
ENROLLED
COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 418
(Senators McCabe and Kessler, original sponsors)
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[Passed April 13, 2001; to take effect July 1, 2001.]
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AN ACT to amend and reenact sections one, two, four, five, six,
seven, eight, nine, twelve and fourteen, article seventeen,
chapter thirty-one of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, all relating to the
regulation of residential mortgage lenders, brokers and
servicers; defining terms; amending licensure exemptions;
providing that licensee bonds are for the benefit of
consumers; extending the time to pass upon a license
application to ninety days; allowing the commissioner to
retain fees to cover administrative costs in the event an
application is denied; increasing license fee; imposing a per-
loan fee; increasing bond for certain brokers; requiring
certain disclosures and recordkeeping; requiring continuing
education for loan originators employed by licensed brokers;
requiring applicants to pay the cost of fingerprint
processing; and authorizing the commissioner to impose fines
and waive certain license application requirements for nonprofits.
Be it enacted by the Legislature of West Virginia:


That sections one, two, four, five, six, seven, eight, nine,
twelve and fourteen, article seventeen, chapter thirty-one of the
code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted, all to read as follows:
ARTICLE 17. WEST VIRGINIA RESIDENTIAL MORTGAGE LENDER, BROKER AND
SERVICER ACT.
§31-17-1. Definitions and general provisions.


As used in this article:


(1) "Primary mortgage loan" means a consumer loan made to an
individual which is secured, in whole or in part, by a primary
mortgage or deed of trust upon any interest in real property used
as
a an owner-occupied residential dwelling with accommodations for
not more than four families;


(2) "Subordinate mortgage loan" means a consumer loan made to
an individual which is secured, in whole or in part, by a mortgage
or deed of trust upon any interest in real property used as
a an
owner-occupied residential dwelling with accommodations for not
more than four families, which property is subject to the lien of
one or more prior recorded mortgages or deeds of trust;


(3) "Person" means an individual, partnership, association,
trust, corporation or any other legal entity, or any combination
thereof;


(4) "Lender" means any person who makes or offers to make or
accepts or offers to accept or purchases or services any primary or
subordinate mortgage loan in the regular course of business. A
person is considered to be acting in the regular course of business if he or she makes or accepts, or offers to make or accept, more
than five primary or subordinate mortgage loans in any one calendar
year;


(5) "Broker" means any person acting in the regular course of
business who, for a fee or commission or other consideration,
negotiates or arranges, or who offers to negotiate or arrange, or
originates, processes or assigns a primary or subordinate mortgage
loan between a lender and a borrower. A person is considered to be
acting in the regular course of business if he or she negotiates or
arranges, or offers to negotiate or arrange, or originates,
processes or assigns any primary or subordinate mortgage loans in
any one calendar year; or if he or she seeks to charge a borrower
or receive from a borrower money or other valuable consideration in
any primary or subordinate mortgage transaction before completing
performance of all broker services that he or she has agreed to
perform for the borrower;


(6) "Brokerage fee" means the fee or commission or other
consideration charged by a broker for the services described in
subdivision (5) of this section;


(7) "Additional charges" means every type of charge arising
out of the making or acceptance of a primary or subordinate
mortgage loan, except finance charges, including, but not limited
to, official fees and taxes, reasonable closing costs and certain
documentary charges and insurance premiums and other charges which
definition is to be read in conjunction with and permitted by
section one hundred nine, article three, chapter forty-six-a of
this code;


(8) "Finance charge" means the sum of all interest and similar charges payable directly or indirectly by the debtor imposed or
collected by the lender incident to the extension of credit as
coextensive with the definition of "loan finance charge" set forth
in section one hundred two, article one, chapter forty-six-a of
this code;


(9) "Commissioner" means the commissioner of banking of this
state;


(10) "Applicant" means a person who has applied for a lender's
or broker's license;


(11) "Licensee" means any person duly licensed by the
commissioner under the provisions of this article as a lender or
broker;


(12) "Amount financed" means the total of the following items
to the extent that payment is deferred:


(a) The cash price of the goods, services or interest in land,
less the amount of any down payment, whether made in cash or in
property traded in;


