STATE OF MISSOURI

Is a license required? The State of Missouri does not require a license for loan modifications, however it does require a license for anyone who brokers a mortgage.
   

 

State specific loan modification law? Yes. Missouri Revised Statutes, Chapter 407, Section 935.2 defines a foreclosure consultant as any person who makes any solicitation or representation to stop or postpone a foreclosure sale or obtain any forbearance from any beneficiary or mortgagee.
   
Advantages of becoming a licensed Mortgage Broker? No advantages.

A mortgage broker is subject to the Missouri Revised Statute, Chapter 433(attached as Schedule A).

Section 443.803 states that no person will engage in the business of brokering residential mortgage loans without first obtaining a license.

443.812 requires that each individual performing duties as a mortgage broker be licensed separately.

 

Agency regulations also require a staffed office in Missouri which is open to the public.

 

Penalties for operating in the state without a license:

 

443.810 states that operating without a license is a class C felony and may also be fined up to $5000 per offense.

 

 

Is an advanced fee permitted?

 

No. Agency regulations, 20 CSR 1140-30.110. (Attached as Schedule B) bar most sorts of advanced fees

 

 
Is a written agreement required? Yes.

 

407.938 requires that foreclosure consultants have a written contract with their clients and has a form that must be included.

 

20 CSR 1140-30.080 requires a mortgage broker to have a written agreement with their client and lists requirements for the agreement.

Other noteworthy information? None.

 

   
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Schedule A

CHAPTER 443

MORTGAGES, DEEDS OF TRUST AND MORTGAGE BROKERS

RESIDENTIAL MORTGAGE BROKERS

Sec.

443.800. Citation of law.

443.803. Definitions.

443.805. License required to broker residential mortgage, exceptions.

443.807. Director, power to request injunction, when.

443.809. Examination, powers of director to inspect records of unlicensed persons to determine licensing required.

443.810. Penalty for violations.

443.812. One license issued to each broker – record required of locations where any business is conducted.

443.816. Residential mortgage board created – appointment, qualifications, terms – vacancies – chairman election – meetings, compensation, expenses – removal from office.

443.817. Board members to file business transactions with ethics commission – rules authorized to avoid conflict of interest.

443.819. Brokerage business to be operated under actual names of persons or corporations, violation, penalties.

443.821. License to be issued on completion of requirements – notice of denial of license to contain reasons – appeal procedure.

443.823. Licenses to be issued in duplicate, effective when.

443.825. Application content, oath and form.

443.827. Applicant for license must agree to maintain certain requirements as to methods of conducting business.

443.830. License refused – grounds.

443.833. Renewal of license, date, procedure, fee – failure to renew, license becomes inactive, reactivation – expires, when.

443.835. Licensee ceasing activity and not desiring to be licensed, procedure – director to cancel license.

443.837. Waiver of license fee for in-state and out-of-state servicers, requirements.

443.839. Application by licensee to open additional full-service offices, fee – certificate to be issued and posted.

443.841. License to be displayed – out-of-state to produce on request – license content.

443.843. Fees to be established by director – rules authorized for assessment and collection.

443.845. Residential mortgage licensing fund created – purpose – fees to be deposited in interest-bearing account to credit of fund – amount in fund subject to lapse into general revenue.

443.847. Rules, procedure to adopt, suspend, rescind and revoke.

443.849. Bonding requirements.

443.851. Audit required annually of licensee’s books and accounts – scope of audit – filed with director, authority for rules – alternative to audit requirements.

443.853. Failure to make an audit – director to select C.P.A. by bid to perform audit – exception, certain federal audit acceptable – workpapers of all audits to be available to director.

443.855. Advertising policies to be established by director – standards required – other rules authorized.

443.857. Licensee shall maintain at least one full-service office with staff, duties to handle matters relating to mortgage.

443.859. Net worth requirement for licensees.

443.861. Transfer or sale of residential mortgage, notice to be given to mortgagor, contents.

443.863. Unlawful discrimination for refusal to loan or vary terms of the loan.

443.865. Escrow accounts, placement by licensees – authority for rules.

443.867. Disclosure statement required of licensees, content – filed at time of application.

443.869. Powers and duties of director – rulemaking authority.

443.871. Director may issue subpoenas and subpoenas duces tecum – authority to administer oaths.

443.873. Failure to comply with subpoenas, director may petition circuit court for compliance order, injunctive relief and other remedies authorized.

