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SCS CSHB 162(FIN): "An Act relating to mortgage lenders, mortgage brokers, mortgage originators, state agents who collect program administration fees, and other persons who engage in activities relating to mortgage lending; relating to mortgage loan activities; relating to an originator fund; relating to fees for mortgage loan transactions; making certain violations unfair trade practices; relating to persons who are licensed under the Alaska Small Loans Act; and providing for an effective date."

00                SENATE CS FOR CS FOR HOUSE BILL NO. 162(FIN)                                                             
01 "An Act relating to mortgage lenders, mortgage brokers, mortgage originators, state                                     
02 agents who collect program administration fees, and other persons who engage in                                         
03 activities relating to mortgage lending; relating to mortgage loan activities; relating to                              
04 an originator fund; relating to fees for mortgage loan transactions; making certain                                     
05 violations unfair trade practices; relating to persons who are licensed under the Alaska                                
06 Small Loans Act; and providing for an effective date."                                                                  
07 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
08    * Section 1. AS 06.01.050(3) is amended to read:                                                                   
09                 (3)  "financial institution" means an institution subject to the regulation                             
10       of the department under this title; in this paragraph, "institution" includes a                                   
11       commercial bank, savings bank, credit union, premium finance company, small loan                                  
12       company, bank holding company, financial holding company, trust company, savings                                  
13       and loan association, [AND] deferred deposit advance licensee under AS 06.50, a                               
01       licensee under AS 06.60, a small mortgage lender under AS 06.60, and an                                       
02       originator under AS 06.60 who is employed by or works under exclusive contract                                
03       for a small mortgage lender; in this paragraph,                                                               
04                      (A)  "licensee under AS 06.60" has the meaning given to                                        
05            "licensee" in AS 06.60.990;                                                                              
06                      (B)  "originator under AS 06.60" has the meaning given to                                      
07            "originator" in AS 06.60.990;                                                                            
08                      (C)  "small mortgage lender under AS 06.60" has the                                            
09            meaning given to "small mortgage lender" in AS 06.60.990;                                                
10    * Sec. 2. AS 06 is amended by adding a new chapter to read:                                                        
11                 Chapter 60. Mortgage Lending Regulation Act.                                                          
12                           Article 1. Licensing.                                                                       
13            Sec. 06.60.010. License required. (a) Except as provided under AS 06.60.015,                               
14       a person, including a person doing business from outside this state, may not operate as                           
15       a mortgage lender or mortgage broker in this state unless the person is licensed under                            
16       this chapter.                                                                                                     
17            (b)  Except as provided by AS 06.60.017, a person may not operate as an                                      
18       originator in this state unless the person is a natural person who is                                             
19                 (1)  licensed as an originator under this chapter; and                                                  
20                 (2)  works under exclusive contract for, or as an employee of, a                                        
21       mortgage licensee.                                                                                                
22            (c)  A mortgage license may cover more than one location of a mortgage                                       
23       licensee.                                                                                                         
24            (d)  A person who operates as both a mortgage lender and a mortgage broker is                                
25       only required to obtain one mortgage license.                                                                     
26            Sec. 06.60.015. Exemptions; requirements of registration. (a) Except as                                    
27       provided by AS 06.60.370(c) and by (b) and (c) of this section, this chapter does not                             
28       apply to a person who operates as a mortgage lender or mortgage broker if the person                              
29       is                                                                                                                
30                 (1)  a person who is authorized to engage in business as a bank, bank                                   
31       holding company, savings institution, savings and loan association, trust company                                 
01       with banking powers, or credit union under the laws of this state, another state, the                             
02       United States, a territory of the United States, or the District of Columbia, and whose                           
03       mortgage loan activity is subject to the general supervision, regulation, and                                     
04       examination of a regulatory body of this state, another state, the United States, a                               
05       territory of the United States, or the District of Columbia;                                                      
06                 (2)  a subsidiary or an operating subsidiary of a person who is identified                              
07       by (1) of this subsection, or of a bank holding company or savings and loan holding                               
08       company, if the subsidiary or operating subsidiary certifies to the department on a                               
09       form provided by the department that the subsidiary or operating subsidiary is exempt                             
10       from this chapter because of applicable federal statute or regulation;                                            
11                 (3)  an employee of a person identified in (1) or (2) of this subsection;                               
12                 (4)  an exclusive agent of a person identified in (1) or (2) of this                                    
13       section, if the person identified in (1) or (2) of this section has received a                                    
14       determination from a regulatory body of the United States government, based on                                    
15       applicable federal law, that the exclusive agent is exempt from this chapter;                                     
16                 (5)  a nonprofit corporation that makes mortgage loans to promote                                       
17       home ownership or home improvements; in this paragraph, "nonprofit corporation"                                   
18       means a corporation that qualifies under 26 U.S.C. 501(c)(3) or (4) (Internal Revenue                             
19       Code) for an exemption from federal income taxation;                                                              
20                 (6)  an agency of the federal government, a state government, a                                         
21       municipality, or a quasi-governmental agency making or brokering mortgage loans                                   
22       under the specific authority of the laws of a state or the United States;                                         
23                 (7)  a person who acts as a fiduciary for an employee pension benefit                                   
24       plan qualified under 26 U.S.C. (Internal Revenue Code) and who makes mortgage                                     
25       loans solely to participants of the plan from assets of the plan;                                                 
26                 (8)  a person who acts in a fiduciary capacity conferred by the authority                               
27       of a court; or                                                                                                    
28                 (9)  a person who is licensed by the United States Small Business                                       
29       Administration as a small business investment company under 15 U.S.C. 661 - 697g                                  
30       (Small Business Investment Act of 1958).                                                                          
31            (b)  A person who is listed in (a)(1) - (9) of this section shall file a registration                        
01       form to obtain an exemption under (a) of this section. The department shall determine                             
02       the form and content of the registration form.                                                                    
03            (c)  A person who is licensed under AS 06.20 is exempt from the requirements                                 
04       of this chapter, except that the person is subject to AS 06.60.320 - 06.60.380.                                   
05            (d)  In this section, "bank holding company" has the meaning given in 12                                     
06       U.S.C. 1841 (Bank Holding Company Act).                                                                           
07            Sec. 06.60.017. Small mortgage lenders and originators. (a)                                                
08       Notwithstanding AS 06.60.010, the department may register                                                         
09                 (1)  a person to operate as a small mortgage lender;                                                    
10                 (2)  a natural person to operate as an originator for a small mortgage                                  
11       lender if the person is an employee of, or working under exclusive contract for, the                              
12       small mortgage lender.                                                                                            
13            (b)  To qualify for registration as a small mortgage lender, a person shall                                  
14                 (1)  submit an application on a form established by the department;                                     
15                 (2)  pay a fee of $150;                                                                                 
16                 (3)  certify that all money used in the operation of the person's business                              
17       as a small mortgage lender belongs to the person and is not borrowed or received from                             
18       another person; and                                                                                               
19                 (4)  be approved by the department under (d) of this section.                                           
20            (c)  To qualify for registration as an originator under this section, a person shall                         
21                 (1)  submit an application on a form established by the department;                                     
22                 (2)  pay a fee of $75;                                                                                  
23                 (3)  be approved by the department under (d) of this section.                                           
24            (d)  Before approving an application of a person under this section, the                                     
25       department shall determine that                                                                                   
26                 (1)  if the person is applying for registration as a small mortgage lender,                             
27       the financial responsibility, experience, character, and general fitness of the person,                           
28       and of the person's directors, officers, members, owners, and other principals, and the                           
29       organization and operation of the applicant indicate that the business will be operated                           
30       efficiently and fairly, in the public interest, and under the law; and                                            
31                 (2)  the person has not                                                                                 
01                      (A)  been enjoined by a court of competent jurisdiction from                                       
02            engaging in an aspect of the business of providing financial services to the                                 
03            public; and                                                                                                  
04                      (B)  within the previous seven years,                                                              
05                           (i)  been prohibited by a federal or state regulatory                                         
06                 agency from engaging in, participating in, or controlling a finance-                                    
07                 related activity that involves providing financial services to the public;                              
08                           (ii)  been convicted, including a conviction based on a                                       
09                 guilty plea or a plea of nolo contendere, of a felony or a misdemeanor                                  
10                 involving fraud, misrepresentation, or dishonesty;                                                      
11                           (iii)  committed an act, made an omission, or engaged in                                      
12                 a practice that constitutes a breach of a fiduciary duty;                                               
13                           (iv)  made a false material statement on an application                                       
14                 submitted under this chapter; or                                                                        
15                           (v)  violated a provision of this chapter, a regulation                                       
16                 adopted under this chapter, or an order of the department under this                                    
17                 chapter.                                                                                                
18            (e)  A registration issued under this chapter remains in effect for two years                                
19       after the registration is issued.                                                                                 
20            (f)  A small mortgage lender may renew a registration by submitting to the                                   
21       department 30 days before the expiration of the registration                                                      
22                 (1)  a renewal application in the form and manner established by the                                    
23       department;                                                                                                       
24                 (2)  a biennial registration fee of $150; and                                                           
25                 (3)  a report identifying any changes in the information provided under                                 
26       (b) of this section.                                                                                              
27            (g)  An originator may renew a registration as an originator by submitting to                                
28       the department 30 days before the expiration of the licensee's registration                                       
29                 (1)  a renewal application in the form and manner established by the                                    
30       department;                                                                                                       
31                 (2)  a biennial registration fee of $75; and                                                            
01                 (3)  a report identifying any changes in the information provided under                                 
02       (c) of this section.                                                                                              
03            (h)  An application under this section is considered granted unless, within 30                               
04       days after the department determines it has received a complete application, the                                  
05       department notifies the applicant that the department has denied the application                                  
06       because of the applicant's noncompliance with this section.                                                       
07            (i)  The department may adopt regulations to implement this section                                          
08            (j)  In this section,                                                                                        
09                 (1)  "registration" means registration under this section;                                              
10                 (2)  "small mortgage lender" means a person who is registered under                                     
11       this section.                                                                                                     
12            Sec. 06.60.020. Application for mortgage license. An application for a                                     
13       mortgage license must                                                                                             
14                 (1)  be in writing;                                                                                     
15                 (2)  be signed by the applicant and notarized;                                                          
16                 (3)  be on the form prescribed by the department;                                                       
17                 (4)  contain the name of the applicant, including the name of the                                       
18       business, and of the natural person who is designated to obtain the originator license                            
19       under AS 06.60.025;                                                                                               
20                 (5)  if the applicant is a partnership or an association not covered by (6)                             
21       or (7) of this section, contain the name and both the residence and business addresses                            
22       of each partner of the partnership or member of the association;                                                  
23                 (6)  if the applicant is a corporation, contain the name and both the                                   
24       residence and business addresses of each officer and director of the corporation, and a                           
25       shareholder holding                                                                                               
26                      (A)  10 percent or more of the total outstanding voting shares, if                                 
27            the corporation has fewer than 75 shareholders; or                                                           
28                      (B)  more than 50 percent of the outstanding voting shares in                                      
29            the corporation, if the corporation has 75 or more shareholders;                                             
30                 (7)  if the applicant is a limited liability company, contain the name and                              
31       both the residence and business addresses of each member of the company, and any                                  
01       manager of the company who individually owns more than 50 percent of the limited                                  
02       liability company;                                                                                                
03                 (8)  contain the mailing address of the applicant, the street address and                               
04       city, if any, for each business location that will be covered by the license, and an                              
05       identification of the applicant's principal office;                                                               
06                 (9)  if requested by the department, include a complete set of                                          
07       fingerprints of the applicant and of the directors, officers, members, owners, and other                          
08       principals of the applicant as specified by the department to obtain a report of criminal                         
09       justice information and a national criminal history record check;                                                 
10                 (10)  contain other information that the department may require                                         
11       concerning the organization and operations of the applicant and the financial                                     
12       responsibility, background, experience, and activities of the applicant and its directors,                        
13       officers, members, owners, and other principals.                                                                  
14            Sec. 06.60.025. Application for originator license. An application for an                                  
15       originator license must                                                                                           
16                 (1)  be in writing;                                                                                     
17                 (2)  be signed by the applicant and notarized;                                                          
18                 (3)  be on a form prescribed by the department;                                                         
19                 (4)  contain the name and residence address of the applicant;                                           
20                 (5)  include a complete set of fingerprints of the applicant to obtain a                                
21       report of criminal justice information and a national criminal history record check; and                          
22                 (6)  contain other information or supporting material that the                                          
23       department may require concerning the applicant, including other forms of                                         
24       identification of the applicant.                                                                                  
25            Sec. 06.60.026. Transfer of originator license. A person who holds an                                      
26       originator license may not transfer or assign the originator license.                                             
27            Sec. 06.60.027. Fingerprint submissions. The department shall submit                                       
28       fingerprints provided under AS 06.60.020 and 06.60.025 to the Department of Public                                
29       Safety to obtain a report of criminal justice information under AS 12.62 and a national                           
30       criminal history record check under AS 12.62.400.                                                                 
31            Sec. 06.60.030. Investigation. The department shall investigate an applicant                               
01       for a license to determine if the applicant satisfies the requirements of this chapter for                        
02       the license.                                                                                                    
03            Sec. 06.60.035. Fees and expenses. (a) Except as provided by (c) of this                                   
04       section, when an applicant submits an application for a license under this chapter to                             
05       the department, the applicant shall pay to the department                                                         
06                 (1)  a nonrefundable application fee of $250 in partial payment of those                                
07       investigation expenses incurred by the department; and                                                            
08                 (2)  a biennial license fee of $500 for the period that terminates two                                  
09       years after the date the license is issued; after this payment, the biennial license fee is                       
10       due every two years on the anniversary date of the original issuance of the license.                              
