Chapter 224

224.75(4) (4) Responsibility for forms. A mortgage banker or mortgage broker is responsible for the preparation and correctness of all entries on forms, documents and records which are under the mortgage banker’s or mortgage broker’s control and which are not dependent on information provided by the residential mortgage loan applicant or a 3rd party.

224.75(5) (5) Accounting practices. A mortgage banker or mortgage broker shall maintain its books and records in accordance with generally accepted accounting principles.

224.75(6) (6) Furnishing books and records. Upon request by the division, any licensee under this subchapter, and any other person whom the division has authority to investigate and examine under s. 224.74 (2), shall make any books and records requested by the division available for inspection and copying by the division. If any records are kept at a licensed office not located within this state, the mortgage banker or mortgage broker shall, upon request of the division, promptly deliver such documents to any location within this state specified by the division.

224.75 History History: 1987 a. 359; 1987 a. 403 s. 182; Stats. 1987 s. 440.75; 1995 a. 27 s. 6596; Stats. 1995 s. 224.75; 1997 a. 145; 2007 a. 211; 2009 a. 2; 2013 a. 360.

224.75 Cross-reference Cross-reference: See also ch. DFI-Bkg 42, Wis. adm. code.

224.755 224.755 Education and testing requirements for mortgage loan originators.

224.755(1) (1) Education requirements applicable prior to license issuance. Subject to sub. (3) (a) and (c), an applicant for a license under s. 224.725 (1), prior to the division’s issuance of the license, shall complete at least 20 hours of education, including a minimum of all of the following:

224.755(1)(a) (a) Three hours of federal law and regulations.

224.755(1)(b) (b) Three hours of ethics, including instruction on fraud, consumer protection, and fair lending issues.

224.755(1)(c) (c) Two hours of training related to lending standards for the nontraditional mortgage product marketplace.

224.755(2) (2) Continuing education requirements. Subject to subs. (3) (a), (c), (d), and (f), an applicant for renewal of a license under s. 224.725 (5), prior to the division’s renewal of the license, shall annually complete at least 8 hours of education, including a minimum of all of the following:

224.755(2)(a) (a) Three hours of federal law and regulations.

224.755(2)(b) (b) Two hours of ethics, including instruction on fraud, consumer protection, and fair lending issues.

224.755(2)(c) (c) Two hours of training related to lending standards for the nontraditional mortgage product marketplace.

224.755(3) (3) Education approval.

224.755(3)(a) (a) No education course may count toward the requirement under sub. (1) or (2) unless the course has been reviewed and approved by the nationwide multistate licensing system and registry based upon reasonable standards, including review and approval of the course provider.

224.755(3)(b) (b) An education course meeting the standard under par. (a) may count toward the requirements under subs. (1) and (2) even if the course is any of the following:

224.755(3)(b)1. 1. Provided by the applicant’s or licensee’s employer, by an entity affiliated with the applicant or licensee by an agency contract, or by any subsidiary or affiliate of such an employer or affiliated entity.

224.755(3)(b)2. 2. Offered through the Internet or another online or electronic medium.

224.755(3)(b)3. 3. Taken in another state.

224.755(3)(c) (c) If an individual was previously registered as a loan originator under s. 224.72, 2007 stats., or previously licensed as a mortgage loan originator under s. 224.725, the division may not issue or renew a mortgage loan originator license for the individual under s. 224.725 unless the individual satisfies the requirements under sub. (1) or (2) or demonstrates to the division’s satisfaction that the individual has completed all education requirements applicable to the individual in the last year in which the individual’s license or registration was valid.

224.755(3)(d) (d) Unless expressly authorized by the division, a licensed mortgage loan originator may receive credit for a continuing education course only in the year in which the course is taken and may not take the same approved course in the same or successive years to meet the requirements under sub. (2).

224.755(3)(e) (e) A licensed mortgage loan originator who is an approved instructor of an approved continuing education course may receive credit for the licensed mortgage loan originator’s own annual continuing education requirement at the rate of 2 hours of credit for every one hour taught.

224.755(3)(f) (f) The division may, by rule, allow an applicant for renewal of a license under s. 224.725 (5) to make up any deficiency in meeting the requirements specified in sub. (2).

224.755(4) (4) Testing requirements.

224.755(4)(a) (a) An applicant for a license under s. 224.725 (1), prior to the division’s issuance of the license, shall pass a written test meeting the standards under par. (b). An individual shall answer at least 75 percent of the test questions correctly to achieve a passing test score.

