IN THE SUPREME COURT, STATE OF WYOMING

2014 WY 56

 APRIL TERM, A.D. 2014

May 5, 2014

IN THE MATTER OF A VIOLATION OF THE 

WYOMING RESIDENTIAL MORTGAGE 

PRACTICES ACT BY CALCON MUTUAL 

MORTGAGE CORPORATION:

CALCON MUTUAL MORTGAGE CORP., 

Appellant

(Petitioner),

v.

STATE OF WYOMING, ex rel., WYOMING 

DEPARTMENT OF AUDIT, DIVISION OF 

BANKING,

Appellee

(Respondent).

No. S-13-0130

Appeal from the District Court of Laramie County

The Honorable Thomas T.C. Campbell, Judge

Representing Appellant:

James R. Salisbury and Anthony M. Reyes, Riske & Salisbury, Cheyenne, 

Wyoming. Argument by Mr. Salisbury.

Representing Appellee:

Peter K. Michael, Attorney General; Martin L. Hardsocg, Deputy Attorney 

General; Ryan T. Schelhaas, Senior Assistant Attorney General. Argument by 

Mr. Schelhaas.

Before KITE, C.J., and HILL, BURKE, DAVIS, and FOX, JJ.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers 

are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 

82002, of any typographical or other formal errors so that correction may be made before final publication in 

the permanent volume.
1

BURKE, Justice.

[¶1] The Wyoming Department of Audit, Division of Banking (Division) conducted a 

compliance examination of Appellant, CalCon Mutual Mortgage Corporation (CalCon),

and determined that, in six separate brokering transactions, CalCon had received 

application fees and “yield spread premiums” exceeding those previously disclosed to its 

customers in violation of the Wyoming Residential Mortgage Practices Act. The 

Division sought reimbursement of the fees charged in those transactions. CalCon

objected and the matter was referred to the Office of Administrative Hearings (OAH) for 

a contested case hearing. The OAH determined that CalCon had violated the Act and the 

State Banking Commissioner subsequently ordered CalCon to reimburse the fees.

CalCon filed a petition for review in the district court, and the district court affirmed. 

CalCon appeals from the district court’s decision. We affirm.

ISSUES

[¶2] CalCon presents the following issues:

1. Whether the Office of Administrative Hearings erred as a 

matter of law in its construction and interpretation of

Wyoming Statute § 40-23-114(d).

2. Whether the decision of the Office of Administrative 

Hearings is arbitrary, capricious, and not supported by 

substantial evidence.

The Division states the issues in a substantially similar manner.

FACTS

[¶3] The facts of this case are undisputed. In March, 2010, the Division conducted a 

regular examination of CalCon’s brokering activities within the state to determine 

compliance with the Wyoming Residential Mortgage Practices Act. After completing the 

examination, the Division concluded that CalCon, in six separate brokering transactions

between January, 2008 and February, 2010, had received application fees and “yield 

spread premiums”

1

exceeding those which had been previously disclosed to its 

 

1 A yield spread premium is a lump sum paid by a lender to a broker at closing when the loan originated 

by the broker bears an above-par interest rate. Schuetz v. Banc One Mortg. Corp., 292 F.3d 1004, 1007

(9th Cir. 2002). The federal Department of Housing and Urban Development has explained yield spread 

premiums as follows:
2

customers. In a representative example of the brokering transactions at issue, A.H., a 

borrower, submitted a residential loan application to CalCon on July 15, 2009. On the 

same day, CalCon provided A.H. with a good faith estimate of the transaction fees which 

did not disclose either an application fee or a yield spread premium. CalCon then sent a 

revised good faith estimate, which disclosed a $150.00 application fee and a yield spread 

premium of $4,224.21, to A.H. on November 17, 2009, seven days prior to execution of 

the mortgage loan closing documents. The revised estimate, however, was not 

accompanied by a written explanation of the increased fees or the reason for charging 

fees exceeding those which were previously disclosed to A.H. In the remaining 

brokering transactions at issue, CalCon followed a similar pattern of disclosure of the 

yield spread premiums, which ranged in amounts from $131.04 to $11,100.00.

Additionally, in one of the remaining transactions, CalCon did not provide a written 

explanation for charging an application fee that was not previously disclosed, as in the 

case of A.H.’s mortgage loan application.

