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 "WyomingResidential Mortgage Practices Act."
40-23-102. Definitions.
(a) As used in this act:
(i) "Borrower" means a person who has applied to amortgage lender for a residential mortgage loan or on whose behalf the mortgagelending and mortgage brokering activities are conducted;
(ii) "Commissioner" means the state bankingcommissioner;
(iii) "Control" means owning twenty-five percent (25%)or more of the voting share of the licensee or having the power to direct thelicensee's management or policies;
(iv) "Division" means the division of banking withinthe department of audit;
(v) "Licensee" means a company licensed under thisact as a mortgage broker or a mortgage lender;
(vi) "Mortgage broker" means any company, who forcompensation, or in the expectation of compensation, assists a person inobtaining or applying to obtain a residential mortgage loan or holds itself outas being able to assist a person in obtaining or applying to obtain aresidential mortgage loan;
(vii) "Mortgage brokerage agreement" means a writtenagreement in which a mortgage broker agrees to assist the borrower in obtaininga residential mortgage loan;
(viii) "Mortgage brokering activities" means forcompensation, either directly or indirectly, assisting or offering to assist inthe preparation of an application for a residential mortgage loan on behalf ofa borrower, or negotiating or offering to negotiate the terms or conditions ofa residential mortgage loan with any person making residential mortgage loans;
(ix) "Mortgage lender" means any company, who makesresidential mortgage loans to borrowers or holds itself out as able to makemortgage loans;
(x) "Mortgage lending activities" means forcompensation, either directly or indirectly, accepting or offering to acceptapplications for making residential mortgage loans;
(xi) "Person" means an individual, soleproprietorship, partnership, corporation, limited liability company or otherentity, public or private;
(xii) "Real Estate Settlement Procedures Act" means theact set forth in 12 U.S.C. 2601 et seq., as amended;
(xiii) "Regulation X" means regulation X as promulgatedby the United States department of housing and urban development and codifiedin 24 CFR part 3500 et seq., as amended;
(xiv) "Regulation Z" means regulation Z as promulgatedby the board of governors of the federal reserve system and codified in 12 CFRpart 226 et seq., as amended;
(xv) "Residential mortgage loan" means a firstmortgage loan made primarily for personal, family or household use that issecured by a mortgage, deed of trust or other equivalent consensual securityinterest on a dwelling or residential real estate in Wyoming upon which isconstructed or intended to be constructed a dwelling;
(xvi) "Residential real property" means real propertyimproved by a one (1) to four (4) family dwelling;
(xvii) "Truth in Lending Act" means the act set forth in15 U.S.C. 1601 et seq., as amended;
(xviii) "Channeling agent" means the third partylicensing system that gathers the application information and distributes it toWyoming for review for the approval or denial decision;
(xix) "Clerical or support duties" means:
(A) The receipt, collection, distribution and analysis ofinformation common for the processing or underwriting of a residential mortgageloan; and
(B) Communicating with a consumer to obtain the informationnecessary for the processing or underwriting of a loan, to the extent that suchcommunication does not include offering or negotiating loan rates or terms, orcounseling consumers about residential mortgage loan rates or terms.
(xx) "Company" means a sole proprietorship,partnership, corporation, limited liability company or other entity, public orprivate;
(xxi) "Depository institution" means a company asdefined in 12 U.S.C. 1813 of the federal deposit insurance act, and includesany credit union;
(xxii) "Dwelling" means a residential structure thatcontains one (1) to four (4) units, whether or not that structure is attachedto real property. "Dwelling", if it is used as a residence, includesan individual condominium unit, cooperative unit, mobile home and trailer;
(xxiii) "Federal banking agency" means the board ofgovernors of the federal reserve system, the comptroller of the currency, thedirector of the office of thrift supervision, the national credit unionadministration or the federal deposit insurance corporation;
(xxiv) "Immediate family member" means a spouse, child,sibling, parent, grandparent, grandchild, stepparent, stepchild, stepsiblingand any adoptive relationship included in this paragraph;
(xxv) "Individual" means a natural person;
(xxvi) "Loan processor or underwriter" means anindividual who performs clerical or support duties as an employee at thedirection of and subject to the supervision and instruction of a licensee, oran exempt person under W.S. 40-23-105;
(xxvii) "Mortgage loan originator":
(A) Means an individual who for compensation or gain or in theexpectation of compensation or gain:
(I) Takes a residential mortgage loan application; or
(II) Offers or negotiates the terms of a residential mortgageloan.
(B) Shall not include any individual engaged solely as a loanprocessor or underwriter except as otherwise described in W.S. 40-23-124(d);
(C) Shall not include a person who only performs real estatebrokerage activities and is licensed or registered in accordance with Wyominglaw, unless the person is compensated by a lender, a mortgage broker or othermortgage loan originator or by any agent of such lender, mortgage broker orother mortgage loan originator; and
(D) Shall not include a person solely involved in extensions ofcredit relating to timeshare plans.