11            (b)  An applicant shall pay all reasonable costs and reasonable investigative                                
12       fees incurred by the department before the department issues a license.                                           
13            (c)  An applicant is not required to pay the application fee or the biennial                                 
14       license fee under (a) of this section if the applicant is applying for a mortgage license                         
15       and an originator license, is the principal owner or legally authorized manager of the                            
16       mortgage license applicant, and is designated in the application under AS 06.60.020(4)                            
17       as the individual to receive an originator license for the mortgage licensee.                                     
18            Sec. 06.60.040. Competency testing. (a) A person who applies for an                                        
19       originator license shall pass a competency test conducted and graded by the                                       
20       department. The department shall establish the scope, content, and minimum passing                                
21       score of the test by regulation.                                                                                  
22            (b)  If an individual fails the competency test, the individual may take the                                 
23       competency test again. The department may charge a fee of $150 for each additional                                
24       competency test that the department provides to the person.                                                       
25            Sec. 06.60.045. Bonding. (a) An applicant for a mortgage license shall file                                
26       with the application submitted to the department under AS 06.60.020 a bond with one                               
27       or more sureties in the amount of $25,000 under which the applicant is the obligor.                               
28       The bond must be satisfactory to the department.                                                                  
29            (b)  The bond required by (a) of this section shall be for the use of the                                    
30       department, the Department of Law, or another person to recover for a claim for relief                            
31       against the obligor under this chapter. The bond must state that the obligor will                                 
01       faithfully conform to and abide by the provisions of this chapter and all regulations                             
02       adopted under this chapter and will pay the department, the Department of Law, or                                 
03       another person all money that may become due or owing to the department, the                                      
04       Department of Law, or the other person from the obligor under this chapter.                                       
05            (c)  An applicant for a mortgage license that covers more than one location is                               
06       not required to file more than one bond.                                                                          
07            (d)  The bond required under (a) of this section must be continuous until the                                
08       department revokes or otherwise terminates the license.                                                           
09            (e)  If the department determines that the bond required under (a) of this                                   
10       section is unsatisfactory for any reason, the department may require the mortgage                                 
11       licensee to file with the department, within 10 days after the receipt of a written                               
12       demand from the department, an additional bond that complies with the provisions of                               
13       this section.                                                                                                     
14            Sec. 06.60.050. Decision on application. (a) Within 30 days after the date the                             
15       department determines that it has received a complete application under AS 06.60.020                              
16       or 06.60.025, the required bond if the application is for a mortgage license, and any                             
17       required fees and investigative costs are received by the department, the department                              
18       shall either grant or deny the license.                                                                           
19            (b)  If the department denies the license, the department shall promptly notify                              
20       the applicant. The notification must state the reason for the denial and that the                                 
21       applicant is entitled to a hearing on the denial.                                                                 
22            Sec. 06.60.060. Determinations for mortgage licensing. Before granting a                                   
23       mortgage license, the department shall determine that                                                             
24                 (1)  the applicant has complied with the requirements of this chapter for                               
25       obtaining the mortgage license;                                                                                   
26                 (2)  the financial responsibility, experience, and general fitness of the                               
27       applicant, and of the applicant's directors, officers, members, owners, and other                                 
28       principals, the character of the applicant and the applicant's directors, officers,                               
29       members, owners, and other principals, and the organization and operation of the                                  
30       applicant indicate that the business will be operated efficiently and fairly, in the public                       
31       interest, and under the law; and                                                                                  
01                 (3)  the department has not found grounds for denial of a mortgage                                      
02       license under AS 06.60.065.                                                                                       
03            Sec. 06.60.065. Determinations for originator licensing. Before granting an                                
04       originator license to a person, the department shall determine that the applicant has                             
05                 (1)  complied with the requirements of this chapter and paid all fees for                               
06       obtaining the originator license;                                                                                 
07                 (2)  not been enjoined by a court of competent jurisdiction from                                        
08       engaging in an aspect of the business of providing financial services to the public; and                          
09                 (3)  not, within the previous seven years,                                                              
10                      (A)  been prohibited by a federal or state regulatory agency                                       
11            from engaging in, participating in, or controlling a finance-related activity that                           
12            involves providing financial services to the public;                                                         
13                      (B)  been convicted, including a conviction based on a plea of                                     
14            guilty, no contest, or nolo contendere, of a felony or a misdemeanor involving                               
15            fraud, misrepresentation, or dishonesty;                                                                     
16                      (C)  committed an act, made an omission, or engaged in a                                           
17            practice that constitutes a breach of a fiduciary duty;                                                      
18                      (D)  made a material false statement in an application submitted                                   
19            under this chapter; or                                                                                       
20                      (E)  violated a provision of this chapter, a regulation adopted                                    
21            under this chapter, or an order of the department under this chapter.                                        
22            Sec. 06.60.070. Form and contents of license. A license must be in a form                                  
23       established by the department and must state the full name of the licensee. A mortgage                            
24       license must state the address for each office of the business where the business of the                          
25       licensee is to be conducted. If a mortgage licensee conducts business on the Internet,                            
26       the mortgage license must also state the registered domain address through which the                              
27       mortgage licensee conducts the mortgage licensee's business and the physical location                             
28       of the mortgage licensee's main business office.                                                                  
29            Sec. 06.60.075. License availability. A licensee shall provide a copy of the                               
30       license to a person who requests a copy.                                                                          
31           Article 2. License Duration, Renewal, Inactivity, and Surrender.                                            
01            Sec. 06.60.080. Duration of license. A license issued under this chapter                                   
02       remains in effect for two years after the license is issued unless revoked, suspended,                            
03       surrendered, or becoming inactive under this chapter.                                                             
04            Sec. 06.60.085. Renewal of license. (a) If a licensee intends to renew a license,                          
05       the licensee shall submit to the department 30 days before the expiration of the                                  
06       licensee's license                                                                                                
07                 (1)  a renewal application in the form and manner established by the                                    
08       department;                                                                                                       
09                 (2)  the biennial license fee required by AS 06.60.105;                                                 
10                 (3)  if the renewal is for a mortgage license, a report identifying any                                 
11       changes in the information provided under AS 06.60.020(4) - (8);                                                  
12                 (4)  if the renewal is for an originator license, certificates or other                                 
13       documents that show the continuing education requirements of AS 06.60.160 have                                    
14       been satisfied; and                                                                                               
15                 (5)  if the renewal is for an originator license, the fund fee required by                              
16       AS 06.60.550.                                                                                                     
17            (b)  A renewal under (a) of this section is considered granted unless, within 30                             
18       days after the department determines it has received a completed renewal application                              
19       containing the items in (a) of this section, the department notifies the licensee that the                        
20       department has denied the renewal application because of the licensee's                                           
21       noncompliance with this title.                                                                                    
22            Sec. 06.60.090. Inactive license. (a) A license may become inactive under this                             
23       section.                                                                                                          
24            (b)  To be eligible to have a mortgage license become inactive, all mortgage                                 
25       loans of a licensee must have been paid in full or sold.                                                          
26            (c)  For a license to become inactive, a licensee shall provide the department                               
27       with a written request that the license become inactive and return the license certificate                        
28       to the department. The request must include the licensee's name, address, and other                               
29       information that the department requires to process the request and a statement by the                            
30       licensee that all mortgage loans of the licensee have been paid in full or sold.                                  