(b) The amount actually paid or to be paid by the seller
pursuant to an agreement with the buyer to discharge a security
interest in or a lien on property traded in; and


(c) If not included in the cash price:


(i) Any applicable sales, use, privilege, excise or
documentary stamp taxes;


(ii) Amounts actually paid or to be paid by the seller for
registration, certificate of title or license fees; and


(iii) Additional charges permitted by this article;

(13) "Affiliated" means persons under the same ownership or
management control. As to corporations, limited liability companies or partnerships, where common owners manage or control a
majority of the stock, membership interests or general partnership
interests of one or more such corporations, limited liability
companies or partnerships, those persons are considered affiliated.
In addition, persons under the ownership or management control of
the members of an immediate family shall be considered affiliated.
For purposes of this section, "immediate family" means mother,
stepmother, father, stepfather, sister, stepsister, brother,
stepbrother, spouse, child and grandchildren; and

(14) "Servicing" or "servicing a residential mortgage loan"
means through any medium or mode of communication the collection or
remittance for, or the right or obligation to collect or remit for
another lender, note owner or noteholder, payments of principal,
interest, including sales finance charges in a consumer credit
sale, and escrow items as insurance and taxes for property subject
to a residential mortgage loan.
§31-17-2. License required for lender or broker; exemptions.

(a) No person shall engage in this state in the business of
lender or broker unless and until he or she shall first obtain a
license to do so from the commissioner, which license remains
unexpired, unsuspended and unrevoked, and no foreign corporation
shall engage in business in this state unless it is registered with
the secretary of state to transact business in this state.

(b) The provisions of this article do not apply to loans made
by the following:
(1) Federally insured depository institutions;
(2) Regulated consumer lender licensees;
(3) Insurance companies;

(4) Any other lender licensed by and under the regular
supervision and examination for consumer compliance of any agency
of the federal government;

(5) Any agency or instrumentality of this state, federal,
county or municipal government or on behalf of the agency or
instrumentality;
(6) By a nonprofit community development
organization making mortgage loans to promote home ownership or
improvements for the disadvantaged which loans are subject to
federal, state, county or municipal government supervision and
oversight; or

(7) Habitat for Humanity International, Inc. and its
affiliates providing low-income housing within this state.

Loans made subject to this exemption may be assigned,
transferred, sold or otherwise securitized to any person and shall
remain exempt from the provisions of this article, except as to
reporting requirements in the discretion of the commissioner where
the person is a licensee under this article. Nothing herein shall
prohibit a broker licensed under this article from acting as broker
of an exempt loan and receiving compensation as permitted under the
provisions of this article.

(c) A person or entity designated in subsection (b) of this
section may take assignments of a primary or subordinate mortgage
loan from a licensed lender and the assignments of said loans that
they themselves could have lawfully made as exempt from the
provisions of this article under this section do not make that
person or entity subject to the licensing, bonding, reporting or
other provisions of this article except as the defense or claim
would be preserved pursuant to section one hundred two, article two, chapter forty-six-a of this code.

(d) The placement or sale for securitization of a primary or
subordinate mortgage loan into a secondary market by a licensee may
not subject the warehouser or final securitization holder or
trustee to the provisions of this article: Provided, That the
warehouser, final securitization holder or trustee under an
arrangement is either a licensee, or person or entity entitled to
make exempt loans of that type under this section, or the loan is
held with right of recourse to a licensee.
§31-17-4. Applications for licenses; requirements; bonds; fees;
renewals; waivers and reductions; per-loan fee.

(a) Application for a lender's or broker's license shall each
year be submitted in writing under oath, in the form prescribed by
the commissioner, and shall contain the full name and address of
the applicant and, if the applicant is a partnership, limited
liability company or association, of every member thereof, and, if
a corporation, of each officer, director and owner of ten percent
or more of the capital stock thereof and further information as the
commissioner may reasonably require. Any application shall also
disclose the location at which the business of lender or broker is
to be conducted.

