Source: https://www.revisor.mn.gov/statutes/cite/58/full
Timestamp: 2019-06-27 06:57:36
Document Index: 643059195

Matched Legal Cases: ['art 5', 'art 1', 'art 1', 'art 226', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art 3', 'art 5', 'art 1', 'art 3', 'art 3', 'art 1', 'art 1', 'art 3', 'art 3', 'art 5', 'art 3', 'art 1', 'art 3', 'art 5', 'art 1', 'art 5', 'art 1', 'art 3', 'art 5', 'art 3', 'art 1', 'art 1', 'art 4', 'art 1', 'art 1', 'art 2', 'art 3', 'art 1', 'art 1', 'art 1', 'art 1', 'art 1']

58.02 subd. 27 has been repealed by Chapter 19, Section 3
58.04 subd. 1 has been amended by Chapter 58, Section 1
58.13 subd. 1 has been amended by Chapter 19, Section 1
58.137 subd. 2 has been amended by Chapter 19, Section 2
CHAPTER 58. MORTGAGE ORIGINATOR AND SERVICER LICENSING
58.01 CITATION.
58.02 DEFINITIONS.
58.03 CLASSES OF LICENSE.
58.04 LICENSING REQUIREMENT.
58.05 EXEMPTIONS FROM LICENSE.
58.06 APPLICATION REQUIREMENTS FOR RESIDENTIAL MORTGAGE ORIGINATORS AND SERVICERS.
58.07 [Repealed, 1999 c 151 s 49]
58.08 BONDS; LETTERS OF CREDIT.
58.09 TERM OF LICENSE.
58.10 FEES.
58.12 DENIAL, SUSPENSION, REVOCATION OF LICENSES.
58.126 [Repealed, 2010 c 347 art 5 s 8]
58.13 STANDARDS OF CONDUCT.
58.135 [Repealed, 2001 c 56 s 12]
58.136 RATES AND CHARGES.
58.14 RECORD KEEPING AND NOTIFICATION REQUIREMENTS.
58.16 RESIDENTIAL MORTGAGE ORIGINATORS; STANDARDS OF CONDUCT FOR AGENCY OR ADVANCE FEE TRANSACTIONS.
58.161 MORTGAGE BROKER DUTIES OF AGENCY.
58.162 TRANSACTION AGENTS OR SERVICERS; DISCLOSURE OF NOTE OWNER INFORMATION TO MORTGAGOR.
58.17 SCOPE OF CHAPTER.
58.18 PRIVATE RIGHT OF ACTION.
58.19 REVERSE MORTGAGE LOANS COORDINATION WITH CHAPTER 47.
This chapter shall be cited as the "Minnesota Residential Mortgage Originator and Servicer Licensing Act."
1998 c 343 art 1 s 1
For purposes of this chapter, the terms defined in this section have the meanings given to them.
Subd. 2.Act.
"Act" means the Minnesota Residential Mortgage Originator and Servicer Licensing Act.
Subd. 3.Advance fee.
"Advance fee" means a commission, fee, charge, or compensation of any kind paid to a residential mortgage originator before the closing of a loan, that is intended in whole or in part as payment for the originator's services in finding or attempting to find a loan for a borrower. Advance fee does not include pass-through fees or commitment or extended lock fees or other fees as determined by the commissioner.
Subd. 3a.Advertisement.
"Advertisement" includes, but is not limited to, any illustration, circular, or statement that presents information to the public in either a paper, electronic, or other medium that is intended to attract clients, generate interest, or otherwise make known the existence of the licensee and which addresses services, fees, or products provided by or available through the licensee, including, but not limited to, interest rates, loan origination fees, types of available loans, discount points, closing costs, or sample mortgage terms.
Subd. 4.Borrower.
"Borrower" means a person or persons applying for a residential mortgage loan, a mortgagor, or the person or persons on whose behalf the activities in subdivisions 12, 14, 22, and 23 are conducted.
Subd. 5.Closing.
"Closing" means either or both of the following: (1) the process whereby the real estate contract between a buyer and a seller is consummated; or (2) the process whereby the documents creating a security interest in real property become effective between the borrower and the lender.
