Chapter 224

224.74 History History: 1987 a. 359; 1987 a. 403 ss. 182, 256; Stats. 1987 s. 440.74; 1991 a. 39; 1995 a. 27 s. 6595; Stats. 1995 s. 224.74; 1997 a. 145; 2009 a. 2; 2013 a. 360; 2015 a. 195 s. 83; 2023 a. 267.

224.75 224.75 Record-keeping requirements for licensees.

224.75(1) (1) Required records; loan application or servicing documents.

224.75(1)(a) (a) Fee record system. A mortgage banker or mortgage broker shall establish and maintain a record system which shows all fees which a mortgage banker or mortgage broker charged a residential mortgage loan applicant or a mortgagor in connection with a residential mortgage loan. The record shall show the application or disposition of those fees.

224.75(1)(b) (b) Loan application record system. A mortgage banker or mortgage broker shall establish and maintain a record system containing all of the following information for each residential mortgage loan application:

224.75(1)(b)1. 1. The application date.

224.75(1)(b)2. 2. The name of the applicant.

224.75(1)(b)3. 3. The address of the property to be mortgaged.

224.75(1)(b)4. 4. The disposition of the application and the reason for the particular disposition.

224.75(1)(b)5. 5. The type of loan.

224.75(1)(b)6. 6. The name of the mortgage loan originator.

224.75(1)(b)7. 7. The loan amount.

224.75(1)(c) (c) Loan application documents. A mortgage banker or mortgage broker shall maintain for each residential mortgage loan application all of the following documents, if used by the mortgage banker or mortgage broker in connection with the residential mortgage loan application file:

224.75(1)(c)1. 1. The completed loan application.

224.75(1)(c)2. 2. The loan commitment.

224.75(1)(c)3. 3. The disclosure statement required by 15 USC 1601 to 1693r and regulations adopted under that law.

224.75(1)(c)4. 4. The loan closing statement.

224.75(1)(c)5. 5. A copy of the mortgage note or bond.

224.75(1)(c)6. 6. A copy of the letter rejecting the application.

224.75(1)(c)7. 7. The appraisal report.

224.75(1)(c)8. 8. The credit report.

224.75(1)(c)9. 9. Any other documents, records or forms shown to or signed by a loan applicant.

224.75(1)(d) (d) Loan servicing records and documents. A mortgage banker shall maintain for each residential mortgage loan serviced by the mortgage banker a copy of or a record of all of the following:

224.75(1)(d)1. 1. All correspondence relating to the loan.

224.75(1)(d)2. 2. All payments received from the borrower.

224.75(1)(d)3. 3. All charges assessed to the borrower’s account.

224.75(1)(d)4. 4. All payments made by the mortgage banker on behalf of the borrower.

224.75(1)(d)5. 5. The unpaid balance on the borrower’s account.

224.75(2) (2) Period of record retention. A mortgage banker or mortgage broker shall keep for at least 36 months, in an office of the mortgage banker or mortgage broker licensed under this subchapter but one that is not located in a residence unless the residence is authorized as a principal office under s. 224.72 (2m) (b) 2., all books and records that, in the opinion of the division, will enable the division to determine whether the mortgage banker or mortgage broker is in compliance with the provisions of this subchapter. These books and records include copies of all deposit receipts, canceled checks, trust account records, the records which a mortgage banker or mortgage broker maintains under sub. (1) (c) or (d), and other relevant documents or correspondence received or prepared by the mortgage banker or mortgage broker in connection with a residential mortgage loan or residential mortgage loan application. The retention period begins on the date the residential mortgage loan is closed or, if the loan is not closed, the date of loan application. If the residential mortgage loan is serviced by a mortgage banker, the retention period commences on the date that the loan is paid in full.

224.75(3) (3) Contents of credit and appraisal reports.

224.75(3)(a) (a) Credit report. If a mortgage banker or mortgage broker charges a residential mortgage loan applicant a separate fee for a credit report, the credit report shall consist, at a minimum, of a written statement indicating the name of the credit reporting agency which investigated the credit history of the applicant.

224.75(3)(b) (b) Appraisal report. If a mortgage banker or mortgage broker charges a residential mortgage loan applicant a separate fee for an appraisal report, the appraisal report shall consist, at a minimum, of a written statement indicating the appraiser’s opinion of the value of the property appraised for residential mortgage loan purposes, the basis for that opinion and the name of the person who conducted the appraisal. If requested by a residential mortgage loan applicant, a mortgage banker or mortgage broker shall provide the loan applicant with a copy of any written appraisal report held by the mortgage banker or mortgage broker, if the loan applicant paid a fee for the report.

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.