31            (d)  The department shall issue an inactive license certificate to a person whose                            
01       license becomes inactive under this section.                                                                      
02            (e)  If a person holds a license that becomes inactive under this section, the                               
03       person may not operate as a mortgage lender, mortgage broker, or originator under the                             
04       license in this state until the license is reactivated.                                                           
05            (f)  If a license becomes inactive under this section, the license remains                                   
06       inactive until the license expires, the person surrenders the license, or the person who                          
07       holds the inactive license provides the department with a written request that the                                
08       license be reactivated. The request must include the information that the department                              
09       requires to process the request.                                                                                  
10            (g)  While a license is inactive under this section, the person holding the                                  
11       inactive license shall pay the biennial license fee as required by AS 06.60.105 and                               
12       inform the department of any change that occurs in the name and address of the                                    
13       person, the location of the person's business, or in the business operations or control of                        
14       the person, but the person is not required to maintain the bond required by                                       
15       AS 06.60.045 or to file the annual report required by AS 06.60.100.                                               
16            (h)  Notwithstanding AS 06.60.120, while a license is inactive under this                                    
17       section, the person who holds the license may not transfer the license to another                                 
18       person.                                                                                                           
19            (i)  While a license is inactive under this section, the person is not required to                           
20       surrender the license under AS 06.60.097(b).                                                                      
21            (j)  While a license is inactive under this section, the person holding the                                  
22       inactive license shall continue to maintain records as required by AS 06.60.135 for the                           
23       business transactions of the person that occurred before the license became inactive.                             
24            (k)  While a license is inactive under this section, the department may take                                 
25       action against the license, the person holding the inactive license, or both for                                  
26       noncompliance with this chapter before the license became inactive or for                                         
27       noncompliance with this section while the license is inactive.                                                    
28            (l)  A licensee whose license lapses under this chapter is not eligible for an                               
29       inactive license under this section unless the license is reactivated under                                       
30       AS 06.60.095.                                                                                                     
31            (m)  A person holding a license that is inactive under this section may not                                  
01       engage in activities for which the license is required, but may receive commissions or                            
02       other payments from a person who contracted with or employed the licensee for                                     
03       services, if the services were performed while the licensee was actively licensed.                                
04            (n)  Except as otherwise provided in this section and by regulations adopted by                              
05       the department, the provisions of this chapter do not apply to a person holding an                                
06       inactive license under this section.                                                                              
07            Sec. 06.60.095. Reactivation of inactive license. (a) Except as provided in (b)                            
08       and (c) of this section, a person who has an inactive license certificate under                                   
09       AS 06.60.090 may apply to the department for an active license and pay the required                               
10       fees.                                                                                                             
11            (b)  A person is eligible for reactivation of an inactive license if the person's                            
12       license has been in an inactive status for less than 24 months from the anniversary date                          
13       of the issuance of the initial inactive license certificate. If the person has been in an                         
14       inactive status for 24 months or longer, the person may obtain a license only by                                  
15       satisfying the qualifications applicable to initial licensure.                                                    
16            (c)  The department may issue an active license that has been converted from                                 
17       inactive status under this section for the term remaining on the license before it                                
18       became inactive.                                                                                                  
19            Sec. 06.60.097. Surrender of license. (a) A licensee may surrender a license                               
20       issued to the licensee by delivering written notice to the department that the licensee                           
21       intends to surrender the license, except that a mortgage licensee may not surrender a                             
22       license until all loans of that mortgage licensee have either been paid in full or sold.                          
23            (b)  A licensee shall surrender a license issued to the licensee if the licensee                             
24       has not engaged in mortgage loan activity for 12 consecutive months.                                              
25            (c)  Surrender of a license under this section does not affect the licensee's civil                          
26       or criminal liability for acts committed before surrender of the license.                                         
27                       Article 3. Licensee Obligations.                                                                
28            Sec. 06.60.100. Annual report. (a) On or before March 15, or on another date                               
29       established by the department by regulation, of each year a mortgage licensee shall file                          
30       a report with the department giving relevant information that the department requires                             
31       concerning the business and operations of each location in this state where the                                   
01       mortgage licensee conducts business in this state during the preceding calendar year.                             
02       The mortgage licensee shall make the report under oath or on affirmation. The content                             
03       and form of the report shall be established by the department by regulation.                                      
04            (b)  A mortgage licensee who fails to file a report as required by this section is                           
05       subject to a civil penalty of $25 for each day's failure to file the report.                                      
06            Sec. 06.60.105. Biennial license fee. (a) Except as provided by (d) of this                                
07       section, a licensee shall pay the department a biennial license fee of $500.                                      
08            (b)  After payment of the initial biennial license fee under AS 06.60.035, a                                 
09       licensee shall pay the biennial license fee every two years on or before the anniversary                          
10       date of the original issuance of the license, subject to renewal by the department.                               
11            (c)  A mortgage licensee who is licensed to act as both a mortgage broker and a                              
12       mortgage lender is not required to pay more than one biennial license fee.                                        
13            (d)  An originator licensee is not required to pay a biennial license fee if the                             
14       licensee holds a mortgage license and an originator license, is the principal owner or                            
15       legally authorized manager of the mortgage licensee, and was designated in the                                    
16       application under AS 06.60.020(4) as the individual to receive an originator license for                          
17       the mortgage licensee.                                                                                            
18            (e)  The license fee imposed by (a) of this section is in addition to the fee                                
19       imposed under AS 43.70 (Alaska Business License Act).                                                             
20            Sec. 06.60.110. Location of business. A mortgage licensee may not maintain                                 
21       the mortgage licensee's principal place of business or a branch office within an office,                          
22       suite, room, or place of business in which any other business is solicited or engaged in,                         
23       or in association or conjunction with another business, unless the name, ownership,                               
24       and business purpose of the other business is disclosed in the mortgage licensee's                                
25       application for a mortgage license.                                                                               
26            Sec. 06.60.115. Change of place of business. If a mortgage licensee wishes to                              
27       change the mortgage licensee's place of business to another location, the mortgage                                
28       licensee shall submit a written notice to the department at least 10 days before                                  
29       relocating the business. If the mortgage licensee is otherwise in compliance with this                            
30       chapter, the department shall issue a revised mortgage license to the mortgage licensee                           
31       that reflects the new location.                                                                                   
01            Sec. 06.60.120. Transfer of business. A mortgage licensee may only transfer                                
02       or assign the licensee's business if                                                                              
03                 (1)  an application is made to the department to transfer or assign the                                 
04       business to another mortgage licensee with the same type of mortgage license as the                               
05       transferring or assigning mortgage licensee;                                                                      
06                 (2)  at least 30 days before the effective date of the proposed transfer or                             
07       assignment, the department determines it has received a complete application from the                             
08       proposed assignee or transferee; and                                                                              
09                 (3)  the department determines that the proposed transferee or assignee                                 
10       complies with AS 06.60.060.                                                                                       
11            Sec. 06.60.130. Change in business control or business operations. (a) The                                 
12       prior written approval of the department is required for the continued operation of a                             
13       mortgage licensee's business when a change in control of the mortgage licensee is                                 
14       proposed. The department may require the information it considers necessary to                                    
15       determine whether a new application is required. The mortgage licensee requesting                                 
16       approval of the change in control shall pay all reasonable expenses incurred by the                               
17       department to investigate and approve or deny the change in control.                                              
18            (b)  If there is a material change in the business operations of a mortgage                                  
19       licensee not covered by AS 06.60.120, the mortgage licensee shall provide written                                 
20       notice to the department at least 30 days before the effective date of the change in                              
21       business operations.                                                                                              
22            Sec. 06.60.135. Records of mortgage licensee. (a) The requirements of this                                 
23       section apply to the business transactions of a mortgage licensee that occur entirely or                          
24       partially in this state.                                                                                          
25            (b)  A mortgage licensee shall keep and use in the mortgage licensee's business                              
26       the accounting records that are in accord with generally accepted accounting                                      
27       principles.                                                                                                       
28            (c)  A mortgage licensee shall maintain a record of the account of each                                      
29       borrower and for each mortgage loan or mortgage loan application that is related to the                           
30       purchase or refinancing of an existing mortgage loan. This record must contain all                                
31       documents, work papers, electronic correspondence, and forms that are produced or                                 
01       prepared for the mortgage loan by the mortgage licensee, and the mortgage licensee                                
02       shall retain each document, work paper, electronic correspondence, and form for 36                                
03       months from the date they were created.                                                                           
04            (d)  A mortgage licensee shall retain for at least three years after final payment                           
05       is made on a mortgage loan, or three years after a mortgage loan is sold, whichever                               
06       occurs first, the original contract for the mortgage licensee's compensation, copies of                           
07       the note, settlement statement, and truth-in-lending disclosure, an account of fees                               
08       received in connection with the loan, and other papers or records relating to the loan                            
09       that may be required by department order or regulation.                                                           
10            (e)  If a mortgage licensee conducts business as a mortgage loan servicing                                   
11       agent for mortgage loans that the mortgage licensee owns, or as an agent for other                                
12       mortgage lenders or investors, the mortgage licensee shall, in addition to complying                              
13       with (b) and (c) of this section, maintain a record for each mortgage loan. The record                            
14       of each mortgage loan must include the amount of the mortgage loan, the total amount                              
15       of interest and finance charges on the mortgage loan, the interest rate on the mortgage                           
16       loan, the amount of each payment to be made on the mortgage loan, a description of                                
17       the collateral taken for the mortgage loan, a history of all payments received by the                             
18       mortgage licensee on the mortgage loan, a detailed history of the amount of each                                  
19       payment that is applied to the reduction of the mortgage loan principal, the interest                             
20       that accrues on the mortgage loan, and any other fees and charges that are related to                             
21       the mortgage loan, as well as other papers required by law, department order, or                                  
22       regulation. The mortgage licensee shall retain the record required by this subsection                             
23       for three years after the loan is sold to another mortgage loan servicing agent or after                          
24       the mortgage loan is satisfied, whichever occurs first.                                                           
25            (f)  In this section, "mortgage loan servicing agent" means a person who acts                                
26       on behalf of the owner of a mortgage loan to collect payments on the mortgage loan                                
27       and enforce the terms of the mortgage loan.                                                                       
28            Sec. 06.60.140. Availability of out-of-state records. A mortgage licensee                                  
29       who operates an office or other place of business outside this state shall, at the request                        
30       of the department,                                                                                                
31                 (1)  make the records of the office or place of business available to the                               
01       department at a location within this state; or                                                                    
02                 (2)  reimburse the department its reasonable costs, as provided in                                      
03       AS 06.60.250(f), that are incurred by the department in conjunction with an                                       
04       investigation or examination conducted at the office or place of business.                                        
05            Sec. 06.60.145. Disqualified persons. (a) A disqualified person may not be an                              
06       officer, a director, a partner, a member, a sole proprietor, a trustee, or an employee of                         
07       a mortgage licensee, or hold another position with similar responsibilities, with the                             
08       organization of a mortgage licensee. In this subsection, "employee" means an                                      
09       individual who negotiates an agreement with a member of the public for the mortgage                               
10       licensee or who has access to, or responsibility for, escrow accounts or escrow money                             
11       held by the mortgage licensee.                                                                                    
12            (b)  A mortgage licensee may not permit a disqualified person to obtain an                                   
13       ownership interest in a mortgage licensee's business without the prior written approval                           
14       of the department.                                                                                                
15            (c)  Before a person may obtain an ownership interest in a mortgage licensee's                               
16       business, the person shall authorize the department to access the person's criminal                               
17       history information in any state or federal court to determine whether the person is a                            
18       disqualified person.                                                                                              
19            (d)  In this section,                                                                                        
20                 (1)  "disqualified person" means a person who is not a licensee;                                        
21                 (2)  "ownership interest" means an ownership interest of                                                
22                      (A)  10 percent or more, if the mortgage licensee is a                                             
23            corporation with fewer than 75 shareholders;                                                                 
24                      (B)  more than 50 percent, if the mortgage licensee is a                                           
25            corporation with 75 or more shareholders or a limited liability company.                                     