[¶4] The Division determined that, in the six transactions at issue, CalCon had failed to 

comply with Wyo. Stat. Ann. §§ 40-23-114(d) and 40-23-117(a)(iv) because it did not 

provide a clear written explanation for the increase in the fees and the reason for charging 

fees exceeding those which were previously disclosed. Relying on Wyo. Stat. Ann. § 40-

23-103(a)(vii), which provides that the State Banking Commissioner shall “[r]equire the 

mortgage broker to reimburse the borrower for undisclosed or incorrectly disclosed fees,” 

 

Payments to brokers by lenders, characterized as yield spread 

premiums, are based on the interest rate and points of the loan entered 

into as compared to the par rate offered by the lender to the mortgage 

broker for that particular loan (e.g., a loan of 8% and no points where the 

par rate is 7.50% will command a greater premium for the broker than a 

loan with a par rate of 7.75% and no points). In determining the price of 

a loan, mortgage brokers rely on rate quotes issued by lenders, 

sometimes several times a day. When a lender agrees to purchase a loan 

from a broker, the broker receives the then applicable pricing for the loan 

based on the difference between the rate reflected in the rate quote and 

the rate of the loan entered into by the borrower. . . .

Lender payments to mortgage brokers may reduce the up-front 

costs to consumers. This allows consumers to obtain loans without 

paying direct fees themselves. Where a broker is not compensated by the 

consumer through a direct fee, or is partially compensated through a 

direct fee, the interest rate of the loan is increased to compensate the 

broker or the fee is added to principal. In any of the compensation 

methods described, all costs are ultimately paid by the consumer, 

whether through direct fees or through the interest rate.

1999 Statement of Policy, 64 Fed. Reg. at 10081 (footnotes omitted).
3

the Division requested that CalCon refund the application fees and yield spread premiums 

to the borrowers. On July 28, 2010, after CalCon failed to comply with the Division’s 

request, the Division sent CalCon a “Notice of Intent to Request the Commissioner to 

Issue Order Compelling Compliance with Report of Compliance Examination.” CalCon 

objected to the Notice of Intent and requested a contested case hearing before the Office 

of Administrative Hearings. 

[¶5] At the contested case hearing, the presiding hearing examiner received testimony 

from the compliance examiner who conducted the review of CalCon’s brokering 

activities, the assistant banking commissioner, and CalCon’s owner. Based on this 

testimony, the hearing examiner concluded that CalCon should be required to reimburse 

the application fees and yield spread premiums to the respective borrowers. The 

Commissioner adopted the hearing examiner’s findings of fact and conclusions of law, 

and issued a final order directing CalCon to reimburse the fees at issue. The 

Commissioner concluded as follows:

37. . . . I am persuaded by the Division’s argument that the 

intent of [Wyo. Stat. Ann. § 40-23-114] requires a broker to 

provide the consumer a clear written explanation of the 

increased fees at issue in this case and the reasons for the 

increase. When a broker receives fees that increased from the 

first or most recent good faith estimate, the broker must 

provide a revised good faith estimate to the borrower at least 

three business days prior to closing, as well as a clear written 

explanation of the increase in fee and the reason for charging 

a fee that exceeded that which was previously disclosed. 

Simply providing a revised good faith estimate which 

identifies the increased fee, without any explanation as 

CalCon did in this case, does not comply with the statute.

38. Conversely, CalCon’s interpretation of [Wyo. Stat. Ann. 

§ 40-23-114] defeats the purpose of the statute. CalCon’s 

position would allow brokers to increase and receive fees in 

excess of the fees initially disclosed to its customers without 

ever having to provide a clear written explanation of the 

increase in fees and the reason for the increase, as long as a 

revised good faith estimate matched the fees on the HUD 

settlement statement. If the borrower wanted to know if any 

fees increased during the loan process, the borrower would 

have to compare each good faith estimate, line by line. Such 

an interpretation would thwart the legislative purpose of the 

statute to construe it in such a manner as to allow a broker to 

increase fees without ever having to fully inform the borrower 
4

of the increase.

CalCon filed a petition for review in the district court, and the district court affirmed after 

concluding that CalCon’s interpretation of Wyo. Stat. Ann. § 40-23-114 “would render 

the subsections in (d)(i) and (ii) meaningless.” CalCon timely appealed the district 

court’s decision.

