “clerical or support duties” may include subsequent to the receipt of an application:
(1) The receipt, collection, distribution, and analysis of information common for the processing or underwriting of a residential mortgage loan; and
(2) Communicating with a consumer to obtain the information necessary for the processing or underwriting of a loan, to the extent that such communication does not include offering or negotiating loan rates or terms or counseling consumers about residential mortgage loan rates or terms.
(c) An individual engaging solely in loan processor or underwriter activities shall not represent to the public, through advertising or other means of communicating or providing information including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that such individual can or will perform any of the activities of a mortgage loan originator.
XI-b. “Management level employee” means any officer of record, assistant vice president or higher, office or branch manager, director of operations, or other position the responsibilities of which provide such employee with the discretion or ability to set policy or manage or direct affairs of the licensee as a whole, or of any division or department or unit of the licensee.
290:7 New Paragraph; Definitions. Amend RSA 397-A:1 by inserting after paragraph XIII the following new paragraph:
XIII-a. “Mortgage lender” means a mortgage banker.
290:8 Definitions. Amend RSA 397-A:1, XIV to read as follows:
XIV. “Mortgage loan” or “residential mortgage loan” means any loan, including a first or second mortgage loan, primarily for personal, family, or household use which is secured in whole or in part by a mortgage, deed of trust, or other equivalent consensual security interest upon a dwelling or any interest in real property [used as a dwelling with accommodations for not more than 4 families] or in residential real estate.
290:9 New Paragraphs; Definitions. Amend RSA 397-A:1 by inserting after paragraph XIV the following new paragraphs:
XIV-a. “Mortgage servicer” means a mortgage servicing company
XIV-b. “Mortgage servicing company” shall have the same meaning as provided in RSA 397-B:1, III.
XIV-c. “Nationwide Mortgage Licensing System and Registry” means a national licensing system and facility developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, or their successors, for the licensing and registration of mortgage loan originators, mortgage lenders, mortgage servicers, and mortgage brokers or any similar system established by the Secretary of the United States Department of Housing and Urban Development.
XIV-d. “Nontraditional mortgage product” means any mortgage product other than a 30-year fixed-rate mortgage.
290:10 Definitions. Amend RSA 397-A:1 to read as follows:
XVII.(a) “Originator” or “mortgage loan originator” or “mortgage originator” or “loan originator” means an individual who [is employed or retained and supervised by a mortgage banker or mortgage broker required to be licensed under RSA 397-A and who,] for direct or indirect compensation or gain or in the expectation of direct or indirect compensation or gain, takes a mortgage application or offers, negotiates, solicits, arranges, or finds a mortgage loan or who assists a consumer in obtaining or applying to obtain a mortgage loan by, among other things, advising on loan terms (including rates, fees, and other costs), preparing loan packages, or collecting information on behalf of the consumer with regard to a mortgage loan or who offers or negotiates terms of a residential mortgage loan. No individual may act as an originator for more than one [licensee] mortgage broker, mortgage servicer, or mortgage banker. A sole proprietor licensed as a mortgage broker, mortgage servicer, or mortgage banker shall also obtain a license as a mortgage originator prior to engaging in the activities of a mortgage originator. Mortgage loan originator does not include:
(1) An individual engaged solely as a loan processor or underwriter except as otherwise provided in RSA 397-A:3, II-a;
(2) A person that only performs real estate brokerage activities and is licensed or registered in accordance with applicable state law, unless the person or entity is compensated by a lender, a mortgage broker, mortgage servicer, or other mortgage loan originator or by any agent of such lender, mortgage broker, mortgage servicer, or other mortgage loan originator; and
(3) A person solely involved in extensions of credit relating to timeshare plans, as that term is defined in 11 U.S.C. section 101(53D).
(b) For purposes of this paragraph, “takes a mortgage application” means:
(1) Recording the borrower’s application information in any form for use in a credit decision; or
(2) Receiving the borrower’s application information in any form for use in a credit decision.
290:11 Definitions. Amend RSA 397-A:1, XXI to read as follows:
XXI. “Real property” means a dwelling or land and the improvements which are affixed thereon or are intended to be fixed thereon, including, but not limited to, single-family homes[,] and multifamily dwellings not exceeding 4 units, [manufactured housing as defined in RSA 384:16-d, II, and any single-family condominium unit,] wholly or partly used or occupied, or intended to be used or occupied, as the home or residence of one or more persons.
290:12 New Paragraphs; Definitions. Amend RSA 397-A:1 by inserting after paragraph XXI the following new paragraphs:
XXI-a. “Registered mortgage loan originator” means any individual who:
(a) Meets the definition of mortgage loan originator and is an employee of:
(1) A depository institution;
(2) A subsidiary that is:
(A) Owned and controlled by a depository institution; and
(B) Regulated by a federal banking agency; or
(3) An institution regulated by the Farm Credit Administration; and
(b) Is registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System and Registry as required by the federal banking agencies.
XXI-b. “Residential real estate” means any real property located in New Hampshire, upon which is constructed or intended to be constructed a dwelling.
XXI-c. “Reverse mortgage” means a mortgage loan generally available to seniors, usually 62 years of age and older, in which a mortgage, deed of trust, or equivalent consensual security interest securing one or more advances is created in the consumer’s dwelling and the payment stream for principal, interest, shared appreciation, or equity is not due and payable until a maturity event or default occurs or any similar debt instrument as the commissioner determines.
290:13 New Paragraph; Definitions. Amend RSA 397-A:1 by inserting after paragraph XXIII the following new paragraph:
XXIII-a. “Senior manager” means a management level employee.
290:14 New Paragraphs; Definitions. Amend RSA 397-A:1 by inserting after paragraph XXIV the following new paragraphs:
XXV. “Unique identifier” means a number or other identifier assigned by protocols established by the Nationwide Mortgage Licensing System and Registry.
XXVI. “Yield spread premium” means a cash rebate paid to a mortgage broker or mortgage originator that is based on selling an interest rate to a borrower that is above the wholesale par rate that the borrower qualifies for.
290:15 Application of Chapter. Amend RSA 397-A:2, I to read as follows:
I. This chapter shall provide for the department’s regulation of persons that engage in the business of offering, originating, making, funding, or brokering mortgage loans from the state of New Hampshire or mortgage loans secured by real property located in the state of New Hampshire[, which is or shall be occupied in whole or in part as a place of residence by the borrower and which consists of not more than 4 living units].
