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.