Certain individuals are exempt from licensing, including: mortgage loan originators registered with NMLSR and employed by certain entities, individuals offering or negotiating terms of residential mortgage loans with or on behalf of an immediate family member, individuals offering or negotiating terms of residential mortgage loans secured by their own residence, and certain attorneys who negotiate the terms of a residential mortgage loan on behalf of a client.

Independent contractor loan processors or underwriters for residential real estate must also be licensed as mortgage loan originators, have a unique identifier issued by NMLSR, and certify annually to the Director of the Division of Finance that they will comply with requirements applicable to mortgage loan originators.

Non-federally insured credit unions which employ loan originators must register the loan originators with the NMLSR.

The director of the Division of Finance is authorized to establish licensing rules for mortgage loan originator licensing. The director may establish expedited procedures for licensing of individuals previously licensed in Missouri as residential mortgage loan brokers. The director is authorized to establish the application form, enter into relationships and contracts with the NMLSR to collect and maintain records and process fees, and modify statutory requirements by rule or regulation as necessary to participate in NMLSR. The director is also required to establish a process for mortgage loan originators to challenge information entered into NMLSR.

An applicant for licensing as a mortgage loan originator must furnish NMLSR with their fingerprints, personal history, and authorize NMLSR to get their credit report and information related to any administrative, civil, or criminal findings by any governmental agency. No applicant would be denied a license solely on the basis of a credit score. Residential mortgage brokers subject to this act must also submit reports to the NMLSR.

Licensees are also required to have continuing education of at least eight hours a year in certain subjects. Provisions for the types of continuing education allowable are included.

The director shall not issue a mortgage loan originator license to anyone, unless the director finds that the applicant: has never had a mortgage loan originator license revoked in any governmental jurisdiction, has not been convicted of certain felonies, or any felony in the last seven years, has demonstrated financial responsibility, character, and fitness for licensing, has completed pre-licensing education requirements, which include at least twenty hours of NMLSR approved courses in specific areas, has passed a NMLSR written test, and met a surety bond requirement.

Standards for renewing mortgage loan originator licenses are also provided. The director is also authorized to adopt procedures for the reinstatement of expired licenses.

The director is authorized to deny licenses to applicants, discipline licensees, order restitution, impose fines, issue cease and desist orders, and order other affirmative action as the director deems necessary. Letters denying or declining to renew a license may be appealed to the residential mortgage board under the Missouri Administrative Procedure Act. All other matters presenting a contested case involving a licensee may be heard by the director under the Missouri Administrative Procedure Act. The civil penalty the director may impose is a maximum of $25,000 per violation.

Mortgage loan originators are required to be covered by the surety bond of the licensed mortgage broker who supervises them. Residential mortgage brokers shall deliver a surety bond to the director prior to the issuance or renewal of a license. The director may promulgate rules or regulations with respect to the requirements of the surety bonds. Provisions regarding the amount of the bond and filing of the bond are also included.

Provisions for the confidentiality of certain information provided by licensees to the director and to the NMLSR are included. Information regarding the employment history and publicly adjudicated disciplinary and enforcement actions against residential mortgage brokers and mortgage originators will be accessible to the public.

The director has the authority to conduct investigations and examinations. The director's investigatory powers and certain actions which would violate the act are specified. The director is required to report violations and other relevant information to the NMLSR.

The unique identifier assigned to each person originating a residential mortgage loan and the residential mortgage loan broker license number must be on all residential mortgage loan application forms, advertisements, business cards, websites, and any other documents as established by the director.

If the U.S. Department of Housing and Urban Development disapproves of any part of the act under their authority under the federal Secure and Fair Enforcement Mortgage Licensing Act, then the director has the rule-making authority to adopt rules necessary to continue participating in the NMLSR.

Residential mortgage loan brokers who are licensed by the director are required to report each mortgage loan originator employed under their supervision to the director and report any apparent violations to the director within thirty days of detection. The director can grant waivers of the residential mortgage loan broker licensing requirement.

Residential mortgage brokers are required to disclose a loan disclosure statement and fee agreement. Mortgage loan originators may only be compensated by the mortgage loan broker that employs them. If the mortgage broker receives fees greater than the amount they disclosed, they shall forfeit double the amount of fees and compensation to the borrower.

The requirement that a mortgage broker have annual audits is repealed.

This act contains an emergency clause.

This act is similar to SB 360 (2009).

EMILY KALMER