No. 26833: R162-210. Examination, Initial Application, and Renewal

DAR File No.: 26833
Filed: 12/04/2003, 09:49
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This emergency rule provides procedures necessary to implement statutory changes (H.B. 277, 2003 General Session) that go into effect on January 1, 2004, related to the examination, initial licensing, and renewal of persons engaged in the business of residential mortgage loans. (DAR Note: H.B. 277 is found at UT L 2003 Ch 243, and is effective January 1, 2004.)

 

Summary of the rule or change:

This rule provides procedures for taking the mortgage examination and applying for a license and standards for the evaluation of those applications. It also establishes procedures to implement the change from "registrations" to "licenses", and establishes continuing education requirements for renewal.

 

State statutory or constitutional authorization for this rule:

Subsections 61-2c-103(3), 61-2c-202(4)(a)(i)(C), and 61-2c-104(7)(d)(ii)(A)

 

Anticipated cost or savings to:

the state budget:

None--It will be more costly for the Division of Real Estate to administer the licensing of residential mortgage lenders, but those costs are due to statutory changes, not these rules implementing the changes. The procedures for licensing those persons who are engaged in the residential mortgage business do not impact any other state agencies and therefore will have no impact on the State budget.

 

local governments:

None--Local governments are not impacted by the procedures for licensing persons who are engaged in the residential mortgage loan business and therefore these rules will have no impact on local governments.

 

other persons:

None--Only those persons who are engaged in the business of residential mortgage loans are affected by these rules. There will be an increased cost to those applying for a new or renewed residential mortgage license because they will now have to take an examination and pay examination fees. However, those costs are due to the statutory changes made by H.B. 277 (2003 General Session) and are not caused by these rules implementing those changes.

 

Compliance costs for affected persons:

There will be an increased cost to those applying for a new or renewed residential mortgage license because they will now have to take an examination and pay examination fees. However, those costs are due to the statutory changes made by H.B. 277 (2003 General Session) and are not caused by these rules implementing those changes.

 

Comments by the department head on the fiscal impact the rule may have on businesses:

There appears to be no fiscal impact to businesses as a result of this emergency rule change that was not already anticipated in recent legislative amendments to the Utah Residential Mortgage Practices Act (H.B. 277, 2003 General Session).

 

Emergency rule reason and justification:

Regular rulemaking procedures would place the agency in violation of federal or state law.

On January 1, 2004, the Division of Real Estate must start administering statutory changes related to changing existing registrants to licensees, must require an examination of new applicants, and must administer continuing education provisions.

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Commerce
Real Estate
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY UT 84111-2316

 

Direct questions regarding this rule to:

Shelley Wismer at the above address, by phone at 801-530-6761, by FAX at 801-530-6749, or by Internet E-mail at [e-mail]

 

This rule is effective on:

12/04/2003

 

Authorized by:

Dexter Bell, Director

 

 

RULE TEXT

R162. Commerce, Real Estate.

R162-210. Examination, Initial Application, and Renewal.

R162-210-1. Examination, Initial Application, and Renewal.

210.1 Effective January 1, 2004, an individual applying for an initial license is required to have passed the licensing examination approved by the commission before making application to the division for a license.

210.1.1 All examination results are valid for 90 days after the date of the examination. If the applicant does not submit an application for licensure within 90 days after successful completion of the examination, the examination results shall lapse and the applicant shall be required to retake and successfully pass the examination again in order to apply for a license.

210.2 All applications must be made in the form required by the division and shall include the following information in addition to that required by Section 61-2c-202:

210.2.1 Any name under which the individual will transact business in this state;

210.2.2 The address of the principal business location of the applicant;

210.2.3 The home street address and home telephone number of the applicant;

210.2.4 A mailing address for the applicant;

210.2.5 The date of birth and social security number of the applicant;

210.2.6 Answers to a "Licensing Questionnaire" supplying information about present or past mortgage licensure in other jurisdictions, past license sanctions or surrenders, pending disciplinary actions, pending investigations, past criminal convictions or pleas, and/or civil judgments based on fraud, misrepresentation, or deceit;

210.2.7 A "Letter of Waiver" authorizing the division to obtain the fingerprints of the applicant, review past and present employment and education records, and to conduct a criminal history background check;

210.2.8 If an applicant has been convicted of any felonies or misdemeanors involving moral turpitude within the ten years preceding application, the charging document, the judgment and sentencing document, and the case docket on each such conviction must be provided with the application; and

210.2.9 If an applicant has had a license or registration suspended, revoked, surrendered, canceled or denied in the five years preceding application based on misconduct in a professional capacity that relates to good moral character or the competency to transact the business of residential mortgage loans, the documents stating the sanction taken against the license or registration and the reasons therefore must be provided with the application.