"Employee" means an individual who is treated as an employee by the residential mortgage originator or servicer for purposes of compliance with federal income tax laws.
Subd. 8.Escrow account.
"Escrow account" means a trust account that is established and maintained to hold funds received from a borrower, such as real estate taxes and insurance premiums, incurred in connection with the servicing of the mortgage.
Subd. 9.Exempt person.
"Exempt person" means a person exempt from residential mortgage originator licensing requirements, and a person exempt from residential mortgage service licensing requirements.
Subd. 10.Financial institution.
"Financial institution" means a bank, bank and trust, trust company with banking powers, savings bank, savings association, or credit union, organized under the laws of this state, any other state, or the United States; an industrial loan and thrift under chapter 53; or a regulated lender under chapter 56. The term "financial institution" also includes a subsidiary or operating subsidiary of a financial institution or of a bank holding company as defined in the federal Bank Holding Company Act, United States Code, title 12, section 1841 et seq., if the subsidiary or operating subsidiary can demonstrate to the satisfaction of the commissioner that it is regulated and subject to active and ongoing oversight and supervision by a federal banking agency, as defined in the Federal Deposit Insurance Act, United States Code, title 12, section 1811 et seq., or the commissioner.
Subd. 11.Lender.
"Lender" means a person who makes residential mortgage loans including a person who provides table funding.
Subd. 12.Making a residential mortgage loan.
"Making a residential mortgage loan" means for compensation or gain, or the expectation of compensation or gain, to advance funds or make a commitment to advance funds in connection with a residential mortgage.
Subd. 13.Mortgage broker; broker.
"Mortgage broker" or "broker" means a person who performs the activities described in subdivisions 14 and 23.
Subd. 14.Mortgage brokering; brokering.
"Mortgage brokering" or "brokering" means helping to obtain from another person, for a borrower, a residential mortgage loan or assisting a borrower in obtaining a residential mortgage loan in return for consideration to be paid by the borrower or lender or both. Mortgage brokering or brokering includes, but is not limited to, soliciting, placing, or negotiating a residential mortgage loan.
[Repealed, 2000 c 427 s 21]
"Person" means a natural person, firm, partnership, limited liability partnership, corporation, association, limited liability company, or other form of business organization and the officers, directors, employees, or agents of that person.
Subd. 17.Person in control.
"Person in control" means any member of senior management, including owners or officers, and other persons who possess, directly or indirectly, the power to direct or cause the direction of the management policies of an applicant or licensee under this chapter, regardless of whether the person has any ownership interest in the applicant or licensee. Control is presumed to exist if a person, directly or indirectly, owns, controls, or holds with power to vote ten percent or more of the voting stock of an applicant or licensee or of a person who owns, controls, or holds with power to vote ten percent or more of the voting stock of an applicant or licensee.
Subd. 18.Residential mortgage loan.
"Residential mortgage loan" means a loan secured primarily by either: (1) a mortgage on residential real property; or (2) certificates of stock or other evidence of ownership interest in and proprietary lease from corporations, partnerships, or other forms of business organizations formed for the purpose of cooperative ownership of residential real property.
Subd. 19.Residential mortgage originator.
"Residential mortgage originator" means a person who, directly or indirectly, for compensation or gain or in expectation of compensation or gain, solicits or offers to solicit, or accepts or offers to accept an application for a residential mortgage loan through any medium or mode of communication from a borrower, or makes a residential mortgage loan. "Residential mortgage originator" includes a lender as defined in subdivision 11 and a broker as defined in subdivision 13.
Subd. 20.Residential mortgage servicer; servicer.
"Residential mortgage servicer" or "servicer" means a person who engages in the activity of servicing a residential mortgage as defined in subdivision 22.
Subd. 21.Residential real property; residential real estate.
"Residential real property" or "residential real estate" means real property improved or intended to be improved by a structure designed principally for the occupancy of from one to four families, whether or not the owner occupies the real property.
Subd. 22.Servicing; servicing a residential mortgage loan.
"Servicing" or "servicing a residential mortgage loan" means through any medium or mode of communication the collection or remittance of, or the right or obligation to collect or remit for a lender, mortgagee, note owner, noteholder, or for a person's own account, payments, interest, principal, and escrow items such as insurance and taxes for property subject to a residential mortgage loan.
