2010 Wyoming Statutes
Title 40 - Trade And Commerce
Chapter 23 - Wyoming Residential Mortgage Practices Act

CHAPTER 23 - WYOMING RESIDENTIAL MORTGAGE PRACTICES ACT

 

40-23-101. Short title.

 

This act may be cited as the "Wyoming Residential Mortgage Practices Act."

 

40-23-102. Definitions.

 

(a) As used in this act:

 

(i) "Borrower" means a person who has applied to a mortgage lender for a residential mortgage loan or on whose behalf the mortgage lending and mortgage brokering activities are conducted;

 

(ii) "Commissioner" means the state banking commissioner;

 

(iii) "Control" means owning twenty-five percent (25%) or more of the voting share of the licensee or having the power to direct the licensee's management or policies;

 

(iv) "Division" means the division of banking within the department of audit;

 

(v) "Licensee" means a company licensed under this act as a mortgage broker or a mortgage lender;

 

(vi) "Mortgage broker" means any company, who for compensation, or in the expectation of compensation, assists a person in obtaining or applying to obtain a residential mortgage loan or holds itself out as being able to assist a person in obtaining or applying to obtain a residential mortgage loan;

 

(vii) "Mortgage brokerage agreement" means a written agreement in which a mortgage broker agrees to assist the borrower in obtaining a residential mortgage loan;

 

(viii) "Mortgage brokering activities" means for compensation, either directly or indirectly, assisting or offering to assist in the preparation of an application for a residential mortgage loan on behalf of a borrower, or negotiating or offering to negotiate the terms or conditions of a residential mortgage loan with any person making residential mortgage loans;

 

(ix) "Mortgage lender" means any company, who makes residential mortgage loans to borrowers or holds itself out as able to make mortgage loans;

 

(x) "Mortgage lending activities" means for compensation, either directly or indirectly, accepting or offering to accept applications for making residential mortgage loans;

 

(xi) "Person" means an individual, sole proprietorship, partnership, corporation, limited liability company or other entity, public or private;

 

(xii) "Real Estate Settlement Procedures Act" means the act set forth in 12 U.S.C. 2601 et seq., as amended;

 

(xiii) "Regulation X" means regulation X as promulgated by the United States department of housing and urban development and codified in 24 CFR part 3500 et seq., as amended;

 

(xiv) "Regulation Z" means regulation Z as promulgated by the board of governors of the federal reserve system and codified in 12 CFR part 226 et seq., as amended;

 

(xv) "Residential mortgage loan" means a first mortgage loan made primarily for personal, family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling or residential real estate in Wyoming upon which is constructed or intended to be constructed a dwelling;

 

(xvi) "Residential real property" means real property improved by a one (1) to four (4) family dwelling;

 

(xvii) "Truth in Lending Act" means the act set forth in 15 U.S.C. 1601 et seq., as amended;

 

(xviii) "Channeling agent" means the third party licensing system that gathers the application information and distributes it to Wyoming for review for the approval or denial decision;

 

(xix) "Clerical or support duties" means:

 

(A) The receipt, collection, distribution and analysis of information common for the processing or underwriting of a residential mortgage loan; and

 

(B) Communicating with a consumer to obtain the information necessary for the processing or underwriting of a loan, to the extent that such communication does not include offering or negotiating loan rates or terms, or counseling consumers about residential mortgage loan rates or terms.

 

(xx) "Company" means a sole proprietorship, partnership, corporation, limited liability company or other entity, public or private;

 

(xxi) "Depository institution" means a company as defined in 12 U.S.C. 1813 of the federal deposit insurance act, and includes any credit union;

 

(xxii) "Dwelling" means a residential structure that contains one (1) to four (4) units, whether or not that structure is attached to real property. "Dwelling", if it is used as a residence, includes an individual condominium unit, cooperative unit, mobile home and trailer;

 

(xxiii) "Federal banking agency" means the board of governors of the federal reserve system, the comptroller of the currency, the director of the office of thrift supervision, the national credit union administration or the federal deposit insurance corporation;

 

(xxiv) "Immediate family member" means a spouse, child, sibling, parent, grandparent, grandchild, stepparent, stepchild, stepsibling and any adoptive relationship included in this paragraph;

 

(xxv) "Individual" means a natural person;

 

(xxvi) "Loan processor or underwriter" means an individual who performs clerical or support duties as an employee at the direction of and subject to the supervision and instruction of a licensee, or an exempt person under W.S. 40-23-105;

 

(xxvii) "Mortgage loan originator":

 

(A) Means an individual who for compensation or gain or in the expectation of compensation or gain:

 

(I) Takes a residential mortgage loan application; or

 

(II) Offers or negotiates the terms of a residential mortgage loan.

 

(B) Shall not include any individual engaged solely as a loan processor or underwriter except as otherwise described in W.S. 40-23-124(d);

 

(C) Shall not include a person who only performs real estate brokerage activities and is licensed or registered in accordance with Wyoming law, unless the person is compensated by a lender, a mortgage broker or other mortgage loan originator or by any agent of such lender, mortgage broker or other mortgage loan originator; and

 

(D) Shall not include a person solely involved in extensions of credit relating to timeshare plans.

 

(xxviii) "Nontraditional mortgage product" means any mortgage product other than a thirty (30) year fixed rate mortgage;

 

(xxix) "Real estate brokerage activity" means any activity that involves offering or providing real estate brokerage services to the public, including:

 

(A) Acting as a real estate agent or real estate broker for a buyer, seller, lessor or lessee of real property;

 

(B) Arranging meetings or communicating with any party interested in the sale, purchase, lease, rental or exchange of real property;

 

(C) Negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental or exchange of real property, unless the negotiating relates to the financing of these transactions, which shall then constitute engaging in the business as a mortgage loan originator;

 

(D) Engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under any applicable law; and

 

(E) Offering to engage in any activity, or act in any capacity, described in subparagraph (A), (B), (C) or (D) of this paragraph.

 

(xxx) "Registered mortgage loan originator" means any individual who:

 

(A) Is registered with, and maintains a unique identifier through, the registry; and

 

(B) Meets the definition of mortgage loan originator and is an employee of:

 

(I) A depository institution;

 

(II) A subsidiary that is:

 

(1) Owned and controlled by a depository institution; and

 

(2) Regulated by a federal banking agency; or

 

(III) An institution regulated by the farm credit administration.