26            Sec. 06.60.150. Posting of license. A mortgage licensee shall conspicuously                                
27       post the mortgage license in each place of business of the mortgage licensee in the                               
28       state.                                                                                                            
29            Sec. 06.60.155. Restriction on originator licensee work. An originator                                     
30       licensee may only work as an originator licensee under contract for, or as an employee                            
31       of, one mortgage licensee.                                                                                        
01            Sec. 06.60.157. Mortgage licensee restrictions on performance of                                           
02       originator activities. A mortgage licensee may not perform originator activities                                
03       except through a licensed originator who is an employee of or under exclusive contract                            
04       with a mortgage licensee.                                                                                         
05            Sec. 06.60.159. Mortgage licensee employment of, contract with, and                                        
06       liability for originator. (a) A mortgage licensee may not employ, or enter into a                               
07       contract with a person who acts as an originator for the mortgage licensee unless the                             
08       person has an originator license.                                                                                 
09            (b)  A mortgage licensee is liable for the conduct of a person acting as an                                  
10       originator if the mortgage licensee knows, or should have known, that the person's                                
11       conduct violates this chapter and the person is employed by or is under contract with                             
12       the mortgage licensee to act as an originator.                                                                    
13            Sec. 06.60.160. Continuing education requirements. (a) An originator                                       
14       licensee shall complete and submit to the department evidence of at least 24 hours of                             
15       continuing education for each biennial license period. The originator licensee or                                 
16       mortgage licensee shall submit the evidence when the originator licensee or mortgage                              
17       licensee submits a license renewal application or an application for reactivation under                           
18       AS 06.60.095. The 24 hours of continuing education must be in training programs                                   
19       approved by the department.                                                                                       
20            (b)  The department shall establish an education committee consisting of seven                               
21       members. The commissioner of commerce, community, and economic development                                        
22       shall appoint two persons employed by the department and five licensees to serve on                               
23       the committee. A licensee may apply to the department to serve on the education                                   
24       committee established under this subsection by submitting an application in the form                              
25       and with the content established by the department.                                                               
26            (c)  The department may consider the recommendations of the education                                        
27       committee when determining which training programs to approve for the continuing                                  
28       education requirements.                                                                                           
29            (d)  The department shall publish on a regular basis a listing of training                                   
30       programs that may be used to satisfy the continuing education requirements of this                                
31       section.                                                                                                          
01                    Article 4. Discipline and Investigation.                                                           
02            Sec. 06.60.200. Disciplinary action. (a) In addition to any other disciplinary                             
03       action allowed under this chapter, the department may suspend or revoke a license or a                            
04       registration under AS 06.60.017 or take other disciplinary action against a licensee or                           
05       small mortgage lender, including action under AS 06.01 or a regulation adopted under                              
06       this chapter or AS 06.01, if the department finds that                                                            
07                 (1)  the licensee failed to                                                                             
08                      (A)  make a payment required by this chapter;                                                      
09                      (B)  maintain a bond required under AS 06.60.045, if the                                           
10            licensee is a mortgage licensee;                                                                             
11                      (C)  satisfy the continuing education requirements, if the                                         
12            licensee is an originator licensee;                                                                          
13                      (D)  comply with an applicable provision of this title, with an                                    
14            applicable regulation adopted under this title, with a lawful demand, ruling,                                
15            order, or requirement of the department, or with another statute or regulation                               
16            applicable to the conduct of the licensee's business;                                                        
17                 (2)  the small mortgage lender has violated a provision of this chapter                                 
18       applicable to the small mortgage lender;                                                                          
19                 (3)  the licensee or small mortgage lender has, with respect to a                                       
20       mortgage loan transaction,                                                                                        
21                      (A)  made a material misrepresentation;                                                            
22                      (B)  made a false promise;                                                                         
23                      (C)  engaged in a serious course of misrepresentation or made a                                    
24            false promise through another licensee or small mortgage lender;                                             
25                      (D)  engaged in conduct that is fraudulent or dishonest;                                           
26                      (E)  procured, or helped another person to procure, a license or                                   
27            a registration under AS 06.60.017 by deceiving the department;                                               
28                      (F)  engaged in conduct of which the department did not have                                       
29            knowledge when the department issued the license or the registration under                                   
30            AS 06.60.017, if the conduct demonstrates that the licensee or small mortgage                                
31            lender is not fit to engage in the activities for which the licensee was licensed                            
01            or small mortgage lender was registered;                                                                     
02                      (G)  authorized, directed, planned, or aided in the publishing,                                    
03            distribution, or circulation of a materially false statement or a material                                   
04            misrepresentation concerning the licensee's business or the small mortgage                                   
05            lender's business or concerning mortgage loans originated in the course of the                               
06            licensee's business or the small mortgage lender's business in this or another                               
07            state; or                                                                                                    
08                 (4)  a fact or condition exists that would have constituted grounds for                                 
09       denial of the initial issuance or the renewal of the license or the registration under                            
10       AS 06.60.017.                                                                                                     
11            (b)  In addition to the bases for disciplinary action under (a) of this section, the                         
12       department may revoke the license of a licensee, or the registration of a small                                   
13       mortgage lender, who is convicted, including conviction by a plea of not guilty, no                               
14       contest, or nolo contendere, of a felony or misdemeanor involving fraud,                                          
15       misrepresentation, or dishonesty committed while licensed under this chapter or                                   
16       registered under AS 06.60.017. A person whose license or registration under                                       
17       AS 06.60.017 is revoked under this subsection is not qualified to receive a new license                           
18       or another registration under AS 06.60.017 until the person provides proof acceptable                             
19       to the department that the person has been unconditionally discharged from the                                    
20       conviction. In this subsection, "unconditional discharge" has the meaning given in                                
21       AS 12.55.185.                                                                                                     
22            (c)  A disciplinary action under this section may be taken by itself or in                                   
23       conjunction with one or more other disciplinary actions under this chapter.                                       
24            Sec. 06.60.210. Suspension or revocation related to fund. (a) When an                                      
25       award is made from the fund, the department may suspend or revoke the license of the                              
26       originator licensee whose actions formed the basis of the award.                                                  
27            (b)  The department shall lift a suspension made under (a) of this section if the                            
28       originator licensee reaches an agreement with the department on terms and conditions                              
29       for the repayment to the fund of the money awarded to the claimant and the costs of                               
30       hearing the fund claim. The department may reimpose the suspension if the originator                              
31       licensee violates the terms of a repayment agreement entered into under this                                      
01       subsection.                                                                                                       
02            Sec. 06.60.230. Divestment. If the department revokes a mortgage license or a                              
03       registration of a small mortgage lender, the mortgage licensee or the small mortgage                              
04       lender shall divest itself of all outstanding loans that were issued under this chapter by                        
05       selling or assigning them to another mortgage licensee or small mortgage lender.                                  
06       Divestment under this section must be approved by the department.                                                 
07            Sec. 06.60.240. Reinstatement. The department may reinstate a revoked                                      
08       license or registration under AS 06.60.017 if the licensee or small mortgage lender                               
09       complies with this chapter or with a demand, ruling, or requirement made by the                                   
10       department under this chapter. Before reinstatement of a license or registration under                            
11       AS 06.60.017, the licensee or small mortgage lender shall pay any fees, restitution,                              
12       and civil penalties owing under this chapter.                                                                     
13            Sec. 06.60.250. Investigation and examination. (a) The department may                                      
14       investigate and examine the affairs, business premises, and records of a person                                   
15       required to be licensed under this chapter or a small mortgage lender to determine                                
16       compliance with this chapter, AS 06.01, and applicable regulations adopted under                                  
17       AS 06.01 or this chapter. Notwithstanding AS 06.01.015, the department may conduct                                
18       an examination every 36 months. The department may conduct an examination more                                    
19       often if the examination is part of the review of a complaint or other information                                
20       received by the department concerning the licensee or small mortgage lender.                                      
21            (b)  For the purposes of conducting an examination under this section, the                                   
22       department                                                                                                        
23                 (1)  shall have free access to the place of business, books, accounts,                                  
24       safes, and vaults of the licensee or small mortgage lender to examine and make copies                             
25       as necessary;                                                                                                     
26                 (2)  may conduct the examination without prior notice to the licensee or                                
27       small mortgage lender; and                                                                                        
28                 (3)  may examine, under oath or affirmation, all persons whose                                          
29       testimony the department may require to conduct the examination.                                                  
30            (c)  For the purpose of hearings, investigations, or other proceedings under this                            
31       chapter and except as otherwise provided in this chapter, the department or an officer                            
01       designated by the department may administer oaths and affirmations, subpoena                                      
02       witnesses, compel the attendance of witnesses, take evidence, and require the                                     
03       production of books, papers, correspondence, memoranda, agreements, or other                                      
04       documents or records that the department considers relevant or material to the matter.                            
05            (d)  If a person refuses to comply with a subpoena, the superior court, on                                   
06       application by the department, may issue to the person an order requiring the person to                           
07       appear before the department to produce documentary evidence or to give evidence                                  
08       touching the matter under investigation or in question.                                                           
09            (e)  The department may share information received or collected during an                                    
10       examination, investigation, or other proceeding with other law enforcement agencies.                              