Subd. 23.Soliciting, placing, or negotiating a residential mortgage loan.
"Soliciting, placing, or negotiating a residential mortgage loan" means for compensation or gain or expectation of compensation or gain, whether directly or indirectly, accepting or offering to accept an application for a residential mortgage loan, assisting, or offering to assist a borrower in applying for a residential mortgage loan, or negotiating or offering to negotiate the terms or conditions of a residential mortgage loan with a lender on behalf of a borrower.
[Repealed, 2004 c 203 art 1 s 11]
"Trust account" means a negotiable order of withdrawal account, demand deposit, or checking account maintained for the purpose of segregating trust funds from other funds. A "trust account" must not allow the financial institution a right of setoff against the money owed it by the account holder.
"Trust funds" means funds received by a residential mortgage originator or servicer in a fiduciary capacity for later distribution, such as appraisal or credit report fees, taxes, or insurance premiums. Trust funds includes commitment, lock, extended lock, and advance fees.
Subd. 27.Subprime loan.
"Subprime loan" means, in the case of an adjustable rate loan secured by a first lien on a dwelling that can increase in interest rate but not decrease in interest rate below the fully indexed rate at the time of origination, a loan for which the annual percentage rate (APR) is greater than two percentage points above the yield on United States Treasury securities having comparable periods of maturity, as of the 15th day of the preceding month if the rate is set between the first and the 14th day of the month and as of the 15th day of the current month if the rate is set on or after the 15th day.
For all other loans secured by a first lien on a dwelling, the term means a loan for which the APR is greater than three percentage points above the yield on United States Treasury securities having comparable periods of maturity, as of the 15th day of the preceding month if the rate is set between the first and the 14th day of the month and as of the 15th day of the current month if the rate is set on or after the 15th day.
For loans secured by a subordinate lien on a dwelling, the term means a loan for which the APR is greater than five percentage points above the yield on United States Treasury securities having comparable periods of maturity, as of the 15th day of the preceding month if the rate is set between the first and the 14th day of the month and as of the 15th day of the current month if the rate is set on or after the 15th day.
For purposes of this section, the annual percentage rate has the meaning given in Code of Federal Regulations, title 12, part 226.
Subd. 28.Negative amortization.
"Negative amortization" occurs when the borrower's compliance with any repayment option offered pursuant to the terms of the residential mortgage loan is insufficient to satisfy the interest accruing on the loan, resulting in an increase in the loan balance. Negative amortization does not occur when a residential mortgage loan is originated, subsidized, or guaranteed by or through a state, tribal, or local government, or nonprofit organization, and bears one or more of the following nonstandard payment terms that substantially benefit the borrower: payments vary with income; payments of principal and interest are deferred until the maturity date of the loan or the sale of the residence; principal or interest is forgivable under specified conditions; or where no interest or an annual interest rate of two percent or less is charged in connection with the loan.
Subd. 29.Fully indexed rate.
Subd. 30.Transaction agent.
1998 c 343 art 1 s 2; 1999 c 86 art 1 s 14; 2000 c 427 s 10; 2001 c 56 s 8; 2007 c 18 s 1; 2007 c 74 s 1,2; 2008 c 238 art 1 s 1; 2008 c 240 s 1,2; 2009 c 178 art 1 s 3
The commissioner may issue the following classes of license under this chapter:
(1) a residential mortgage originator license; and
(2) a residential mortgage servicer license.
1998 c 343 art 1 s 3
Subdivision 1.Residential mortgage originator licensing requirements.
(6) a person exempted by order of the commissioner.
Subd. 2.Residential mortgage servicer licensing requirements.
(a) Beginning August 1, 1999, no person shall engage in activities or practices that fall within the definition of "servicing a residential mortgage loan" under section 58.02, subdivision 22, without first obtaining a license from the commissioner according to the licensing procedures provided in this chapter.