210.3 Incomplete Application. If an applicant for a license makes a good faith attempt to submit a completed application within 90 days after passing the examination, but the application is incomplete, the Division may grant an extension of the validity of the examination results for a period not to exceed 30 days to enable the applicant to provide the missing documents or information necessary to complete the application. Following the extension period, the application will be denied as incomplete if the applicant has not supplied the missing documents or information.

210.4 All fees required in conjunction with an application for a license are nonrefundable and will not be refunded if the applicant fails to complete an application or if a completed application is denied for failure to meet the licensing criteria.

210.5 Determining Fitness for Licensure.

210.5.1 Good Moral Character. The Commission and the Division will consider information necessary to determine whether an applicant for a license meets the requirement of good moral character, which may include the following in addition to whether the individual has been convicted of a felony or misdemeanor involving moral turpitude in the ten years preceding the application:

(a) The circumstances that led to any criminal convictions considered by the Commission and the Division;

(b) The amount of time that has passed since the individual's last criminal conviction;

(c) Any character testimony presented at the hearing and any character references submitted by the individual;

(d) Past acts related to honesty or moral character involving the business of residential mortgage loans;

(e) Whether the individual has been guilty of dishonest conduct in the five years preceding the application that would have been grounds under Utah law for revocation or suspension of a registration or license had the individual then been registered or licensed;

(f) Whether a civil judgment based on fraud, misrepresentation, or deceit has been entered against the individual, or whether a finding of fraud by the individual has been made in a civil suit, regardless of whether related to the residential mortgage loan business, and whether any money judgment has been fully satisfied;

(g) Whether fines and restitution ordered by a court in a criminal proceeding have been fully satisfied, and whether the individual has complied with court orders in the criminal proceeding;

(h) Whether a probation agreement, plea in abeyance, or diversion agreement entered into in a criminal proceeding in the ten years preceding the application has been successfully completed;

(i) Whether any tax and child support arrearages have been paid; and

(j) Whether there has been good conduct on the part of the individual subsequent to the individual's offenses.

210.5.2 Competency to Transact the Business of Residential Mortgage Loans. The Commission and the Division will consider information necessary to determine whether an applicant for a license meets the requirement of competency to transact the business of residential mortgage loans, which may include the following:

(a) Past acts related to competency to transact the business of residential mortgage loans;

(b) Whether a civil judgment involving the business of mortgage loans has been entered against the individual, and whether the judgment has been fully satisfied, unless the judgment has been discharged in bankruptcy;

(c) The failure of any previous mortgage loan business in which the individual engaged, and the reasons for any failure;

(d) The individual's management and employment practices in any previous mortgage loan business, including whether or not employees were paid the amounts owed to them;

(e) The individual's training and education in mortgage lending, if any was available to the applicant;

(f) The individual's training, education, and experience in the mortgage loan business or in management of a mortgage loan business, if any was available to the individual;

(g) A lack of knowledge of the Utah Residential Mortgage Practices Act on the part of the individual;

(h) A history of disregard for licensing laws;

(i) A prior history of drug or alcohol dependency within the last five years, and any subsequent period of sobriety; and

(j) Whether the individual has demonstrated competency in business subsequent to any past incompetence by the individual in the mortgage loan business.

210.6 Conversion of Existing Registrations. In order to comply with Section 61-2c-201(1), the division shall convert all valid registrations to licenses on January 1, 2004. The licenses issued to individuals under the authority of this rule shall be issued subject to Section 61-2c-202(4)(a)(ii).

210.7 Licensing Examination. In order to register for the licensing examination, the applicant shall deliver an application to take the examination, together with the applicable examination fee to the testing service designated by the division. If the applicant registers for the examination but fails to take a scheduled examination, the examination fee will be forfeited.

210.7.1 The licensing examination will be a multiple choice examination and will consist of a national portion and a Utah-specific portion. Both portions of the examination must be passed within a six-month period of time.

210.8 Renewal period. Registrations and licenses issued under the Utah Residential Mortgage Practices Act are valid for a period of two years.

210.8.1 Renewal of converted licenses. If an individual whose existing registration was converted by the division to a license pursuant to R162-210.6 applies to renew after January 1, 2004 but before January 1, 2005, the division shall renew the license without requiring proof that the individual has passed the examination required by Section 61-2c-202(4)(a)(i)(C). The renewed license issued under the authority of this section shall be issued subject to Section 61-2c-202(4)(a)(ii).

210.9 Required hours of Continuing Education. As authorized by Section 61-2c-104(7)(d)(ii)(A), the Utah Residential Mortgage Commission has set the number of hours of continuing education required for renewal as follows:

(a) Individuals with renewal dates on or before December 31, 2005 - zero hours.

(b) Individuals with renewal dates after December 31, 2005 - fourteen hours.

 

KEY: residential mortgage loan origination

December 4, 2003

61-2c-103(3)

61-2c-202(4)(a)(i)(C)

61-2c-104(7)(d)(ii)(A)