Qualifications of mortgage loan originators

What it does

Summary by the Legislative Reference Bureau, the Legislature's nonpartisan drafting office. It's their wording, not ours.

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.

Who's behind it

2 representatives are its authors⁠. All 2 are Democrats.

1 more lawmaker signed on in support⁠.

Versions and amendments

Every text the Legislature printed for this bill, including proposed changes. Each opens on the Legislature's site.

• Amendment AA1-AB658
• LC Amendment Memo