(b) The following persons are exempt from the residential mortgage servicer licensing requirements:
(1) a person licensed as a residential mortgage originator;
(2) an employee of one licensee or one person holding a certificate of exemption based on an exemption under this subdivision;
(3) a person servicing loans made with its own funds, if no more than three such loans are made in any 12-month period;
(4) a financial institution as defined in section 58.02, subdivision 10;
(5) an agency of the federal government, or of a state or municipal government;
(6) an employee or employer pension plan making loans only to its participants;
(7) a person acting in a fiduciary capacity, such as a trustee or receiver, as a result of a specific order issued by a court of competent jurisdiction; or
(8) a person exempted by order of the commissioner.
Subd. 3.Conducting business under license.
No person required to be licensed under this chapter may, without a license, do business under a name or title or circulate or use advertising or make representations or give information to a person, that indicates or reasonably implies activity within the scope of this chapter.
No person licensed under this chapter may do business under more than one name or title.
Subd. 4.Applicability to banks and credit unions.
Except for sections 58.13 and 58.137, subdivisions 2 and 3, this chapter does not apply to a bank, savings bank, savings association, or credit union, or to any subsidiary of any of them, that is subject to supervision by either a federal regulatory agency or the commissioner.
1998 c 343 art 1 s 4; 1999 c 151 s 34; 2000 c 427 s 11-13; 2002 c 342 s 7; 2007 c 57 art 3 s 13; 2010 c 347 art 5 s 1
Subdivision 1.Exempt person.
An exempt person as defined by section 58.04, subdivision 1, paragraph (c), and subdivision 2, paragraph (b), is exempt from the licensing requirements of this chapter, but is subject to all other provisions of this chapter.
Subd. 3.Certificate of exemption.
A person must obtain a certificate of exemption from the commissioner to qualify as an exempt person under section 58.04, subdivision 1, paragraph (c), a financial institution under clause (2), or by order of the commissioner under clause (6); or under section 58.04, subdivision 2, paragraph (b), as a financial institution under clause (4), or by order of the commissioner under clause (8).
1998 c 343 art 1 s 5; 2000 c 427 s 14; 2007 c 57 art 3 s 14; 2009 c 37 art 3 s 6; 2009 c 86 art 1 s 9
Subdivision 1.License application form.
Application for a residential mortgage originator or a residential mortgage servicer license must be in writing, under oath, and on a form obtained from and prescribed by the commissioner.
Subd. 2.Application contents.
(a) The application must contain the name and complete business address or addresses of the license applicant. The license applicant must be a partnership, limited liability partnership, association, limited liability company, corporation, or other form of business organization, and the application must contain the names and complete business addresses of each partner, member, director, and principal officer. The application must also include a description of the activities of the license applicant, in the detail and for the periods the commissioner may require.
(b) A residential mortgage originator applicant must submit a surety bond that meets the requirements of section 58.08, subdivision 1a.
(c) The application must also include all of the following:
(1) an affirmation under oath that the applicant:
(i) is in compliance with the requirements of section 58.125;
(ii) will advise the commissioner of any material changes to the information submitted in the most recent application within ten days of the change;
(iii) will advise the commissioner in writing immediately of any bankruptcy petitions filed against or by the applicant or licensee;
(iv) will maintain at all times a surety bond in the amount of at least $100,000;
(v) complies with federal and state tax laws; and
(vi) complies with sections 345.31 to 345.60, the Minnesota unclaimed property law;
(2) information as to the mortgage lending, servicing, or brokering experience of the applicant and persons in control of the applicant;
(3) information as to criminal convictions, excluding traffic violations, of persons in control of the license applicant;
(4) whether a court of competent jurisdiction has found that the applicant or persons in control of the applicant have engaged in conduct evidencing gross negligence, fraud, misrepresentation, or deceit in performing an act for which a license is required under this chapter;
(5) whether the applicant or persons in control of the applicant have been the subject of: an order of suspension or revocation, cease and desist order, or injunctive order, or order barring involvement in an industry or profession issued by this or another state or federal regulatory agency or by the Secretary of Housing and Urban Development within the ten-year period immediately preceding submission of the application; and
The commissioner may, for good cause shown, waive any requirement of this section with respect to an initial license application or to permit a license applicant to submit substituted information in its license application in lieu of the information required by this section.
1998 c 343 art 1 s 6; 1999 c 151 s 35; 2007 c 57 art 3 s 15,16; 2009 c 37 art 3 s 7; 2010 c 347 art 5 s 2
[Repealed, 2007 c 57 art 3 s 64]
Subd. 1a.Residential mortgage originators.