290:16 License Required. Amend RSA 397-A:3, II to read as follows:
II. It is unlawful for any individual to transact business in this state as an originator unless such individual is licensed under this chapter. An individual shall not engage in the business of a mortgage loan originator with respect to any dwelling without first obtaining and maintaining annually a license under this chapter and each licensed mortgage loan originator shall register with and obtain and maintain a valid unique identifier issued by the Nationwide Mortgage Licensing System and Registry. Under this chapter, an originator’s license is only in effect when such originator is associated with a particular licensed mortgage banker, servicer, or broker.
290:17 New Paragraph; License Required; Loan Processor or Underwriter. Amend RSA 397-A:3 by inserting after paragraph II the following new paragraph:
II-a. A loan processor or underwriter who is an independent contractor may not engage in the activities of a loan processor or underwriter unless such independent contractor loan processor or underwriter obtains and maintains a license. Each independent contractor loan processor or underwriter licensed as a mortgage loan originator must have and maintain a valid unique identifier issued by the Nationwide Mortgage Licensing System and Registry.
290:18 New Paragraph; License Required; Branch Office Licensee. Amend RSA 397-A:3 by inserting after paragraph III the following new paragraph:
IV. A branch office of a mortgage banker or mortgage broker shall be licensed prior to conducting business at such location.
290:19 Exemptions. RSA 397-A:4 is repealed and reenacted to read as follows:
397-A:4 Exemptions. The provisions of this chapter shall not apply to:
I. Depository institutions or an institution regulated by the Farm Credit Administration.
II. Registered mortgage loan originators, when acting for an entity described in paragraph I or for a subsidiary that is owned and controlled by an entity described in paragraph I.
III. Any individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual.
IV. An individual who offers or negotiates terms of a residential mortgage loan secured by a dwelling that served as the individual’s residence.
V. A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney’s representation of the client, provided that the attorney is not compensated, directly or indirectly, by a lender, a mortgage broker, mortgage servicer, or other mortgage loan originator or by any agent of such lender, mortgage broker, mortgage servicer, or other mortgage loan originator.
290:20 License Application; Investigation. Amend RSA 397-A:5, I to read as follows:
I. To be considered for mortgage banker or mortgage broker licensing, each person shall complete and file with the department, through the Nationwide Mortgage Licensing System and Registry, one verified application prescribed by the commissioner. At a minimum, the application shall state the primary business address of the applicant, the applicant’s tax identification number, the address of its principal office and all branch offices [located or to be located within the state], and a list of the principals of the applicant. Each principal shall provide his or her social security number and shall authorize the commissioner to conduct a background check. The applicant shall submit any other information that the commissioner may require including, but not limited to, the applicant’s form and place of organization, the applicant’s proposed method of doing business, the qualifications and business history of the applicant and its principals, and the applicant’s financial condition and history. The applicant shall disclose whether the applicant or any of its principals has ever been issued or been the subject of an injunction or administrative order, has ever been convicted of a misdemeanor involving [the lending industry or any aspect of the lending business] financial services or a financial services-related business or any fraud, false statements or omissions, theft or any wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these offenses or has ever been convicted of any felony.
290:21 New Subparagraph; License Application; Investigation. Amend RSA 397-A:5, II by inserting after subparagraph (d) the following new subparagraph:
(e) The department may rely on criminal records checks reported through the Nationwide Mortgage Licensing System and Registry in lieu of subparagraphs (b) and (c).
290:22 License Application; Bankers and Mortgage Brokers. Amend RSA 397-A:5, III to read as follows:
III.(a) The mortgage banker or mortgage broker license issued for the licensee’s principal place of business shall be referred to as a “principal office license.” Each additional license issued for New Hampshire mortgage lending or brokering activity occurring in a location [in this state] that is separate from the licensee’s principal place of business shall be referred to as a “branch office license.” [If the applicant or licensee desires to make or broker mortgage loans in more than one location, the commissioner, upon favorable action on the applicant’s principal office license, shall issue a branch office license for each location where the business of making or brokering mortgage loans is to be conducted.]
(b) Each mortgage banker or mortgage broker license application shall be accompanied by a nonrefundable application fee of $500 for each separate office location to be licensed. Sums collected under this chapter shall be payable to the state treasurer as restricted revenue and credited to the appropriation for the commissioner, consumer credit administration division.
(c) Each mortgage banker or mortgage broker applicant shall be required to submit to the department detailed financial information sufficient for the commissioner to determine the applicant’s ability to conduct the business of a mortgage banker or a mortgage broker with financial integrity. The mortgage broker’s application shall include a statement of net worth[.] prepared in accordance with the generally accepted accounting principles. The mortgage banker’s application shall include a balance sheet, income statement, cash flow statement, statement of owner’s equity, and note disclosure, and shall be prepared in accordance with generally accepted accounting principles. An applicant or licensee shall demonstrate and maintain a minimum positive net worth and an amount of minimum positive net worth shall be set by rule. Minimum net worth shall be maintained in an amount that reflects the dollar amount of loans originated as determined by the commissioner. Net worth statements provided in connection with a license application under this section shall be subject to review and verification during the course of any examination or investigation conducted under the authority of RSA 397-A:12. Each mortgage banker applicant shall [demonstrate a net worth at all times of at least $100,000 or increase their posted] post a continuous surety bond [to a total] in the minimum amount of $100,000 to the commissioner that shall be increased under conditions set by rule. Each mortgage [banker and] broker shall post a continuous surety bond in the minimum amount of [$20,000] $50,000 to the commissioner[.] that shall be increased under conditions set by rule. Surety bonds shall provide coverage in an amount that reflects the dollar amount of loans originated by each mortgage loan originator employed by or retained by the mortgage banker or mortgage broker as determined by the commissioner. Surety bonds shall include a provision requiring the surety to give written notice to the commissioner 20 days in advance of the cancellation or termination of the bond. Every bond shall provide that no recovery may be made against the bond unless the state makes a claim for recovery or the person brings suit naming the licensee within 6 years after the act upon which the recovery or suit is based. When an action is commenced on a licensee’s bond, the licensee shall immediately file a new bond. Immediately upon recovery upon any action on the bond the licensee shall file a new bond.