11            (f)  A person shall reimburse the department reasonable costs incurred by the                                
12       department to conduct an examination under this section. The reimbursement under                                  
13       this subsection may not exceed the rate of $75 an hour for the examination, plus travel                           
14       costs, including a per diem allowance that does not exceed the per diem allowance for                             
15       employees of the state under AS 39.20.110.                                                                        
16            Sec. 06.60.260. Revocation, removal, or suspension of originator licensee.                                 
17       If the department finds that an originator licensee is dishonest, reckless, or                                    
18       incompetent when operating as an originator, or fails to comply with applicable law,                              
19       with regulations or orders of the department, or with written requirements or                                     
20       instructions of the department relating to the originator license, the department may                             
21       revoke or suspend the originator license, remove the originator licensee from                                     
22       operating as an originator in the state, or order a person licensed under this title to                           
23       remove the originator licensee from operating as an originator for the person.                                    
24            Sec. 06.60.270. Removal by entity. A mortgage licensee shall remove an                                     
25       originator licensee from acting as an originator for the mortgage licensee if the                                 
26       department directs the mortgage licensee to remove the originator licensee under                                  
27       AS 06.60.260.                                                                                                     
28            Sec. 06.60.280. Department list. The department shall make available to the                                
29       public a list of all licensees who have been censured, barred, or had their licenses                              
30       suspended or revoked under this chapter. The department shall update the list on a                                
31       monthly basis.                                                                                                    
01                  Article 5. Business Duties and Restrictions.                                                         
02            Sec. 06.60.320. False, misleading, or deceptive advertising prohibited. A                                  
03       person, including a small mortgage lender, may not advertise, print, display, publish,                            
04       distribute, broadcast, or cause or permit to be advertised, printed, displayed, published,                        
05       distributed, or broadcast, in any manner a statement or representation with regard to                             
06       the rates, terms, or conditions for a mortgage loan that is false, misleading, or                                 
07       deceptive.                                                                                                        
08            Sec. 06.60.330. Compliance with federal requirements. A person, including                                  
09       a small mortgage lender, subject to this chapter shall conduct the person's mortgage                              
10       loan activities in compliance with 12 CFR Part 226 and other regulations adopted by                               
11       the federal government under                                                                                      
12                 (1)  12 U.S.C. 2601 - 2617 (Real Estate Settlement Procedures Act of                                    
13       1974);                                                                                                            
14                 (2)  12 U.S.C. 2801 - 2810 (Home Mortgage Disclosure Act of 1975);                                      
15                 (3)  12 U.S.C. 2901 - 2908 (Community Reinvestment Act of 1977);                                        
16                 (4)  15 U.S.C. 1601 - 1666j and 1671 - 1693r (Consumer Credit                                           
17       Protection Act);                                                                                                  
18                 (5)  42 U.S.C. 3601 - 3631 (Fair Housing Act of 1968); and                                              
19                 (6)  any other federal law or regulation.                                                               
20            Sec. 06.60.340. Prohibited activities. In addition to activities prohibited                                
21       elsewhere in this chapter or by law, a person who is a licensee, a person who is                                  
22       required to be licensed under this chapter, a person who is a small mortgage lender,                              
23       and a person who is licensed under AS 06.20 may not misrepresent or conceal material                              
24       facts or make false promises likely to influence, persuade, or induce an applicant for a                          
25       mortgage loan or a borrower to enter into a mortgage loan transaction, or, in the course                          
26       of a mortgage loan transaction,                                                                                   
27                 (1)  pursue a course of misrepresentation through an agent;                                             
28                 (2)  improperly refuse to issue a satisfaction of a mortgage loan;                                      
29                 (3)  fail to account for or deliver to a person money, a document, or                                   
30       another thing of value obtained in connection with a mortgage loan, including money                               
31       provided for a real estate appraisal or a credit report if the person is not entitled to                          
01       retain the money under the circumstances;                                                                         
02                 (4)  pay, receive, or collect, in whole or in part, a commission, fee, or                               
03       other compensation for brokering a mortgage loan in violation of this chapter,                                    
04       including a mortgage loan brokered by an unlicensed person other than an exempt                                   
05       person under AS 06.60.015;                                                                                        
06                 (5)  fail to disburse money in accordance with a written commitment or                                  
07       agreement to make a mortgage loan;                                                                                
08                 (6)  engage in a transaction, practice, or course of business that is not                               
09       engaged in by the person in good faith or fair dealing or that constitutes a fraud on a                           
10       person in connection with the brokering, making, purchase, or sale of a mortgage loan;                            
11                 (7)  influence or attempt to influence through coercion, extortion, or                                  
12       bribery the development, reporting, result, or review of a real estate appraisal sought                           
13       in connection with a mortgage loan; this paragraph does not prohibit a person from                                
14       asking an appraiser to                                                                                            
15                      (A)  consider additional appropriate property information;                                         
16                      (B)  provide further detail, substantiation, or explanation for the                                
17            appraiser's value determination; or                                                                          
18                      (C)  correct errors in the appraisal report;                                                       
19                 (8)  in a loan commitment or prequalification letter, make a false or                                   
20       misleading statement, or omit relevant information or conditions that the person knew                             
21       or reasonably should have known from a preliminary examination of the borrower's                                  
22       loan application, credit report, assets, and income, except that this paragraph does not                          
23       apply if the borrower made a false or misleading statement or omitted relevant                                    
24       information in the loan application that the person relied on when issuing the loan                               
25       commitment or prequalification letter;                                                                            
26                 (9)  engage in a practice or course of business in which the ultimate                                   
27       rates, terms, or costs of mortgage loans are materially worse for the borrowers than                              
28       they are represented to be in the first good faith estimates the person provides to the                           
29       borrowers; this paragraph does not apply if                                                                       
30                      (A)  the person's generally published or advertised rates, terms,                                  
31            or costs, if any, change for a borrower's loan program; or                                                   
01                      (B)  new or changed information from the borrower makes it                                         
02            necessary to change the loan program offered to the borrower;                                                
03                 (10)  represent that the person has a license, registration, title,                                     
04       certification, sponsorship, approval, status, affiliation or connection that the person                           
05       does not have;                                                                                                    
06                 (11)  engage in unfair, deceptive, or fraudulent mortgage loan practices                                
07       or advertising.                                                                                                   
08            Sec. 06.60.350. Certain refinancing prohibited. (a) A covered person may                                   
09       not refinance a mortgage loan within 12 months after the date the mortgage loan is                                
10       closed, unless the refinancing is beneficial to the borrower.                                                     
11            (b)  The factors to be considered when determining if refinancing is beneficial                              
12       to the borrower under this section may include whether                                                            
13                 (1)  the borrower's new monthly payment is lower than the total of all                                  
14       monthly obligations being refinanced, after taking into account the costs and fees of                             
15       the refinancing;                                                                                                  
16                 (2)  the amortization period of the new mortgage loan is different from                                 
17       the amortization period of the mortgage loan being refinanced;                                                    
18                 (3)  the borrower receives cash in excess of the costs and fees of the                                  
19       refinancing;                                                                                                      
20                 (4)  the rate of interest of the borrower's promissory note is reduced;                                 
21                 (5)  the mortgage loan changes from an adjustable rate loan to a fixed                                  
22       rate loan; in a determination under this paragraph, the department may take into                                  
23       account costs and fees;                                                                                           
24                 (6)  the refinancing is necessary to respond to a bona fide personal need                               
25       or an order of a court of competent jurisdiction;                                                                 
26                 (7)  the original term of the mortgage loan being refinanced is two                                     
27       years or less; and                                                                                                
28                 (8)  the refinancing is being made to prevent a foreclosure on an                                       
29       existing mortgage loan.                                                                                           
30            Sec. 06.60.360. Escrow accounts. (a) A covered person and a borrower may                                   
31       agree that the covered person will keep in an escrow account all money that the                                   
01       borrower is required to pay to defray future taxes or insurance premiums or for other                             
02       lawful purposes. The escrow account must be segregated from the other accounts of                                 
03       the covered person and be subject to a written escrow agreement. The covered person                               
04       may not commingle the borrower's money with the general funds of the covered                                      
05       person. Money deposited in an escrow account under this subsection shall be                                       
06       maintained in the account until it is disbursed in accordance with the written escrow                             
07       agreement.                                                                                                        
08            (b)  A covered person may not require a borrower to pay money into escrow to                                 
09       defray future taxes, to defray insurance premiums, or for another purpose, in                                     
10       connection with a subordinate mortgage loan, unless an escrow account for that                                    
11       purpose is not being maintained for the mortgage loan that is superior to the                                     
12       subordinate mortgage loan.                                                                                        
13            (c)  If the billing address of a covered person who is holding money in escrow                               
14       for insurance premiums changes, the covered person shall notify the insurer in writing                            
15       about the change of billing address within 30 days after the change, or 60 days before                            
16       the renewal date of the insurance policy, whichever is later.                                                     
17            (d)  A covered person who accepts money belonging to a borrower in                                           
18       connection with a mortgage loan shall deposit all of the money into an escrow account                             
19       maintained by the covered person in a bank or another recognized depository                                       
20       institution. In this subsection, "recognized depository institution" means a person who                           
21       is organized as a financial institution under the laws of a state or the federal                                  
22       government and whose deposits are insured by a federal agency.                                                    
23            (e)  Money held in an escrow account under this section is exempt from                                       
24       execution, attachment, or garnishment under AS 09.38 and is not subject to a claim                                
25       under AS 09.38.065.                                                                                               
26            Sec. 06.60.370. Criminal liability of licensee or small mortgage lender. (a)                               
27       The department may report violations of (b) - (e) of this section to the attorney                                 
28       general, who may institute the proper proceedings to enforce the criminal penalties                               
29       provided in (b) - (e) of this section.                                                                            
30            (b)  A person, including a small mortgage lender, who knowingly provides                                     
31       false or misleading information to the department that is material under this chapter is                          
01       guilty of a class A misdemeanor.                                                                                  
02            (c)  A licensee, person who is a small mortgage lender, or person who is                                     
03       exempt under AS 06.60.015 who knowingly fails to account for or deliver to a person                               
04       money, deposits, or checks or other forms of negotiable instruments in violation of the                           
05       provisions of this chapter is guilty of a class A misdemeanor.                                                    
06            (d)  A licensee or a small mortgage lender who knowingly fails to disburse                                   
07       money belonging to the borrower without just cause is guilty of a class A                                         
08       misdemeanor.                                                                                                      
09            (e)  A mortgage lender, mortgage broker, or originator who knowingly                                         
10       operates without a license or without being registered under AS 06.60.017, and is not                             
11       exempt under AS 06.60.015 is guilty of a class A misdemeanor.                                                     
12            Sec. 06.60.380. Definition of "covered person." In AS 06.60.320 -                                          
13       06.60.380, "covered person" means a mortgage licensee or a person who is licensed                                 
14       under AS 06.20.                                                                                                   
15                         Article 6. Enforcement.                                                                       
16            Sec. 06.60.400. Cease and desist orders. The department may issue, under                                   
17       AS 06.01.030, an order directing a person, including a small mortgage lender, to cease                            
18       and desist.                                                                                                       
19            Sec. 06.60.410. Censure, suspension, or bar. (a) In addition to any other                                  
20       remedy provided under this chapter, the department may, by order after appropriate                                
21       notice and opportunity for a hearing, censure a person, suspend the license of a person                           
22       for a period not to exceed 12 months, suspend the registration of a small mortgage                                
23       lender for a period not to exceed 12 months, or bar a person from a position of                                   
24       employment, management, or control of a licensee or a small mortgage lender, if the                               
25       department finds that                                                                                             
26                 (1)  the censure, suspension, or bar is in the public interest;                                         
27                 (2)  the person has knowingly committed or caused a violation of this                                   
28       chapter or a regulation adopted under this chapter; and                                                           
29                 (3)  the violation has caused material damage to the licensee, to the                                   
30       small mortgage lender, or to the public.                                                                          
31            (b)  When a person who is the subject of a proposed order under this section                                 
01       receives a notice of the department's intention to issue an order under this section, the                         
02       person is immediately prohibited from engaging in any activities for which a license or                           
03       registration as a small mortgage lender is required under this chapter.                                           
04            (c)  A person who is suspended or barred under this section is prohibited from                               
05       participating in a business activity of a licensee or a small mortgage lender and from                            
06       engaging in a business activity on the premises where a licensee or small mortgage                                
07       lender is conducting the licensee's or small mortgage lender's business. This                                     
08       subsection may not be construed to prohibit a suspended or barred person from having                              
09       the person's personal transactions processed by a licensee or a small mortgage lender.                            