(a) An applicant for a residential mortgage originator license must file with the department a surety bond in the amount of $100,000, issued by an insurance company authorized to do so in this state. The bond must cover all mortgage loan originators who are employees or independent agents of the applicant. The bond must be available for the recovery of expenses, fines, and fees levied by the commissioner under this chapter and for losses incurred by borrowers as a result of a licensee's noncompliance with the requirements of this chapter, sections 325D.43 to 325D.48, and 325F.67 to 325F.69, or breach of contract relating to activities regulated by this chapter.
(b) The bond must be submitted with the originator's license application and evidence of continued coverage must be submitted with each renewal. Any change in the bond must be submitted for approval by the commissioner, within ten days of its execution. The bond or a substitute bond shall remain in effect during all periods of licensing.
(c) Upon filing of the mortgage call report as required by section 58A.17, a licensee shall maintain or increase its surety bond to reflect the total dollar amount of the closed residential mortgage loans originated in this state in the preceding year according to the table in this paragraph. A licensee may decrease its surety bond according to the table in this paragraph if the surety bond required is less than the amount of the surety bond on file with the department.
Dollar Amount of Closed Residential Mortgage Loans Surety Bond Required
For purposes of this subdivision, "mortgage loan originator" has the meaning given the term in section 58A.02, subdivision 7.
Subd. 2.Residential mortgage servicers.
A residential mortgage servicer licensee shall continuously maintain a surety bond or irrevocable letter of credit in an amount not less than $100,000 in a form approved by the commissioner, issued by an insurance company or bank authorized to do so in this state. The bond or irrevocable letter of credit must be available for the recovery of expenses, fines, and fees levied by the commissioner under this chapter, and for losses or damages incurred by borrowers or other aggrieved parties as the result of a licensee's noncompliance with the requirements of this chapter, sections 325D.43 to 325D.48, and 325F.67 to 325F.69, or breach of contract relating to activities regulated by this chapter.
The bond or irrevocable letter of credit must be submitted with the servicer's license application and evidence of continued coverage must be submitted with each renewal. Any change in the bond or letter of credit must be submitted for approval by the commissioner, within ten days of its execution.
Subdivision 2 does not apply to mortgage originators or mortgage servicers who are approved as seller/servicers by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.
Subd. 4.Irrevocable letter of credit.
As used in this chapter, an irrevocable letter of credit must be accepted only if it is clean, irrevocable, and contains an evergreen clause.
(a) "Clean" means a letter of credit that is not conditioned on the delivery of any other documents or materials.
(b) "Irrevocable" means a letter of credit that cannot be modified or revoked without the consent of the beneficiary once the beneficiary is established.
(c) "Evergreen clause" means one that specifically states the expiration of a letter of credit will not take place without a 60-day notice by the issuer and one that allows the issuer to conduct an annual review of the account party's financial condition. If prior notice of expiration is not given by the issuer, the letter of credit is automatically extended for one year.
A clean irrevocable letter of credit must be accepted only if it is issued by a financial institution that is authorized to engage in banking in any of the 50 states or under the laws of the United States, and whose business is substantially confined to banking and supervised by the state commissioner of commerce or similar official, and that has a long-term debt rating by a recognized national rating agency of investment grade or better. If no long-term debt rating is available, the financial institution must have the equivalent investment grade financial characteristics.
1998 c 343 art 1 s 8; 1999 c 151 s 36; 2000 c 427 s 15; 2007 c 57 art 3 s 17; 2010 c 347 art 5 s 3
Licenses for residential mortgage originators and residential mortgage servicers issued under this chapter expire on December 31 and are renewable on January 1 of each year after that date.
1998 c 343 art 1 s 9; 2010 c 347 art 5 s 4
Subdivision 1.Amounts.
(1) for a residential mortgage originator license, $1,000, $50 of which is credited to the consumer education account in the special revenue fund;
(2) for a renewal license, $500, $50 of which is credited to the consumer education account in the special revenue fund;
(3) for a residential mortgage servicer's license, $500;
(4) for a renewal license, $250; and
(5) for a certificate of exemption, $100.