(b) At the time of making application for a lender's license,
the applicant therefor shall:

(1) If a foreign corporation, submit a certificate from the
secretary of state certifying that the applicant is registered with
the secretary of state to transact business in this state;

(2) Submit proof that he or she has available for the operation of the business at the location specified in the
application net worth of at least two hundred fifty thousand
dollars;

(3) File with the commissioner a bond in favor of the state
for the benefit of consumers in the amount of one hundred thousand
dollars, in a form and with conditions as the commissioner may
prescribe, and executed by a surety company authorized to do
business in this state;

(4) Pay to the commissioner a license fee of one thousand two
hundred fifty dollars plus the actual cost of fingerprint
processing. If the commissioner shall determine that an
investigation outside this state is required to ascertain facts or
information relative to the applicant or information set forth in
the application, the applicant may be required to advance
sufficient funds to pay the estimated cost of the investigation.
An itemized statement of the actual cost of the investigation
outside this state shall be furnished to the applicant by the
commissioner and the applicant shall pay or shall have returned to
him or her, as the case may be, the difference between his or her
payment in advance of the estimated cost and the actual cost of the
investigation; and

(5) Submit proof that the applicant is a business in good
standing in its state of incorporation, or if not a corporation,
its state of business registration, and a full and complete
disclosure of any litigation or unresolved complaint filed by a
governmental authority or class action lawsuit on behalf of
consumers relating to the operation of the license applicant.

(c) At the time of making application for a broker's license, the applicant therefor shall:

(1) If a foreign corporation, submit a certificate from the
secretary of state certifying that the applicant is registered with
the secretary of state to transact business in this state;

(2) Submit proof that he or she has available for the
operation of the business at the location specified in the
application net worth of at least ten thousand dollars;

(3) File with the commissioner a bond in favor of the state
for the benefit of consumers in the amount of twenty-five thousand
dollars, in a form and with conditions as the commissioner may
prescribe, and executed by a surety company authorized to do
business in this state: Provided, That the bond must be in the
amount of fifty thousand dollars before a broker may participate in
a table-funded residential mortgage loan;

(4) Pay to the commissioner a license fee of three hundred
fifty dollars plus the actual cost of fingerprint processing; and

(5) Submit proof that the applicant is a business in good
standing in its state of incorporation, or if not a corporation,
its state of business registration, and a full and complete
disclosure of any litigation or unresolved complaint filed by a
governmental authority or class action lawsuit on behalf of
consumers relating to the operation of the license applicant.

(d) The aggregate liability of the surety on any bond given
pursuant to the provisions of this section shall in no event exceed
the amount of the bond.

(e) Nonresident lenders and brokers licensed under this
article by their acceptance of the license acknowledge that they are subject to the jurisdiction of the courts of West Virginia and
the service of process pursuant to section one hundred
thirty-seven, article two, chapter forty-six-a of this code and
section thirty-three, article three, chapter fifty-six of this
code.

(f) The commissioner may elect to reduce or waive the
application fees, bond amounts and net worth requirements imposed
by this section for nonprofit corporations whose residential
mortgage lending or brokering activities provide housing primarily
to households or persons below the HUD-established median income
for their area of residence.

(g) Every licensee shall pay a fee of five dollars for each
residential mortgage loan originated, made or brokered in a
calendar year. This fee shall be paid semiannually to the division
of banking and remitted with the report required pursuant to
subsection (b), section eleven of this article for loans made,
brokered or originated during the last six months of the previous
calendar year and with the license renewal application required
pursuant to subsection (b), section seven of this article for the
loans made, brokered or originated in the first six months of that
calendar year. In the event a licensee ceases operation, it shall
remit any fees due since the last reporting period when it
relinquishes its license.
§31-17-5. Refusal or issuance of license.

(a) Upon an applicant's full compliance with the provisions of
section four of this article, the commissioner shall investigate
the relevant facts with regard to the applicant and his or her
application for a lender's or broker's license, as the case may be. Upon the basis of the application and all other information before
him or her, the commissioner shall make and enter an order denying
the application and refusing the license sought if the commissioner
finds that:

(1) The applicant does not have available the net worth
required by the provisions of section four of this article;

(2) The financial responsibility, character, reputation,
experience or general fitness of the applicant, including its
officers, directors, principals and employees, reasonably warrants
the belief that the business will not be operated lawfully and
properly in accordance with the provisions of this article;



(3) The applicant has done any act or has failed or
refused to perform any duty or obligation for which the license
sought could be suspended or revoked were it then issued and
outstanding.