224.755(4)(b) (b)

224.755(4)(b)1. 1. No test may satisfy the requirement under par. (a) unless the test is developed by the nationwide multistate licensing system and registry and administered by a test provider approved by the nationwide multistate licensing system and registry based upon reasonable standards.

224.755(4)(b)2. 2. A test does not meet the standard under subd. 1. unless the test adequately measures the applicant’s knowledge and comprehension in appropriate subject areas, including all of the following:

224.755(4)(b)2.a. a. Ethics.

224.755(4)(b)2.b. b. Federal and state law, regulations, and rules pertaining to mortgage origination.

224.755(4)(b)2.c. c. Federal and state law, regulations, and rules relating to residential mortgage transactions, including instruction on fraud, consumer protection, the nontraditional mortgage product marketplace, and fair lending issues.

224.755(4)(c) (c) A written test meeting the standards under par. (b) may satisfy the requirement under par. (a) even if the test is provided at the location of the applicant’s employer, any subsidiary or affiliate of the applicant’s employer, or any entity with which the applicant holds an exclusive arrangement to conduct the business of a mortgage loan originator.

224.755(4)(d) (d) An individual may take a test 3 consecutive times, with each retest occurring at least 30 days after the preceding test. If the individual fails 3 consecutive tests, the individual may not retake a test again for at least 6 months.

224.755(4)(e) (e) If an individual previously licensed as a mortgage loan originator fails to maintain a valid license for a period of 5 years or longer, not taking into account any time during which the individual is a registered loan originator, the individual shall retake the test under par. (a).

224.755(5) (5) Compliance records. A mortgage loan originator shall keep records documenting compliance with this section for at least 4 years.

224.755 History History: 2003 a. 260; 2009 a. 2; 2013 a. 360; 2023 a. 267.

224.76 224.76 Mortgage banker, mortgage loan originator, and mortgage broker trust accounts. A mortgage banker, mortgage loan originator, or mortgage broker shall deposit in one or more trust accounts all funds other than nonrefundable fees which it receives on behalf of any person, pending disbursement of the funds in accordance with instructions from the person on whose behalf the funds are deposited. A mortgage banker or mortgage broker shall maintain trust accounts in a depository institution. The mortgage banker or mortgage broker shall notify the division of the location of its trust accounts.

224.76 History History: 1987 a. 359; 1987 a. 403 s. 182; Stats. 1987 s. 440.76; 1995 a. 27 s. 6597; Stats. 1995 s. 224.76; 1997 a. 145; 2009 a. 2.

224.76 Cross-reference Cross-reference: See also ch. DFI-Bkg 42, Wis. adm. code.

224.77 224.77 Prohibited acts and practices, and discipline, of mortgage bankers, mortgage loan originators, mortgage brokers, and registered entities.

224.77(1) (1) Prohibited acts and practices. No mortgage banker, mortgage loan originator, mortgage broker, or, with respect to pars. (f), (fg), (g), (gd), and (gh), registered entity, and no member, officer, director, principal, partner, trustee, or other agent of a mortgage banker, mortgage broker, or registered entity may do any of the following:

224.77(1)(a) (a) Make a material misstatement, or knowingly omit a material fact, in a license application or in other information or reports furnished to the division, to the nationwide multistate licensing system and registry, or to any other governmental agency, including failing to disclose a criminal conviction or any disciplinary action taken by a state or federal regulatory agency.

224.77(1)(b) (b) Make, in any manner, any materially false or deceptive statement or representation, including engaging in bait and switch advertising or falsely representing residential mortgage loan rates, points, or other financing terms or conditions.

224.77(1)(c) (c) Make a false, deceptive, or misleading promise relating to the services being offered or that influences, persuades, or induces a client to act to his or her detriment.

224.77(1)(d) (d) Pursue a continued and flagrant course of misrepresentation, or make false promises, whether directly or through agents or advertising.

224.77(1)(e) (e) Act for more than one party in a transaction without the knowledge and consent of all parties on whose behalf the mortgage banker, mortgage loan originator, or mortgage broker is acting.

224.77(1)(f) (f) Accept a commission, money, or other thing of value for performing an act as a mortgage loan originator unless the payment is from the mortgage banker, mortgage broker, or registered entity with whom the mortgage loan originator’s license is associated, as identified in the records of the division at the time the act is performed.

