Chapter 224

224.71(1h) (1h) “Federal banking agency” means the board of governors of the federal reserve system, the U.S. office of the comptroller of the currency, the national credit union administration, or the federal deposit insurance corporation.

224.71(1m) (1m) “Finds,” with respect to a residential mortgage loan, means to assist a residential mortgage loan applicant in locating a lender for the purpose of obtaining a residential mortgage loan and to make arrangements for a residential mortgage loan applicant to obtain a residential mortgage loan, including collecting information on behalf of an applicant and preparing a loan package.

224.71(1r) (1r) “Housing finance agency” means any authority that is all of the following:

224.71(1r)(a) (a) Chartered by a state to help meet the affordable housing needs of the residents of the state.

224.71(1r)(b) (b) Supervised directly or indirectly by the state government.

224.71(1r)(c) (c) Subject to audit and review by the state in which it operates.

224.71(2) (2) “Loan processor or underwriter” means an individual who, as an employee, performs clerical or support duties at the direction of and subject to the supervision and instruction of a mortgage loan originator licensed under s. 224.725 or exempt from licensing under s. 224.725 (1m), which clerical or support duties may include any of the following occurring subsequent to the receipt of a residential mortgage loan application:

224.71(2)(a) (a) The receipt, collection, distribution, and analysis of information common for the processing or underwriting of a residential mortgage loan.

224.71(2)(b) (b) Communicating with a residential mortgage loan applicant to obtain the information necessary for the processing or underwriting of a residential mortgage loan, to the extent that the communication does not include offering or negotiating loan rates or terms or providing counseling related to loan rates or terms.

224.71(3) (3) “Mortgage banker” means a person who does any of the following:

224.71(3)(c) (c) Originates residential mortgage loans for itself, as payee on the note evidencing the residential mortgage loan, or for another person.

224.71(3)(d) (d) Sells residential mortgage loans or interests in residential mortgage loans to another person.

224.71(3)(e) (e) Services residential mortgage loans or provides escrow services.

224.71(4) (4) “Mortgage broker” means a person who, for compensation or gain or in the expectation of compensation or gain, does any of the following but does not make an underwriting decision or close a residential mortgage loan:

224.71(4)(a) (a) Assists a person in obtaining or applying to obtain a residential mortgage loan.

224.71(4)(b) (b) Holds himself, herself, or itself out as being able to assist a person in obtaining or applying to obtain a residential mortgage loan.

224.71(4)(c) (c) Engages in table funding.

224.71(6) (6) “Mortgage loan originator” means an individual who, for compensation or gain or in the expectation of compensation or gain, does any of the following:

224.71(6)(c) (c) Takes a residential mortgage loan application.

224.71(6)(d) (d) Offers or negotiates terms of a residential mortgage loan.

224.71(7) (7) “Nationwide multistate licensing system and registry” has the meaning given in s. 224.35 (1g) (b).

224.71(8) (8) “Negotiate,” with respect to a residential mortgage loan, means to discuss, explain, or present the terms and conditions, including rates, fees, and other costs, of a residential mortgage loan with or to a residential mortgage loan applicant, but does not include making an underwriting decision on a residential mortgage loan or closing a residential mortgage loan.

224.71(9) (9) “Net worth” means total tangible assets less total liabilities of a person, or, if the person is an individual, total tangible assets less total liabilities exclusive of the person’s principal residence and its furnishings and personal use vehicles.

224.71(10) (10) “Nontraditional mortgage product” means any mortgage product other than a 30-year fixed rate mortgage.

224.71(11) (11) “Originate,” with respect to a residential mortgage loan, means to make an underwriting decision on the residential mortgage loan and close the loan.

224.71(12) (12) “Principal office,” with respect to a mortgage banker or mortgage broker, means the place of business designated by the mortgage banker or mortgage broker as its principal place of business, as identified in the records of the division.

224.71(13) (13) “Real estate brokerage activity” means any activity that involves offering or providing to the public real estate brokerage services involving residential real property in this state, including all of the following:

224.71(13)(a) (a) Acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee of real property.

224.71(13)(b) (b) Bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property.

224.71(13)(c) (c) Negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property, other than in connection with providing financing for the transaction. For purposes of this paragraph, providing financing for the transaction does not include use by a licensee under s. 452.03 of forms approved under s. REEB 16.03, Wis. Adm. Code.

224.71(13)(d) (d) Engaging in any activity for which a person engaged in the activity is required to be licensed under s. 452.03.

224.71(13)(e) (e) Offering to engage in any activity, or act in any capacity, described in pars. (a) to (d).

224.71(13c) (13c) “Registered entity” means a depository institution that voluntarily registers with the division for the purpose of sponsoring licensed mortgage loan originators that are under the depository institution’s direct supervision and control.