(xxviii) "Nontraditional mortgage product" means anymortgage product other than a thirty (30) year fixed rate mortgage;
(xxix) "Real estate brokerage activity" means anyactivity that involves offering or providing real estate brokerage services tothe public, including:
(A) Acting as a real estate agent or real estate broker for abuyer, seller, lessor or lessee of real property;
(B) Arranging meetings or communicating with any partyinterested in the sale, purchase, lease, rental or exchange of real property;
(C) Negotiating, on behalf of any party, any portion of acontract relating to the sale, purchase, lease, rental or exchange of realproperty, unless the negotiating relates to the financing of thesetransactions, which shall then constitute engaging in the business as amortgage loan originator;
(D) Engaging in any activity for which a person engaged in theactivity is required to be registered or licensed as a real estate agent orreal 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 anyindividual who:
(A) Is registered with, and maintains a unique identifierthrough, the registry; and
(B) Meets the definition of mortgage loan originator and is anemployee 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 mortgagelicensing system and registry which is a mortgage licensing system developedand maintained by the conference of state bank supervisors and the Americanassociation of residential mortgage regulators for the licensing andregistration of mortgage lenders, mortgage brokers and mortgage loanoriginators;
(xxxii) "Timeshare plan" means as defined in 11 U.S.C. 101(53D);
(xxxiii) "Unique identifier" means a number or otheridentifier assigned by protocols established by the registry;
(xxxiv) "This act" means W.S. 40-23-101 through40-23-133.
40-23-103. Powers and duties of commissioner.
(a) In addition to any other powers and duties imposed upon thecommissioner 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 ofthis act;
(ii) Order any mortgage broker, mortgage lender or mortgage loanoriginator to cease any activity or practice which the commissioner deems to bedeceptive, dishonest, a violation of state or federal laws or regulations or undulyharmful to the interests of the public;
(iii) Conduct investigations, issue subpoenas, and hold hearingsas necessary to determine whether a person has violated any provision of thisact;
(iv) Conduct examinations of the books and records of licenseesand conduct investigations as necessary and proper for the enforcement of theprovisions of this act and the rules promulgated under the authority of thisact;
(v) Issue orders that are necessary to execute, enforce andeffectuate the purposes of this act;
(vi) Require that all application, renewal, licensing,examination and all other fees included under this act, except the amount paidfor data processing by a nationwide mortgage licensing system and database,shall be deposited by the commissioner with the state treasurer into thefinancial institutions administration account within the earmarked revenuefund;
(vii) Require the mortgage broker to reimburse the borrower forundisclosed or incorrectly disclosed fees pursuant to W.S. 40-23-114(d) andrequire the mortgage lender to reimburse the borrower for undisclosed orincorrectly disclosed fees pursuant to W.S. 40-23-113(e);
(viii) Require a background investigation including fingerprintchecks for state and national criminal history record checks as necessary. Thecommissioner may utilize background checks completed by the division ofcriminal investigation, other government agencies in this state or in otherstates, the federal bureau of investigation or a nationwide mortgage licensingsystem;
(ix) Determine the content of application forms and the means bywhich an applicant applies for, renews or makes changes to a license under thisact. The commissioner may require applicants to utilize a nationwide mortgagelicensing 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 mortgagelending activities or mortgage brokering activities without first obtaining alicense in accordance with this act.
(b) A company engaged in mortgage lending or mortgage brokeringactivities with any dwelling located in Wyoming shall first obtain a license inaccordance 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 stateand its political subdivisions;
(ii) An owner of real property who offers credit secured by acontract of sale, mortgage or deed of trust on the property sold;
(iii) Any person licensed or chartered under the laws of anystate or the United States as a bank, savings and loan association, creditunion, or trust company or an operating subsidiary of which the person owns orcontrols eighty percent (80%) or more of the voting stock;
(iv) An attorney licensed to practice law in Wyoming who is notprincipally engaged in the business of negotiating residential mortgage loanswhen the attorney renders services in the course of his practice as anattorney;
(v) Repealed By Laws 2009, Ch. 184, 3.
(vi) Any person who purchases or otherwise obtains a residentialmortgage loan which has been originated, processed and closed with the borrowerby a licensee or by an exempt person, who does not directly or indirectlysolicit borrowers in Wyoming for the purpose of making residential mortgageloans, and who does not participate in the negotiation of residential mortgageloans with the borrower. For the purpose of this paragraph, "negotiationof residential mortgage loans" does not include setting the terms underwhich a person may buy or fund a residential mortgage loan originated by alicensee or exempt person after the residential mortgage loan has closed.