443.875. Bond may be required, conditioned on compliance with subpoena, when.

443.877. Writ of attachment authorized on failure to comply with subpoena.

443.879. Reports required, failure to comply, penalty.

443.881. Suspension or revocation of license, grounds – procedure, penalties.

443.883. Director to maintain a staff capable of investigations – licensees to open record for investigators.

443.885. Report to be filed with director annually, contents.

443.887. General rulemaking powers of director.

443.889. Court action to recover compensation for services, proof that services performed by valid licensee required, exception.

443.891. Removal or prohibition notice issued on certain findings of conduct.

443.893. Receiver or conservator to be appointed by court, when – attorney general’s duty.

REVERSE MORTGAGE

443.901. Reverse mortgage act – definitions.

443.903. Reverse mortgage regulations.

443.906. Reverse mortgage may be made regardless of certain other transactions.

443.909. Treatment of payments for certain purposes.

443.912. Statement regarding counseling services on reverse mortgages.

10 RESIDENTIAL MORTGAGE BROKERS

443.800. Citation of law. – Sections 443.800 to 443.893 shall be known and may be cited as the “Residential Mortgage Brokers License Act”.

(L. 1994 S.B. 718 § 1)

443.803. Definitions. – 1. For the purposes of sections 443.800 to 443.893, the following terms mean:

(1) “Advertisement”, the attempt by publication, dissemination or circulation to induce, directly or indirectly, any person to apply for a loan to be secured by residential real estate;

(2) “Affiliate”:

(a) Any entity that directly controls, or is controlled by, the licensee and any other company that is directly affecting activities regulated by sections 443.800 to 443.893 that is controlled by the company that controls the licensee;

(b) Any entity:

a. That is controlled, directly or indirectly, by a trust or otherwise by, or for the benefit of, shareholders who beneficially, or otherwise, control, directly or indirectly, by trust or otherwise, the licensee or any company that controls the licensee; or

b. A majority of the directors or trustees of which constitute a majority of the persons holding any such office with the licensee or any company that controls the licensee;

(c) Any company, including a real estate investment trust, that is sponsored and advised on a contractual basis by the licensee or any subsidiary or affiliate of the licensee;

(3) “Annual audit”, a certified audit of the licensee’s books and records and systems of internal control performed by a certified public accountant in accordance with generally accepted accounting principles and generally accepted auditing standards;

(4) “Board”, the residential mortgage board, created in section 443.816;

(5) “Borrower”, the person or persons who use the services of a loan broker, originator or lender;

(6) “Director”, the director of the division of finance within the department of economic development;

(7) “Escrow agent”, a third party, individual or entity, charged with the fiduciary obligation for holding escrow funds on a residential mortgage loan pending final payout of those funds in accordance with the terms of the residential mortgage loan;

(8) “Exempt entity”, the following entities:

(a) Any bank or trust company organized under the laws of this or any other state or any national bank or any foreign banking corporation licensed by the division of finance or the United States Comptroller of the Currency to transact business in this state;

(b) Any state or federal savings and loan association, savings bank or credit union or any consumer finance company licensed under sections 367.100 to 367.215, RSMo, which is actively engaged in consumer credit lending;

(c) Any insurance company authorized to transact business in this state;

(d) Any person engaged solely in commercial mortgage lending or any person making or acquiring residential or commercial construction loans with the person’s own funds for the person’s own investment;

(e) Any service corporation of a federally chartered or state- chartered savings and loan association, savings bank or credit union;

(f) Any first-tier subsidiary of a national or state bank that has its principal place of business in this state, provided that such first-tier subsidiary is regularly examined by the division of finance or the Comptroller of the Currency or a consumer compliance examination of it is regularly conducted by the Federal Reserve;

(g) Any person engaged solely in the business of securing loans on the secondary market provided such person does not make decisions about the extension of credit to the borrower;

(h) Any mortgage banker as defined in subdivision (19) of this subsection; or

(i) Any wholesale mortgage lender who purchases mortgage loans originated by a licensee provided such wholesale lender does not make decisions about the extension of credit to the borrower;

(j) Any person making or acquiring residential mortgage loans with the person’s own funds for the person’s own investment;

(k) Any person employed or contracted by a licensee to assist in the performance of the activities regulated by sections 443.800 to 443.893 who is compensated in any manner by only one licensee;