(d) No person shall be issued or continue to hold a mortgage banker or mortgage broker license unless at least one person employed full-time in a supervisory capacity at the company’s principal office shall have been actively engaged in the mortgage business in a similar supervisory capacity for a minimum of 3 of the preceding 5 years.
290:23 License Application; Investigation. Amend RSA 397-A:5, IV-a to read as follows:
IV-a. To be considered for originator licensing, the applicant shall complete and file with the department, through the Nationwide Mortgage Licensing System and Registry, one verified application prescribed by the commissioner. The application shall be signed under oath by both the originator applicant and [by] the licensed mortgage banker or mortgage broker for whom the individual will originate mortgage loans. Each licensed mortgage originator shall register with and maintain a valid unique identifier issued by the Nationwide Mortgage Licensing System and Registry. At a minimum, the application shall state the primary business address of the applicant and the applicant’s social security number and shall authorize the commissioner to conduct a background check. The applicant shall submit any other information that the commissioner and the Nationwide Mortgage Licensing System and Registry may require including, but not limited to, the applicant’s residential and employment history. The applicant shall disclose his or her financial, criminal, regulatory civil, arbitration, civil litigation, and employment termination history, including but not limited to, whether the applicant has ever been issued or been the subject of an injunction or administrative order or has ever been charged with or convicted of a misdemeanor or any felony. Each license application shall be accompanied by a nonrefundable license fee of $100. A mortgage originator’s license may be transferred during a calendar year from one mortgage banker, mortgage servicer, or mortgage broker to another upon payment of a $50 fee and approval by the commissioner provided such application is filed prior to the expiration of the 15-day time frame established by RSA 397-A:3, III. Sums collected under this chapter shall be payable to the state treasurer as restricted revenue and credited to the appropriation for the commissioner, consumer credit administration division.
290:24 New Paragraphs; License Application; Investigation. Amend RSA 397-A:5 by inserting after paragraph IV-a the following new paragraphs:
IV-b. Each mortgage loan originator operating in New Hampshire and each mortgage loan originator making or brokering mortgage loans on New Hampshire real property and each principal of a mortgage banker or mortgage broker shall, in addition to other requirements in New Hampshire law and regulations, prior to licensure:
(a) Furnish to the Nationwide Mortgage Licensing System and Registry information concerning the applicant’s or principal’s identity, including:
(1) Fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a state, national, and international criminal history background check; and
(2) Personal history and experience in a form prescribed by the commissioner and the Nationwide Mortgage Licensing System and Registry including the submission of authorization for the Nationwide Mortgage Licensing System and Registry and the commissioner to obtain:
(A) An independent credit report obtained from a consumer reporting agency described in section 603(p) of the Fair Credit Reporting Act; and
(B) Information related to any administrative, civil, or criminal findings by any law enforcement entity, court, or governmental jurisdiction; and
(C) Criminal history record information; and
(D) Other background information as may be required by the commissioner.
(b) For the purposes of this paragraph and in order to reduce the points of contact which the Federal Bureau of Investigation may have to maintain for subparagraphs IV-b(a)(1) and IV-b(a)(2)(B), the commissioner may use the Nationwide Mortgage Licensing System and Registry as a channeling agent for requesting information from and distributing information to the department of justice or any governmental agency.
(c) For the purposes of this paragraph and in order to reduce the points of contact which the commissioner may have to maintain for purposes of subparagraphs IV-b(a)(2)(A) and (B), the commissioner may use the Nationwide Mortgage Licensing System and Registry as a channeling agent for requesting and distributing information to and from any source so directed by the commissioner.
IV-c.(a) The commissioner shall not issue a mortgage loan originator license unless the commissioner makes at a minimum the following findings that the applicant:
(1) Has never had a mortgage loan originator license revoked in any governmental jurisdiction, except that a subsequent formal vacation of such revocation shall not be deemed a revocation; and
(2) Has not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court:
(A) During the 7-year period preceding the date of the application for licensing and registration; or
(B) At any time preceding the date of such application if such felony involved an act of fraud, dishonesty, theft, or a breach of trust or money laundering; and
(C) Provided that any pardon of a conviction shall not be a conviction for the purposes of this paragraph; and
(3) Has not ever been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court except that for a felony conviction at a time prior to 10 years preceding the date of such application that did not involve an act of fraud, dishonesty, theft, or a breach of trust or money laundering, the commissioner may allow licensure by rule or order; and
(4) Has not ever been convicted of, or pled guilty or nolo contendere in a domestic, foreign, or military court to, a misdemeanor involving: financial services or a financial services-related business; any fraud, false statements, or omissions; any theft or wrongful taking of property; bribery; perjury; forgery; counterfeiting; extortion; or a conspiracy to commit any of these offenses except that for such a misdemeanor conviction at a time prior to 10 years preceding the date of such application, the commissioner may allow licensure by rule or order; and
(5) Has demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the mortgage loan originator will operate honestly, fairly, and efficiently within the purposes of this chapter. For purposes of this subparagraph a person has shown that he or she is not financially responsible when he or she has shown a disregard in the management of his or her own financial condition. A determination that an individual has not shown financial responsibility may include, but not be limited to:
(A) Bankruptcies filed within the previous 10 years;
(B) Current outstanding judgments, except judgments solely as a result of medical expenses;
(C) Current outstanding tax liens or other government liens and filings;
(D) Foreclosures within the previous 3 years;
(E) A pattern of serious delinquent accounts within the past 3 years; and
(6) Has completed the pre-licensing education requirement described in subparagraph (b); and
(7) Has passed a written test that meets the test requirement described in subparagraph (c); and
(8) Is covered by a surety bond maintained by the mortgage banker, mortgage servicer, or mortgage broker who employs or retains the originator. The surety bond shall provide coverage for each mortgage loan originator in an amount that reflects the dollar amount of loans originated as determined by the commissioner.
(b)(1) For purposes of subparagraph (a)(6), a person shall complete at least 20 hours of education approved in accordance with subparagraph (c), which shall include at least:
(A) Three hours of federal law and regulations;
(B) Three hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues; and
(C) Two hours of training related to lending standards for the nontraditional mortgage product marketplace; and
(2) Pre-licensing education courses shall be reviewed and approved by the Nationwide Mortgage Licensing System and Registry based upon reasonable standards. Review and approval of a pre-licensing education course shall include review and approval of the course provider. Pre-licensing education may be offered either in a classroom, online, or by any other means approved by the Nationwide Mortgage Licensing System and Registry. The pre-licensing education requirements approved by the Nationwide Mortgage Licensing System and Registry for any state shall be accepted as credit towards completion of pre-licensing education requirements in New Hampshire. An individual previously licensed under this chapter subsequent to July 31, 2009 who applies for a new license shall prove that he or she has completed all of the continuing education requirements for the year in which the license was last held.
