Law change October 1, 2007

CHAPTER 494 LEGISLATION – 2007 

Senate Bill 1824 – Senator Mike Fasano & Representative Garrett Richter 

Clarifies that account executives (wholesale representatives) of lenders are considered loan originators and are required to be included in Quarterly Reports and complete continuing education. 

• Defines loan application as a submission of borrower’s financial information in anticipation of a credit decision regarding a specific property.

• Clarifies that the mortgage brokerage fee is to include all compensation received by the mortgage brokerage business for the transaction.

•The Office is authorized to take administrative action against mortgage business school similar to other license types. 

• Strengthening of requirements for continuing education courses offered electronically or through distance learning (correspondence) courses. 

Electronically offered training requires verification of individual taking training and how long spent on training.

Correspondence courses require passing test to complete training. 

• Strengthening of mortgage broker disclosures (includes correspondent mortgage/mortgage lenders acting as mortgage brokers) to include: 

On face-to-face interviews the mortgage brokerage agreement must be completed, signed, and dated within 3 business days of receipt of an application. On mail away applications the broker is responsible for proving that the agreement was sent within 3 business days of receipt of an application and that the borrower received and accepted the terms. 

A mortgage brokerage business can only receive a broker fee pursuant to a signed mortgage brokerage contract. 

Mortgage brokerage agreement must include the maximum dollar amount of any fees to be received by the lender (no more percentage range). 

The exact amount of any mortgage brokerage fee to be received from the lender must be disclosed in writing to the borrower at least 3 business days prior to closing. All material changes in the loan terms must be provided to and accepted by the borrower within 3 business days of the terms changes, but not less than 3 business days prior to closing.

A signed and dated good faith estimate, covering all fees that the borrower is expected to pay, must be given within 3 business days of receipt of the application.  Broker and/or lender is responsible for proving that the borrower received and accepted the terms on mail away applications. 

• The good faith estimate must identify the recipient of all payments charged the borrower. The identity can be disclosed in generic terms, except in regard to fees received by the mortgage brokerage business and the correspondent mortgage/mortgage lender.

• Complete written disclosures of all particular terms on all applications where the loan product being offered is not a fixed rate loan.  These disclosures must be given within 3 business days of receipt of the application by the broker and lender.  Required plan disclosures and the Charm Booklet currently required under Regulation Z of the Federal Reserve Board will now also be required under this act.

• All material changes in the loan terms must be provided to and accepted by the borrower within 3 business days of the terms changes, but not less than 3 business days prior to closing.  A waiver of this requirement can be granted by the borrower to meet a bona fide personal financial emergency.

• Any violation of the federal Real Estate Settlement Procedures Act or the federal Truth In Lending Act will also be a violation of Chapter 494, Florida Statutes.

• Lenders must certify that they currently meet the minimum net worth requirements and that all of their loan originators have completed the continuing education requirements in order to renew their license.

• Principal Representatives of correspondent mortgage/mortgage lenders are subject to disciplinary actions of the chapter for violations of the company employees and/or associates.