40-23-106. Initial licensing and compliance.
A person conducting mortgage lending ormortgage brokering activities, as of July 1, 2005 shall, not later thanSeptember 30, 2005, apply to the commissioner for a license.
40-23-107. Application for license to do business as a mortgage lenderor mortgage broker.
(a) The commissioner shall receive and act on all applicationsfor licenses to do business as a mortgage lender or mortgage broker. Applications shall be filed in the manner prescribed by the commissioner, shallcontain such information as prescribed by the commissioner, shall be updated asprescribed by the commissioner to keep the information current, and shall beaccompanied by an application fee not to exceed one thousand dollars($1,000.00) for the home office location and an amount not to exceed onehundred dollars ($100.00) for each additional location, as set by rule of thecommissioner. When an application for licensure is denied or withdrawn, thecommissioner shall retain all fees paid by the applicant.
(b) An application for license may be granted if thecommissioner finds:
(i) The financial responsibility and experience, character andfitness of the license applicant, of the owners or persons in charge of theapplicant and individuals designated in charge of the applicant's places ofbusiness, are such as to warrant belief that the business will be operatedhonestly and fairly within the purposes of this act;
(ii) The applicant has not been convicted of, pled guilty ornolo contendere to, a felony in a domestic, foreign or military court duringthe 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 anact of fraud, dishonesty, breach of trust or money laundering;
(iii) The applicant has not been the subject of anyadministrative action or enforcement proceeding by any state or federalgovernment agency involving the revocation of any license or authoritysubstantially equivalent to a license under this act;
(iv) The applicant has not filed an application for a licensewhich 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 applicationas required by the commissioner pursuant to subsection (a) of this section; and
(vii) The applicant has not been convicted of, pled guilty ornolo contendere to a misdemeanor in a domestic, foreign or military courtinvolving an act of fraud, dishonesty, breach of trust or money laundering.
(c) The commissioner is empowered to conduct investigations asdeemed necessary to determine the existence of the requirements in subsection(b) of this section.
(d) Upon written request, an applicant is entitled to a hearingon the question of his qualifications for a license if:
(i) The commissioner has notified the applicant in writing thathis application has been denied, or objections to the application have beenfiled 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 filingobjections shall reimburse, pro rata, the commissioner for his reasonable andnecessary expenses incurred as a result of the hearing. Notwithstanding anyprovision under the Wyoming Administrative Procedure Act, a request for hearingshall not be made more than fifteen (15) days after the applicant has receivednotification by certified mail that the application has been denied and statingin substance the commissioner's finding supporting denial of the application orthat objections have been filed and the substance thereof.
(f) Every licensee shall license and maintain a home office asa principal location for the transaction of mortgage business. A separatelicense shall be required for each place of business from which mortgagebrokering activities or mortgage lending activities are directly or indirectlyconducted. The commissioner may issue additional licenses to the same applicantupon compliance with all the provisions of this act governing the issuance of asingle license. Each license shall remain in full force and effect unless thelicensee does not satisfy the renewal requirements of W.S. 40-23-109, or thelicense is relinquished, suspended or revoked. Licenses shall be terminatedupon the relinquishment or revocation of a home office license.
(g) No licensee shall change the location of any place ofbusiness, consolidate two (2) or more locations, open a new location or closeany location, without giving the commissioner prior written notice and paying alicense modification fee not to exceed one hundred dollars ($100.00) as set byrule of the commissioner.
(h) A licensee shall not engage in the business of making orbrokering residential mortgage loans at any place of business for which he doesnot hold a license nor shall he engage in business under any other name thanthat on the license without the approval of the commissioner.
(j) The commissioner may suspend action upon a licenseapplication pending resolution of any criminal charges, before any court ofcompetent jurisdiction, against an applicant which would disqualify thatapplicant if convicted.
(k) An applicant shall make complete disclosure of all informationrequired 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 aproposed change of control of a licensee within fifteen (15) business daysafter learning of the proposed change of control.
(b) The commissioner may require the licensee to provideadditional information concerning the proposed persons in control of thelicensee. The additional information shall be limited to the same informationrequired of the licensee or persons in control of the licensee as part of itsoriginal license or renewal application.
(c) The licensee shall reapply and submit the required feesestablished by rule, not to exceed one thousand dollars ($1,000.00) for a homeoffice location and an amount not to exceed one hundred dollars ($100.00) foreach additional location upon a change in the control of the licensee asdetermined by the commissioner. The license is not transferable nor assignableto the new persons in control of the licensee.