(c)(1) For purposes of subparagraph (a)(7), an individual shall pass, in accordance with the standards established under this subparagraph, a qualified written test developed by the Nationwide Mortgage Licensing System and Registry and administered by a test provider approved by the Nationwide Mortgage Licensing System and Registry based upon reasonable standards.
(2) A written test shall not be treated as a qualified written test for purposes of this subparagraph unless the test adequately measures the applicant’s knowledge and comprehension in appropriate subject areas, including but not limited to:
(A) Ethics.
(B) Federal law and regulation pertaining to mortgage origination.
(C) State law and regulation pertaining to mortgage origination.
(D) Federal and state law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace, and fair lending issues.
(3) Nothing in this paragraph shall prohibit a test provider approved by the Nationwide Mortgage Licensing System and Registry from providing a test at the location of the employer of the applicant or the location of any subsidiary or affiliate of the employer of the applicant, or the location of any entity with which the applicant holds an exclusive arrangement to conduct the business of a mortgage loan originator.
(4) An individual shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than 75 percent correct answers to questions. An individual may retake a test 3 consecutive times with each consecutive taking occurring at least 30 days after the preceding test. After failing 3 consecutive tests, an individual shall wait at least 6 months before taking the test again.
(5) A licensed mortgage originator who fails to maintain a valid license for a period of 5 years or longer shall retake the test, not taking into account any time during which such individual is a registered mortgage loan originator.
IV-d.(a) In addition to other provisions in New Hampshire law and rules in order to be eligible to renew a license, a mortgage originator shall:
(1) Meet and continue to meet the minimum standards for license issuance under paragraph IV-c; and
(2) Satisfy the annual continuing education requirements described in paragraph IV-e; and
(3) Pay the annual originator license renewal fee of $100.
(b) The license of a mortgage loan originator failing to satisfy the minimum standards for license renewal shall expire. The commissioner may adopt procedures for the reinstatement of expired licenses consistent with the standards established by the Nationwide Mortgage Licensing System and Registry. The commissioner may deny or refuse to renew a mortgage loan originator’s license for failure to meet minimum standards, for failure to pay outstanding fees or fines, for violation of state or Federal law and regulations, and for other good cause.
(c) Unless the commissioner has refused to renew or has denied a mortgage originator’s application for renewal, an originator’s license shall remain in force until it has been surrendered, revoked, or suspended, or terminates or expires in accordance with the provisions of this chapter, including subparagraph (b). Each license shall expire on December 31 of each calendar year.
IV-e.(a) In order to renew a license, an originator shall complete at least 8 hours of education approved in accordance with subparagraph (b), which shall include at least:
(1) Three hours of federal law and regulations;
(2) Two hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues; and
(3) Two hours of training related to lending standards for the nontraditional mortgage product marketplace.
(b) For purposes of subparagraph (a), continuing education courses shall be reviewed and approved by the Nationwide Mortgage Licensing System and Registry based upon reasonable standards. Review and approval of a continuing education course shall include review and approval of the course provider. Continuing education may be offered either in a classroom or online or by any other means approved by the Nationwide Mortgage Licensing System and Registry.
(c) A mortgage originator shall:
(1) Only receive credit for a continuing education course in the year in which the course is taken; and
(2) Not take the same approved course in the same or successive years to meet the annual requirements for continuing education.
(d) A mortgage originator who is an approved instructor of an approved continuing education course may receive credit for the mortgage originator’s own annual continuing education requirement at the rate of 2 hours’ credit for every 1 hour taught.
(e) Successful completion of the continuing education requirements approved by the Nationwide Mortgage Licensing System and Registry for any state shall be accepted as credit towards completion of the continuing education requirements in New Hampshire.
(f) A licensed mortgage loan originator who subsequently becomes unlicensed must complete the continuing education requirements for the last year in which the license was held prior to issuance of a new or renewed license.
IV-f.(a) Mortgage originators who hold a valid New Hampshire mortgage originator’s license on July 30, 2009 shall complete all the requirements of paragraphs IV-b, IV-c, IV-d, and IV-e prior to renewal of their licenses for the 2010 calendar year.
(b) The commissioner may by order establish interim procedures for licensing and acceptance of applications. For previously registered or licensed individuals, the commissioner may establish expedited review and licensing procedures.
IV-g. In order to fulfill the purposes of this chapter, the commissioner is authorized to establish relationships or contracts with the Nationwide Mortgage Licensing System and Registry or other entities designated by the Nationwide Mortgage Licensing System and Registry to collect and maintain records and process transaction fees or other fees related to licensees or other persons subject to this chapter.
290:25 New Subparagraph; License Requirements; Investigation. Amend RSA 397-A:5, V by inserting after subparagraph (b) the following new subparagraph:
(c) The applicant’s principals shall meet the requirements of 397-A:5, IV-b and 397-A:5, IV-c(a)(1) through (5).
290:26 License Application; Requirements; Investigation. RSA 397-A:5, VI is repealed and reenacted to read as follows:
VI.(a) In addition to any other duties imposed upon the commissioner by law, the commissioner shall require mortgage bankers, mortgage brokers, mortgage servicers, and mortgage loan originators to be licensed and registered through the Nationwide Mortgage Licensing System and Registry. In order to carry out this requirement, the commissioner is authorized to participate in the Nationwide Mortgage Licensing System and Registry. For this purpose, the commissioner may establish by rule, order, or otherwise the procedures, requirements, and standards as necessary, including but not limited to:
(1) Background checks for:
(A) Criminal history through fingerprint or other databases;
(B) Civil or administrative records;
(C) Credit history; and
(D) Any other information as deemed necessary by the Nationwide Mortgage Licensing System and Registry; and
(2) The payment of fees to apply for or renew licenses through the Nationwide Mortgage Licensing System and Registry; and
(3) The setting or resetting as necessary of renewal or reporting dates; and
(4) Requirements for amending or surrendering a license or any other such activities as the commissioner deems necessary for participation in the Nationwide Mortgage Licensing System and Registry.