224.77(1)(fg) (fg) As a mortgage banker, mortgage broker, or registered entity, pay a commission, money, or other thing of value to any person for performing an act as a mortgage loan originator unless the mortgage loan originator’s license is associated with the mortgage banker, mortgage broker, or registered entity in the records of the division at the time the act is performed.

224.77(1)(g) (g) As a mortgage loan originator, represent or attempt to represent a mortgage banker, mortgage broker, or registered entity other than the mortgage banker, mortgage broker, or registered entity with whom the mortgage loan originator’s license was associated, as identified in the records of the division at the time the representation or attempted representation occurs.

224.77(1)(gd) (gd) As a mortgage banker, mortgage broker, or registered entity, permit a person who is not licensed under this subchapter to act as a mortgage loan originator on behalf of the mortgage banker, mortgage broker, or registered entity.

224.77(1)(gh) (gh) As a mortgage banker, mortgage broker, or registered entity, permit a person whose mortgage loan originator license is not associated in the records of the division with the mortgage banker, mortgage broker, or registered entity to act as a mortgage loan originator on behalf of the mortgage banker, mortgage broker, or registered entity.

224.77(1)(gp) (gp) As a mortgage banker or mortgage broker, conduct business at or from a principal office or branch office that is not licensed under this subchapter.

224.77(1)(h) (h) Fail, within a reasonable time, to account for or remit any moneys coming into the mortgage banker’s, mortgage loan originator’s, or mortgage broker’s possession that belong to another person.

224.77(1)(i) (i) Demonstrate a lack of competency to act as a mortgage banker, mortgage loan originator, or mortgage broker in a way that safeguards the interests of the public.

224.77(1)(j) (j) Pay or offer to pay a commission, money, or other thing of value to any person for acts or services in violation of this subchapter.

224.77(1)(jm) (jm) Pay a person who is not licensed under this subchapter a commission, money, or other thing of value for performing an act as a mortgage banker, mortgage loan originator, or mortgage broker.

224.77(1)(k) (k) Violate any provision of this subchapter, ch. 138, or any federal or state statute, rule, or regulation that relates to practice as a mortgage banker, mortgage loan originator, or mortgage broker.

224.77(1)(L) (L) Engage in conduct that violates a standard of professional behavior which, through professional experience, has become established for mortgage bankers, mortgage loan originators, or mortgage brokers.

224.77(1)(m) (m) Engage in conduct, whether of the same or a different character than specified elsewhere in this section, that constitutes improper, fraudulent, or dishonest dealing.

224.77(1)(o) (o) In the course of practice as a mortgage banker, mortgage loan originator, or mortgage broker, except in relation to housing designed to meet the needs of elderly individuals, treat a person unequally solely because of sex, race, color, handicap, sexual orientation, as defined in s. 111.32 (13m), religion, national origin, age, or ancestry, the person’s lawful source of income, or the sex, marital status, or status as a victim of domestic abuse, sexual assault, or stalking, as defined in s. 106.50 (1m) (u), of the person maintaining a household.

224.77(1)(p) (p) Intentionally encourage or discourage any person from purchasing or renting real estate on the basis of race.

224.77(1)(q) (q) Because of the age or location of the property or the race of the residential mortgage loan applicant, rather than because of the credit worthiness of the applicant and the condition of the property securing the loan:

224.77(1)(q)1. 1. Refuse to negotiate, to offer, or to attempt to negotiate a residential mortgage loan or commitment for a residential mortgage loan, or refuse to find a residential mortgage loan.

224.77(1)(q)2. 2. Find a residential mortgage loan or negotiate a residential mortgage loan on terms less favorable than are usually offered.

224.77(1)(s) (s) Violate, or fail to comply with, any lawful order of the division.

224.77(1)(sm) (sm) As a mortgage loan originator, fail to identify his or her name and sign the mortgage loan application for a loan originated by him or her.

224.77(1)(sn) (sn) As a mortgage banker, mortgage broker, or mortgage loan originator, fail to clearly place his, her, or its unique identifier on all residential mortgage loan application forms, solicitations, and advertisements, including business cards, Internet sites, email signature blocks, and on all other documents specified by rule of the division.

224.77(1)(sq) (sq) As a mortgage banker, mortgage broker, or mortgage loan originator, use any solicitation or advertisement to which any of the following applies:

224.77(1)(sq)1. 1. The solicitation or advertisement misrepresents that the provider is, or is affiliated with, any governmental entity or other organization.