Otherwise, the commissioner shall issue to the applicant a
lender's or broker's license which shall entitle the applicant to
engage in the business of lender or broker, as the case may be,
during the period, unless sooner suspended or revoked, for which
the license is issued.

(b) Every application for a lender's or broker's license shall
be passed upon and the license issued or refused within ninety days
after the applicant therefor has fully complied with the provisions
of section four of this article. Under no circumstances whatever
shall a person or licensee act as a broker and lender in the same
transaction. Whenever an application for a lender's or broker's
license is denied and the license sought is refused, which refusal
has become final, the commissioner shall retain all fees to cover administrative costs of processing the broker or lender
application.
§31-17-6. Minimum net worth to be maintained; bond to be kept in
full force and effect; foreign corporation to remain qualified
to do business in this state.

At all times, a licensee shall: (1) Have available the net
worth required by the provisions of section four of this article;
(2) keep the bond required by said section in full force and
effect; and (3) if the licensee be a foreign corporation, remain
qualified to transact business in this state unless otherwise
exempt.
§31-17-7. Form of license; posting required; license not
transferable or assignable; license may not be franchised;
renewal of license.

(a) It shall be stated on the license, whether it is a
lender's or broker's license, the location at which the business is
to be conducted and the full name of the licensee. A broker's
license shall be conspicuously posted in the licensee's place of
business in this state and a lender's license shall be
conspicuously posted in the licensee's place of business if in this
state. No license shall be transferable or assignable. No
licensee may offer a franchise under that license to another
person. The commissioner may allow licensees to have branch
offices without requiring additional licenses provided the location
of all branch offices is registered with the division of banking by
the licensee. Whenever a licensee changes his or her place of
business to a location other than that set forth in his or her
license and branch registration, he or she shall give written notice thirty days prior to such change to the commissioner.

(b) Every lender's or broker's license shall, unless sooner
suspended or revoked, expire on the thirty-first day of December of
each year and any license may be renewed each year in the same
manner, for the same license fee or fees specified above and upon
the same basis as an original license is issued in accordance with
the provisions of section five of this article. All applications
for the renewal of licenses shall be filed with the commissioner at
least ninety days before the expiration thereof.

(c) The amendments to this article in the year two thousand
are effective on and after the first day of July, two thousand.
Licenses previously issued and in effect on the first day of July,
two thousand, shall be extended for one year and, unless sooner
suspended or revoked, shall expire on the thirty-first day of
December, two thousand one. Any person, not already licensed, who
is operating as a broker or lender on the first day of July, two
thousand, and who is registered with the secretary of state to do
business in the state, may file an application with the
commissioner on or before the first day of August, two thousand. If
issued, such licenses shall, unless sooner suspended or revoked,
expire on the thirty-first day of December, two thousand one.

(d) Beginning with renewal applications in the year two
thousand two, a broker's license may not be renewed unless that
licensee's executive officer certifies to the commissioner on the
renewal application that every loan originator employed by that
licensed broker has received at least seven hours of continuing
education in the prior year. The continuing education must be
related to the laws and regulations applicable to residential mortgage loan origination. Both the course of instruction and the
entity providing such continuing education must receive prior
approval from the commissioner as satisfying the continuing
education requirement established herein before the commissioner
may accept a certification from a licensee. The commissioner shall
make available a list of entities and courses that have been
approved for continuing education hours.
§31-17-8. Maximum interest rate on subordinate loans; prepayment
rebate; maximum points, fees and charges; overriding of
federal limitations; limitations on lien documents;
prohibitions on primary and subordinate mortgage loans; civil
remedy.

(a) The maximum rate of finance charges on or in connection
with any subordinate mortgage loan may not exceed eighteen percent
per year on the unpaid balance of the amount financed.

(b) A borrower shall have the right to prepay his or her debt,
in whole or in part, at any time and shall receive a rebate for any
unearned finance charge, exclusive of any points, investigation
fees and loan origination fees, which rebate shall be computed
under the actuarial method.