(b) The commissioner shall establish a process whereby mortgage loan originators may challenge information entered into the Nationwide Mortgage Licensing System and Registry by the commissioner.
290:27 New Paragraphs; License Application; Requirements; Investigation. Amend RSA 397-A:5 by inserting after paragraph VII the following new paragraphs:
VIII. A license shall not be issued and effective unless the applicant or licensee is licensed or registered in the licensee’s or applicant’s home state, which in the case of an organization is the state where its principal office is located and in the case of an individual is the state from which the individual primarily conducts mortgage business.
IX. Non-federally insured credit unions which employ loan originators, as defined in the S.A.F.E. Mortgage Licensing Act of 2008, Public Law 110-289, Title V, shall register such employees with the Nationwide Mortgage Licensing System and Registry by furnishing the information concerning the employees’ identities set forth in section 1507(a)(2) of Public Law 110-289, Title V.
290:28 License Grant; Mortgage Bankers and Brokers. Amend RSA 397-A:6, I to read as follows:
I. If the commissioner determines that the applicant meets the requirements of this chapter, then the commissioner shall forthwith issue a license or licenses permitting the applicant to engage in the business of originating, making, or brokering mortgage loans in accordance with the laws of this state. The commissioner may, by order, restrict or impose conditions for a license. Licensees shall ensure that the Nationwide Mortgage License System and Registry unique identifier of any person originating a residential mortgage loan shall be clearly shown on all residential mortgage loan application forms, solicitations or advertisements, including business cards or websites, and any other documents as established by rule, regulation, or order of the commissioner. Licensees shall be responsible for the supervision of their employees, agents, loan originators, and branch offices. Licensees shall conduct background checks, including checking the list of entities issued by the Office of Foreign Assets Control (OFAC) whose assets were frozen by executive order, on all of their loan originators.
290:29 License Term; Renewal; Mortgage Bankers and Brokers. Amend RSA 397-A:8 to read as follows:
397-A:8 License Term; Renewal.
I. Each mortgage banker or mortgage broker license shall remain in force until it has been surrendered, revoked, or suspended, or terminates or expires in accordance with the provisions of this chapter. Each license shall expire on December 31 of each calendar year.
II. If a person holds a valid mortgage banker or mortgage broker license under this section and is in compliance with this chapter and the rules thereunder, such licensee may renew the license by paying the required fee to the banking department on or before December 1 for the ensuing year that begins on January 1. Failure to renew the license shall result in the license terminating on December 31.
III. A mortgage banker or mortgage broker renewal fee of $500 for the principal office license and each branch office license shall be submitted with the application for license renewal. [An originator renewal fee of $100 shall be submitted with the application for license renewal.]
IV. No application for renewal of a mortgage banker or mortgage broker license shall be denied without reasonable cause and the right of appeal pursuant to RSA 541-A and RSA 541.
290:30 Examination; Mortgage Bankers and Brokers. Amend RSA 397-A:12, V to read as follows:
V. The expense of such examination shall be chargeable to and paid by the licensee. The [procedure for such] payment shall be calculated by the same method as for payments by institutions for cost of examinations under RSA 383:11, except when the principal office of the licensee or person is located outside of this state and the department has determined that the examination must be conducted at that out-of-state location, the actual cost of travel, lodging, meals, and other expenses of examination personnel making the examination, shall be chargeable to and paid by such licensee or person in addition to the per diem charge for examination personnel set forth in RSA 383:11.
290:31 New Paragraphs; Examination; Mortgage Bankers and Brokers. Amend RSA 397-A:12 by inserting after paragraph X the following new paragraphs:
XI. Each licensee or person subject to this chapter shall make or compile reports or prepare other information as directed by the commissioner in order to carry out the purposes of the chapter including but not limited to:
(a) Accounting compilations;
(b) Information lists and data concerning loan transactions in a format prescribed by the commissioner; and
(c) Such other information deemed necessary to carry out the purposes of the chapter.
XII. In making any examination or investigation authorized by this chapter, the commissioner may control access to any documents and records of the licensee or person under examination or investigation. The commissioner may take possession of the documents and records or place a person in exclusive charge of the documents and records in the place where they are usually kept. During the period of control, no person shall remove or attempt to remove any of the documents and records except pursuant to a court order or with the consent of the commissioner. Unless the commissioner has reasonable grounds to believe the documents or records of the licensee have been, or are at risk of, being altered or destroyed for purposes of concealing a violation of this chapter, the licensee or owner of the documents and records shall have access to the documents or records as necessary to conduct its ordinary business affairs.
XIII. The authority of this section shall remain in effect, whether a licensee or person subject to this chapter acts or claims to act under any licensing or registration law of this state, or claims to act without such authority.
XIV. The authority of this section shall extend to any person who has custody of or control over documents within the jurisdiction of the commissioner including but not limited to title companies and other settlement providers who shall provide loan documents to the commissioner upon request.
XV. No licensee or person subject to investigation or examination under this section may knowingly withhold, abstract, remove, mutilate, destroy, or secrete any books, records, computer records, or other information. Such actions shall be fraud under the chapter.
290:32 New Section; Confidentiality; Mortgage Bankers and Brokers. Amend RSA 397-A by inserting after section 12 the following new section:
397-A:12-a Confidentiality.
I. In order to promote more effective regulation and reduce regulatory burden through supervisory information sharing and except as otherwise provided in the S.A.F.E. Mortgage Licensing Act of 2008, Public Law 110-289, Title V, section 1512, the requirements under any federal law or RSA 383:10-b, RSA 383:10-c, RSA 397-A:12, X, and RSA 91-A regarding the privacy or confidentiality of any information or material provided to the Nationwide Mortgage Licensing System and Registry, and any privilege arising under federal or state law, including the rules of any federal or state court, with respect to such information or material, shall continue to apply to such information or material after the information or material has been disclosed to the Nationwide Mortgage Licensing System and Registry. Such information and material may be shared with all state and federal regulatory officials with mortgage industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by federal law or RSA 383:10-b, RSA 383:10-c, RSA 397-A:12, X, and RSA 91-A.
II. The commissioner is authorized to enter agreements or sharing arrangements with other governmental agencies, the Conference of State Bank Supervisors, the American Association of Residential Mortgage Regulators, or other associations representing governmental agencies.