(d) Before filing a request for approval to acquire control, aperson may request in writing a determination from the commissioner as towhether the person would be considered a person in control of a licensee uponconsummation of a proposed transaction. If the commissioner determines thatthe person would not be a person in control of a licensee, the commissionershall enter an order stating the proposed person and transaction is not subjectto 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 issuedunder this act shall expire on December 31. The license shall be renewedannually not less than thirty (30) days before the stated expiration date. Therenewal 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 formprescribed by the commissioner, which shall include:
(i) Any material changes to any of the information submitted bythe licensee on its original application which have not been reportedpreviously to the commissioner on any other report required to be filed underthis act;
(ii) Any update necessary on the surety bond;
(iii) Any update on civil or criminal proceedings against thelicensee or any administrative or enforcement proceedings by any state orfederal government agency involving fines, penalties or the revocation orsuspension of any business licensee or authority substantially equivalent to alicense under this act;
(iv) Any other information as the commissioner may deemnecessary.
40-23-110. Surety bonds.
(a) All licensees shall maintain a surety bond to the state ofWyoming in accordance with this section. The surety bond shall be used tocover 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 tenthousand dollars ($10,000.00) for each licensed office;
(ii) Effective January 1, 2010, as established by rule of thecommissioner based upon the volume of business activity transacted by the licenseeunder this act.
(b) The surety bond shall be a continuing obligation of theissuing surety. The surety's liability under the bond for any claims madeunder the bond either individually or in the aggregate shall in no event exceedthe face amount of the bond issued. The bond shall be issued by a suretyauthorized to do business in the state of Wyoming. The bond, including any andall riders and endorsements executed subsequent to the effective date of thebond, shall be placed on file with the commissioner.
(c) In the event that a licensee or person employed by or undercontract with a licensee has violated any of the provisions of this act or of arule or order lawfully made pursuant to this act, or federal law or regulationpertaining to the mortgage lending or mortgage brokering, and has damaged anyperson by such violation, then the bond shall be forfeited and paid by thesurety to the state of Wyoming for the benefit of any person so damaged, in anamount sufficient to satisfy the violation or the bond in its entirety if theviolation exceeds the amount of the bond.
(d) Surety bonds shall remain effective continuously untilreleased in writing by the commissioner. If a bond has not been previouslyreleased by the commissioner, the bond shall expire two (2) years after thedate of the surrender, revocation or expiration of the license.
40-23-111. Examinations and investigations.
(a) The commissioner may conduct examinations of any licenseeunder this act at intervals he deems necessary to determine compliance withthis act and other applicable laws, rules and regulations.
(b) The commissioner may at any time investigate the loans orbusiness books and records of any licensee or person engaged in mortgagelending or mortgage brokering activities for the purpose of determiningcompliance with this act or securing information required under this act. Forthese purposes, the commissioner shall have free and reasonable access to theoffices, places of business, books and records of the licensee.
(c) If a licensee's or person's records are located outsidethis state, the licensee or person shall have the option to make them availableto the commissioner at a convenient location within this state, or pay thereasonable and necessary expenses for the commissioner or his representative toexamine them at the place where they are maintained. The commissioner maydesignate representatives, including comparable officials of the state in whichthe records are located, to inspect them on his behalf.
(d) Each licensee or person subject to examination orinvestigation under this act shall pay to the commissioner an amount assessedby the commissioner to cover the direct and indirect cost of examinations orinvestigations conducted pursuant to this section not to exceed one hundreddollars ($100.00) per hour.
40-23-112. Records; confidentiality of records; exception.
(a) Every licensee shall maintain records in conformity withgenerally accepted accounting principles in a manner that will enable thecommissioner to determine whether the licensee is complying with the provisionsof this act. The recordkeeping system of a licensee shall be sufficient if hemakes the required information available. The records need not be kept in theplace of business where residential mortgage loans are made, if thecommissioner is given free access to the records wherever located. The recordspertaining 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 thissection, all information or reports obtained by the commissioner from anapplicant or licensee are confidential.
(c) The commissioner may disclose confidential information tomortgage lending or mortgage brokering supervisory agencies in other states orto federal regulatory authorities or to appropriate prosecuting attorneys.
(d) The commissioner may enter into cooperative, coordinatingor information sharing agreements with any other supervisory agency or anyorganization affiliated with or representing one (1) or more mortgage lendingor mortgage brokering supervisory agencies with respect to the periodic examinationor other supervision of any office in Wyoming of an out-of-state licensee, andthe commissioner may accept such parties' reports of examination and reports ofinvestigation in lieu of conducting his own examinations or investigations.
(e) The commissioner may enter into contracts with any mortgagelending or mortgage brokering supervisory agency having concurrent jurisdictionover a Wyoming licensee pursuant to this act to engage the services of theagency's examiners at a reasonable rate of compensation. Any such contractshall not be subject to the provisions of W.S. 9-2-1016(b).