(c) Except as provided by section one hundred nine, article
three, chapter forty-six-a of this code and by subsection (g) of
this section, no additional charges may be made, nor may any charge
permitted by this section be assessed unless the loan is made.

(d) Where loan origination fees, investigation fees or points
have been charged by the licensee, the charges may not be imposed
again by the same or affiliated licensee in any refinancing of that
loan or any additional loan on that property made within twenty-four months thereof, unless the new loan has a reasonable, tangible
net benefit to the borrower considering all of the circumstances,
including the terms of both the new and the refinanced loans, the
cost of the new loan and the borrower's circumstances. The licensee
shall document this benefit in writing on a form prescribed by the
commissioner and maintain such documentation in the loan file. To
the extent this subdivision overrides the preemption on limiting
points and other charges on first lien residential mortgage loans
contained in the United States Depository Institutions Deregulation
and Monetary Control Act of 1980, 12 U.S.C. §1735f-7a, the state
law limitations contained in this section shall apply.

(e) Notwithstanding other provisions of this section, a
delinquent charge or "late charge" may be charged on any
installment made ten or more days after the regularly scheduled due
date in accordance with section one hundred twelve or one hundred
thirteen, article three, chapter forty-six-a of this code,
whichever is applicable. The charge may be made only once on any
one installment during the term of the primary or subordinate
mortgage loan.

(f) Hazard insurance may be required by the lender and other
types of insurance may be offered as provided in section one
hundred nine, article three, chapter forty-six-a of this code. The
charges for any insurance shall not exceed the standard rate
approved by the insurance commissioner for the insurance. Proof of
all insurance in connection with primary and subordinate mortgage
loans subject to this article shall be furnished to the borrower
within thirty days from and after the date of application therefor
by the borrower.

(g) Except for fees for services provided by unrelated third
parties for appraisals, inspections, title searches and credit
reports, no application fee may be allowed whether or not the
mortgage loan is consummated; however, the borrower may be required
to reimburse the licensee for actual expenses incurred by the
licensee in a purchase money transaction after acceptance and
approval of a mortgage loan proposal made in accordance with the
provisions of this article which is not consummated because of:

(1) The borrower's willful failure to close the loan; or

(2) The borrower's false or fraudulent representation of a
material fact which prevents closing of the loan as proposed.

(h) No licensee shall make, offer to make, accept or offer to
accept any primary or subordinate mortgage loan except on the terms
and conditions authorized in this article.

(i) No licensee shall induce or permit any borrower to become
obligated to the licensee under this article, directly or
contingently, or both, under more than one subordinate mortgage
loan at the same time for the purpose or with the result of
obtaining greater charges than would otherwise be permitted under
the provisions of this article.

(j) No instrument evidencing or securing a primary or
subordinate mortgage loan shall contain:

(1) Any power of attorney to confess judgment;

(2) Any provision whereby the borrower waives any rights
accruing to him or her under the provisions of this article;

(3) Any requirement that more than one installment be payable
in any one installment period, or that the amount of any
installment be greater or less than that of any other installment, except for the final installment which may be in a lesser amount,
or unless the loan is structured as a revolving line of credit
having no set final payment date;

(4) Any assignment of or order for the payment of any salary,
wages, commissions or other compensation for services, or any part
thereof, earned or to be earned;

(5) A requirement for compulsory arbitration which does not
comply with federal law; or

(6) Blank or blanks to be filled in after the consummation of
the loan. A borrower must be given a copy of every signed document
executed by the borrower at the time of closing.

(k) No licensee shall charge a borrower or receive from a
borrower money or other valuable consideration as compensation
before completing performance of all services the licensee has
agreed to perform for the borrower unless the licensee also
registers and complies with all requirements set forth for credit
service organizations in article six-c, chapter forty-six-a of this
code, including all additional bonding requirements as may be
established therein.

(l) No licensee shall make or broker revolving loans secured
by a primary or subordinate mortgage lien for the retail purchase
of consumer goods and services by use of a lender credit card.