III. The commissioner shall regularly report violations of this chapter, the rules promulgated under this chapter, and enforcement actions taken under this chapter, and other relevant information, to the Nationwide Mortgage Licensing System and Registry subject to the provisions contained in paragraph I.
IV. Information or material that is subject to a privilege or confidentiality under paragraph I of this section shall not be subject to:
(a) Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or the respective state; or
(b) Subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by the Nationwide Mortgage Licensing System and Registry with respect to such information or material, the person to whom such information or material pertains waives, in whole or in part, in the discretion of such person, that privilege.
V. RSA 383:10-b, RSA 383:10-c, RSA 397-A:12, X, and RSA 91-A, relating to the disclosure of confidential supervisory information or any information or material described in paragraph I of this section that is inconsistent with paragraph I shall be superseded by the requirements of this section.
VI. This section shall not apply with respect to the information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions against, mortgage loan originators that is included in the Nationwide Mortgage Licensing System and Registry for access by the public.
290:33 New Paragraph; Annual Report; Mortgage Bankers and Brokers. Amend RSA 397-A:13 by inserting after paragraph VI the following new paragraph:
VII. Each licensee shall submit to the Nationwide Mortgage Licensing System and Registry reports of condition, which shall be in such form and shall contain such information as the Nationwide Mortgage Licensing System and Registry may require.
290:34 New Paragraph; Lending Practices; Mortgage Bankers and Brokers. Amend RSA 397-A:14 by inserting after paragraph III the following new paragraph:
IV. No person subject to this chapter shall:
(a) Obtain property by fraud or misrepresentation;
(b) Solicit or enter into a contract with a borrower that provides that the person subject to this chapter may earn a fee or commission through “best efforts” to obtain a loan even though no loan is actually obtained for the borrower;
(c) Solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting;
(d) Conduct any business covered by this chapter without holding a valid license as required under this chapter, or assist or aid and abet any person in the conduct of business under this chapter without a valid license as required under this chapter;
(e) Fail to make disclosures as required by this chapter and any other applicable state or federal law including rules and regulations thereunder;
(f) Fail to comply with this chapter or rules or orders promulgated under this chapter, or fail to comply with any other state or federal law, including the rules and regulations thereunder, applicable to any business authorized or conducted under this chapter;
(g) Make, in any manner, any false or deceptive statement or representation with regard to the rates, points, or other financing terms or conditions for a residential mortgage loan, or engage in bait and switch advertising;
(h) Negligently make any false statement or knowingly and willfully make any omission of material fact in connection with any information or reports filed with a governmental agency or the Nationwide Mortgage Licensing System and Registry or in connection with any investigation conducted by the commissioner or another governmental agency;
(i) Make any payment, threat, or promise, directly or indirectly, to any person for the purposes of influencing the independent judgment of the person in connection with a residential mortgage loan, or make any payment, threat, or promise, directly or indirectly, to any appraiser of a property, for the purposes of influencing the independent judgment of the appraiser with respect to the value of the property;
(j) Collect, charge, attempt to collect or charge, or use or propose any agreement purporting to collect or charge any fee prohibited by this chapter;
(k) Cause or require a borrower to obtain property insurance coverage in an amount that exceeds the replacement cost of the improvements as established by the property insurer;
(l) Fail to truthfully account for monies belonging to a party to a residential mortgage loan transaction;
(m) Collect an advance fee for a loan modification; or
(n) Engage in unfair, deceptive, unethical, or fraudulent business practices.
290:35 New Paragraphs; Borrowers Rights; Mortgage Bankers and Brokers. Amend RSA 397-A:15 by inserting after paragraph VII the following new paragraphs:
VIII. A yield spread premium is prohibited in a reverse mortgage transaction.
IX.(a) Every field on the United States Department of Housing and Urban Development’s Good Faith Estimate (GFE) form shall be completed before it is given to a borrower. The mortgage originator shall complete the Tradeoff Table on the instruction page of the GFE where a yield spread premium is to be paid in connection with a mortgage transaction.
(b) At the time the interest rate is locked for a loan the borrower shall be given a completed GFE Tradeoff Table for such loan; the intent is to allow the borrower to clearly see the loan options available to him or her that he or she did not elect.
(c) When completing the GFE Tradeoff Table, if a loan with a lower interest rate is not available to a borrower an entry of “N/A” is acceptable and if a loan with lower settlement charges is not available an entry of “N/A” is acceptable.
(d) A copy of each disclosure, including those required by IX(a)-(c), and its method and timing of delivery shall be kept by the mortgage broker and by the mortgage banker.
X. Mortgage bankers and mortgage brokers shall have a documented methodology, approved by a senior manager, that enables its employees, agents, and originators to make a reasonable determination that the borrower can repay a mortgage loan. The methodology shall reflect all relevant factors that have a bearing on the present and future capacity of the borrower to adequately service the debt. A mortgage banker, mortgage broker, and mortgage originator shall not offer or extend a mortgage loan to a borrower unless a reasonable lender would believe at the time the loan is made that the borrower will be able to make the scheduled payments associated with the loan. The loan file kept by the mortgage banker, mortgage broker, and mortgage originator shall document the analysis used to arrive at that conclusion.
XI. A person, or its affiliate, brokering or funding a reverse mortgage shall not participate in, or be associated with, or employ any party that participates in or is associated with, any other financial or insurance activity and a mortgagor shall not be required, directly or indirectly, as a condition of obtaining a mortgage, to purchase any other financial or insurance product.