(f) Except as provided in P.L. 110-289, section 1512, therequirements under any federal law or state law regarding the privacy orconfidentiality of any information or material provided to the registry, andany privilege arising under federal or state law, including the rules of anyfederal or state court, with respect to such information or material, shallcontinue to apply to such information or material after the information ormaterial has been disclosed to the registry. Such information and any otherconfidential material obtained by the commissioner may be shared with all stateand federal regulatory officials with mortgage industry oversight authority withoutthe loss of privilege or the loss of confidentiality protections provided byfederal law or any state law.
(g) Information or material that is subject to a privilege orconfidentiality under subsection (f) of this section shall not be subject to:
(i) Disclosure under any federal or state law governing thedisclosure to the public of information held by an officer or agency of thefederal government or the respective state; or
(ii) Subpoena, discovery or admission into evidence, in anyprivate civil action or administrative process, unless with respect to anyprivilege 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 confidentialsupervisory information or any information or material described in subsection(f) of this section that is inconsistent with subsection (f) of this sectionshall be superceded by the requirements of this section.
(j) This section shall not apply with respect to theinformation or material relating to the employment history of, and publiclyadjudicated disciplinary and enforcement actions against, any mortgage loanoriginator that is included in the registry for access by the public.
(k) This section does not prohibit the commissioner fromdisclosing 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 loanapplication and prior to receiving any consideration, other than third partyfees, from the borrower, the mortgage lender shall:
(i) Disclose the terms of the loan to the borrower incompliance with the disclosure requirements of the federal Truth-in-LendingAct, its associated regulations, and the federal Real Estate SettlementProcedures Act and its associated regulations and any other applicable federaland state requirements;
(ii) If a prepayment penalty may be a condition of theresidential mortgage loan offered to a borrower, that fact shall be separatelydisclosed in writing to the borrower and the borrower shall agree in writing toaccept that condition. The disclosure shall state that a prepayment penaltyprovision imposes a charge if the borrower refinances or pays off the mortgageloan before the date for repayment stated in the loan agreement. The writtendisclosure shall be in a form prescribed by the commissioner and shallinitially be delivered along with the good faith estimate of settlement costswithin three (3) business days after accepting an application from theborrower. The disclosure shall subsequently be provided by the lender andsigned by the borrower at the same time the borrower is given the final federalTruth-in-Lending Act disclosure.
(b) With the exception of a loan cancellation fee, a licensedmortgage lender shall not require a borrower to pay any fees or charges priorto a residential mortgage loan closing, except:
(i) Charges actually incurred by the licensee on behalf of theborrower for services which have been rendered by third parties necessary toprocess the application. These fees may include, but are not limited to, feesfor credit reports, flood insurance certifications, property inspections, titleinsurance commitments, uniform commercial code article 4 lien searches, andappraisals;
(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 alicensee at any time either prior to the scheduled closing of a residentialmortgage loan transaction or subsequent thereto.
(d) Any fees charged under the authority of this section shallbe 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 tothe benefit of the mortgage lender, either directly or indirectly, if the feeexceeds the fee disclosed on the most recent good faith estimate unless:
(i) The need to charge the higher fee was not reasonablyforeseeable at the time the good faith estimate was written; and
(ii) The mortgage lender has provided to the borrower, no lessthan three (3) business days prior to the signing of the mortgage loan closingdocuments, a new good faith estimate of settlement costs, a clear writtenexplanation of the increase in the fee and the reason for charging a fee thatexceeds the fee which was previously disclosed.
(f) If the fee was originally disclosed as a percentage of themortgage loan amount and the dollar amount of the fee increases because themortgage loan amount increases, but the fee as a percentage of the mortgageloan amount does not change, then no redisclosure shall be required unless thefee 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 acompleted mortgage loan application and before the borrower provides anyconsideration to the licensee, the licensee shall execute and deliver to theborrower a mortgage brokerage agreement. The mortgage brokerage agreementshall be in writing, signed and dated by both the borrower and the authorizedrepresentative of the licensed mortgage broker whose services to the borrowerconstitute mortgage brokering and shall contain the following information:
(i) That the mortgage broker cannot make mortgage loans orissue loan commitments in the mortgage broker's name;
(ii) That the mortgage broker cannot guarantee acceptance intoany particular mortgage loan program or promise any specific mortgage loanterms 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 partyfee;
(iv) The terms and conditions for obtaining a refund of any feesor arranging for the transfer of third party service work products to anothermortgage lender or mortgage broker, if any. The amount of any fees collectedin excess of the actual cost shall be returned within sixty (60) days afterrejection, withdrawal of an application or closing of the loan.
(b) The mortgage brokerage agreement shall be the onlyagreement between the borrower and licensee with respect to a single mortgageloan transaction, except that the licensed mortgage broker shall also provideto the borrower disclosure statements necessary to comply with the federalTruth-in-Lending Act and its associated regulations, the federal Real EstateSettlement Procedures Act and its associated regulations, and any otherapplicable federal and state requirements.