(l) Any person licensed pursuant to the real estate agents and brokers licensing law, chapter 339, RSMo, who engages in servicing or the taking of applications and credit and appraisal information to forward to a licensee or an exempt entity for transactions in which the licensee is acting as a real estate broker and who is compensated by either a licensee or an exempt entity;

(m) Any person who originates, services or brokers residential mortgagee loans and who receives no compensation for those activities, subject to the director’s regulations regarding the nature and amount of compensation;

(9) “Financial institution”, a savings and loan association, savings bank, credit union, mortgage banker or bank organized under the laws of Missouri or the laws of the United States with its principal place of business in Missouri;

(10) “First-tier subsidiary”, as defined by administrative rule promulgated by the director;

(11) “Full-service office”, office and staff in Missouri reasonably adequate to handle efficiently communications, questions and other matters relating to any application for a new, or existing, home mortgage loan which the licensee is brokering, funding, originating, purchasing or servicing. The management and operation of each full-service office must include observance of good business practices such as adequate, organized and accurate books and records, ample phone lines, hours of business, staff training and supervision and provision for a mechanism to resolve consumer inquiries, complaints and problems. The director shall promulgate regulations with regard to the requirements of this subdivision and shall include an evaluation of compliance with this subdivision in the periodic examination of the licensee;

(12) “Government-insured mortgage loan”, any mortgage loan made on the security of residential real estate insured by the Department of Housing and Urban Development or Farmers Home Loan Administration, or guaranteed by the Veterans Administration;

(13) “Lender”, any person who either lends money for or invests money in residential mortgage loans;

(14) “Licensee” or “residential mortgage licensee”, a person who is licensed to engage in the activities regulated by sections 443.800 to 443.893;

(15) “Loan broker” or “broker”, a person exempted from licensing pursuant to subdivision (8) of this subsection, who performs the activities described in subdivisions (17) and (32) of this subsection;

(16) “Loan brokerage agreement”, a written agreement in which a broker agrees to do either of the following:

(a) Obtain a residential mortgage loan for the borrower or assist the borrower in obtaining a residential mortgage loan; or

11 (b) Consider making a residential mortgage loan to the borrower;

(17) “Loan brokering”, “mortgage brokering”, or “mortgage brokerage service”, the act of helping to obtain for an investor or from an investor for a borrower, a loan secured by residential real estate situated in Missouri or assisting an investor or a borrower in obtaining a loan secured by residential real estate in return for consideration;

(18) “Making a residential mortgage loan” or “funding a residential mortgage loan”, for compensation or gain, either, directly or indirectly, advancing funds or making a commitment to an applicant for a residential mortgage loan;

(19) “Mortgage banker”, a mortgage loan company which is subject to licensing, supervision, or annual audit requirements by the Federal National Mortgage Association (FNMA), or the Federal Home Loan Mortgage Corporation (FHLMC), or the United States Veterans Administration (VA), or the United States Department of Housing and Urban Development (HUD), or a successor of any of the foregoing agencies or entities, as an approved lender, loan correspondent, seller, or servicer;

(20) “Mortgage loan” or “residential mortgage loan”, a loan to, or for the benefit of, any natural person made primarily for personal, family or household use, including a reverse mortgage loan, primarily secured by either a mortgage or reverse mortgage on residential real property or certificates of stock or other evidence of ownership interests in, and proprietary leases from, corporations or partnerships formed for the purpose of cooperative ownership of residential real property;

(21) “Net worth”, as provided in section 443.859;

(22) “Originating”, the advertising, soliciting, taking applications, processing, closing, or issuing of commitments for, and funding of, residential mortgage loans;

(23) “Party to a residential mortgage financing transaction”, a borrower, lender or loan broker in a residential mortgage financing transaction;

(24) “Payments”, payment of all, or any part of, the following: principal, interest and escrow reserves for taxes, insurance and other related reserves and reimbursement for lender advances;

(25) “Person”, any individual, firm, partnership, corporation, company or association and the legal successors thereof;

(26) “Personal residence address”, a street address, but shall not include a post office box number;

(27) “Purchasing”, the purchase of conventional or government-insured mortgage loans secured by residential real estate from either the lender or from the secondary market;

(28) “Residential mortgage board”, the residential mortgage board created in section 443.816;

(29) “Residential mortgage financing transaction”, the negotiation, acquisition, sale or arrangement for, or the offer to negotiate, acquire, sell or arrange for, a residential mortgage loan or residential mortgage loan commitment;