290:36 License Revocation; Suspension; Mortgage Bankers and Brokers. Amend the introductory paragraph of RSA 397-A:17, I to read as follows:
I. The commissioner may issue an order requiring a person to whom any license has been granted or any person under the commissioner’s jurisdiction to show cause why the license should not be revoked[,] or suspended, or penalties imposed, or both, for violations of this chapter. The order shall give reasonable notice of the opportunity for a hearing and shall state the reasons for the issuance of the order. The commissioner may by order summarily postpone or suspend any license or application pending final determination of any order to show cause, or other order, or of any other proceeding under this section, provided the commissioner finds that the public interest would be irreparably harmed by delay in issuing such order. Upon the entry of the order, the commissioner shall promptly notify the respondent, applicant, or licensee that the order has been entered and of the reasons for the order and that within 10 calendar days after receipt of a written request the matter will be scheduled for hearing. Valid delivery of such order shall be by hand or certified mail at the last known principal office of the licensee, or respondent, to an officer, director, 5 percent or more owner, member, partner, or legal representative of the licensee or respondent. If the person to whom an order to show cause or other order is issued fails to request a hearing within 30 calendar days of receipt or valid delivery of the order and no hearing is ordered by the commissioner, then such person shall be deemed in default, and the order shall, on the thirty-first day, become permanent, and shall remain in full force and effect until and unless later modified or vacated by the commissioner, for good cause shown. A hearing, if requested shall be scheduled not later than 10 calendar days after the written request for such hearing is received by the commissioner, after which and within 20 calendar days from the date of the hearing the commissioner shall enter an order making such disposition of the matter as the facts require. If the licensee or respondent fails to request a hearing within 30 calendar days of receipt or valid delivery of such order or fails to appear at a hearing after being duly notified, or cannot be located after a reasonable search, such person shall be deemed in default and the proceeding may be decided against the person upon consideration of the order to show cause or other order, the allegations of which may be deemed to be true. The commissioner may by order, upon due notice and opportunity for hearing, assess penalties or deny, suspend, decline to renew, or revoke a license or application and bar any person from licensure if it is in the public interest and the applicant, respondent, or licensee, any partner, officer, member, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the applicant, respondent, or licensee:
290:37 License Revocation; Suspension; Mortgage Bankers and Brokers. Amend RSA 397-A:17, I(a) to read as follows:
(a) Has violated any provision of this chapter or rules or orders thereunder;
290:38 License Revocation; Suspension; Mortgage Bankers and Brokers. RSA 397-A:17, II-III is repealed and reenacted to read as follows:
II. The commissioner may issue orders or directives under this chapter as follows:
(a) Order or direct persons subject to this chapter to cease and desist from conducting business, including immediate temporary orders to cease and desist.
(b) Order or direct persons subject to this chapter to cease any harmful activities or violations of this chapter, including immediate temporary orders to cease and desist.
(c) Enter immediate temporary orders to cease business under a license if the commissioner has determined that such license was erroneously granted or the licensee is currently in violation of the chapter or rules or orders under the chapter.
(d) Order or direct such other affirmative action as the commissioner deems necessary.
(e) Remove or ban from office or employment, including license revocation, any person conducting business under this chapter:
(1) For a violation of this chapter or orders or rules promulgated under this chapter; or
(2) For a violation of federal laws, rules, or regulations; or
(3) If the commissioner determines that such person has been convicted of a felony or misdemeanor that would preclude licensing under this chapter; or
(4) If by a preponderance of evidence the commissioner determines that the person no longer demonstrates the financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the person subject to the chapter will operate honestly, fairly, and efficiently within the purposes of the chapter.
(f) Deny, suspend, revoke, condition, or decline to renew a license if an applicant or licensee fails at any time to meet the requirements of RSA 397-A:5, IV-c or 397-A:5, IV-d, or withholds information or makes a material misstatement in an application for a license or renewal of a license.
III. If the commissioner finds that protection of consumers, lenders, or investors requires emergency action and incorporates a finding to that effect in his or her order, immediate suspension of a license may be ordered pending an adjudicative proceeding. The adjudicative proceeding shall be commenced not later than 10 business days after the date of the order suspending the license. Unless expressly waived by the licensee, the commissioner’s failure to commence an adjudicative proceeding within 10 business days shall mean that the suspension order is automatically vacated. The commissioner shall not again suspend the license for the same conduct which formed the basis of the vacated suspension without granting the licensee prior notice and an opportunity for an adjudicative proceeding.
290:39 New Paragraphs; License Revocation; Suspension. Amend RSA 397-A:17 by inserting after paragraph VII the following new paragraphs:
VIII. After notice and opportunity for hearing, the commissioner may enter an order of rescission, restitution, or disgorgement of profits directed to a person who has violated this chapter, or a rule or order under this chapter. Rescission, restitution, or disgorgement of profits shall be in addition to any other penalty provided for under this chapter or RSA 383:10-d.
IX. In addition to any other penalty provided for under this chapter, after notice and opportunity for hearing, the commissioner may assess fines and penalties against a mortgage loan originator in an amount not to exceed $25,000 if the commissioner finds that such loan originator has violated or failed to comply with any requirement of the S.A.F.E. Mortgage Licensing Act of 2008, Public Law 110-289, Title V or any regulation or order issued thereunder. Each of the acts specified shall constitute a separate violation.
X. An action to enforce any provision of this chapter shall be commenced within 6 years after the date on which the violation occurred.
290:40 New Paragraph; Administration by Commissioner; Rulemaking. Amend RSA 397-A:20 by inserting after paragraph VII the following new paragraph:
VIII. The commissioner may share information with state and federal law enforcement agencies for the purposes of criminal investigations.
290:41 Records and Filings; Mortgage Bankers and Brokers. Amend RSA 397-A:22, I to read as follows:
I. A document is filed when it is received by the commissioner. If any filing deadline date falls on a weekend or on a New Hampshire state or federal legal holiday, the due date shall be automatically extended to the next business day following such weekend or holiday. Examination expenses, fines, penalties, and other moneys obliged to be paid to the department shall be due and payable within 14 days of receipt of notice by the licensee or other person or at such later time determined by the commissioner.
290:42 Severability; Mortgage Bankers and Brokers. Amend RSA 397-A:23 to read as follows:
397-A:23 Severability. If any provision of this chapter or the application thereof to any person or circumstance is held invalid, the [invalidity does not affect other provisions or applications of the chapter which can be given effect without the invalid provisions or application] remainder of the chapter or the application of the provision to other persons or circumstances is not affected and to this end the provisions of this chapter are severable.
290:43 New Paragraph; Definitions; Control. Amend RSA 397-A:1 by inserting after paragraph V the following new paragraph:
V-a. “Control” means the power, directly or indirectly, to direct the management or policies of a company, whether through ownership of securities, by contract, or otherwise. Any person is presumed to control a company that:
(a) Is a director, general partner, or executive officer;
(b) Directly or indirectly has the right to vote 10 percent or more of a class of a voting security or membership interest, or has the power to sell or direct the sale of 10 percent or more of a class of voting securities or membership interest;
(c) In the case of a limited liability company, is a managing member; or
(d) In the case of a partnership, has the right to receive upon dissolution, or has contributed, 10 percent or more of the capital.