Subd. 2.Forfeiture.
All fees are nonrefundable except that an overpayment of a fee must be refunded upon proper application.
Subd. 3.Consumer education account; money credited and appropriated.
(a) The consumer education account is created in the special revenue fund. Money credited to this account may be appropriated to the commissioner for the purpose of making grants to programs and campaigns designed to help consumers avoid being victimized by unscrupulous lenders and mortgage brokers. Preference shall be given to programs and campaigns designed by coalitions of public sector, private sector, and nonprofit agencies, institutions, companies, and organizations.
(b) A sum sufficient is appropriated annually from the consumer education account to the commissioner to make the grants described in paragraph (a).
1998 c 343 art 1 s 10; 2000 c 427 s 16; 2001 c 208 s 3,4; 2007 c 57 art 3 s 18; 2010 c 347 art 5 s 5
The commissioner has under this chapter the same powers with respect to examinations that the commissioner has under section 46.04.
2007 c 57 art 3 s 19; 2014 c 222 art 1 s 9
(1) bar a person from engaging in residential mortgage origination or servicing;
(2) deny, suspend, or revoke a residential mortgage originator or a servicer license;
(3) censure a licensee;
(4) impose a civil penalty as provided for in section 45.027, subdivision 6; or
(5) revoke an exemption or certificate of exemption.
(2) that the residential mortgage originator, servicer, applicant, or other person, an officer, director, partner, employee, or agent or any person occupying a similar status or performing similar functions, or a person in control of the originator, servicer, applicant, or other person has:
(i) violated any provision of this chapter or rule or order under this chapter;
(iii) failed to maintain compliance with the affirmations made under section 58.06, subdivision 2;
(iv) violated a standard of conduct or engaged in a fraudulent, coercive, deceptive, or dishonest act or practice, whether or not the act or practice involves the residential mortgage lending business including, but not limited to, negligently making a false statement or knowingly and willfully omitting a material fact;
(v) engaged in an act or practice, whether or not the act or practice involves the business of making a residential mortgage loan, that demonstrates untrustworthiness, financial irresponsibility, or incompetence;
(vii) paid a civil penalty or been the subject of disciplinary action by the commissioner, or an order of suspension or revocation, cease and desist order or injunction order or order barring involvement in an industry or profession issued by this or any other state or federal regulatory agency or by the Secretary of Housing and Urban Development;
Subd. 2.Orders of the commissioner.
To begin a proceeding under this section, the commissioner shall issue an order requiring the subject of the proceeding to show cause why action should not be taken against the person according to this section. The order must be calculated to give reasonable notice of the time and place for the hearing and must state the reasons for entry of the order. The commissioner may by order summarily suspend a license or exemption or summarily bar a person from engaging in residential mortgage origination or servicing, pending a final determination of an order to show cause. If a license or exemption is summarily suspended or if the person is summarily barred from any involvement in the residential mortgage loan business, pending final determination of an order to show cause, a hearing on the merits must be held within 30 days of the issuance of the order of summary suspension or bar. All hearings must be conducted under chapter 14. After the hearing, the commissioner shall enter an order disposing of the matter as the facts require. If the subject of the order fails to appear at a hearing after having been duly notified of it, the person is considered in default, and the proceeding may be determined against the subject of the order upon consideration of the order to show cause, the allegations of which may be considered to be true.
Subd. 3.Actions against lapsed license.
If a license or certificate of exemption lapses, is surrendered, withdrawn, terminated, or otherwise becomes ineffective, the commissioner may institute a proceeding under this subdivision within two years after the license or certificate of exemption was last effective and enter a revocation or suspension order as of the last date on which the license or certificate of exemption was in effect, and may impose a civil penalty as provided for in this section or section 45.027, subdivision 6.
1998 c 343 art 1 s 12; 2014 c 198 art 4 s 2
Subd. 2.Statements, representations, or advertising.
A statement, representation, or advertisement is deceptive or misleading if it has the capacity or tendency to deceive or mislead a borrower or potential borrower. The commissioner shall consider the following factors in deciding whether a statement, representation, or advertisement is deceptive or misleading: the overall impression that the statement, representation, or advertisement reasonably creates; the particular type of audience to which it is directed; and whether it may be reasonably comprehended by the segment of the public to which it is directed.