(m) In making any primary or subordinate mortgage loan, no
licensee may, and no primary or subordinate mortgage lending
transaction may, contain terms which:

(1) Collect a fee not disclosed to the borrower; collect any
attorney fee at closing in excess of the fee that has been or will
be remitted to the attorney; collect a fee for a product or service where the product or service is not actually provided; misrepresent
the amount charged by or paid to a third party for a product or
service; or collect duplicate fee or points to act as both broker
and lender for the same mortgage loan, however, fees and points may
be divided between the broker and the lender as they agree, but may
not exceed the total charges otherwise permitted under this
article: Provided, That the fact of any fee, point or compensation
is disclosed to the borrower consistent with the solicitation
representation made to the borrower;

(2) Compensate, whether directly or indirectly, coerce or
intimidate an appraiser for the purpose of influencing the
independent judgment of the appraiser with respect to the value of
real estate that is to be covered by a deed of trust or is being
offered as security according to an application for a primary or
subordinate mortgage loan;

(3) Make or assist in making any primary or subordinate
mortgage loan with the intent that the loan will not be repaid and
that the lender will obtain title to the property through
foreclosure: Provided, That this subdivision shall not apply to
reverse mortgages obtained under the provisions of article
twenty-four, chapter forty-seven of this code;

(4) Require the borrower to pay, in addition to any periodic
interest, combined fees, compensation, yield spread premium or
points of any kind to the lender and broker to arrange, originate,
evaluate, maintain or service a loan secured by any encumbrance on
residential property that exceed, in the aggregate, six percent of
the loan amount financed: Provided, That reasonable closing costs, as defined in section one hundred two, article one, chapter forty-
six-a of this code, payable to unrelated third parties may not be
included within this limitation: Provided, however, That no yield
spread premium is permitted for any loan for which the annual
percentage rate exceeds eighteen percent per year on the unpaid
balance of the amount financed: Provided further, That if no yield
spread premium is charged, the aggregate of periodic interest,
fees, compensation or points can be no greater than five percent of
the loan amount financed. The financing of the fees and points are
permissible and, where included as part of the finance charge, does
not constitute charging interest on interest. To the extent that
this section overrides the preemption on limiting points and other
charges on first lien residential mortgage loans contained in the
United States Depository Institutions Deregulation and Monetary
Control Act of 1980, 12 U.S.C. §1735f-7a, the state law limitations
contained in this section applies;

(5) Secure a primary or subordinate mortgage loan by any
security interest in personal property unless the personal property
is affixed to the residential dwelling or real estate;

(6) Allow or require a primary or subordinate mortgage loan to
be accelerated because of a decrease in the market value of the
residential dwelling that is securing the loan;

(7) Require terms of repayment which do not result in
continuous monthly reduction of the original principal amount of
the loan: Provided, That the provisions of this subdivision may
not apply to reverse mortgage loans obtained under article
twenty-four, chapter forty-seven of this code, home equity, open-end lines of credit, bridge loans used in connection with the
purchase or construction of a new residential dwelling or
commercial loans for multiple residential purchases;

(8) Secure a primary or subordinate mortgage loan in a
principal amount that, when added to the aggregate total of the
outstanding principal balances of all other primary or subordinate
mortgage loans secured by the same property, exceeds the fair
market value of the property on the date that the latest mortgage
loan is made. For purposes of this paragraph, a broker or lender
may rely upon a bona fide written appraisal of the property made by
an independent third-party appraiser, or other evidence of fair
market value, if the broker or lender does not have actual
knowledge that the value is incorrect;

(9) Advise or recommend that the consumer not make timely
payments on an existing loan preceding loan closure of a
refinancing transaction; or

(10) Knowingly violate any provision of any other applicable
state or federal law regulating primary or subordinate mortgage
loans, including, without limitation, chapter forty-six-a of this
code.
§31-17-9. Disclosure; closing statements; other records required;

record-keeping requirements.