224.71(13g) (13g) “Registered mortgage loan originator” means any individual who is all of the following:

224.71(13g)(a) (a) An employee of, and acting for, a depository institution, a subsidiary owned and controlled by a depository institution and regulated by a federal banking agency, or an institution regulated by the farm credit administration.

224.71(13g)(b) (b) Registered with, and who maintains a unique identifier through, the nationwide multistate licensing system and registry.

224.71(13m) (13m) “Regularly engage,” with respect to an individual, means that any of the following applies:

224.71(13m)(a) (a) The individual engaged in the business of a mortgage loan originator on more than 5 residential mortgage loans, in this state or another state, in the previous calendar year or expects to engage in the business of a mortgage loan originator on more than 5 residential mortgage loans, in this state or another state, in the current calendar year.

224.71(13m)(b) (b) The individual is acting on behalf of a person who is, or is required to be, licensed as a mortgage lender, mortgage banker, or mortgage broker in this state or another state.

224.71(13m)(c) (c) The individual is acting on behalf of a registered entity.

224.71(14) (14) “Residential mortgage loan” means any loan primarily for personal, family, or household use that is secured by a lien or mortgage, or equivalent security interest, on a dwelling or residential real property located in this state.

224.71(15) (15) “Residential real property” means real property on which a dwelling is constructed or intended to be constructed.

224.71(16) (16) “Services,” with respect to a residential mortgage loan, means to receive payments on a note from the borrower and distribute these payments in accordance with the terms of the note or servicing agreement.

224.71(17) (17) “Table funding” means a transaction in which a person conducts a residential mortgage loan closing in the person’s name with funds provided by a 3rd party and the person assigns the residential mortgage loan to the 3rd party within 24 hours of the residential mortgage loan closing.

224.71(18) (18) “Unique identifier” has the meaning given in s. 224.35 (1g) (e).

224.71 History History: 1987 a. 359; 1987 a. 403 s. 182; Stats. 1987 s. 440.71; 1989 a. 45; 1995 a. 27 s. 6590; Stats. 1995 s. 224.71; 1997 a. 27, 145; 2001 a. 16; 2003 a. 33, 260; 2005 a. 22; 2007 a. 211; 2009 a. 2 ss. 565 to 594, 597; 2013 a. 360 ss. 1 to 28, 43; 2023 a. 267.

224.71 Cross-reference Cross-reference: See also ch. DFI-Bkg 40, Wis. adm. code.

224.71 Annotation Wisconsin’s new mortgage banking law. Thompson. Wis. Law. March 1989.

224.72 224.72 Licensing of mortgage bankers and mortgage brokers.

224.72(1m) (1m) License required. Except as provided in sub. (1r), a person may not conduct business or act as a mortgage banker or mortgage broker, use the title “mortgage banker” or “mortgage broker,” or advertise or otherwise portray himself, herself, or itself as a mortgage banker or mortgage broker, unless the person has been issued a mortgage banker or mortgage broker license by the division.

224.72(1r) (1r) License exemptions. The following persons shall not be required to be licensed under this section or comply with the other provisions of this subchapter:

224.72(1r)(a) (a) A depository institution.

224.72(1r)(b) (b) A subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency.

224.72(1r)(c) (c) A federal, state, or local government agency or housing finance agency.

224.72(1r)(d) (d) An institution regulated by the farm credit administration.

224.72(1r)(e) (e) A bona fide nonprofit organization that does not operate in a commercial context and that is exempt under this paragraph. To qualify for an exemption under this paragraph, an organization shall certify, on a form prescribed by the division, that it is a bona fide nonprofit organization and shall provide documentation as required by the division. To maintain this exemption, the organization shall file the prescribed certification and accompanying documentation with the division by December 31 of each year.

224.72(1r)(f) (f) A mortgage banker that meets all of the following criteria:

224.72(1r)(f)1. 1. The mortgage banker engaged in the business of a mortgage banker on 5 or fewer residential mortgage loans during the previous calendar year.

224.72(1r)(f)2. 2. The mortgage banker expects to serve as the prospective source of financing, or to perform other phases of origination or servicing, on 5 or fewer residential mortgage loans in the current calendar year.

224.72(1r)(f)3. 3. The mortgage banker does not advertise or otherwise hold himself, herself, or itself out as a “mortgage banker.”

224.72(1r)(g) (g) A person that only performs real estate brokerage activities and is licensed under s. 452.03, unless the person is compensated by a lender, mortgage broker, or mortgage loan originator or by any agent of a lender, mortgage broker, or mortgage loan originator.

224.72(1r)(h) (h) A person solely involved in extensions of credit relating to time-share plans, as defined in 11 USC 101 (53D).

224.72(2) (2) License applications.

224.72(2)(am) (am) Applicants for a mortgage banker or mortgage broker license shall apply to the division, on forms and in the manner prescribed by the division, and shall pay the fee specified in rules promulgated under sub. (8). The division shall utilize the nationwide multistate licensing system and registry, and the provisions of s. 224.35 shall apply, with respect to mortgage bankers and mortgage brokers. Forms prescribed by the division under this paragraph may contain any content or requirement that the division, in its discretion, determines necessary and these forms may be modified or updated as necessary by the division to carry out the purposes of this subchapter.