(c) A licensed mortgage broker shall not require a borrower topay any fees or charges prior to the mortgage loan closing, except chargesactually incurred by the licensed mortgage broker on behalf of the borrower forservices 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 tothe benefit of the mortgage broker, either directly or indirectly if it exceedsthe fee disclosed on the most recent good faith estimate unless:
(i) The need to charge the higher fee was not reasonablyforeseeable at the time the good faith estimate was written; and
(ii) The mortgage broker has provided to the borrower, no lessthan three (3) business days prior to the signing of the mortgage loan closingdocuments, a new good faith estimate of settlement costs, a clear writtenexplanation of the increase in the fee and the reason for charging a fee thatexceeds that which was previously disclosed.
(e) If the fee was originally disclosed as a percentage of themortgage loan amount, and the dollar amount of the fee increases because themortgage loan amount increases, but the fee as a percentage of the mortgageloan amount does not change, then no redisclosure shall be required unless thefee increased by more than one thousand dollars ($1,000.00).
(f) Any fees charged under the authority of this section shallbe reasonable and customary as to the type and the amount of the fee charged.
40-23-115. Loan commitments; prepayment penalty disclosure by mortgagebroker.
(a) A mortgage broker may issue a loan commitment and mayfurnish a lock-in of the interest rate and program on behalf of the mortgagelender when the mortgage broker has obtained a written or electronicallytransmitted loan commitment or lock-in for the mortgage loan from the mortgagelender on behalf of the borrower. The loan commitment issued by the mortgagebroker to the borrower on behalf of the mortgage lender shall be in the sameform and substance as issued by the mortgage lender and shall identify themortgage 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 residentialmortgage loan offered to a borrower, that fact shall be separately disclosed inwriting to the borrower and the borrower shall agree in writing to accept thatcondition. The disclosure shall state that a prepayment penalty provisionimposes a charge if the borrower refinances or pays off the mortgage loanbefore the date for repayment stated in the loan agreement. The writtendisclosure shall be in a form prescribed by the commissioner and shall bedelivered as soon as the condition is known, but no later than the issuance ofa commitment, for the mortgage loan product chosen by the borrower.
40-23-116. Trust accounts.
All monies received from a borrower forpayment of third party provider services shall be deemed as held in trustimmediately upon receipt. All such trust funds shall be deposited, prior tothe end of the third business day following receipt of the funds, in a trustaccount of a federally insured financial institution. All trust account fundscollected under this act shall remain on deposit in a noninterest bearing trustaccount until disbursement. The trust account shall be designated andmaintained for the benefit of borrowers. Monies maintained in the trustaccount shall be exempt from execution, attachment or garnishment. A mortgagelender or mortgage broker shall not in any way encumber the corpus of the trustaccount or commingle any other operating funds with trust account funds. Withdrawals from the trust account shall be only for the payment of bona fideservices 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 notproperly licensed unless such person is exempt under W.S. 40-23-105;
(ii) Obtain any exclusive dealing or exclusive agency agreementfrom any borrower;
(iii) Delay closing of any residential mortgage loan for thepurpose of increasing interest, costs, fees or charges payable by the borrower;
(iv) Accept any fees at closing which were not previouslydisclosed fully to the borrower;
(v) Obtain any agreement or instrument in which blanks are leftto be filled in after execution;
(vi) Engage in any misrepresentation in connection with aresidential mortgage loan;
(vii) Directly or indirectly make any statement regarding value,except that a copy of the sales contract for purchase transactions may beprovided, or make or provide payment of any kind to any in-house or feeappraiser for the purpose of influencing the independent judgment of theappraiser with respect to the value of any real estate which is to be coveredby a residential mortgage loan;
(viii) Make any false promises likely to influence or persuade, orpursue a course of misrepresentations and false promises through agents,solicitors, advertising or otherwise;
(ix) Misrepresent, circumvent or conceal any of the materialparticulars or the nature thereof, regarding a transaction to which it is aparty;
(x) Enter into any agreement, with or without the payment of afee, to fix in advance a particular interest rate or other term in aresidential mortgage loan unless written confirmation of the agreement isdelivered 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 thetime when the licensee applied for its license, would have been grounds fordenying the application;
(ii) The licensee violated any provision of this act or any ruleor order validly promulgated by the commissioner;
(iii) The licensee is conducting its business in an unsafe orunsound manner;
(iv) The licensee refuses to permit the commissioner to make anyexamination authorized by this act;
(v) The licensee willfully fails to make any report required bythis act;
(vi) The competence, experience, character or general fitness ofthe licensee indicates that it is not in the public interest to permit thelicensee 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 oremployee of the licensee has been convicted of a felony or misdemeanorinvolving any aspect of the mortgage lending business, breach of trust, orfraudulent or dishonest dealing;
(ix) The licensee or any partner, officer, director, manager oremployee of the licensee has had a license substantially equivalent to alicense under this act, and issued by another state, denied, revoked orsuspended under the laws of that state;
(x) The licensee has filed an application for a license whichas 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 orcontained any statement that was, in light of the circumstances under which itwas made, false or misleading with respect to any material fact.
(b) Notwithstanding any provision of the Wyoming AdministrativeProcedure Act, if the commissioner finds that probable cause for revocation ofa license exists and that enforcement of this act and the public interestrequire immediate suspension of the license pending investigation, he may,after a hearing upon five (5) days written notice, enter an order suspendingthe license for not more than thirty (30) days.
(c) The commissioner may, in his discretion, reinstate alicense, terminate a suspension or grant a new license to a person whoselicense has been revoked or suspended if no fact or condition then exists whichclearly would justify the commissioner in refusing to grant a license.
(d) For purposes of this section, "licensee" shallalso 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 actor of a rule adopted or an order issued under this act by a licensee is likelyto cause immediate and irreparable harm to the licensee, its customers or thepublic as a result of the violation or cause insolvency of the licensee, thecommissioner may issue an order requiring the licensee to cease and desist fromthe violation. The order becomes effective upon service upon the licensee.
(b) If the commissioner determines that a person is conductingmortgage lending or mortgage brokering activities governed under this actwithout a valid license, the commissioner may issue an order requiring theunlicensed person to cease and desist from mortgage lending or mortgagebrokering activities. The order becomes effective upon service upon theunlicensed person.
(c) Before issuing a final cease and desist order undersubsections (a) and (b) of this section, the commissioner shall serve notice ofintent 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 theviolations of law and cease and desist mortgage lending or mortgage brokeringactivities. The notice shall be served by certified mail return receiptrequested to the last known address of the person or shall be served as providedby 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 hearingon the order.
(d) In an emergency, the commissioner may petition the districtcourt for the issuance of a temporary restraining order.
(e) An order to cease and desist becomes effective upon serviceupon the person.
(f) An order to cease and desist remains effective andenforceable pending the completion of an administrative proceeding pursuant tothe Wyoming Administrative Procedure Act.
(g) A person served with an order to cease and desist forviolating this act may petition the district court for a judicial order settingaside, limiting or suspending the enforcement, operation or effectiveness ofthe order pending the completion of an administrative proceeding pursuant tothe Wyoming Administrative Procedure Act.
(h) The commissioner shall commence a contested case proceedingwithin twenty (20) days after issuing an order to cease and desist.
40-23-120. Consent orders.
The commissioner may enter into a consentorder at any time with a person to resolve a matter arising under this act. Aconsent order shall be signed by the person to whom it is issued or by theperson's authorized representative and shall indicate agreement with the termscontained in the order. A consent order may provide that it does notconstitute an admission by a person that this act or a rule adopted or an orderissued under this act has been violated.
40-23-121. Civil penalties.
The commissioner may impose a civil penaltyupon a person who violates this act or a rule adopted or an order issued underthis act in an amount not to exceed five hundred dollars ($500.00) per day foreach day the violation is outstanding, plus the state's costs and expenses forthe investigation and prosecution of the matter, including reasonableattorney's fees. Any penalties collected pursuant to this section shall bedeposited in the public school fund of the appropriate county as required byarticle 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 bemaintained under this act or who intentionally makes a false entry or omits amaterial entry in the record is guilty of a felony, punishable by not less thanthree (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 forwhich a license is required under this act, without being licensed under thisact is guilty of a felony punishable by not less than three (3) yearsimprisonment or a fine of not less than ten thousand dollars ($10,000.00), orboth.
(c) A person, except an individual, who knowingly engages inany activity for which a license is required under this act, without beinglicensed under this act is guilty of a misdemeanor punishable by a fine of notless 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 notsuspend or revoke a license, issue an order to cease and desist or assess acivil penalty without notice and an opportunity to be heard.
40-23-124. Loan originator licensing; registration; rulemaking.
(a) An individual, unless specifically exempted undersubsection (c) of this section, shall not engage in the business of a mortgageloan originator for any dwelling located in Wyoming without first obtaining andmaintaining annually a license in accordance with this act. Each licensedmortgage loan originator shall register with and maintain a valid uniqueidentifier issued by the registry.