290:44 New Paragraph; Definitions; Real Estate Brokerage Activity. Amend RSA 397-A:1 by inserting after paragraph XX-a the following new paragraph:
XX-b. “Real estate brokerage activity” means, for purposes of this chapter only, any activity that involves offering or providing real estate brokerage services to the public, including:
(a) Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee of real property;
(b) Bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property;
(c) Negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property other than in connection with providing financing with respect to any such transaction;
(d) Engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under any applicable law; and
(e) Offering to engage in any activity, or act in any capacity, described in subparagraph (a), (b), (c), or (d).
290:45 License Posting. Amend RSA 397-A:9 to read as follows:
397-A:9 License Posting. It shall be unlawful to engage in the business of [making or brokering mortgage loans] a mortgage banker or mortgage broker without a conspicuously posted license in the licensee’s principal place of business within this state and in each of the licensee’s licensed branch offices [within this state].
290:46 License Surrender. Amend RSA 397-A:10-a to read as follows:
397-A:10-a License Surrender.
I.(a) A licensee who ceases to engage in the business of a mortgage banker, mortgage broker, or originator, at any time during a license year for any cause, including, but not limited to, bankruptcy, license revocation, or voluntary dissolution, shall surrender, by notice to the commissioner or by return of such paper license, if a paper license was issued, in person, through the Nationwide Mortgage Licensing System and Registry, or by registered or certified mail to the commissioner within 15 calendar days of such cessation, and mortgage banker and mortgage broker licensees shall cause to be published in a newspaper of general circulation in the licensee’s market area a notice to such effect. The commissioner shall adopt rules, in accordance with RSA 541-A, relative to such notice and final reports to the commissioner.
(b) Withdrawal of the surrendered license becomes effective [30 days after] upon receipt by the commissioner of the notice or license [or within such shorter period of time as the commissioner may determine], unless a revocation or suspension proceeding is pending when the withdrawal is filed or a proceeding to revoke or suspend or to impose conditions upon the withdrawal is instituted within 30 days after the license is surrendered. If a proceeding is pending or instituted, withdrawal becomes effective at such time and upon such conditions as the commissioner by order determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the commissioner may nevertheless institute a revocation or suspension proceeding under RSA 397-A:17 within one year after withdrawal became effective and may enter a revocation or suspension order as of the last date on which the license was effective.
II. Failure to comply with the provisions of this section and rules adopted under this section shall be cause for denial of future license applications and the imposition of penalties under RSA 397-A:21.
290:47 Administration by the Commissioner; Rulemaking. Amend RSA 397-A:20, V to read as follows:
V. The commissioner may, for good cause shown, abate all or a portion of fees or delinquency penalties assessed under this chapter.
290:48 New Paragraphs; Definitions. Amend RSA 397-B:1 by inserting after paragraph IV the following new paragraphs:
IV-a. “Mortgage loan” shall have the same meaning as provided in RSA 397-A:1, XIV.
IV-b. “Nationwide Mortgage Licensing System and Registry” shall have the same meaning as provided in RSA 397-A:1, XIV-c.
IV-c. “Originator” and “mortgage loan originator” shall have the same meaning as provided in RSA 397-A:1, XVII.
290:49 New Paragraph; Mortgage Servicing Companies. Amend RSA 397-B:4 by inserting after paragraph IV the following new paragraph:
V. A mortgage servicing company shall:
(a) File its initial and renewal application through the Nationwide Mortgage Licensing System and Registry and shall post a surety bond in the amount and terms for mortgage brokers under RSA 397-A:5, III and the rules adopted thereunder; and
(b) Supervise mortgage loan originators that it employs or retains: and
(c) License its mortgage loan originators on or before July 31, 2010 through the Nationwide Mortgage Licensing System and Registry in accordance with all of the licensing provisions of RSA 397-A; and
(d) Follow the provisions of RSA 397-A as they pertain to originators and to the reporting requirements of the National Mortgage Licensing System and Registry; and
(e) File under oath, its financial statement with the commissioner within 90 days from the date of its fiscal year end. The financial statement shall be prepared in accordance with generally accepted accounting principles and shall include a balance sheet, income statement, statement of changes in owners’ equity, cash flow statement, and note disclosures. If the financial statement is not audited, a certification statement shall be attached and signed by a duly authorized officer of the licensee. The certification statement shall state that the financial statement is true and accurate to the best of the officer’s belief and knowledge.
290:50 Change in Name; Ownership; Location. Amend RSA 397-A:10, II-III to read as follows:
II. A mortgage banker or mortgage broker licensee shall submit written notification to the department of the addition or deletion of a principal and shall provide the name and address of each new principal no later than 30 days after such change. Each new principal shall authorize the commissioner to conduct a background check. The commissioner shall investigate management and ownership changes including, but not limited to, each principal’s qualifications and business history. The licensee shall disclose any injunction or administrative order that has been issued against the principal and whether the principal has been convicted of a misdemeanor involving [the lending industry or any aspect of the lending business] financial services or a financial services-related business or any fraud, false statements, or omissions, theft or any wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion, or a conspiracy to commit any of these offenses or convicted of any felony, prior to the commissioner’s approval of such change.
III. Mortgage banker or mortgage broker licensees shall provide written notice to the banking department of any proposed change in location or proposed closing of any licensed office no later than 10 business days prior to the effective date of such change of location or closing, unless such change of location or closing occurs under circumstances beyond the control of the licensee whereby such written notice shall be provided within 10 business days from the date the licensee becomes aware of the closing or relocation. Failure to comply with the provisions of this paragraph [shall] may be deemed sufficient cause for license revocation or denial of license renewal applications.
290:51 Banking Department; Positions Established. The following classified positions are hereby established in the banking department:
I. Two bank examiner III, labor grade 27.
II. One hearings examiner, labor grade 31.
III. One paralegal II, labor grade 19.
290:52 Banking Department; Supplemental Appropriation; Positions. The sum of $220,603 for the fiscal year ending June 30, 2010 and the sum of $346,530 for the fiscal year ending June 30, 2011 is hereby appropriated to the banking department to fund the 4 positions established in section 51 of this act and other costs associated with the 4 new positions. This appropriation shall be a charge against the consumer credit administration license fund under RSA 399-A:5 and shall be in addition to any other funds appropriated to the banking department.
290:53 Effective Date. This act shall take effect July 31, 2009.
Approved: July 30, 2009
Effective Date: July 31, 2009