224.77(1)(sq)2. 2. The solicitation or advertisement misrepresents that the product is or relates to a government benefit, or is endorsed, sponsored by, or affiliated with any government or government-related program, including through the use of formats, symbols, or logos that resemble those of such entity, organization, or program.

224.77(1)(sq)3. 3. The solicitation or advertisement does not clearly and conspicuously identify the name of the mortgage broker or mortgage banker or, if a mortgage loan originator is sponsored by a registered entity, the registered entity.

224.77(1)(t) (t) Impede an investigation or examination of the division or deny the division access to any books, records, or other information which the division is authorized to obtain under s. 224.74 (2), 224.75 (6), or any other provision of this subchapter.

224.77(1)(tm) (tm) Make a material misstatement, or knowingly omit a material fact, or knowingly mutilate, destroy, or secrete any books, records, or other information requested by the division, in connection with any investigation or examination conducted by the division or another governmental agency.

224.77(1)(u) (u) Solicit or enter into a contract with a borrower that provides in substance that the mortgage banker, mortgage broker, or mortgage loan originator may earn a fee or commission through “best efforts” to obtain a residential mortgage loan even though no residential mortgage loan is actually obtained for the borrower.

224.77(1)(um) (um) Solicit, advertise, or enter into a contract for specific interest rates, points, or other financing terms unless the terms are actually available at the time of soliciting, advertising, or contracting.

224.77(1)(v) (v) Assist, aid, or abet any person in unlawfully conducting business under this subchapter without a valid license.

224.77(1)(w) (w) Fail to make disclosures required under this subchapter or required under any other applicable state or federal law, rule, or regulation.

224.77(1)(x) (x) Withhold any payment or make any payment, threat, or promise, directly or indirectly, to any person for the purpose of influencing the independent judgment of the person in connection with a residential mortgage loan, or withhold any payment or make any payment, threat, or promise, directly or indirectly, to any appraiser of a property for the purpose of influencing the independent judgment of the appraiser with respect to the value of the property.

224.77(1)(y) (y) Cause or require a borrower to obtain property insurance coverage in an amount exceeding the replacement cost of improvements on the property, as determined by the property insurer.

224.77(1m) (1m) Administrative forfeiture and hearing rights.

224.77(1m)(a) (a) The division may assess against any person who violates this subchapter a forfeiture of not more than $25,000 for each violation and may further order restitution to any person suffering loss as a result of the violation.

224.77(1m)(b) (b) A person may contest an assessment of forfeiture, or a restitution order, under par. (a) by sending, within 10 days after receipt of notice of the assessment or order under par. (a), a written request for hearing under s. 227.44 to the division of hearings and appeals created under s. 15.103 (1). The administrator of the division of hearings and appeals may designate a hearing examiner to preside over the case and recommend a decision to the administrator under s. 227.46. The decision of the administrator of the division of hearings and appeals shall be the final administrative decision. The division of hearings and appeals shall commence the hearing within 30 days after receipt of the request for hearing and shall issue a final decision within 15 days after the close of the hearing. Proceedings before the division of hearings and appeals are governed by ch. 227. In any petition for judicial review of a decision by the division of hearings and appeals, the party, other than the petitioner, who was in the proceeding before the division of hearings and appeals shall be the named respondent.

224.77(1m)(c) (c)

224.77(1m)(c)1. 1. All forfeitures shall be paid to the division of banking within 10 days after receipt of notice of assessment or, if the forfeiture is contested under par. (b), within 10 days after receipt of the final decision after exhaustion of administrative review. The division of banking shall remit all forfeitures paid to the secretary of administration for deposit in the school fund.

224.77(1m)(c)2. 2. All amounts ordered as restitution shall be paid to the person suffering loss within 10 days after receipt of notice of the order or, if the restitution order is contested under par. (b), within 10 days after receipt of the final decision after exhaustion of administrative review.

224.77(1m)(d) (d) The attorney general may bring an action in the name of the state to collect any forfeiture imposed, or amount ordered as restitution, under this subsection if the forfeiture or restitution amount has not been paid following the exhaustion of all administrative and judicial reviews. The only issue to be contested in any such action shall be whether the forfeiture or restitution amount has been paid.

224.77(2m) (2m) Division action on license.

224.77(2m)(a) (a)