 

(xxxi) "Registry" means the nationwide mortgage licensing system and registry which is a mortgage licensing system developed and maintained by the conference of state bank supervisors and the American association of residential mortgage regulators for the licensing and registration of mortgage lenders, mortgage brokers and mortgage loan originators;

 

(xxxii) "Timeshare plan" means as defined in 11 U.S.C. 101(53D);

 

(xxxiii) "Unique identifier" means a number or other identifier assigned by protocols established by the registry;

 

(xxxiv) "This act" means W.S. 40-23-101 through 40-23-133.

 

40-23-103. Powers and duties of commissioner.

 

(a) In addition to any other powers and duties imposed upon the commissioner by law, the commissioner shall:

 

(i) Perform any and all acts necessary to promulgate, administer and enforce the provisions of this act and any rules, regulations, orders, limitations, standards, requirements or licenses issued under this act, and to exercise all incidental powers as necessary to carry out the purposes of this act;

 

(ii) Order any mortgage broker, mortgage lender or mortgage loan originator to cease any activity or practice which the commissioner deems to be deceptive, dishonest, a violation of state or federal laws or regulations or unduly harmful to the interests of the public;

 

(iii) Conduct investigations, issue subpoenas, and hold hearings as necessary to determine whether a person has violated any provision of this act;

 

(iv) Conduct examinations of the books and records of licensees and conduct investigations as necessary and proper for the enforcement of the provisions of this act and the rules promulgated under the authority of this act;

 

(v) Issue orders that are necessary to execute, enforce and effectuate the purposes of this act;

 

(vi) Require that all application, renewal, licensing, examination and all other fees included under this act, except the amount paid for data processing by a nationwide mortgage licensing system and database, shall be deposited by the commissioner with the state treasurer into the financial institutions administration account within the earmarked revenue fund;

 

(vii) Require the mortgage broker to reimburse the borrower for undisclosed or incorrectly disclosed fees pursuant to W.S. 40-23-114(d) and require the mortgage lender to reimburse the borrower for undisclosed or incorrectly disclosed fees pursuant to W.S. 40-23-113(e);

 

(viii) Require a background investigation including fingerprint checks for state and national criminal history record checks as necessary. The commissioner may utilize background checks completed by the division of criminal investigation, other government agencies in this state or in other states, the federal bureau of investigation or a nationwide mortgage licensing system;

 

(ix) Determine the content of application forms and the means by which an applicant applies for, renews or makes changes to a license under this act. The commissioner may require applicants to utilize a nationwide mortgage licensing system and database for the processing of applications and fees.

 

40-23-104. License requirements.

 

(a) With the exception of those persons exempt pursuant to W.S. 40-23-105, on and after July 1, 2005, no company shall engage in mortgage lending activities or mortgage brokering activities without first obtaining a license in accordance with this act.

 

(b) A company engaged in mortgage lending or mortgage brokering activities with any dwelling located in Wyoming shall first obtain a license in accordance with this act.

 

40-23-105. Exemptions from license requirements.

 

(a) The provisions of this act do not apply to:

 

(i) Agencies of the United States and agencies of this state and its political subdivisions;

 

(ii) An owner of real property who offers credit secured by a contract of sale, mortgage or deed of trust on the property sold;

 

(iii) Any person licensed or chartered under the laws of any state or the United States as a bank, savings and loan association, credit union, or trust company or an operating subsidiary of which the person owns or controls eighty percent (80%) or more of the voting stock;

 

(iv) An attorney licensed to practice law in Wyoming who is not principally engaged in the business of negotiating residential mortgage loans when the attorney renders services in the course of his practice as an attorney;

 

(v) Repealed By Laws 2009, Ch. 184, 3.

 

(vi) Any person who purchases or otherwise obtains a residential mortgage loan which has been originated, processed and closed with the borrower by a licensee or by an exempt person, who does not directly or indirectly solicit borrowers in Wyoming for the purpose of making residential mortgage loans, and who does not participate in the negotiation of residential mortgage loans with the borrower. For the purpose of this paragraph, "negotiation of residential mortgage loans" does not include setting the terms under which a person may buy or fund a residential mortgage loan originated by a licensee or exempt person after the residential mortgage loan has closed.

 

40-23-106. Initial licensing and compliance.

 

A person conducting mortgage lending or mortgage brokering activities, as of July 1, 2005 shall, not later than September 30, 2005, apply to the commissioner for a license.

 

40-23-107. Application for license to do business as a mortgage lender or mortgage broker.

 

(a) The commissioner shall receive and act on all applications for licenses to do business as a mortgage lender or mortgage broker. Applications shall be filed in the manner prescribed by the commissioner, shall contain such information as prescribed by the commissioner, shall be updated as prescribed by the commissioner to keep the information current, and shall be accompanied by an application fee not to exceed one thousand dollars ($1,000.00) for the home office location and an amount not to exceed one hundred dollars ($100.00) for each additional location, as set by rule of the commissioner. When an application for licensure is denied or withdrawn, the commissioner shall retain all fees paid by the applicant.

 

(b) An application for license may be granted if the commissioner finds:

 

(i) The financial responsibility and experience, character and fitness of the license applicant, of the owners or persons in charge of the applicant and individuals designated in charge of the applicant's places of business, are such as to warrant belief that the business will be operated honestly and fairly within the purposes of this act;

 

(ii) The applicant has not been convicted of, pled guilty or nolo contendere to, a felony in a domestic, foreign or military court during the seven (7) year period preceding the date of the application for licensing, or at any time preceding such date of application if such felony involved an act of fraud, dishonesty, breach of trust or money laundering;

 

(iii) The applicant has not been the subject of any administrative action or enforcement proceeding by any state or federal government agency involving the revocation of any license or authority substantially equivalent to a license under this act;

 

(iv) The applicant has not filed an application for a license which is false or misleading with respect to any material fact;

 

(v) Repealed By Laws 2008, Ch. 76, 2.