224.72(2)(c) (c)

224.72(2)(c)1. 1. Except as provided in par. (d), an application shall include the following:

224.72(2)(c)1.a. a. In the case of an individual, the individual’s social security number.

224.72(2)(c)1.b. b. In the case of a person that is not an individual, the person’s federal employer identification number.

224.72(2)(c)2. 2. The division may not disclose any information received under subd. 1. to any person except as follows:

224.72(2)(c)2.a. a. The division may disclose information under subd. 1. to the department of revenue for the sole purpose of requesting certifications under s. 73.0301 and to the department of workforce development for the sole purpose of requesting certifications under s. 108.227.

224.72(2)(c)2.b. b. The division may disclose information under subd. 1. a. to the department of children and families in accordance with a memorandum of understanding under s. 49.857.

224.72(2)(c)2.c. c. The division may disclose information to the nationwide multistate licensing system and registry as provided in s. 224.35.

224.72(2)(d) (d)

224.72(2)(d)1. 1. If an applicant who is an individual does not have a social security number, the applicant, as a condition of applying for or applying to renew a license under this section, shall submit a statement made or subscribed under oath or affirmation to the division that the applicant does not have a social security number. The form of the statement shall be prescribed by the department of children and families.

224.72(2)(d)2. 2. Any license issued or renewed in reliance upon a false statement submitted by an applicant under subd. 1. is invalid.

224.72(2m) (2m) Licensed offices.

224.72(2m)(a) (a) Each mortgage banker or mortgage broker shall obtain and maintain a license for its principal office and a separate license for each branch office.

224.72(2m)(b) (b)

224.72(2m)(b)1. 1. A principal office of a mortgage banker or mortgage broker shall be located in either this state or another state. Except as provided in subd. 2., a principal office may not be located in a residence.

224.72(2m)(b)2. 2. A principal office of a mortgage banker or mortgage broker located in a residence on April 25, 2014, may continue to be located in that residence after this date but may not thereafter be relocated to any residence with a different address.

224.72(2m)(c) (c) A branch office of a mortgage banker or mortgage broker shall be located in either this state or another state. A branch office may be located in a residence.

224.72(4) (4) Additional requirements. In addition to the requirements of sub. (2), an applicant for a mortgage banker or mortgage broker license shall do all of the following:

224.72(4)(am) (am) File with the division a commercial surety bond which is in the amount of $300,000 for a mortgage banker or $120,000 for a mortgage broker, is issued by a surety company authorized to do business in this state, secures the applicant’s faithful performance of all duties and obligations of a mortgage banker or mortgage broker, is payable to the division for the benefit of persons to whom the mortgage banker or mortgage broker provided services as a mortgage banker or mortgage broker, is issued on a form that is acceptable to the division and provides that the bond may not be terminated without at least 60 days’ written notice to the division.

224.72(4)(b) (b) Submit evidence that establishes, to the division’s satisfaction, a minimum net worth of $250,000 for a mortgage banker or $100,000 for a mortgage broker. Evidence of net worth shall include the submission of recent financial statements accompanied by a written statement by an independent certified public accountant attesting that he or she has reviewed the financial statements in accordance with generally accepted accounting principles.

224.72(5m) (5m) Completion of licensing process. Except as provided in sub. (7m), upon the filing of an application for a mortgage banker or mortgage broker license and the payment of the fee specified in rules promulgated under sub. (8), the division shall make an investigation of the applicant including, if the applicant is a partnership, limited liability company, association, or corporation, the members or officers and directors, respectively, of the applicant. If the division finds that the character, general fitness, and financial responsibility of the applicant, including its members or officers and directors if the applicant is a partnership, limited liability company, association, or corporation, warrant the belief that the business will be operated in compliance with this subchapter, the division shall issue to the applicant a mortgage banker or mortgage broker license. A mortgage banker or mortgage broker license is not assignable or transferable.

224.72(7) (7) License renewal and reinstatement. A mortgage broker or mortgage banker may apply to renew or reinstate a license issued under this section as provided in s. 224.35 (7).

224.72(7m) (7m) Denial of application for certain reasons. The division may not issue or renew a license under this section if any of the following applies:

224.72(7m)(a) (a) The applicant for the issuance or renewal has failed to provide any information required under sub. (2) (c) 1.

224.72(7m)(b) (b) The department of revenue has certified under s. 73.0301 that the applicant is liable for delinquent taxes. An applicant whose application for issuance or renewal of a license is denied under this paragraph for delinquent taxes is entitled to a notice under s. 73.0301 (2) (b) 1. b. and hearing under s. 73.0301 (5) (a) but is not entitled to any other notice or hearing under this section.