AB 765

Under current law, a person may not act as a mortgage banker, mortgage

broker, or mortgage loan originator unless the person is licensed as such with the

Division of Banking in the Department of Financial Institutions (division). A

mortgage banker is, with certain exceptions, a person who originates residential

mortgage loans (loans) for itself or for another person; sells loans or interests in loans

to another person; or services loans or provides escrow services. A mortgage broker

is, with certain exceptions, a person who, on behalf of a loan applicant or an investor

and for commission or other compensation, finds a loan or negotiates a loan or loan

commitment. A mortgage loan originator is, with certain exceptions, an individual

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

residential mortgage loan for compensation or gain. State and federally chartered

financial institutions are not mortgage bankers or mortgage brokers. In

2009

Wisconsin Act 2

(Act 2), provisions of the federal Secure and Fair Enforcement for

Mortgage Licensing Act of 2008 were adopted into state law. Act 2 made extensive

changes related to the regulation of mortgage loan originators and also made some

changes related to the regulation of mortgage bankers and mortgage brokers,

including changes related to minimum net worth and bonding amounts for mortgage

bankers and mortgage brokers.

Under current law (after Act 2), an applicant for a mortgage banker license

must file with the division a bond in the amount of $300,000 to secure the applicant's

faithful performance of duties and obligations and must submit evidence of a

minimum net worth of $250,000. An applicant for a mortgage broker license must

file with the division a bond in the amount of $120,000 to secure the applicant's

faithful performance of duties and obligations and must submit evidence of a

minimum net worth of $100,000.

This bill reduces, with one exception, the amount of the bond and net worth

requirements for mortgage banker and mortgage broker applicants. Under the bill,

an applicant for a mortgage banker license must file a bond in an amount that ranges

from $100,000 to $300,000, depending on the annual amount of the mortgage

banker's loan originations, and must submit evidence of a minimum net worth of

$100,000. An applicant for a mortgage broker license must file a bond in an amount

that ranges from $50,000 to $100,000, depending on the annual amount of the

mortgage broker's loan originations, and must submit evidence of a minimum net

worth of $50,000.

Under current law, there are exceptions that expressly exclude the Department

of Veterans Affairs (DVA), when administering its veterans housing loan program,

from being considered a mortgage banker or mortgage broker and that exclude its

employees from being considered mortgage loan originators.