 

(vi) The applicant has provided information on the application as required by the commissioner pursuant to subsection (a) of this section; and

 

(vii) The applicant has not been convicted of, pled guilty or nolo contendere to a misdemeanor in a domestic, foreign or military court involving an act of fraud, dishonesty, breach of trust or money laundering.

 

(c) The commissioner is empowered to conduct investigations as deemed necessary to determine the existence of the requirements in subsection (b) of this section.

 

(d) Upon written request, an applicant is entitled to a hearing on the question of his qualifications for a license if:

 

(i) The commissioner has notified the applicant in writing that his application has been denied, or objections to the application have been filed with the commissioner;

 

(ii) The commissioner has not issued a license within sixty (60) days after a complete application for the license was filed.

 

(e) If a hearing is held, the applicant and those filing objections shall reimburse, pro rata, the commissioner for his reasonable and necessary expenses incurred as a result of the hearing. Notwithstanding any provision under the Wyoming Administrative Procedure Act, a request for hearing shall not be made more than fifteen (15) days after the applicant has received notification by certified mail that the application has been denied and stating in substance the commissioner's finding supporting denial of the application or that objections have been filed and the substance thereof.

 

(f) Every licensee shall license and maintain a home office as a principal location for the transaction of mortgage business. A separate license shall be required for each place of business from which mortgage brokering activities or mortgage lending activities are directly or indirectly conducted. The commissioner may issue additional licenses to the same applicant upon compliance with all the provisions of this act governing the issuance of a single license. Each license shall remain in full force and effect unless the licensee does not satisfy the renewal requirements of W.S. 40-23-109, or the license is relinquished, suspended or revoked. Licenses shall be terminated upon the relinquishment or revocation of a home office license.

 

(g) No licensee shall change the location of any place of business, consolidate two (2) or more locations, open a new location or close any location, without giving the commissioner prior written notice and paying a license modification fee not to exceed one hundred dollars ($100.00) as set by rule of the commissioner.

 

(h) A licensee shall not engage in the business of making or brokering residential mortgage loans at any place of business for which he does not hold a license nor shall he engage in business under any other name than that on the license without the approval of the commissioner.

 

(j) The commissioner may suspend action upon a license application pending resolution of any criminal charges, before any court of competent jurisdiction, against an applicant which would disqualify that applicant if convicted.

 

(k) An applicant shall make complete disclosure of all information required in the application, including information concerning officers, directors, partners, members, managers or employees.

 

40-23-108. Change in control of a licensee.

 

(a) A licensee shall give the commissioner written notice of a proposed change of control of a licensee within fifteen (15) business days after learning of the proposed change of control.

 

(b) The commissioner may require the licensee to provide additional information concerning the proposed persons in control of the licensee. The additional information shall be limited to the same information required of the licensee or persons in control of the licensee as part of its original license or renewal application.

 

(c) The licensee shall reapply and submit the required fees established by rule, not to exceed one thousand dollars ($1,000.00) for a home office location and an amount not to exceed one hundred dollars ($100.00) for each additional location upon a change in the control of the licensee as determined by the commissioner. The license is not transferable nor assignable to the new persons in control of the licensee.

 

(d) Before filing a request for approval to acquire control, a person may request in writing a determination from the commissioner as to whether the person would be considered a person in control of a licensee upon consummation of a proposed transaction. If the commissioner determines that the person would not be a person in control of a licensee, the commissioner shall enter an order stating the proposed person and transaction is not subject to the requirements of subsections (a) through (c) of this section.

 

40-23-109. License renewal and annual report.

 

(a) Each mortgage broker and mortgage lender license issued under this act shall expire on December 31. The license shall be renewed annually not less than thirty (30) days before the stated expiration date. The renewal fee for each license shall not exceed one thousand dollars ($1,000.00) for the home office location and an amount not to exceed one hundred dollars ($100.00) for each additional location, as set by rule of the commissioner.

 

(b) The renewal fee shall be accompanied by a report, in a form prescribed by the commissioner, which shall include:

 

(i) Any material changes to any of the information submitted by the licensee on its original application which have not been reported previously to the commissioner on any other report required to be filed under this act;

 

(ii) Any update necessary on the surety bond;

 

(iii) Any update on civil or criminal proceedings against the licensee or any administrative or enforcement proceedings by any state or federal government agency involving fines, penalties or the revocation or suspension of any business licensee or authority substantially equivalent to a license under this act;

 

(iv) Any other information as the commissioner may deem necessary.

 

40-23-110. Surety bonds.

 

(a) All licensees shall maintain a surety bond to the state of Wyoming in accordance with this section. The surety bond shall be used to cover individual loan originators employed or under contract with a licensee. The bond to be maintained shall be in the amount:

 

(i) Until December 31, 2009, of twenty-five thousand dollars ($25,000.00). This amount shall be increased by an additional sum of ten thousand dollars ($10,000.00) for each licensed office;

 

(ii) Effective January 1, 2010, as established by rule of the commissioner based upon the volume of business activity transacted by the licensee under this act.

 

(b) The surety bond shall be a continuing obligation of the issuing surety. The surety's liability under the bond for any claims made under the bond either individually or in the aggregate shall in no event exceed the face amount of the bond issued. The bond shall be issued by a surety authorized to do business in the state of Wyoming. The bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be placed on file with the commissioner.

 

(c) In the event that a licensee or person employed by or under contract with a licensee has violated any of the provisions of this act or of a rule or order lawfully made pursuant to this act, or federal law or regulation pertaining to the mortgage lending or mortgage brokering, and has damaged any person by such violation, then the bond shall be forfeited and paid by the surety to the state of Wyoming for the benefit of any person so damaged, in an amount sufficient to satisfy the violation or the bond in its entirety if the violation exceeds the amount of the bond.

 

(d) Surety bonds shall remain effective continuously until released in writing by the commissioner. If a bond has not been previously released by the commissioner, the bond shall expire two (2) years after the date of the surrender, revocation or expiration of the license.

 

40-23-111. Examinations and investigations.

 

(a) The commissioner may conduct examinations of any licensee under this act at intervals he deems necessary to determine compliance with this act and other applicable laws, rules and regulations.

 

(b) The commissioner may at any time investigate the loans or business books and records of any licensee or person engaged in mortgage lending or mortgage brokering activities for the purpose of determining compliance with this act or securing information required under this act. For these purposes, the commissioner shall have free and reasonable access to the offices, places of business, books and records of the licensee.

 

(c) If a licensee's or person's records are located outside this state, the licensee or person shall have the option to make them available to the commissioner at a convenient location within this state, or pay the reasonable and necessary expenses for the commissioner or his representative to examine them at the place where they are maintained. The commissioner may designate representatives, including comparable officials of the state in which the records are located, to inspect them on his behalf.

 

(d) Each licensee or person subject to examination or investigation under this act shall pay to the commissioner an amount assessed by the commissioner to cover the direct and indirect cost of examinations or investigations conducted pursuant to this section not to exceed one hundred dollars ($100.00) per hour.

 

40-23-112. Records; confidentiality of records; exception.

 

(a) Every licensee shall maintain records in conformity with generally accepted accounting principles in a manner that will enable the commissioner to determine whether the licensee is complying with the provisions of this act. The recordkeeping system of a licensee shall be sufficient if he makes the required information available. The records need not be kept in the place of business where residential mortgage loans are made, if the commissioner is given free access to the records wherever located. The records pertaining to any loan shall be retained for the period of twenty-five (25) months from the date of loan closing.

 

(b) Except as provided in subsections (c) through (f) of this section, all information or reports obtained by the commissioner from an applicant or licensee are confidential.

 

(c) The commissioner may disclose confidential information to mortgage lending or mortgage brokering supervisory agencies in other states or to federal regulatory authorities or to appropriate prosecuting attorneys.

 

(d) The commissioner may enter into cooperative, coordinating or information sharing agreements with any other supervisory agency or any organization affiliated with or representing one (1) or more mortgage lending or mortgage brokering supervisory agencies with respect to the periodic examination or other supervision of any office in Wyoming of an out-of-state licensee, and the commissioner may accept such parties' reports of examination and reports of investigation in lieu of conducting his own examinations or investigations.

 

(e) The commissioner may enter into contracts with any mortgage lending or mortgage brokering supervisory agency having concurrent jurisdiction over a Wyoming licensee pursuant to this act to engage the services of the agency's examiners at a reasonable rate of compensation. Any such contract shall not be subject to the provisions of W.S. 9-2-1016(b).

 

(f) Except as provided in P.L. 110-289, section 1512, the requirements under any federal law or state law regarding the privacy or confidentiality of any information or material provided to the registry, and any privilege arising under federal or state law, including the rules of any federal or state court, with respect to such information or material, shall continue to apply to such information or material after the information or material has been disclosed to the registry. Such information and any other confidential material obtained by the commissioner may be shared with all state and federal regulatory officials with mortgage industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by federal law or any state law.

 

(g) Information or material that is subject to a privilege or confidentiality under subsection (f) of this section shall not be subject to:

 

(i) Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or agency of the federal government or the respective state; or

 

(ii) Subpoena, discovery or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by the registry with respect to such information or material, the person to whom such information or material pertains waives that privilege, in whole or in part.

 

(h) Any Wyoming law relating to the disclosure of confidential supervisory information or any information or material described in subsection (f) of this section that is inconsistent with subsection (f) of this section shall be superceded by the requirements of this section.

 

(j) This section shall not apply with respect to the information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions against, any mortgage loan originator that is included in the registry for access by the public.

 

(k) This section does not prohibit the commissioner from disclosing to the public a list of persons licensed under this act.

 

40-23-113. Disclosure of mortgage lender fees.

 

(a) Within three (3) working days of taking a mortgage loan application and prior to receiving any consideration, other than third party fees, from the borrower, the mortgage lender shall:

 

(i) Disclose the terms of the loan to the borrower in compliance with the disclosure requirements of the federal Truth-in-Lending Act, its associated regulations, and the federal Real Estate Settlement Procedures Act and its associated regulations and any other applicable federal and state requirements;

 

(ii) If a prepayment penalty may be a condition of the residential mortgage loan offered to a borrower, that fact shall be separately disclosed in writing to the borrower and the borrower shall agree in writing to accept that condition. The disclosure shall state that a prepayment penalty provision imposes a charge if the borrower refinances or pays off the mortgage loan before the date for repayment stated in the loan agreement. The written disclosure shall be in a form prescribed by the commissioner and shall initially be delivered along with the good faith estimate of settlement costs within three (3) business days after accepting an application from the borrower. The disclosure shall subsequently be provided by the lender and signed by the borrower at the same time the borrower is given the final federal Truth-in-Lending Act disclosure.

 

(b) With the exception of a loan cancellation fee, a licensed mortgage lender shall not require a borrower to pay any fees or charges prior to a residential mortgage loan closing, except:

 

(i) Charges actually incurred by the licensee on behalf of the borrower for services which have been rendered by third parties necessary to process the application. These fees may include, but are not limited to, fees for credit reports, flood insurance certifications, property inspections, title insurance commitments, uniform commercial code article 4 lien searches, and appraisals;

 

(ii) A rate lock in fee; and

 

(iii) A commitment fee upon approval of the residential mortgage loan.

 

(c) A loan cancellation fee may be charged and collected by a licensee at any time either prior to the scheduled closing of a residential mortgage loan transaction or subsequent thereto.

 

(d) Any fees charged under the authority of this section shall be reasonable and customary as to the type and the amount of the fee charged.

 

(e) A mortgage lender shall not receive any fee that inures to the benefit of the mortgage lender, either directly or indirectly, if the fee exceeds the fee disclosed on the most recent good faith estimate unless:

 

(i) The need to charge the higher fee was not reasonably foreseeable at the time the good faith estimate was written; and

 

(ii) The mortgage lender has provided to the borrower, no less than three (3) business days prior to the signing of the mortgage loan closing documents, a new good faith estimate of settlement costs, a clear written explanation of the increase in the fee and the reason for charging a fee that exceeds the fee which was previously disclosed.

 

(f) If the fee was originally disclosed as a percentage of the mortgage loan amount and the dollar amount of the fee increases because the mortgage loan amount increases, but the fee as a percentage of the mortgage loan amount does not change, then no redisclosure shall be required unless the fee increased by more than one thousand dollars ($1,000.00).

 

40-23-114. Disclosure of mortgage broker fees.