1998 c 343 art 1 s 13; 2004 c 203 art 1 s 1; art 2 s 61; 2007 c 18 s 2; 2007 c 74 s 3; 2008 c 241 s 1; 2008 c 276 s 2; 2009 c 37 art 3 s 9
NOTE: Subdivision 1, clauses (9) and (19), were found preempted for national banks by the federal National Bank Act in Bohnhoff v. Wells Fargo Bank, N.A., 853 F.Supp.2d 849 (D. Minn. 2012).
Notwithstanding any other law to the contrary, a residential mortgage originator making a residential mortgage loan to a borrower located in this state must comply with any applicable limits on the rate and amount of interest, discount points, finance charges, fees, and other charges as found in the laws of this state.
Nothing in this section authorizes a residential mortgage originator to make loans on terms and conditions that would not be available to it in the absence of this section.
2001 c 56 s 9
Subdivision 1.Change in licensing data.
A licensee must advise the commissioner of any material changes to the information submitted in the most recent license application within ten days of the change.
Subd. 2.Notice of bankruptcy petitions.
A licensee or person who has been issued a certificate of exemption must advise the commissioner in writing immediately of any bankruptcy petitions filed against or by the licensee.
Subd. 3.Documentation and resolution of complaints.
A licensee or exempt person must investigate and attempt to resolve complaints made regarding acts or practices subject to the provisions of this chapter. If a complaint is received in writing, the licensee or exempt person must maintain a file containing all materials relating to the complaint and subsequent investigation for a period of 60 months.
Subd. 4.Trust account records for mortgage originators.
A residential mortgage originator shall keep and maintain for 60 months a record of all trust funds, sufficient to identify the transaction, date and source of receipt, and date and identification of disbursement.
Subd. 5.Record retention.
A licensee or exempt person must keep and maintain for 60 months the business records, including advertisements, regarding residential mortgage loans applied for, originated, or serviced in the course of its business.
1998 c 343 art 1 s 14; 2001 c 56 s 10; 2008 c 240 s 3-5
Subdivision 1.Nonagency disclosure.
Subd. 2.Form and content requirements.
Subd. 3.Electronic application disclosure requirement.
Subd. 4.Exemption from disclosure requirement.
If the Department of Housing and Urban Development adopts and implements a disclosure requirement that the commissioner determines to be substantially similar to the disclosure required in subdivision 2, compliance with the HUD disclosure shall be considered sufficient to satisfy the requirements of subdivision 2.
1998 c 343 art 1 s 15; 2001 c 56 s 11; 2007 c 18 s 4
Subdivision 1.Compliance.
Subd. 2.Contract provisions.
(a) A residential mortgage originator who engages in the activities described in subdivision 1 shall enter into a written contract with each borrower and shall provide a copy of the written contract to each borrower at or before the time of receipt of any fee or valuable consideration paid for mortgage origination services. The written contract must:
(1) specifically describe the services to be provided by the residential mortgage originator and if the originator collects an advance fee, the dates by which the services will be performed;
(2) specifically identify whether the residential mortgage originator may receive compensation from sources other than the borrower in connection with the loan transaction;
(3) state the total amount of commission or compensation that the borrower agrees to pay for the residential mortgage originator's services, or the basis on which the compensation will be computed;
(4) state the maximum rate of interest to be charged on any residential mortgage loan obtained;
(5) contain a statement that notifies the borrower of the right to cancel the contract according to subdivision 3 and disclose the cancellation rights and procedures provided in subdivision 3; and
(6) disclose, with respect to the 12-month period ending ten business days before the date of the contract in question, the percentage of the mortgage originator's customers for whom loans have actually been funded as a result of the residential mortgage originator's services.
(b) If an advance fee is solicited or received the contract must also:
(1) identify the trust account into which the fees or consideration will be deposited;
(2) set forth the circumstances under which the residential mortgage originator will be entitled to disbursement from the trust account; and
(3) set forth the circumstances under which the borrower will be entitled to a refund of all or part of the fee.