(30) “Residential mortgage loan commitment”, a written conditional agreement to finance a residential mortgage loan;

(31) “Residential real property” or “residential real estate”, real property located in this state improved by a one-family to four-family dwelling;

(32) “Servicing”, the collection or remittance for, or the right or obligation to collect or remit for, any lender, noteowner, noteholder or for a licensee’s own account, of payments, interests, principal and trust items such as hazard insurance and taxes on a residential mortgage loan and includes loan payment follow-up, delinquency loan follow-up, loan analysis and any notifications to the borrower that are necessary to enable the borrower to keep the loan current and in good standing;

(33) “Soliciting, processing, placing or negotiating a residential mortgage loan”, for compensation or gain, either, directly or indirectly, accepting or offering to accept an application for a residential mortgage loan, assisting or offering to assist in the processing of an application for a residential mortgage loan on behalf of a borrower, or negotiating or offering to negotiate the terms or conditions of a residential mortgage loan with a lender on behalf of a borrower including, but not limited to, the submission of credit packages for the approval of lenders, the preparation of residential mortgage loan closing documents, and including a closing in the name of a broker;

(34) “Ultimate equitable owner”, a person who, directly or indirectly, owns or controls an ownership interest in a corporation, foreign corporation, alien business organization, trust or any other form of business organization regardless of whether the person owns or controls the ownership interest through one or more persons or one or more proxies, powers of attorney, nominees, corporations, associations, partnerships, trusts, joint stock companies or other entities or devices, or any combination thereof.

2. The director may define by rule any terms used in sections 443.800 to 443.893 for efficient and clear administration.

(L. 1994 S.B. 718 § 3, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

*Word “or” does not appear in original rolls.

443.805. License required to broker residential mortgage, exceptions. – 1. No person shall engage in the business of brokering, funding, originating, servicing or purchasing of residential mortgage loans without first obtaining a license from the director, pursuant to sections 443.800 to 443.893 and the regulations promulgated thereunder. The licensing provisions of sections 443.805 to 443.812 shall not apply to any entity engaged solely in commercial mortgage lending or to any person exempt as provided in section 443.803 or pursuant to regulations promulgated as provided in sections 443.800 to 443.893.

2. No person except a licensee or exempt entity shall do any business under any name or title or circulate or use any advertising or make any representation or give any information to any person which indicates or reasonably implies activity within the scope of the provisions of sections 443.800 to 443.893.

(L. 1994 S.B. 718 § 2 subsecs. 1, 2, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.807. Director, power to request injunction, when. – The director may, through the attorney general, request the circuit court in the appropriate jurisdiction to issue an injunction to restrain any person from violating, or continuing to violate, any provision of sections 443.805 to 443.812.

(L. 1994 S.B. 718 § 2 subsec. 3, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.809. Examination, powers of director to inspect records of unlicensed persons to determine licensing required. – When the director has reasonable cause to believe that any person has not submitted an application for licensure and is conducting any of the activities described in subsection 1 of section 443.805, the director may examine all books and records of the person12


and any additional documentation necessary to determine whether such person is required to be licensed pursuant to sections 443.800 to 443.893.

(L. 1994 S.B. 718 § 2 subsec. 4, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.810. Penalty for violations. – Effective May 21, 1998, any person who violates any provision of sections 443.805 to 443.812 shall be deemed guilty of a class C felony.

(L. 1994 S.B. 718 § 2 subsec. 5, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.812. One license issued to each broker – record required of locations where any business is conducted. – 1. Only one license shall be issued to each person conducting activities regulated by sections 443.800 to 443.893. A licensee shall register with the director each office, place of business or location where the licensee conducts any part of the licensee’s business pursuant to section 443.839.

2. Licensees may only solicit, broker, fund, originate, serve and purchase residential mortgage loans in conformance with sections 443.800 to 443.893 and such rules as may be promulgated by the director thereunder.