(b) In order to facilitate an orderly transition to licensingand 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 sectionif he is:
(i) A registered mortgage loan originator, when acting for anentity described in W.S. 40-23-102(a)(xxx)(B)(I), (II) or (III);
(ii) An individual who offers or negotiates terms of aresidential mortgage loan with or on behalf of an immediate family member ofthe individual;
(iii) An individual who offers or negotiates terms of aresidential mortgage loan secured by a dwelling that serves as the individual'sresidence;
(iv) A licensed attorney who negotiates the terms of aresidential mortgage loan on behalf of a client as an ancillary matter to theattorney's representation of the client, unless the attorney is compensated bya lender, a mortgage broker or other mortgage loan originator or by any agentof such lender, mortgage broker or other mortgage loan originator;
(v) An individual engaging solely in loan processor orunderwriter activities, who does not represent to the public, throughadvertising or other means of communicating or providing information includingthe use of business cards, stationery, brochures, signs, rate lists or otherpromotional items, that the individual can or will perform any of theactivities of a mortgage loan originator.
(d) A loan processor or underwriter who is an independentcontractor may not engage in the activities of a loan processor or underwriterunless the independent contractor, loan processor or underwriter obtains andmaintains a license pursuant to subsection (a) of this section. Eachindependent contractor, loan processor or underwriter licensed as a mortgageloan originator shall have and maintain a valid unique identifier issued by theregistry.
(e) For the purposes of implementing an orderly and efficientlicensing process the commissioner may establish licensing rules or regulationsand interim procedures for licensing and acceptance of applications.
40-23-125. Loan originator application; processing.
(a) Applicants for a mortgage loan originator license shall applyin a form prescribed by the commissioner. Each application form shall containcontent as set forth by rule of the commissioner and may be changed or updatedas necessary by the commissioner in order to carry out the purposes of thisact.
(b) In order to fulfill the purposes of this act, thecommissioner may establish relationships or contracts with the registry orother entities designated by the registry to collect and maintain records andprocess transaction fees or other fees related to licensees or other personssubject to this act.
(c) In connection with an application for licensing as amortgage loan originator, the applicant shall, at a minimum, furnish to theregistry information concerning the applicant's identity, including:
(i) Fingerprints for submission to the federal bureau ofinvestigation, and any governmental agency or entity authorized to receive suchinformation for a state, national and international criminal history backgroundcheck; and
(ii) Personal history and experience, including the submissionof authorization for the registry and the commissioner to obtain:
(A) An independent credit report obtained from a consumerreporting agency described in section 603(p) of the Fair Credit Reporting Act;and
(B) Information related to any administrative, civil orcriminal findings by any governmental jurisdiction.
(d) For the purposes of this section and in order to reduce thepoints of contact which the federal bureau of investigation may have tomaintain for purposes of paragraph (c)(i) of this section and subparagraph(c)(ii)(B) of this section, the commissioner may use the registry as achanneling agent for requesting information from and distributing informationto the department of justice or any governmental agency.
(e) For the purposes of this section and in order to reduce thepoints of contact which the commissioner may have to maintain for purposes ofsubparagraphs (c)(ii)(A) and (B) of this section, the commissioner may use theregistry as a channeling agent for requesting and distributing information toand from any source so directed by the commissioner.
(f) Each application submitted under subsection (a) of thissection shall be accompanied by an application fee not to exceed three hundreddollars ($300.00), as established by rule of the commissioner. When anapplication for licensure is denied or withdrawn, the commissioner shall retainall fees paid by the applicant.
40-23-126. Issuance of loan originator license.
(a) The commissioner shall not issue a mortgage loan originatorlicense unless the commissioner makes at a minimum the following findings:
(i) The applicant has never had a mortgage loan originatorlicense revoked in any governmental jurisdiction, except that a subsequentformal vacation of such revocation shall not be deemed a revocation;
(ii) The applicant has not been convicted of, or pled guilty ornolo contendere to, a felony in a domestic, foreign or military court:
(A) During the seven (7) year period preceding the date of theapplication for licensing and registration; or
(B) At any time preceding the date of application, if thefelony involved an act of fraud, dishonesty, or a breach of trust or moneylaundering;
(C) A pardon of a conviction shall not be a conviction for thepurposes of this paragraph.
(iii) The applicant has demonstrated financial responsibility,character and general fitness such as to command the confidence of thecommunity and to warrant a determination that the mortgage loan originator willoperate honestly, fairly and efficiently within the purposes of this act;
(iv) The applicant has completed the prelicensing educationrequirement pursuant to W.S. 40-23-127;
(v) The applicant has passed a written test that meets the testrequirement of W.S. 40-23-128.
(b) For purposes of paragraph (a)(iii) of this section, aperson has shown that he is not financially responsible when he has shown adisregard in the management of his own financial condition. A determinationthat an individual has not shown financial responsibility shall include, butnot be limited to:
(i) Having any outstanding judgment, except a judgment solelyas a result of medical expenses;
(ii) Ha