Chapter 224

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.

224.72(7m)(bm) (bm) The department of workforce development has certified under s. 108.227 that the applicant is liable for delinquent unemployment insurance contributions. An applicant whose application for issuance or renewal of a license is denied under this paragraph for delinquent unemployment insurance contributions is entitled to a notice under s. 108.227 (2) (b) 1. b. and hearing under s. 108.227 (5) (a) but is not entitled to any other notice or hearing under this section.

224.72(7m)(c) (c) The applicant for the issuance or renewal is an individual who fails to comply, after appropriate notice, with a subpoena or warrant issued by the department of children and families or a county child support agency under s. 59.53 (5) and related to paternity or child support proceedings or who is delinquent in making court-ordered payments of child or family support, maintenance, birth expenses, medical expenses or other expenses related to the support of a child or former spouse, as provided in a memorandum of understanding entered into under s. 49.857. An applicant whose license is not issued or renewed under this paragraph for delinquent payments is entitled to a notice and hearing under s. 49.857 but is not entitled to any other notice or hearing under this section.

224.72(8) (8) License period; fees. The division shall promulgate rules establishing the license period and the license fees for mortgage bankers and mortgage brokers.

224.72 History History: 1987 a. 359; 1987 a. 403 ss. 182, 256; Stats. 1987 s. 440.72; 1989 a. 45; 1991 a. 39; 1993 a. 112; 1995 a. 27 ss. 6210, 6527m, 6528m, 6535m, 6591 to 6593; Stats. 1995 s. 224.72; 1995 a. 465; 1997 a. 27, 35, 145, 191, 237, 252; 1999 a. 9, 32; 2003 a. 260; 2007 a. 20; 2009 a. 2; 2013 a. 36; 2013 a. 360 ss. 11 to 15, 29 to 35; 2021 a. 239 s. 73; 2023 a. 267.

224.72 Cross-reference Cross-reference: See also chs. DFI-Bkg 40 and 41, Wis. adm. code.

224.72 Annotation Persons who received an ad in the mail or a post card offering services from a mortgage banker were not “provided services” and the surety had no liability to them. All Cities Privacy Class v. Hartford Fire Insurance Company, 2011 WI App 71, 333 Wis. 2d 483, 798 N.W.2d 909, 10-1738.

224.722 224.722 Registered entities.

224.722(1) (1) A depository institution may apply for registered entity status with the division. The application shall be on forms and in the manner prescribed by the division and the applicant shall pay the same fee as that established by rule under s. 224.72 (8) for mortgage bankers. The application shall be accompanied by a commercial surety bond in the amount of $300,000 that is issued by a surety company authorized to do business in this state and is written on a form that is acceptable to the division.

224.722(2) (2) Upon the filing of an application for registered entity status and the payment of the required fee, the division shall make an investigation of the applicant. If the application is complete, and the division has no concerns regarding the applicant’s character, general fitness, or financial responsibility, the division shall register the applicant as a registered entity.

224.722(3) (3) Each registered entity shall register with the division each branch office where a mortgage loan originator sponsored by the registered entity engages in business as a mortgage loan originator. Applications for branch office registration shall be made on forms and in the manner prescribed by the division and shall be accompanied by the same fee as that established by rule for branch offices of mortgage bankers.

224.722(5) (5) A depository institution’s registered entity status, and the registration of all of its registered branch offices, expires on December 31 of each year.

224.722(6) (6) A registered entity may apply to renew its registered entity status, and the registration of all of its registered branch offices, by timely submitting, on forms and in the manner prescribed by the division, a completed renewal application for the registered entity and for each branch office, along with the applicable fee under sub. (1) or (3). The division may not renew registered entity status under this section unless the division finds that the registered entity continues to meet the minimum standards for registration under this section.

224.722(7) (7) If a registered entity fails to satisfy the minimum standards for renewal of its registration, its registration shall expire. If a registered entity fails to satisfy any requirement under sub. (6) for renewing its registration of a branch office, the registration for that branch office shall expire.

224.722(8) (8) A registered entity shall cooperate with, and provide access to records and documents required by, the division to carry out examinations in accordance with s. 224.74 (2) of mortgage loan originators that are sponsored by the registered entity.

224.722 History History: 2013 a. 360.

224.725 224.725 Licensing of mortgage loan originators.

224.725(1) (1) License required. Except as provided in subs. (1m) and (1r), an individual may not regularly engage in the business of a mortgage loan originator with respect to a residential mortgage loan, or use the title “mortgage loan originator,” advertise, or otherwise portray himself or herself as a mortgage loan originator in this state, unless the individual has been issued by the division, and thereafter maintains, a license under this section. Each licensed mortgage loan originator shall register with, and maintain a valid unique identifier issued by, the nationwide multistate licensing system and registry.

224.725(1m) (1m) License exemptions. The following individuals are not required to be licensed under this section:

224.725(1m)(a) (a) A registered mortgage loan originator.

224.725(1m)(b) (b) An employee of a federal, state, or local government agency or housing finance agency who acts as a mortgage loan originator only pursuant to his or her official duties as an employee of the federal, state, or local government agency or housing finance agency.

224.725(1m)(c) (c) An individual engaged solely as a loan processor or underwriter, unless the individual is an independent contractor or represents to the public, through advertising or another means of communication such as the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that the individual can or will perform any of the activities of a mortgage loan originator.

224.725(1m)(d) (d) An individual who performs real estate brokerage activities only and is licensed under s. 452.03, unless the individual is compensated by a lender, mortgage broker, or another mortgage loan originator or by any agent of a lender, mortgage broker, or another mortgage loan originator.