 

(a) Within three (3) business days of a borrower signing a completed mortgage loan application and before the borrower provides any consideration to the licensee, the licensee shall execute and deliver to the borrower a mortgage brokerage agreement. The mortgage brokerage agreement shall be in writing, signed and dated by both the borrower and the authorized representative of the licensed mortgage broker whose services to the borrower constitute mortgage brokering and shall contain the following information:

 

(i) That the mortgage broker cannot make mortgage loans or issue loan commitments in the mortgage broker's name;

 

(ii) That the mortgage broker cannot guarantee acceptance into any particular mortgage loan program or promise any specific mortgage loan terms or conditions;

 

(iii) A good faith estimate of the fees to be collected, including a credit report fee, property appraisal fee or any other third party fee;

 

(iv) The terms and conditions for obtaining a refund of any fees or arranging for the transfer of third party service work products to another mortgage lender or mortgage broker, if any. The amount of any fees collected in excess of the actual cost shall be returned within sixty (60) days after rejection, withdrawal of an application or closing of the loan.

 

(b) The mortgage brokerage agreement shall be the only agreement between the borrower and licensee with respect to a single mortgage loan transaction, except that the licensed mortgage broker shall also provide to the borrower disclosure statements necessary to comply with the federal Truth-in-Lending Act and its associated regulations, the federal Real Estate Settlement Procedures Act and its associated regulations, and any other applicable federal and state requirements.

 

(c) A licensed mortgage broker shall not require a borrower to pay any fees or charges prior to the mortgage loan closing, except charges actually incurred by the licensed mortgage broker on behalf of the borrower for services from third parties necessary to process the mortgage loan application, such as credit reports and appraisals.

 

(d) A mortgage broker shall not receive any fee that inures to the benefit of the mortgage broker, either directly or indirectly if it exceeds the fee disclosed on the most recent good faith estimate unless:

 

(i) The need to charge the higher fee was not reasonably foreseeable at the time the good faith estimate was written; and

 

(ii) The mortgage broker has provided to the borrower, no less than three (3) business days prior to the signing of the mortgage loan closing documents, a new good faith estimate of settlement costs, a clear written explanation of the increase in the fee and the reason for charging a fee that exceeds that which was previously disclosed.

 

(e) If the fee was originally disclosed as a percentage of the mortgage loan amount, and the dollar amount of the fee increases because the mortgage loan amount increases, but the fee as a percentage of the mortgage loan amount does not change, then no redisclosure shall be required unless the fee increased by more than one thousand dollars ($1,000.00).

 

(f) Any fees charged under the authority of this section shall be reasonable and customary as to the type and the amount of the fee charged.

 

40-23-115. Loan commitments; prepayment penalty disclosure by mortgage broker.

 

(a) A mortgage broker may issue a loan commitment and may furnish a lock-in of the interest rate and program on behalf of the mortgage lender when the mortgage broker has obtained a written or electronically transmitted loan commitment or lock-in for the mortgage loan from the mortgage lender on behalf of the borrower. The loan commitment issued by the mortgage broker to the borrower on behalf of the mortgage lender shall be in the same form and substance as issued by the mortgage lender and shall identify the mortgage lender by name.

 

(i) Repealed By Laws 2008, Ch. 76, 2.

 

(ii) Repealed By Laws 2008, Ch. 76, 2.

 

(iii) Repealed By Laws 2008, Ch. 76, 2.

 

(iv) Repealed By Laws 2008, Ch. 76, 2.

 

(b) If a prepayment penalty is a condition of the residential mortgage loan offered to a borrower, that fact shall be separately disclosed in writing to the borrower and the borrower shall agree in writing to accept that condition. The disclosure shall state that a prepayment penalty provision imposes a charge if the borrower refinances or pays off the mortgage loan before the date for repayment stated in the loan agreement. The written disclosure shall be in a form prescribed by the commissioner and shall be delivered as soon as the condition is known, but no later than the issuance of a commitment, for the mortgage loan product chosen by the borrower.

 

40-23-116. Trust accounts.

 

All monies received from a borrower for payment of third party provider services shall be deemed as held in trust immediately upon receipt. All such trust funds shall be deposited, prior to the end of the third business day following receipt of the funds, in a trust account of a federally insured financial institution. All trust account funds collected under this act shall remain on deposit in a noninterest bearing trust account until disbursement. The trust account shall be designated and maintained for the benefit of borrowers. Monies maintained in the trust account shall be exempt from execution, attachment or garnishment. A mortgage lender or mortgage broker shall not in any way encumber the corpus of the trust account or commingle any other operating funds with trust account funds. Withdrawals from the trust account shall be only for the payment of bona fide services rendered by a third party provider or for refunds to a borrower.

 

40-23-117. Prohibited practices.

 

(a) No licensee or person required to have a license shall:

 

(i) Pay compensation to, contract with or employ in any manner, any person engaged in mortgage lending or brokering activities who is not properly licensed unless such person is exempt under W.S. 40-23-105;

 

(ii) Obtain any exclusive dealing or exclusive agency agreement from any borrower;

 

(iii) Delay closing of any residential mortgage loan for the purpose of increasing interest, costs, fees or charges payable by the borrower;

 

(iv) Accept any fees at closing which were not previously disclosed fully to the borrower;

 

(v) Obtain any agreement or instrument in which blanks are left to be filled in after execution;

 

(vi) Engage in any misrepresentation in connection with a residential mortgage loan;

 

(vii) Directly or indirectly make any statement regarding value, except that a copy of the sales contract for purchase transactions may be provided, or make or provide payment of any kind to any in-house or fee appraiser for the purpose of influencing the independent judgment of the appraiser with respect to the value of any real estate which is to be covered by a residential mortgage loan;

 

(viii) Make any false promises likely to influence or persuade, or pursue a course of misrepresentations and false promises through agents, solicitors, advertising or otherwise;

 

(ix) Misrepresent, circumvent or conceal any of the material particulars or the nature thereof, regarding a transaction to which it is a party;

 

(x) Enter into any agreement, with or without the payment of a fee, to fix in advance a particular interest rate or other term in a residential mortgage loan unless written confirmation of the agreement is delivered to the borrower.

 

40-23-118. License suspension or revocation.

 

(a) The commissioner may suspend, not to exceed six (6) months, or revoke a license if the commissioner finds:

 

(i) Any fact or condition exists that, if it had existed at the time when the licensee applied for its license, would have been grounds for denying the application;

 

(ii) The licensee violated any provision of this act or any rule or order validly promulgated by the commissioner;

 

(iii) The licensee is conducting its business in an unsafe or unsound manner;

 

(iv) The licensee refuses to permit the commissioner to make any examination authorized by this act;

 

(v) The licensee willfully fails to make any report required by this act;

 

(vi) The competence, experience, character or general fitness of the licensee indicates that it is not in the public interest to permit the licensee to continue to conduct business;

 

(vii) The bond of the licensee has been revoked, cancelled, expired or otherwise is not effective;

 

(viii) The licensee or any partner, officer, director, manager or employee of the licensee has been convicted of a felony or misdemeanor involving any aspect of the mortgage lending business, breach of trust, or fraudulent or dishonest dealing;

 

(ix) The licensee or any partner, officer, director, manager or employee of the licensee has had a license substantially equivalent to a license under this act, and issued by another state, denied, revoked or suspended under the laws of that state;

 

(x) The licensee has filed an application for a license which as of the date the license was issued, or as of the date of an order denying, suspending or revoking a license, was incomplete in any material respect or contained any statement that was, in light of the circumstances under which it was made, false or misleading with respect to any material fact.

 

(b) Notwithstanding any provision of the Wyoming Administrative Procedure Act, if the commissioner finds that probable cause for revocation of a license exists and that enforcement of this act and the public interest require immediate suspension of the license pending investigation, he may, after a hearing upon five (5) days written notice, enter an order suspending the license for not more than thirty (30) days.

 

(c) The commissioner may, in his discretion, reinstate a license, terminate a suspension or grant a new license to a person whose license has been revoked or suspended if no fact or condition then exists which clearly would justify the commissioner in refusing to grant a license.

 

(d) For purposes of this section, "licensee" shall also mean a licensed mortgage loan originator pursuant to W.S. 40-23-124.

 

40-23-119. Orders to cease and desist.

 

(a) If the commissioner determines that a violation of this act or of a rule adopted or an order issued under this act by a licensee is likely to cause immediate and irreparable harm to the licensee, its customers or the public as a result of the violation or cause insolvency of the licensee, the commissioner may issue an order requiring the licensee to cease and desist from the violation. The order becomes effective upon service upon the licensee.

 

(b) If the commissioner determines that a person is conducting mortgage lending or mortgage brokering activities governed under this act without a valid license, the commissioner may issue an order requiring the unlicensed person to cease and desist from mortgage lending or mortgage brokering activities. The order becomes effective upon service upon the unlicensed person.

 

(c) Before issuing a final cease and desist order under subsections (a) and (b) of this section, the commissioner shall serve notice of intent to issue the order upon the person being ordered to cease and desist. The notice shall be in writing and shall direct the person to discontinue the violations of law and cease and desist mortgage lending or mortgage brokering activities. The notice shall be served by certified mail return receipt requested to the last known address of the person or shall be served as provided by the Wyoming Rules of Civil Procedure. Notice of the order shall include:

 

(i) A statement of the grounds for issuing the proposed order, including a citation to the statute or rule involved;

 

(ii) A statement of the facts in support of the allegations;

 

(iii) A statement informing the person of the right to a hearing on the order.

 

(d) In an emergency, the commissioner may petition the district court for the issuance of a temporary restraining order.

 

(e) An order to cease and desist becomes effective upon service upon the person.

 

(f) An order to cease and desist remains effective and enforceable pending the completion of an administrative proceeding pursuant to the Wyoming Administrative Procedure Act.

 

(g) A person served with an order to cease and desist for violating this act may petition the district court for a judicial order setting aside, limiting or suspending the enforcement, operation or effectiveness of the order pending the completion of an administrative proceeding pursuant to the Wyoming Administrative Procedure Act.

 

(h) The commissioner shall commence a contested case proceeding within twenty (20) days after issuing an order to cease and desist.

 

40-23-120. Consent orders.

 

The commissioner may enter into a consent order at any time with a person to resolve a matter arising under this act. A consent order shall be signed by the person to whom it is issued or by the person's authorized representative and shall indicate agreement with the terms contained in the order. A consent order may provide that it does not constitute an admission by a person that this act or a rule adopted or an order issued under this act has been violated.

 

40-23-121. Civil penalties.

 

The commissioner may impose a civil penalty upon a person who violates this act or a rule adopted or an order issued under this act in an amount not to exceed five hundred dollars ($500.00) per day for each day the violation is outstanding, plus the state's costs and expenses for the investigation and prosecution of the matter, including reasonable attorney's fees. Any penalties collected pursuant to this section shall be deposited in the public school fund of the appropriate county as required by article 7, section 5 of the Wyoming constitution.

 

40-23-122. Criminal penalties.

 

(a) A person who intentionally makes a false statement, misrepresentation or false certification in a record filed or required to be maintained under this act or who intentionally makes a false entry or omits a material entry in the record is guilty of a felony, punishable by not less than three (3) years imprisonment or a fine of not less than ten thousand dollars ($10,000.00), or both.

 

(b) An individual who knowingly engages in any activity for which a license is required under this act, without being licensed under this act is guilty of a felony punishable by not less than three (3) years imprisonment or a fine of not less than ten thousand dollars ($10,000.00), or both.

 

(c) A person, except an individual, who knowingly engages in any activity for which a license is required under this act, without being licensed under this act is guilty of a misdemeanor punishable by a fine of not less than twenty-five thousand dollars ($25,000.00).

 

40-23-123. Hearings.

 

Except as otherwise provided in W.S. 40-23-103(a)(vii), 40-23-108(c) and 40-23-109, the commissioner shall not suspend or revoke a license, issue an order to cease and desist or assess a civil penalty without notice and an opportunity to be heard.

 

40-23-124. Loan originator licensing; registration; rulemaking.

 

(a) An individual, unless specifically exempted under subsection (c) of this section, shall not engage in the business of a mortgage loan originator for any dwelling located in Wyoming without first obtaining and maintaining annually a license in accordance with this act. Each licensed mortgage loan originator shall register with and maintain a valid unique identifier issued by the registry.

 

(b) In order to facilitate an orderly transition to licensing and minimize disruption in the marketplace, the effective date for subsection (a) of this section shall be July 1, 2010.

 

(c) An individual is exempt from subsection (a) of this section if he is:

 

(i) A registered mortgage loan originator, when acting for an entity described in W.S. 40-23-102(a)(xxx)(B)(I), (II) or (III);

 

(ii) An individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual;

 

(iii) An individual who offers or negotiates terms of a residential mortgage loan secured by a dwelling that serves as the individual's residence;

 

(iv) A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney's representation of the client, unless the attorney is compensated by a lender, a mortgage broker or other mortgage loan originator or by any agent of such lender, mortgage broker or other mortgage loan originator;

 

(v) An individual engaging solely in loan processor or underwriter activities, who does not represent to the public, through advertising or other means of communicating or providing information including the use of business cards, stationery, brochures, signs, rate lists or other promotional items, that the individual can or will perform any of the activities of a mortgage loan originator.

 

(d) A loan processor or underwriter who is an independent contractor may not engage in the activities of a loan processor or underwriter unless the independent contractor, loan processor or underwriter obtains and maintains a license pursuant to subsection (a) of this section. Each independent contractor, loan processor or underwriter licensed as a mortgage loan originator shall have and maintain a valid unique identifier issued by the registry.

 

(e) For the purposes of implementing an orderly and efficient licensing process the commissioner may establish licensing rules or regulations and interim procedures for licensing and acceptance of applications.

 

40-23-125. Loan originator application; processing.

 

(a) Applicants for a mortgage loan originator license shall apply in a form prescribed by the commissioner. Each application form shall contain content as set forth by rule of the commissioner and may be changed or updated as necessary by the commissioner in order to carry out the purposes of this act.

 

(b) In order to fulfill the purposes of this act, the commissioner may establish relationships or contracts with the registry or other entities designated by the registry to collect and maintain records and process transaction fees or other fees related to licensees or other persons subject to this act.

 

(c) In connection with an application for licensing as a mortgage loan originator, the applicant shall, at a minimum, furnish to the registry information concerning the applicant's identity, including:

 

(i) Fingerprints for submission to the federal bureau of investigation, and any governmental agency or entity authorized to receive such information for a state, national and international criminal history background check; and

 

(ii) Personal history and experience, including the submission of authorization for the registry and the commissioner to obtain:

 

(A) An independent credit report obtained from a consumer reporting agency described in section 603(p) of the Fair Credit Reporting Act; and

 

(B) Information related to any administrative, civil or criminal findings by any governmental jurisdiction.

 

(d) For the purposes of this section and in order to reduce the points of contact which the federal bureau of investigation may have to maintain for purposes of paragraph (c)(i) of this section and subparagraph (c)(ii)(B) of this section, the commissioner may use the registry as a channeling agent for requesting information from and distributing information to the department of justice or any governmental agency.

 

(e) For the purposes of this section and in order to reduce the points of contact which the commissioner may have to maintain for purposes of subparagraphs (c)(ii)(A) and (B) of this section, the commissioner may use the registry as a channeling agent for requesting and distributing information to and from any source so directed by the commissioner.

 

(f) Each application submitted under subsection (a) of this section shall be accompanied by an application fee not to exceed three hundred dollars ($300.00), as established by rule of the commissioner. When an application for licensure is denied or withdrawn, the commissioner shall retain all fees paid by the applicant.

 

40-23-126. Issuance of loan originator license.

 

(a) The commissioner shall not issue a mortgage loan originator license unless the commissioner makes at a minimum the following findings:

 

(i) The applicant has never had a mortgage loan originator license revoked in any governmental jurisdiction, except that a subsequent formal vacation of such revocation shall not be deemed a revocation;

 

(ii) The applicant has not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign or military court:

 

(A) During the seven (7) year period preceding the date of the application for licensing and registration; or

 

(B) At any time preceding the date of application, if the felony involved an act of fraud, dishonesty, or a breach of trust or money laundering;

 

(C) A pardon of a conviction shall not be a conviction for the purposes of this paragraph.

 

(iii) The applicant has demonstrated financial responsibility, character and general fitness such as to command the confidence of the community and to warrant a determination that the mortgage loan originator will operate honestly, fairly and efficiently within the purposes of this act;

 

(iv) The applicant has completed the prelicensing education requirement pursuant to W.S. 40-23-127;

 

(v) The applicant has passed a written test that meets the test requirement of W.S. 40-23-128.

 

(b) For purposes of paragraph (a)(iii) of this section, a person has shown that he is not financially responsible when he has shown a disregard in the management of his own financial condition. A determination that an individual has not shown financial responsibility shall include, but not be limited to:

 

(i) Having any outstanding judgment, except a judgment solely as a result of medical expenses;

 

(ii) Having any outstanding tax lien or other government lien;

 

(iii) Having any foreclosure within the past three (3) years;

 

(iv) Having a pattern of seriously delinquent accounts within the past three (3) years.

 

(c) Upon written request, an applicant is entitled to a hearing on the question of his qualifications for a license if:

 

(i) The commissioner has notified the applicant in writing that his application has been denied, or objections to the application have been filed with the commissioner;

 

(ii) The commissioner has not issued a license within sixty (60) days after a complete application for the license was filed.

 

(d) If a hearing is held, the applicant and those filing objections shall reimburse, pro rata, the commissioner for his reasonable and necessary expenses incurred as a result of the hearing. Notwithstanding any provision under the Wyoming Administrative Procedure Act, a request for hearing shall not be made more than fifteen (15) days after the applicant has received notification by certified mail that the application has been denied and stating in substance the commissioner's finding supporting denial of the application or that objections have been filed and the substance thereof.

 

40-23-127. Prelicensing and relicensing education of loan originators.

 

(a) In order to meet the prelicensing education requirement referred to in W.S. 40-23-126(a)(iv), a person shall complete at least twenty (20) hours of education approved in accordance with subsection (b) of this section, which shall include at least:

 

(i) Three (3) hours of federal law and regulations related to mortgage origination;

 

(ii) Three (3) hours of ethics, which shall include instruction on fraud, consumer protection and fair lending issues; and

 

(iii) Two (2) hours of training related to lending standards for the nontraditional mortgage product marketplace.

 

(b) For purposes of subsection (a) of this section, prelicensing education courses shall be reviewed and approved by the registry. The review and approval of a prelicensing education course shall include review and approval of the course provider.

 

(c) Nothing in this section shall preclude any prelicensing education course, as approved by the registry, that is provided by the employer of the applicant or an entity which is affiliated with the applicant by an agency contract, or any subsidiary or affiliate of such employer or entity.

 

(d) Prelicensing education may be offered either in a classroom, online or by any other means approved by the registry.

 

(e) The prelicensing education requirements approved by the registry in paragraphs (a)(i), (ii) and (iii) of this section for any state shall be accepted as credit towards completion of prelicensing education requirements in Wyoming.

 

(f) An individual licensed under W.S. 40-23-124 after July 1, 2009 and who subsequently applies to be licensed again:

 

(i) Shall not have to complete prelicensing education requirements;

 

(ii) Shall have completed all the continuing education requirements pursuant to W.S. 40-23-130.

 

40-23-128. Testing of mortgage loan originators.

 

(a) In order to meet the written test requirement under W.S. 40-23-126(a)(v), an individual shall pass, in accordance with the standards established under this section, a qualified written test developed by the registry and administered by a test provider approved by the registry.

 

(b) A written test shall not be treated as a qualified written test for purposes of subsection (a) of this section unless the test adequately measures the applicant's knowledge and comprehension in appropriate subject areas, including:

 

(i) Ethics;

 

(ii) Federal law and regulation pertaining to mortgage origination;

 

(iii) Wyoming law and regulation pertaining to mortgage origination; and

 

(iv) Federal and Wyoming law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace and fair lending issues.

 

(c) Nothing in the section shall prohibit a test provider from providing a test at the location of the employer of the applicant, the location of any subsidiary or affiliate of the employer of the applicant or the location of any entity with which the applicant holds an exclusive arrangement to conduct the business of a mortgage loan originator.

 

(d) An individual shall not be considered to have passed a qualified written test unless the individual achieves a test score of not less than seventy-five percent (75%) correct answers to questions.

 

(e) An individual may retake a test three (3) times with each test taking occurring at least thirty (30) days after the preceding test.

 

(f) After failing three (3) tests, an individual shall wait at least six (6) months before taking the test again.

 

(g) A licensed mortgage loan originator who fails to maintain a valid license for at least five (5) years shall retake the written test. Any time the individual spends working as a registered mortgage loan originator shall not be counted against this five (5) year period.

 

40-23-129. Standards for loan originator license renewal; rulemaking.

 

(a) The minimum standards for license renewal for mortgage loan originators shall include the following:

 

(i) The mortgage loan originator continues to meet the minimum standards for license issuance under W.S. 40-23-126(a)(i) through (v);

 

(ii) The mortgage loan originator has satisfied the annual continuing education requirements described in W.S. 40-23-130;

 

(iii) The mortgage loan originator has paid the license renewal fee not to exceed three hundred dollars ($300.00), as established by rule of the commissioner.

 

(b) Each mortgage loan originator license shall expire on December 31. The license shall be renewed annually by satisfying the minimum standards for license renewal under subsection (a) of this section not less than thirty (30) days before the stated expiration date. The commissioner may establish rules for the reinstatement of expired licenses consistent with the standards established by the registry.

 

40-23-130. Continuing education for mortgage loan originators; rulemaking.

 

(a) In order to meet the annual continuing education requirements referred to in W.S. 40-23-129(a)(ii), a licensed mortgage loan originator shall complete at least eight (8) hours of education approved in accordance with subsection (b) of this section, which shall include at least:

 

(i) Three (3) hours of federal law and regulations relating to mortgage origination;

 

(ii) Two (2) hours of ethics, which shall include instruction on fraud, consumer protection and fair lending issues; and

 

(iii) Two (2) hours of training related to lending standards for the nontraditional mortgage product marketplace.

 

(b) For purposes of section (a) of this section, continuing education courses shall be reviewed and approved by the registry. The review and approval of a continuing education course shall include review and approval of the course provider.

 

(c) Nothing in this section shall preclude any education course, as approved by the registry, that is provided by the employer of the mortgage loan originator or an entity which is affiliated with the mortgage loan originator by an agency contract, or any subsidiary or affiliate of such employer or entity.

 

(d) Continuing education may be offered either in a classroom, online or by any other means approved by the registry.

 

(e) A licensed mortgage loan originator:

 

(i) Except as provided in W.S. 40-23-129(b), shall only receive credit for a continuing education course in the year in which the course is taken; and

 

(ii) Shall not take the same approved course in the same or successive years to meet the annual requirements for continuing education.

 

(f) A licensed mortgage loan originator who is an instructor of an approved continuing education course may receive credit for the licensed mortgage loan originator's own annual continuing education requirement at the rate of two (2) hours of credit for every one (1) hour taught.

 

(g) An individual having successfully completed the education requirements approved by the registry in paragraphs (a)(i), (ii) and (iii) of this section for any state shall be accepted as credit towards completion of continuing education requirements in Wyoming.

 

(h) An individual meeting the requirements of W.S. 40-23-129(a)(i) and (iii) may make up any deficiency in continuing education as established by rule of the commissioner.

 

(j) An individual licensed under W.S. 40-23-124 after July 1, 2009 and who subsequently applies to be licensed again shall complete the continuing education requirements for the last year in which the license was held prior to issuance of a new or renewed license.

 

40-23-131. Mortgage call reports.

 

Each licensee shall submit to the registry reports of condition, which shall be in such form and shall contain all information as required by the registry.

 

40-23-132. Report to the registry.

 

The commissioner shall regularly report violations of this act, as well as enforcement actions and other relevant information, to the registry subject to the provisions contained in W.S. 40-23-112. The commissioner shall establish by rule a process where a mortgage loan originator may challenge information entered into the registry by the commissioner.

 

40-23-133. Unique identifier; rulemaking.

 

The unique identifier of any person originating a residential mortgage loan shall be clearly shown on all residential mortgage loan applications forms, solicitations or advertisements, including business cards or websites and any other documents as established by rule of the commissioner.