10            Sec. 06.60.420. Civil penalty for violations. (a) A person, including a small                              
11       mortgage lender, who violates a provision of this chapter or a regulation adopted                                 
12       under this chapter is liable for a civil penalty not to exceed $10,000 for each violation.                        
13            (b)  The remedies provided by this section and by other sections of this chapter                             
14       are not exclusive and may be applied in combination with other remedies to enforce                                
15       the provisions of this chapter.                                                                                   
16            Sec. 06.60.430. Additional enforcement provisions, actions, and rights. (a)                                
17       The department may treat a licensee or a small mortgage lender as a financial                                     
18       institution under AS 06.01 when applying the enforcement provisions of AS 06.01.                                  
19            (b)  This chapter may not be interpreted to prevent the attorney general or any                              
20       other person from exercising the rights provided under AS 45.50.471 - 45.50.561.                                  
21            (c)  If the department determines that a licensee, a small mortgage lender, or a                             
22       person acting on behalf of the licensee or small mortgage lender is in violation of, or                           
23       has violated, a provision of this chapter, the department may refer the information to                            
24       the attorney general and request that the attorney general investigate the violation                              
25       under AS 45.50.495. The attorney general may enjoin a violation of this chapter and                               
26       may seek restitution, rescission, and other relief as allowed by law.                                             
27            (d)  In addition to another investigation allowed under this chapter, the                                    
28       department may conduct other examinations, periodic audits, special audits,                                       
29       investigations, and hearings as may be necessary and proper for the efficient                                     
30       administration of this chapter.                                                                                   
31            Sec. 06.60.440. Definition. In AS 06.60.400 - 06.60.440, "small mortgage                                   
01       lender" includes a natural person who is an employee of, or working under exclusive                               
02       contract for, a small mortgage lender.                                                                            
03                     Article 7. Originator Surety Fund.                                                                
04            Sec. 06.60.500. Originator surety fund. The originator surety fund is                                      
05       established as a separate account in the general fund.                                                            
06            Sec. 06.60.510. Composition of fund. The fund consists of payments made by                                 
07       originator licensees under AS 06.60.550, filing fees retained under AS 06.60.620,                                 
08       income earned on the investment of the money in the fund, and money deposited in                                  
09       the fund by the department under AS 06.60.740.                                                                    
10            Sec. 06.60.520. Use of fund. The legislature may appropriate the money                                     
11       collected in the fund under AS 06.60.510 to the department to implement                                           
12       AS 06.60.500 - 06.60.750, including paying claims, holding hearings, and incurring                                
13       legal expenses and other expenses directly related to fund claims and the operation of                            
14       the fund. Nothing in AS 06.60.500 - 06.60.750 creates a dedicated fund.                                           
15            Sec. 06.60.530. Fund report. Every six months the department shall provide a                               
16       written report to the director of the office of management and budget on the activities                           
17       of the fund, the balances in the fund, interest earned on the fund, and interest returned                         
18       to the fund.                                                                                                      
19            Sec. 06.60.540. Approval required. (a) The department must approve a fund                                  
20       expenditure that is used to prepare, print, manufacture, sponsor, produce, or otherwise                           
21       provide an item or a service to a member of the public, a licensee, a potential licensee,                         
22       or another person.                                                                                                
23            (b)  In this section, "an item or a service" includes an information pamphlet, an                            
24       examination preparation packet, an educational course, the certification of a                                     
25       continuing education course, and an instructor for a continuing education course.                                 
26            Sec. 06.60.550. Required fund fees. (a) A person who applies for or renews                                 
27       an originator license shall pay to the department, in addition to the fees required by                            
28       AS 06.60.035, a fund fee not to exceed $150.                                                                      
29            (b)  Every two years, if the department determines that the average balance in                               
30       the fund during the previous two years was less than $250,000 or more than $500,000,                              
31       the department shall, unless the department waives the adjustment, adjust the fund fee                            
01       so that the average balance of the fund during the next two years is anticipated to be an                         
02       amount that is not less than $250,000 or more than $500,000. In this subsection,                                  
03       "average balance" means the average balance in the fund after the department deducts                              
04       anticipated expenditures for claims against the fund and for hearing and legal expenses                           
05       directly related to fund operations and claims.                                                                   
06            (c)  At least once a month, the department shall pay the fees collected under                                
07       this section into the general fund. These payments shall be credited to the fund.                                 
08            (d)  Notwithstanding (a) of this section, an originator licensee who obtains an                              
09       initial originator license when the department has reduced the fund fee to nothing shall                          
10       nonetheless pay a fund fee of $150 to the department for the first year of the originator                         
11       license or, for a mortgage licensee, of operating as an originator.                                               
12            Sec. 06.60.560. Claim for reimbursement. In addition to any other remedies                                 
13       available to the person, a person may seek reimbursement for a loss suffered in a                                 
14       mortgage loan transaction as a result of fraud, misrepresentation, deceit, or the                                 
15       wrongful conversion of money by an originator licensee and is eligible to be                                      
16       reimbursed under AS 06.60.500 - 06.60.750 for the loss from money appropriated for                                
17       that purpose.                                                                                                     
18            Sec. 06.60.570. Submission of fund claim. To seek reimbursement under                                      
19       AS 06.60.560, a person shall submit a fund claim to the department for the                                        
20       reimbursement on a form furnished by the department. The person must file the fund                                
21       claim within two years after the occurrence of the fraud, misrepresentation, deceit, or                           
22       conversion that is claimed as the basis for the reimbursement.                                                    
23            Sec. 06.60.580. Form and contents of fund claim. The form for a fund claim                                 
24       shall be executed under penalty of unsworn falsification and must include                                         
25                 (1)  the name and address of each originator licensee involved;                                         
26                 (2)  the amount of the alleged loss;                                                                    
27                 (3)  the date or period of time during which the alleged loss occurred;                                 
28                 (4)  the date when the alleged loss was discovered;                                                     
29                 (5)  the name and address of the claimant; and                                                          
30                 (6)  a general statement of the facts related to the fund claim.                                        
31            Sec. 06.60.590. Claim hearing. Except as otherwise provided by                                             
01       AS 06.60.610, a hearing on a fund claim shall be handled by the office of                                         
02       administrative hearings (AS 44.64.010).                                                                           
03            Sec. 06.60.600. Filing and distribution of claim. At least 20 days before a                                
04       hearing is held on the fund claim by the office of administrative hearings                                        
05       (AS 44.64.010), the department shall send a copy of the claim filed with the                                      
06       department to                                                                                                     
07                 (1)  each originator licensee alleged to have committed the misconduct                                  
08       resulting in the alleged loss;                                                                                    
09                 (2)  the employer of the originator licensee described in (1) of this                                   
10       section; and                                                                                                      
11                 (3)  any other parties involved in the mortgage loan transaction that is                                
12       the subject of the fund claim.                                                                                    
13            Sec. 06.60.610. Election to use small claims court. (a) Within seven days                                  
14       after receiving a copy of a fund claim under AS 06.60.600, each originator licensee                               
15       against whom the claim is made may elect to defend the fund claim as a small claims                               
16       action in district court under District Court Rules of Civil Procedure if the claim does                          
17       not exceed the small claims jurisdictional limit.                                                                 
18            (b)  An originator licensee who elects under (a) of this section to defend a fund                            
19       claim in district court under the small claims rules may not revoke the election without                          
20       the consent of the person who filed the fund claim.                                                               
21            (c)  On receipt of a valid written election under (a) of this section, the                                   
22       department shall dismiss the fund claim filed with the department and notify the                                  
23       person who filed the fund claim that the person who filed the fund claim must bring a                             
24       small claims action in the appropriate district court.                                                            
25            Sec. 06.60.620. Filing fee. (a) A person who files a fund claim under                                      
26       AS 06.60.570 shall pay the department a filing fee of $250 when the person files the                              
27       fund claim.                                                                                                       
28            (b)  The department shall refund the filing fee required under this section if the                           
29                 (1)  department makes an award to the claimant;                                                         
30                 (2)  fund claim is dismissed under AS 06.60.610; or                                                     
31                 (3)  fund claim is withdrawn by the claimant before the office of                                       
01       administrative hearings (AS 44.64.010) holds a hearing on the fund claim.                                         
02            Sec. 06.60.630. Department contracts. When the department receives a fund                                  
03       claim, the department may contract under AS 36.30 (State Procurement Code) with an                                
04       investigator, an accountant, an attorney, or another person necessary for the                                     
05       department to process the fund claim. A contract may cover more than one fund claim.                              