(L. 1994 S.B. 718 § 2 subsecs. 6, 7, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.816. Residential mortgage board created – appointment, qualifications, terms – vacancies – chairman election – meetings, compensation, expenses – removal from office. – There is hereby created in the division of finance a “Residential Mortgage Board” which shall have such powers and duties as are now or hereafter conferred upon it by law. The board shall consist of five members who shall be appointed by the governor. The members of the board shall be residents of this state, and one of the members shall be a member of the Missouri Bar in good standing. Three members of the board shall be experienced in mortgage brokering and the remaining members of the board shall have no financial interest in any mortgage brokering business. Not more than three members of the board shall be members of the same political party. The term of office of each member shall be three years, except for those first appointed. Two shall be appointed for terms of two years and one shall be appointed for a term of one year. Members shall serve until their successors are duly appointed and have qualified. Each member shall serve for the remainder of the term for which the member was appointed. The board shall select one of the members as chairman and one of the members as secretary. Vacancies on the board shall be filled for the unexpired term in the same manner as in the case of an original appointment. The members of the board shall receive as compensation the sum of one hundred dollars per day while discharging their duties, and they shall be reimbursed for their actual and necessary expenses incurred in the performance of their duties. A majority of the members of the board shall constitute a quorum and the decision of a majority of a quorum shall be the decision of the board. The board shall meet upon call of the chairman, or of the director, or of any two members of the board, and may meet at any place in this state. The board shall:

(1) Approve or disapprove each regulation proposed by the director pertaining to mortgage brokering; and

(2) Hear and determine any appeal from a denial or revocation of a mortgage broker license or decision of the director pertaining to mortgage brokering.

(L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.817. Board members to file business transactions with ethics commission – rules authorized to avoid conflict of interest. – Each member of the residential mortgage board shall file annually, no later than February first, with the Missouri ethics commission a statement of the member’s current business transactions or other affiliations with any licensee under the provisions of sections 443.800 to 443.893. The board may adopt any rules or regulations regarding the conduct of board members to avoid conflicts of interest on the part of the members of the residential mortgage board in connection with their positions on the board.

(L. 1994 S.B. 718 § 4 subsec. 2)

443.819. Brokerage business to be operated under actual names of persons or corporations, violation, penalties. – 1. No person engaged in a business regulated by sections 443.800 to 443.893 shall operate such business under a name other than the real names of the persons conducting such business, a corporate name adopted pursuant to chapter 351, RSMo, or a fictitious name registered with the secretary of state’s office.

2. Any person who knowingly violates this section shall be deemed guilty of a class A misdemeanor. A person who is convicted of a second or subsequent violation of this section shall be deemed guilty of a class C felony.

(L. 1994 S.B. 718 § 5, A.L. 2001 S.B. 538)

443.821. License to be issued on completion of requirements – notice of denial of license to contain reasons – appeal procedure. – The director shall issue a license upon completion of the following:

(1) The filing of an application;

(2) The filing with the director of a listing of judgments entered against, and bankruptcy petitions by, the applicant for the preceding seven years;

(3) The payment of investigation and application fees to be established by administrative rule; and

(4) An investigation of the averments required by section 443.827, which investigation must allow the director to issue positive findings stating that the financial responsibility, experience, character and general fitness of the applicant, and of the members thereof, if the applicant is a partnership or association, and of the officers and directors thereof if the applicant is a corporation, are such as to command the confidence of the community and to warrant belief that the business will be operated honestly, fairly and efficiently within the scope of sections 443.800 to 443.893. If the director does not find the applicant’s business and personal conduct warrants the issuance of a license, the director shall notify the applicant of the denial with the reasons stated for such denial. An applicant may appeal such denial to the board.

(L. 1994 S.B. 718 § 6 subsec. 1, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.823. Licenses to be issued in duplicate, effective when. – All licenses shall be issued in duplicate with one copy being transmitted to the license applicant and the second being retained with the director. Upon receipt of such license, a residential mortgage licensee may engage in a business regulated by sections 443.800 to 443.893. Such license shall remain in full force and effect until it expires without renewal, is surrendered by the licensee or is revoked or suspended as provided in sections 443.800 to 443.893.

(L. 1994 S.B. 718 § 6 subsec. 2, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

13


443.825. Application content, oath and form. – 1. Application for a license shall be made as provided in sections 443.833 and 443.835. The application shall be in writing, made under oath, and on a form provided by the director.

2. The application shall contain the name and complete business and residential address or addresses of the applicant. If the applicant is a partnership, association, corporation or other form of business organization, the application shall contain the names and complete business and residential addresses of each member, director and principal officer of such entity. Such application shall also include a description of the activities of the applicant, in such detail and for such periods as the director may require, including all of the following:

(1) An affirmation of financial solvency noting such capitalization requirements as may be required by the director, and access to such credit as may be required by the director;

(2) An affirmation that the applicant or the applicant’s members, directors or principals, as may be appropriate, are at least eighteen years of age;

(3) