AB 658

Under current law, an individual may not engage in business as a mortgage

loan originator, or otherwise act as a mortgage loan originator, unless the individual

is licensed with the Division of Banking in the Department of Financial Institutions

(division). In

2009 Wisconsin Act 2

, provisions of the federal Secure and Fair

Enforcement for Mortgage Licensing Act of 2008 were adopted into state law,

including provisions establishing standards for the licensing of mortgage loan

originators. A mortgage loan originator is, with specified exceptions, an individual

who takes a residential mortgage loan application or offers or negotiates terms of a

residential mortgage loan for compensation or gain. The division may issue a

mortgage loan originator license to an applicant only if the applicant satisfies certain

criteria. The applicant must provide: fingerprints for submission to the Federal

Bureau of Investigation for a state, national, and international criminal history

background check; personal history information; and authorization for the release

of certain information, including the applicant's credit report and information

related to any administrative, civil, or criminal findings against the applicant. The

division may not issue a mortgage loan originator license to an applicant if the

applicant has previously had a mortgage loan originator license revoked or if the

applicant has had specified felony convictions. To issue a mortgage loan originator

license, the division must also find that the applicant has demonstrated financial

responsibility, character, and general fitness that will command the confidence of the

community and warrant a determination that the mortgage loan originator will

operate honestly, fairly, and efficiently. An individual will not be found to be

financially responsible if he or she has shown a disregard in the management of his

or her own financial condition, including having current outstanding judgments or

tax liens or having, within the past three years, foreclosures or any pattern of

seriously delinquent accounts. The division may only renew a mortgage loan

originator license if the mortgage loan originator continues to meet the minimum

standards for license issuance.

This bill modifies the criteria for issuance or renewal of a mortgage loan

originator's license by eliminating foreclosures as a disqualifying criteria for an

applicant. Accordingly, under the bill, the division is not

required

to make a finding

that an applicant who has suffered a recent foreclosure is not financially responsible,

but the division can still, in its discretion, make such a finding.