06            Sec. 06.60.640. Defense of claim. When the department receives a fund claim,                               
07       the department shall allow each originator licensee against whom the claim is made an                             
08       opportunity to file with the department, within seven days after receipt of notification                          
09       of the fund claim under AS 06.60.600, a written statement in opposition to the fund                               
10       claim and a request for a hearing.                                                                                
11            Sec. 06.60.650. Standard of proof. A person who submits a fund claim under                                 
12       AS 06.60.570 bears the burden of establishing by a preponderance of the evidence that                             
13       the person suffered a loss in a mortgage loan transaction as a result of fraud,                                   
14       misrepresentation, deceit, or the conversion of trust funds by an originator licensee                             
15       and the extent of those losses.                                                                                   
16            Sec. 06.60.660. Postponement. The department may postpone its                                              
17       consideration of a fund claim until after a hearing under AS 06.60.200 or 06.60.590 or                            
18       until the completion of a pending court proceeding.                                                               
19            Sec. 06.60.670. Nonapplication. AS 06.60.630 - 06.60.660 do not apply to a                                 
20       fund claim that is dismissed under AS 06.60.610.                                                                  
21            Sec. 06.60.680. Findings and payment. (a) At the conclusion of the                                         
22       department's consideration of a claim made under AS 06.60.570, the department shall                               
23       issue a written report that provides the department's findings of fact and conclusions of                         
24       law.                                                                                                              
25            (b)  If the department determines that the claimant has suffered a loss in a                                 
26       mortgage loan transaction as a result of fraud, misrepresentation, deceit, or the                                 
27       wrongful conversion of money by an originator licensee, the department may award                                  
28       the person who filed the fund claim reimbursement from money appropriated to the                                  
29       fund.                                                                                                             
30            Sec. 06.60.690. Fund operations. The department shall deposit into the fund                                
31       money that the department recovers from an originator licensee under AS 06.60.745.                                
01       The department may not consider amounts paid from the fund for hearing or legal                                   
02       expenses when determining the maximum reimbursement to be awarded under                                           
03       AS 06.60.710 or the maximum liability for fund claims under AS 06.60.710.                                         
04            Sec. 06.60.700. Payment of small claims judgment. (a) If a fund claim                                      
05       dismissed under AS 06.60.610 results in a monetary award against an originator                                    
06       licensee, the department may pay, subject to AS 06.60.710 and 06.60.720, any                                      
07       outstanding portion of the small claims judgment from money appropriated to the                                   
08       department for the purpose.                                                                                       
09            (b)  Before making payment under (a) of this section, the person who received                                
10       the award shall file with the department a copy of the final judgment and an affidavit                            
11       stating that more than 30 days have elapsed since the judgment became final and that                              
12       the judgment has not yet been satisfied by the originator licensee against whom the                               
13       award was made.                                                                                                   
14            (c)  After the department pays a small claims judgment under this section, the                               
15       department is subrogated to the rights of the person to whom the money was awarded                                
16       under the judgment.                                                                                               
17            Sec. 06.60.710. Maximum liability. (a) Payment of a fund claim may not                                     
18       exceed $15,000 for each claimant and $15,000 for each mortgage loan transaction                                   
19       regardless of the number of persons injured or the number of pieces of residential                                
20       property involved in the mortgage loan transaction.                                                               
21            (b)  The maximum liability for fund claims against one originator licensee may                               
22       not exceed $50,000.                                                                                               
23            (c)  If the $50,000 liability under (b) of this section is insufficient to pay in full                       
24       the valid fund claims of all persons who have filed fund claims against one originator                            
25       licensee, the $50,000 shall be distributed among the claimants in the ratio that their                            
26       individual fund claims bear to the aggregate of valid fund claims against that                                    
27       originator licensee. The department shall distribute the money among the persons                                  
28       entitled to share in the recovery without regard to the order in which their fund claims                          
29       were filed.                                                                                                       
30            Sec. 06.60.720. Order of fund claim payment. If the money appropriated to                                  
31       the department for payment under AS 06.60.520 - 06.60.750 is insufficient to satisfy                              
01       an award under AS 06.60.680 for a fund claim, the department shall, when sufficient                               
02       money has been appropriated to the department for the purpose, satisfy unpaid fund                                
03       claims in the order the fund claims were originally filed, plus accumulated interest at                           
04       the rate allowed under AS 45.45.010(a).                                                                           
05            Sec. 06.60.730. False claims or documents. A person who files a notice,                                    
06       statement, or other document under AS 06.60.500 - 06.60.750 that contains a material                              
07       misstatement of fact is guilty of a class A misdemeanor.                                                          
08            Sec. 06.60.740. Right to subrogation. When the department has paid to a                                    
09       claimant the sum awarded under AS 06.60.680 or 06.60.700 and any amount due                                       
10       under AS 06.60.720, the department shall be subrogated to all of the rights of the                                
11       claimant to the amount paid, and the claimant shall assign all right, title, and interest in                      
12       that portion of the claim to the department. Money collected by the department on the                             
13       claim shall be deposited in the fund.                                                                             
14            Sec. 06.60.745. Reimbursement for expenses. If the department pays all or a                                
15       portion of a fund claim against an originator licensee under AS 06.60.680 or                                      
16       06.60.700, the department may recover from the originator licensee, in addition to the                            
17       payment of the fund claim, the expenses incurred by the department to process and                                 
18       otherwise handle the fund claim.                                                                                  
19            Sec. 06.60.750. Disciplinary action against an originator licensee.                                        
20       Repayment in full of all obligations to the fund does not nullify or modify the effect of                         
21       disciplinary proceedings brought against an originator licensee under this chapter.                               
22                    Article 8. Program Administration Fee.                                                             
23            Sec. 06.60.800. Authorization of program administration fee. (a) The                                       
24       department may collect a program administration fee of $10 for each mortgage loan                                 
25       transaction to reimburse the state for the cost of administering this chapter.                                    
26            (b)  The program administration fee shall be paid by a borrower who is                                       
27       providing real property as security for the mortgage loan, except that, if the regulations                        
28       of a federal or state loan program that insures the loan and that applies to the mortgage                         
29       loan transaction prohibits the borrower from paying the program administration fee,                               
30       another party to the mortgage loan transaction shall pay the program administration                               
31       fee.                                                                                                              
01            (c)  If there are multiple mortgage loan instruments recorded for a single                                   
02       mortgage loan transaction, the department shall collect only one program                                          
03       administration fee.                                                                                               
04            (d)  In this section, "mortgage loan instrument" means a deed of trust,                                      
05       mortgage, or another loan instrument recorded to encumber residential real property in                            
06       the state.                                                                                                        
07            Sec. 06.60.810. Payment and use of fees. (a) The department shall coordinate                               
08       with the Department of Natural Resources to collect the program authorization fee.                                
09            (b)  The program authorization fee shall be charged when payment is made to                                  
10       the Department of Natural Resources for recording a document under AS 44.37.025.                                  
11            (c)  The program authorization fees collected under (b) of this section shall be                             
12       separately accounted for and may be appropriated by the legislature to the department                             
13       for the operation of this chapter.                                                                                
14                 Article 9. Duties and Powers of the Department.                                                       
15            Sec. 06.60.850. Publication of disciplinary action. The department may                                     
16       release for publication in a newspaper of general circulation in the locale of a                                  
17       licensee's principal office notice of disciplinary action taken by the department against                         
18       the licensee.                                                                                                     
19            Sec. 06.60.860. Authority of department. The department may make a ruling,                                 
20       demand, or finding that the department determines is necessary for the proper conduct                             
21       of a licensee's business regulated by this chapter or for the enforcement of this chapter,                        
22       including an order for the payment of restitution. The ruling, demand, or finding must                            
23       be consistent with this chapter.                                                                                  
24                     Article 10. Miscellaneous Provisions.                                                             
25            Sec. 06.60.890. Application to Internet activities. This chapter applies to a                              
26       person, including a small mortgage lender to the extent this chapter applies to a small                           
27       mortgage lender, even if the person is engaging in the activities regulated by this                               
28       chapter by using an Internet website from within or outside the state.                                          
29            Sec. 06.60.895. Effect of revocation, suspension, or surrender of license.                                 
30       The revocation, suspension, or surrender of a license does not impair or otherwise                                
31       affect the rights or obligations of a preexisting lawful contract between the licensee                            
01       and a borrower.                                                                                                   
02            Sec. 06.60.900. Applicability of administrative procedures. The provisions                                 
03       of AS 44.62 (Administrative Procedure Act) apply to an action of the department to                                
04       deny, revoke, or suspend a license under this chapter, to censure, suspend, or bar a                              
05       person under AS 06.60.410, to take other disciplinary action under this chapter, to                               
06       hold hearings, and to issue orders.                                                                               
07            Sec. 06.60.905. Untrue, misleading, or false statements. A person, including                               
08       a small mortgage lender, may not, in a document filed with the department or in an                                
09       examination, an investigation, a hearing, or another proceeding under this chapter,                               
10       make or cause to be made, an untrue statement of a material fact, or omit to state a                              
11       material fact necessary in order to make the statement made, in the light of the                                  
12       circumstances under which it is made, not misleading or false.                                                  
13            Sec. 06.60.910. Regulations. The department may adopt regulations under                                    
14       AS 44.62 (Administrative Procedure Act) to implement this chapter.                                                
15            Sec. 06.60.920. Relationship to federal and other state law. (a) If a                                      
16       provision of this chapter is preempted by or conflicts with federal law in a particular                           
17       situation, the provision does not apply to the extent of the preemption or conflict.                              
18            (b)  If a provision of this chapter conflicts with another state law in a particular                         
19       situation, the provision in this chapter governs to the extent of the conflict.                                   