(a) Any licensee or person making on his or her own behalf, or
as agent, broker or in other representative capacity on behalf of
any other person, a primary or subordinate mortgage loan shall at
the time of the closing furnish to the borrower a complete and
itemized closing statement which shall show in detail:

(1) The amount and date of the note or primary and subordinate mortgage loan contract and the date of maturity;

(2) The nature of the security;

(3) The finance charge rate per annum and the itemized amount
of finance charges and additional charges;

(4) The principal and total of payments;

(5) Disposition of the principal;

(6) A description of the payment schedule;

(7) The terms on which additional advances, if any, will be
made;

(8) The charge to be imposed for past-due installments;

(9) A description and the cost of insurance required by the
lender or purchased by the borrower in connection with the primary
or subordinate mortgage loan;

(10) The name and address of the borrower and of the lender;
and

(11) That the borrower may prepay the primary or subordinate
mortgage loan, in whole or in part, on any installment date and
that the borrower will receive a rebate in full for any unearned
finance charge.

Such detailed closing statement shall be signed by the broker,
lender or closing representative and a completed and signed copy
thereof is retained by the broker or lender and made available at
all reasonable times to the borrower, the borrower's successor in
interest to the residential property or the authorized agent of the
borrower or the borrower's successor, until the time as the
indebtedness is satisfied in full. Providing a HUD 1 or HUD 1A
settlement statement that provides the disclosures required by this
subsection and the residential mortgage disclosures required by federal law is considered to meet the requirements of this
subsection.

The commissioner may, from time to time, by rules prescribe
additional information to be included in a closing statement.

(b) Upon written request from the borrower, the holder of a
primary or subordinate mortgage loan instrument shall deliver to
the borrower, within ten business days from and after receipt of
the written request, a statement of the borrower's account as
required by subsection two, section one hundred fourteen, article
two, chapter forty-six-a of this code.

(c) Upon satisfaction of a primary or subordinate mortgage
loan obligation in full, the holder of the instrument evidencing or
securing the obligation shall comply with the requirements of
section one, article twelve, chapter thirty-eight of this code in
the prompt release of the lien which had secured the primary or
subordinate mortgage loan obligation.

(d) Upon written request or authorization from the borrower,
the holder of a primary or subordinate mortgage loan instrument
shall send or otherwise provide to the borrower or his or her
designee, within three business days after receipt of the written
request or authorization, a payoff statement of the borrower's
account. Except as provided by this subsection, no charge may be
made for providing the payoff statement. Charges for the actual
expenses associated with using a third-party courier delivery or
expedited mail delivery service may be assessed when this type of
delivery is requested and authorized by the borrower following
disclosure to the borrower of its cost. The payoff information is
provided by mail, telephone, courier, facsimile or other transmission as requested by the borrower or his or her designee.

(e) A licensee shall keep and maintain for thirty-six months
after the date of final entry the business records regarding
residential mortgage loans applied for, brokered, originated or
serviced in the course of its business.
§31-17-12. Grounds for suspension or revocation of license;
suspension and revocation generally; reinstatement or new
license.

(a) The commissioner may suspend or revoke any license issued
hereunder if he or she finds that the licensee or any owner,
director, officer, member, partner, stockholder, employee or agent
of the licensee:

(1) Has knowingly violated any provision of this article or
any order, decision or rule of the commissioner lawfully made
pursuant to the authority of this article; or

(2) Has knowingly made any material misstatement in the
application for the license; or

(3) Does not have available the net worth required by the
provisions of section four of this article; or

(4) Has failed or refused to keep the bond required by section
four of this article in full force and effect; or

(5) In the case of a foreign corporation, does not remain
qualified to do business in this state; or

(6) Has committed any fraud or engaged in any dishonest
activities with respect to any mortgage loan business in this state
or failed to disclose any of the material particulars of any
mortgage loan transaction in this state to anyone entitled to the
information; or

(7) Has otherwise demonstrated bad faith, dishonesty or any
other quality indicating that the business of the licensee in this
state has not been or will not be conducted honestly or fairly
within the purpose of this article. It shall be a demonstration of
bad faith and an unfair or deceptive act or practice to engage in
a pattern of making loans where the consumer has insufficient
sources of income to timely repay the debt and the lender had the
primary intent to acquire the property upon default rather than to
derive profit from the loan. This section may not limit any right
the consumer may have to bring an action for a violation of section
one hundred four, article six, chapter forty-six-a of this code in
an individual case.