A borrower who pays an advance fee, or who enters into a contract for residential mortgage services as set forth in subdivisions 1 and 2, has an unconditional right to rescind the contract for residential mortgage origination services at any time until midnight of the third business day after the day on which the contract is signed. Cancellation is evidenced by the borrower giving written notice of cancellation to the residential mortgage originator at the address stated in the contract. Notice of cancellation, if given by mail, is effective upon deposit in a mailbox properly addressed to the originator with postage prepaid. Notice of cancellation need not take a particular form and is sufficient if it indicates by any form of written expression the intention of the borrower not be bound by the contract. No act of a borrower or a residential mortgage originator is effective to waive the right to rescind as provided in this subdivision.
Subd. 4.Trust account.
The residential mortgage originator shall deposit in a trust account within three business days all fees received before the time a loan is actually funded. The trust account must be in a financial institution located within the state of Minnesota, and, with respect to advance fees, the account must be controlled by an unaffiliated accountant, attorney, or bank.
The residential mortgage originator shall maintain a separate record of all fees received for services performed or to be performed as a residential mortgage originator. Each record must set forth the date the funds are received; the person from whom the funds are received; the amount received; the date of deposit in the escrow account, the account number, the date the funds are disbursed and the check number of the disbursement, and a description of each disbursement and the justification for the disbursement.
Subd. 6.Monthly statement.
The residential mortgage originator shall provide to each borrower at least monthly a detailed written accounting of all disbursements of the borrower's funds from the trust account.
Subd. 7.Disclosure of lenders.
The residential mortgage originator shall provide to each borrower at the expiration of the contract a list of the lenders or loan sources to whom loan applications were submitted on behalf of the borrower.
1998 c 343 art 1 s 16; 2004 c 203 art 1 s 2,3; 2005 c 118 s 9; 2007 c 18 s 5
2007 c 18 s 6
Upon written request of a mortgagor, a transaction agent or servicer shall provide in writing to the mortgagor the identity, address, and telephone number of the current owner of the note secured by the mortgage, based on the transaction agent's or servicer's actual knowledge. A transaction agent or servicer must provide the information within ten business days of receipt of the request. Upon request of a mortgagor, a transaction agent or servicer must provide this information about the current owner of the note without a fee once per calendar year. In lieu of complying with this section, a transaction agent or servicer may comply with the requirements of section 6(k) of the Real Estate Settlement Procedures Act, as amended by section 1463 of Public Law 111-203, regardless of whether those acts apply to the mortgage.
2011 c 61 s 1
Subdivision 1.Residential mortgage originator services.
This chapter applies when an offer of residential mortgage origination services is made to a borrower in this state or when the residential mortgage originator is located in this state.
Subd. 2.Residential mortgage servicing.
The provisions of this chapter regarding residential mortgage servicing apply when the borrower is a resident of this state.
Subd. 3.Offer.
For purposes of this section, an "offer" means any advertisement or solicitation of any type, including an advertisement or solicitation in newspapers and magazines, by mail, by telephone, on television, on radio, or via the Internet or any other electronic medium of any kind, for residential mortgage originator services. The term "offer" excludes an advertisement or solicitation that specifically states that the services are not available to Minnesota residents.
1998 c 343 art 1 s 17
A borrower injured by a violation of the standards, duties, prohibitions, or requirements of sections 58.13, 58.136, 58.137, 58.16, and 58.161 shall have a private right of action and the court shall award:
Subd. 2.Private attorney general statute.
A borrower injured by a violation of the standards, duties, prohibitions, or requirements of sections 58.13, 58.136, 58.137, 58.16, and 58.161 also may bring an action under section 8.31. A private right of action by a borrower under this chapter is in the public interest.
The remedies provided in this section are cumulative and do not restrict any other right or remedy otherwise available to the borrower.
This section does not apply to a residential mortgage loan originated by a federal or state chartered bank, savings bank, or credit union.
2007 c 74 s 5; 2008 c 276 s 3,4
No person acting as a residential mortgage originator or servicer, including a person required to be licensed under this chapter, and no person exempt from the licensing requirements of this chapter under section 58.04, shall make, provide, or arrange for a reverse mortgage as defined in chapter 47 without complying with that chapter.
2010 c 375 s 7