20                       Article 11. General Provisions.                                                                 
21            Sec. 06.60.990. Definitions. In this chapter, unless the context otherwise                                 
22       requires,                                                                                                         
23                 (1)  "agent" does not include a person who is a state employee when                                     
24       acting in the capacity of a state employee;                                                                       
25                 (2)  "borrower" means an individual who receives a mortgage loan;                                       
26                 (3)  "broker" means to operate as a mortgage broker;                                                    
27                 (4)  "control," except as provided in AS 06.60.065, means                                               
28                      (A)  the ownership of, or the power to vote, directly or                                           
29            indirectly, at least 25 percent of a class of voting securities or voting interests;                         
30                      (B)  the power to elect a majority of executive officers,                                          
31            managers, directors, trustees, or other persons exercising managerial authority;                             
01            or                                                                                                           
02                      (C)  the power to exercise, directly or indirectly, a controlling                                  
03            influence over management or policies or person in control;                                                  
04                                                                                                                         
05                 (5)  "department" means the Department of Commerce, Community,                                          
06       and Economic Development;                                                                                         
07                 (6)  "escrow account" means an account                                                                  
08                      (A)  to which a borrower makes payments for obligations                                            
09            related to the real property that is the subject of a mortgage loan of the                                   
10            borrower;                                                                                                    
11                      (B)  held by a third person; and                                                                   
12                      (C)  from which the third person identified in (B) of this                                         
13            paragraph disburses money in accordance with a written agreement to pay                                      
14            obligations related to the real property that is the subject of a mortgage loan of                           
15            the borrower.                                                                                                
16                 (7)  "fund" means the originator surety fund established by                                             
17       AS 06.60.500;                                                                                                     
18                 (8)  "fund claim" means a claim authorized under AS 06.60.560;                                          
19                 (9)  "fund fee" means the fee that is required to be paid by                                            
20       AS 06.60.550;                                                                                                     
21                 (10)  "knowingly" has the meaning given in AS 11.81.900;                                                
22                 (11)  "license" means a license issued under this chapter;                                              
23                 (12)  "licensee" means a person who holds a license issued under this                                   
24       chapter;                                                                                                          
25                 (13)  "mortgage broker" means a person who, for compensation or gain,                                   
26       or in the expectation of compensation or gain, directly or indirectly, by telephone, by                           
27       electronic means, by mail, through the Internet, in person, or by the person itself or an                         
28       originator who is an employee or under exclusive contract to the person,                                          
29                      (A)  arranges with a variety of lending sources, who may be                                        
30            private lenders, institutional investors, or wholesale lenders, to provide                                   
31            financing for mortgage loans; or                                                                             
01                      (B)  assists or offers to assist a borrower or potential borrower                                  
02            to obtain financing for mortgage loans;                                                                      
03                 (14)  "mortgage lender" means a person who consummates and funds a                                      
04       mortgage loan and who is named as the payee in the promissory note and as the                                     
05       beneficiary of the deed of trust; "mortgage lender" does not include a subsequent                                 
06       purchaser of a mortgage loan or an interest in a mortgage loan that is originated by a                            
07       licensee under this chapter;                                                                                      
08                 (15)  "mortgage lender license" means a license issued under this                                       
09       chapter to operate as a mortgage lender;                                                                          
10                 (16)  "mortgage lender licensee" means a person who holds a mortgage                                    
11       lender license;                                                                                                   
12                 (17)  "mortgage license" means a mortgage lender license or a                                           
13       mortgage broker license;                                                                                          
14                 (18)  "mortgage licensee" means a mortgage lender licensee or a                                         
15       mortgage broker licensee;                                                                                         
16                 (19)  "mortgage loan"                                                                                   
17                      (A)  means a loan made to an individual if the proceeds are to                                     
18            be used primarily for personal, family, or household purposes and if the loan is                             
19            secured by a mortgage or deed of trust on an interest in a residential owner-                                
20            occupied property for one to four family units located in the state and                                      
21            regardless of where the loan is made;                                                                        
22                      (B)  includes the renewal or refinancing of a loan;                                                
23                      (C)  does not include loans                                                                        
24                           (i)  or extensions of credit to buyers of real property for                                   
25                 a part of the purchase price of the property by persons selling the                                     
26                 property owned by them;                                                                                 
27                           (ii)  to persons related to the lender by blood or                                            
28                 marriage;                                                                                               
29                           (iii)  to persons who are employees of the lender; or                                         
30                           (iv)  made primarily for a business, commercial, or                                           
31                 agricultural purpose of the borrower or for construction of residential                                 
01                 property;                                                                                               
02                 (20)  "operate" means do business, offer to provide, or provide;                                        
03                 (21)  "originator"                                                                                      
04                      (A)  means a natural person who, for compensation or gain, or                                      
05            in the expectation of compensation or gain, directly or indirectly, by telephone,                            
06            by electronic means, by mail, or in person                                                                   
07                           (i)  interviews the consumer in connection with the                                           
08                 consumer's application for a mortgage loan;                                                             
09                           (ii)  accepts or offers to accept an application for a                                        
10                 mortgage loan from a potential borrower;                                                                
11                           (iii)  solicits or offers to solicit a mortgage loan for a                                    
12                 potential borrower;                                                                                     
13                           (iv)  negotiates or offers to negotiate the terms or                                          
14                 conditions of a mortgage loan with or for a borrower or potential                                       
15                 borrower; or                                                                                            
16                           (v)  issues or offers to issue to borrowers, potential                                        
17                 borrowers, or the representatives of borrowers or potential borrowers,                                  
18                 mortgage loan commitments, interest rate agreements, interest rate                                      
19                 guarantees, prequalification letters, or commitments to finance up to a                                 
20                 stated amount of the value of real property, or 90-percent letters to                                   
21                 finance up to a stated amount of the value of real property;                                            
22                      (B)  does not include employees of a mortgage licensee, or                                         
23            employees of a person who is exempt from licensure under AS 06.60.015, who                                   
24            perform clerical duties in connection with mortgage loan transactions, collect                               
25            financial information and other related documents that are part of the                                       
26            application process, order verifications of employment, verifications of                                     
27            deposits, requests for mortgage payoffs, and other loan verifications,                                       
28            appraisals, inspections, or engineering reports, or perform the functions of a                               
29            mortgage loan processor, at the direction of and subject to the supervision of                               
30            the mortgage licensee, a mortgage originator, or the person exempt from                                      
31            licensure.                                                                                                   
01                 (22)  "originator license" means a license issued to a person to operate                                
02       as an originator;                                                                                                 
03                 (23)  "originator licensee" means a person who holds an originator                                      
04       license;                                                                                                          
05                 (24)  "program administration fee" means the fee described under                                        
06       AS 06.60.800(a);                                                                                                  
07                 (25)  "record" means information that is inscribed on a tangible                                        
08       medium or that is stored in an electronic or other medium and is retrievable in                                   
09       perceivable form;                                                                                                 
10                 (26)  "residential property" means improved real property used or                                       
11       occupied, or intended to be used or occupied, for residential purposes;                                           
12                 (27)  "small mortgage lender" means a person registered under                                           
13       AS 06.60.017.                                                                                                     
14            Sec. 06.60.995. Short title. This chapter may be known as the Mortgage                                     
15       Lending Regulation Act.                                                                                           
16    * Sec. 3. AS 09.38.015 is amended by adding a new subsection to read:                                              
17            (e)  Money held in an escrow account under AS 06.60.360 is exempt.                                           
18    * Sec. 4. AS 09.38.065(a) is amended to read:                                                                      
19            (a)     Subject  to  AS 06.60.360(e), and notwithstanding                                                
20       [NOTWITHSTANDING] other provisions of this chapter,                                                               
21                 (1)  a creditor may make a levy against exempt property of any kind to                                  
22       enforce a claim for                                                                                               
23                      (A)  child support;                                                                                
24                      (B)  unpaid earnings of up to one month's compensation or the                                      
25            full-time equivalent of one month's compensation for personal services of an                                 
26            employee; or                                                                                                 
27                      (C)  state or local taxes;                                                                         
28                 (2)  a creditor may make a levy against exempt property to enforce a                                    
29       claim for                                                                                                         
30                      (A)  the purchase price of the property or a loan made for the                                     
31            express purpose of enabling an individual to purchase the property and used                                  
01            for that purpose;                                                                                            
02                      (B)  labor or materials furnished to make, repair, improve,                                        
03            preserve, store, or transport the property; and                                                              
04                      (C)  a special assessment imposed to defray costs of a public                                      
05            improvement benefiting the property; and                                                                     
06                 (3)  a creditor may make a levy against exempt property of any kind to                                  
07       enforce the claim of a victim, including a judgment of restitution on behalf of a victim                          
08       of a crime or a delinquent act, if the claim arises from conduct of the debtor that                               
09       results in a conviction of a crime or an adjudication of delinquency, except that the                             
10       debtor is entitled to an exemption in property                                                                    
11                      (A)  not to exceed an aggregate value of $3,000 chosen by the                                      
12            debtor from the following categories of property:                                                            
13                           (i)  household goods and wearing apparel reasonably                                           
14                 necessary for one household;                                                                            
15                           (ii)  books and musical instruments, if reasonably held                                       
16                 for the personal use of the debtor or a dependent of the debtor; and                                    
17                           (iii)  family portraits and heirlooms of particular                                           
18                 sentimental value to the debtor; and                                                                    
19                      (B)  not to exceed an aggregate value of $2,800 of the debtor's                                    
20            implements, professional books, and tools of the trade.                                                      
21    * Sec. 5. AS 12.62.400 is amended by adding a new paragraph to read:                                               
22                 (15)  licensure as a mortgage lender, a mortgage broker, or an                                          
23       originator under AS 06.60.                                                                                        
24    * Sec. 6. AS 44.62.330(a) is amended by adding a new paragraph to read:                                            
25                 (47)  Department of Commerce, Community, and Economic                                                   
26       Development relating to mortgage lending under AS 06.60.                                                          
27    * Sec. 7. AS 44.64.030(a)(5) is amended to read:                                                                   
28                 (5)  AS 06 (banks, [AND] financial institutions, and fund claims),                          
29       except as provided otherwise by AS 06.60.590;                                                                 
30    * Sec. 8. AS 45.50.471(b) is amended by adding a new paragraph to read:                                            
31                 (52)  violating AS 06.60.010 - 06.60.380 (mortgage lending                                              
01       regulation);                                                                                                      
02    * Sec. 9. AS 45.50.481 is amended by adding a new subsection to read:                                              
03            (c)  The exemption in (a)(1) of this section does not apply to an act or                                     
04       transaction regulated under AS 06.60.                                                                             
05    * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to                         
06 read:                                                                                                                   
07       TRANSITION: LICENSING OF CURRENT MORTGAGE LENDERS AND                                                             
08 MORTGAGE BROKERS. Notwithstanding AS 06.60.010, enacted by sec. 2 of this Act, a                                        
09 person who is engaging in activities for which a license is required under AS 06.60, enacted                            
10 by sec. 2 of this Act, immediately before the effective date of AS 06.60 is not required to                             
11 comply with the licensing requirements of AS 06.60 until March 1, 2009. In this section,                                
12 "license" has the meaning given in AS 06.60.990, enacted by sec. 2 of this Act.                                         
13    * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to                         
14 read:                                                                                                                   
15       TRANSITION: REGULATIONS. The Department of Commerce, Community, and                                               
16 Economic Development may proceed to adopt regulations necessary to implement the                                        
17 changes made by this Act. The regulations take effect under AS 44.62 (Administrative                                    
18 Procedure Act), but not before July 1, 2008.                                                                            
19    * Sec. 12. Section 11 of this Act takes effect immediately under AS 01.10.070(c).                                  
20    * Sec. 13. Except as provided in sec. 12 of this Act, this Act takes effect July 1, 2008.