The commissioner may also suspend or revoke the license of a
licensee if he or she finds the existence of any ground upon which
the license could have been refused or any ground which would be
cause for refusing a license to the licensee were he or she then
applying for the same. The commissioner may also suspend or revoke
the license of a licensee pursuant to his or her authority under
section thirteen, article two, chapter thirty-one-a of this code.

(b) The suspension or revocation of the license of any
licensee shall not impair or affect the obligation of any
preexisting lawful mortgage loan between the licensee and any
obligor.

(c) The commissioner may reinstate a suspended license, or
issue a new license to a licensee whose license has been revoked,
if the grounds upon which any license was suspended or revoked have
been eliminated or corrected and the commissioner is satisfied that
the grounds are not likely to recur.

(d) In addition to the authority conferred under this section,
the commissioner may impose a fine or penalty not exceeding one
thousand dollars upon any lender or broker required to be licensed
under this chapter who the commissioner determines has violated any
of the provisions of this chapter. For the purposes of this
section, each separate violation is subject to the fine or penalty
herein prescribed and each day after the date of notification,
excluding Sundays and holidays, that an unlicensed person engages
in the business or holds himself or herself out to the general
public as a mortgage lender or broker shall constitute a separate
violation.
§31-17-14. Hearing before commissioner; provisions pertaining to
hearing.

(a) Any applicant or licensee, as the case may be, adversely
affected by an order made and entered by the commissioner in
accordance with the provisions of section thirteen of this article,
if not previously provided the opportunity to a hearing on the
matter, may in writing demand a hearing before the commissioner.
The commissioner may appoint a hearing examiner to conduct the
hearing and prepare a recommended decision. The written demand for
a hearing must be filed with the commissioner within thirty days
after the date upon which the applicant or licensee was served with
a copy of the order. The timely filing of a written demand for
hearing shall stay or suspend execution of the order in question,
pending a final determination, except for an order suspending a
license for failure of the licensee to maintain the bond required
by section four of this article in full force and effect. If a
written demand is timely filed as aforesaid, the aggrieved party is entitled to a hearing as a matter of right.

(b) All of the pertinent provisions of article five, chapter
twenty-nine-a of this code shall apply to and govern the hearing
and the administrative procedures in connection with and following
such hearing, with like effect as if the provisions of the article
were set forth in extenso in this subsection.

(c) For the purpose of conducting any such hearing hereunder,
the commissioner or appointed hearing examiner shall have the power
and authority to issue subpoenas and subpoenas duces tecum in
accordance with the provisions of section one, article five,
chapter twenty-nine-a of this code. All subpoenas and subpoenas
duces tecum are issued and served in the manner, within the time
and for the fees and shall be enforced, as specified in the
section, and all of the section provisions dealing with subpoenas
and subpoenas duces tecum shall apply to subpoenas and subpoenas
duces tecum issued for the purpose of a hearing hereunder.

(d) Any hearing shall be held within twenty days after the
date upon which the commissioner received the timely written demand
therefor unless there is a postponement or continuance. The
commissioner or hearing examiner may postpone or continue any
hearing on his or her own motion or for good cause shown upon the
application of the aggrieved party. At any hearing, the aggrieved
party may represent himself or herself or be represented by any
attorney-at-law admitted to practice before any circuit court of
this state.

(e) After the hearing and consideration of all of the
testimony, evidence and record in the case, the commissioner shall
make and enter an order affirming, modifying or vacating his or her earlier order, or shall make and enter an order as is considered
appropriate, meet and proper. If the commissioner appoints a
hearing examiner then the commissioner must issue his or her final
order within fifteen days of receiving the recommended decision of
the hearing examiner. The order shall be accompanied by findings
of fact and conclusions of law as specified in section three,
article five, chapter twenty-nine-a of this code and a copy of the
order and accompanying findings and conclusions shall be served
upon the aggrieved party and his or her attorney of record, if any,
in person or by certified mail, return receipt requested, or in any
other manner in which process in a civil action in this state may
be served. The order of the commissioner is final unless vacated
or modified on judicial review thereof in accordance with the
provisions of section fifteen of this article.