2018 Connecticut General Statutes
Title 36a - The Banking Law of Connecticut
Chapter 669 - Regulated Activities
Section 36a-719 - Mortgage servicer license. Issuance. Application. Renewal standards. Withdrawal or abandonment of application. Schedule and report.

(a) The Banking Commissioner shall issue a mortgage servicer license to an applicant for such license if the commissioner finds that: (1) The applicant has identified a qualified individual for its main office and a branch manager for each branch office where such business is conducted, provided such qualified individual and branch manager have supervisory authority over the mortgage servicer activities at the respective office location and at least three years’ experience in the mortgage servicing business within the five years immediately preceding the date of the application for licensure; (2) notwithstanding the provisions of section 46a-80, the applicant, the control persons of the applicant, the qualified individual and any branch manager with supervisory authority at the office for which the license is sought have not been convicted of or pled guilty or nolo contendere to, in a domestic, foreign or military court, a felony during the seven-year period preceding the date of the application for licensing or a felony involving an act of fraud or dishonesty, a breach of trust or money laundering at any time preceding the date of application, provided any pardon or expungement of a conviction shall not be a conviction for purposes of this subdivision; (3) the applicant demonstrates that the financial responsibility, character and general fitness of the applicant, the control persons of the applicant, the qualified individual and any branch manager having supervisory authority over the office for which the license is sought command the confidence of the community and warrant a determination that the applicant will operate honestly, fairly and efficiently within the purposes of sections 36a-715 to 36a-719l, inclusive; (4) the applicant has met the surety bond, fidelity bond and errors and omissions coverage requirement under section 36a-719c; (5) the applicant has not made a material misstatement in the application; and (6) the applicant has met any other similar requirements as determined by the commissioner. If the commissioner fails to make such findings, the commissioner shall not issue a license, and shall notify the applicant of the denial and the reasons for such denial. For purposes of this subsection, the level of offense of the crime and the status of any conviction, pardon or expungement shall be determined by reference to the law of the jurisdiction where the case was prosecuted. In the event such jurisdiction does not use the term “felony”, “pardon” or “expungement”, such terms shall include legally equivalent events. For purposes of subdivision (1) of this subsection, “experience in the mortgage servicing business” means paid experience in the (A) servicing of mortgage loans, (B) accounting, receipt and processing of payments on behalf of mortgagees or creditors, or (C) supervision of such activities, or any other relevant experience as determined by the commissioner.

(b) An application for a license as a mortgage servicer or renewal of such license shall be filed, in a form prescribed by the commissioner, with the system and accompanied by the fees required by section 36a-719b. Each such form shall contain content as set forth by instruction or procedure of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purpose of sections 36a-715 to 36a-718, inclusive, and sections 36a-719a to 36a-719l, inclusive. The applicant shall, at a minimum, furnish to the system information concerning the identity of the applicant, any control person of the applicant, the qualified individual and any branch manager, including personal history and experience in a form prescribed by the system and information related to any administrative, civil or criminal findings by any governmental jurisdiction. The applicant shall notify the commissioner on the system of any change to the information submitted in connection with its most recent application for licensure not later than fifteen days after the applicant has reason to know of such change. For the purpose of this subsection, evidence of experience of the qualified individual and any branch manager shall include: (1) A statement specifying the duties and responsibilities of such person’s employment, the term of employment, including month and year, and the name, address and telephone number of a supervisor, employer or, if self-employed, a business reference; and (2) if required by the commissioner, copies of W-2 forms, 1099 tax forms or, if self-employed, 1120 corporate tax returns, signed letters from the employer on the employer’s letterhead verifying such person’s duties and responsibilities and term of employment including month and year, and, if such person is unable to provide such letters, other proof satisfactory to the commissioner that such person meets the experience requirement. The commissioner may conduct a criminal history records check of the applicant, any control person of the applicant, the qualified individual and any branch manager with supervisory authority at the office for which the license is sought and require the applicant to submit the fingerprints of such persons as part of the application.

(c) (1) The minimum standards for license renewal for a mortgage servicer shall include the following: (A) The applicant continues to meet the minimum standards under subsection (a) of this section; and (B) the mortgage servicer has paid all required fees for renewal of the license.

(2) The license of a mortgage servicer 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 system. The commissioner may automatically suspend a mortgage servicer license if the licensee receives a deficiency on the system indicating that the payment required by section 36a-719b was Returned-ACH or returned pursuant to such other term as may be utilized by the system to indicate that the payment was not accepted. After a license has been automatically suspended pursuant to this section, the commissioner shall give such licensee notice of the automatic suspension, pending proceedings for revocation or refusal to renew pursuant to section 36a-719j and an opportunity for a hearing on such action in accordance with section 36a-51 and require such licensee to take or refrain from taking such action that, in the opinion of the commissioner, will effectuate the purposes of this section.

(d) (1) Withdrawal of an application for a license filed under this section shall become effective upon the commissioner’s acceptance on the system of a withdrawal request. The commissioner may deny a license up to one year after the effective date of withdrawal.

(2) If the license of a mortgage servicer expires due to the licensee’s failure to renew, the commissioner may institute a revocation or suspension proceeding or issue an order suspending or revoking such license pursuant to subsection (a) of section 36a-719j not later than one year after the date of such expiration.

(e) The commissioner may deem an application for a license under this section abandoned if the applicant fails to respond to any request for information required under sections 36a-715 to 36a-719l, inclusive, or the regulations adopted pursuant to said sections. The commissioner shall notify the applicant on the system that if such information is not submitted not later than sixty days from the date of such request, the application shall be deemed abandoned. An application filing fee paid prior to the date an application is deemed abandoned pursuant to this subsection shall not be refunded. Abandonment of an application pursuant to this subsection shall not preclude the applicant from submitting a new application for a license.

(f) As part of its application and upon a change to such information, a mortgage servicer shall file with the commissioner a current schedule of the ranges of costs and fees it charges mortgagors for its servicing-related activities. At least annually, a licensee shall file with the commissioner a report in a form and format acceptable to the commissioner detailing the mortgage servicer’s activities in the state, including (1) the number of residential mortgage loans the mortgage servicer is servicing, (2) the type and characteristics of the residential mortgage loans in this state, (3) the number of serviced residential mortgage loans in default, along with a breakdown of thirty-day, sixty-day and ninety-day delinquencies, (4) information on loss mitigation activities, and (5) information on foreclosures commenced in this state.

(P.A. 14-89, S. 5; P.A. 17-38, S. 15, 17-233, S. 26.)

History: P.A. 17-38 amended Subsec. (d)(1) by replacing “receipt by the commissioner of a notice of intent to withdraw such application” with “the commissioner’s acceptance on the system of a withdrawal request”; P.A. 17-233 amended Subsec. (f) by deleting “At least annually” and adding “and upon a change to such information” re filing with commissioner current schedule of ranges of costs and fees charged for servicing-related activities, deleting Subdiv. (1) and (2) designators and redesignating existing Subparas. (A) to (E) as Subdivs. (1) to (5), adding “At least annually, a licensee shall file with the commissioner” re report, deleting “including details on workout arrangements undertaken,” in redesignated Subdiv. (4), and making technical changes.