STANDARD OF REVIEW

[¶6] When we consider an appeal from a district court’s review of an administrative 

agency’s decision, we review the case as though it had come directly from the 

administrative agency. State ex rel. Dep’t of Family Servs. v. Kisling, 2013 WY 91, ¶ 8, 

305 P.3d 1157, 1159 (Wyo. 2013). The extent of our review is governed by Rule 12.09 

of the Wyoming Rules of Appellate Procedure. That rule provides that “Review . . . shall 

be confined to the record as supplemented pursuant to Rule 12.08 and to the issues set 

forth in the petition and raised before the agency. Review shall be limited to a 

determination of the matters specified in Wyo. Stat. 16-3-114(c).” Wyo. Stat. Ann. 16-3-

114(c) (LexisNexis 2011), part of the Wyoming Administrative Procedure Act, provides 

that the reviewing court shall:

(ii) Hold unlawful and set aside agency action, findings and 

conclusions found to be: 

(A) Arbitrary, capricious, an abuse of discretion or 

otherwise not in accordance with law;

(B) Contrary to constitutional right, power, privilege or 

immunity;

(C) In excess of statutory jurisdiction, authority or 

limitations or lacking statutory right;

(D) Without observance of procedure required by law; 

or

(E) Unsupported by substantial evidence in a case 

reviewed on the record of an agency hearing provided 

by statute.

We review an agency’s conclusions of law de novo, and “[w]e will affirm an agency’s 

legal conclusion only if it is in accordance with the law.” Dale v. S & S Builders, LLC, 

2008 WY 84, ¶ 26, 188 P.3d 554, 562 (Wyo. 2008) (quoting Diamond B Servs., Inc. v. 

Rohde, 2005 WY 130, ¶ 12, 120 P.3d 1031, 1038 (Wyo. 2005)).
5

DISCUSSION

[¶7] The parties agree that the dispositive issue in this case is whether the 

Commissioner properly interpreted Wyo. Stat. Ann. § 40-23-114 in determining that 

CalCon was required to provide a written explanation of increased application fees and 

yield spread premiums in the transactions at issue. The statute provides, in relevant part, 

as follows:

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

(a) Within three (3) business days of a borrower signing a 

completed mortgage loan application and before the borrower 

provides any consideration to the licensee, the licensee shall 

execute and deliver to the borrower a mortgage brokerage 

agreement. The mortgage brokerage agreement shall be in 

writing, signed and dated by both the borrower and the 

authorized representative of the licensed mortgage broker 

whose services to the borrower constitute mortgage brokering 

and shall contain the following information:

. . .

(iii) A good faith estimate of the fees to be collected, 

including a credit report fee, property appraisal fee or 

any other third party fee;

. . . 

(d) A mortgage broker shall not receive any fee that inures to 

the benefit of the mortgage broker, either directly or 

indirectly if it exceeds the fee disclosed on the most recent 

good faith estimate unless:

(i) The need to charge the higher fee was not 

reasonably foreseeable at the time the good faith 

estimate was written; and

(ii) The mortgage broker has provided to the borrower, 

no less than three (3) business days prior to the signing 

of the mortgage loan closing documents, a new good 

faith estimate of settlement costs, a clear written 

explanation of the increase in the fee and the reason 
6

for charging a fee that exceeds that which was 

previously disclosed.

[¶8] CalCon contends that, under Wyo. Stat. Ann. § 40-23-114(d)(ii), a broker is not 

required to provide a clear written explanation of an increase in fees as long as the new or 

increased fee is listed on a revised good faith estimate provided to the borrower at least 

three days prior to closing. This assertion is based on CalCon’s interpretation of the

phrase “most recent good faith estimate.” CalCon claims that “As used in Wyoming 

Statute § 40-23-114, the phrase ‘most recent good faith estimate’ can only refer to the 

good faith estimate provided to the separate borrowers most recent in time to the date of 

closing.” (Emphasis in original.) According to CalCon, “Since the date of closing is the 

date on which CalCon received the fees at issue from the lender, and since the yield 

spread premiums and/or application fees received by CalCon were disclosed on the good 

faith estimate, CalCon was not required to provide the information contemplated by 

Wyoming Statute § 40-23-114(d)(ii).” CalCon asserts that its interpretation is consistent 

with the mortgage lending process because “A good faith estimate provided at the time of 

loan application can only provide that information which is known at the time by the 

mortgage broker. Once loan terms have been locked, those terms are provided in a good 

faith estimate to the borrower.” CalCon’s argument suggests that a good faith estimate 

can be provided only when the lender “knows” what the lending fees will be. We cannot 

agree. CalCon misapprehends the nature of an “estimate,” as well as the very purpose 

that Wyo. Stat. Ann. § 40-23-114(d)(ii) is intended to serve.

[¶9] In interpreting the phrase “most recent good faith estimate,” as used in Wyo. Stat. 

Ann. § 40-23-114, we strive to give effect to the intent of the legislature. We look first to 

the plain meaning of the language chosen by the legislature and employ well-accepted 

rules of statutory construction if that language is ambiguous or capable of varying 

interpretations. Chevron U.S.A., Inc. v. Dep’t of Revenue, 2007 WY 43, ¶ 10, 154 P.3d 

331, 334 (Wyo. 2007).

A statute is clear and unambiguous if its wording is such that 

reasonable persons are able to agree on its meaning with 

consistency and predictability. Conversely, a statute is 

ambiguous if it is found to be vague or uncertain and subject 

to varying interpretations. If we determine that a statute is 

clear and unambiguous, we give effect to the plain language 

of the statute.

We have recognized that divergent opinions among 

parties as to the meaning of a statute may be evidence of 

ambiguity but is not conclusive. . . . Ultimately, whether a 

statute is ambiguous is a matter of law to be determined by 

the court.
7

Id., ¶ 13, 154 P.3d at 335 (quoting RME Petroleum Co. v. Wyo. Dep’t of Revenue, 2007 

WY 16, ¶¶ 25, 28, 150 P.3d 673, 683-84 (Wyo. 2007)) (internal citations omitted). “[I]t 

is a fundamental rule of statutory interpretation that all portions of an act must be read in 

pari materia, and every word, clause, and sentence must be construed so that no part is 

inoperative or superfluous.” State ex rel. Wyo. Workers’ Safety & Comp. Div. v. Singer, 

2011 WY 57, ¶ 12, 248 P.3d 1155, 1159 (Wyo. 2011) (quoting Deloges v. State ex rel. 

Wyo. Workers’ Compensation Division, 750 P.2d 1329, 1331 (Wyo. 1988)). 

[¶10] We conclude that the statute is unambiguous. Under Section 114(d), a broker may 

only receive a fee that exceeds the fee disclosed on the “most recent good faith estimate”

if a “new good faith estimate,” accompanied by a written explanation of the increase in 

the fee and the reason for charging a fee that “exceeds that which was previously 

disclosed,” is provided to the borrower at least three days prior to closing. The statute’s

references to a “new good faith estimate” and to a fee exceeding that which was 

“previously disclosed,” indicate that the “most recent good faith estimate” refers to the 

estimate that has previously been provided to the borrower, as required by Wyo. Stat.

Ann. § 40-23-114(a)(iii). If the broker seeks to charge a higher fee, then the broker must 

provide a new good faith estimate, which then replaces the original good faith estimate as 

the “most recent good faith estimate.” In this manner, the statute operates to prevent a 

broker from charging a fee that has increased from the previous estimate without 

providing a written explanation and the reason for charging a fee that exceeds that which 

was previously disclosed. This operation is consistent with the purpose of the statute, as 

explained by the assistant banking commissioner at the contested case hearing:

[T]hat statute is set up, it’s designed, again, as a consumer 

protection statute, to try, to the best of its ability, to prevent 

the, quote unquote, bait and switch tactics [by requiring a] 

good faith estimate disclosure to consumers to tell them 

exactly what they’re going to have to pay in the transaction 

that they are agreeing to move forward with.

The law then says that you can’t charge anything 

different[] than what you’ve told consumers unless you redisclose to them with a new good faith estimate, and 

specifically provide them with a written explanation of what 

is changing on that recent good faith estimate and the reason 

that it’s changing.

Further, we note that any reference to the time of closing as the operative date for 

determining the “most recent good faith estimate” is conspicuously absent from the 

statute. If the legislature had intended for the “most recent good faith estimate” to be 

measured relative to the closing date, it could have easily so provided. However, we are 
8

unable to find such intent in the plain language or the purpose of the statute. For these 

reasons, we conclude that the “most recent good faith estimate,” as used in Wyo. Stat. 

Ann. § 40-23-114, refers to the estimate that has previously been provided to the 

borrower. Because CalCon received fees in excess of the fees originally disclosed to the

borrowers in the transactions at issue, and because it did not provide a clear written 

explanation of the increased fees or the reason for charging fees exceeding those which 

were previously disclosed, the Banking Commissioner properly concluded that CalCon 

was statutorily precluded from accepting the increased fees. 

[¶11] In its second issue, CalCon contends the Commissioner’s decision was per se

“arbitrary and capricious” because the Division has not used its regulatory powers to 

define the phrase “most recent good faith estimate.” We find no merit in this argument. 

We have already determined that the plain language of the statute is sufficient to convey 

the meaning of the phrase “most recent good faith estimate.” As we have previously 

stated, “A clear statutory direction is enforceable by an agency in accordance with 

its plain meaning without promulgation of a rule.” Thomson v. Wyoming In-Stream Flow 

Comm., 651 P.2d 778, 791 (Wyo. 1982). Accordingly, we conclude that the 

Commissioner’s decision was not arbitrary or capricious.

[¶12] Affirmed.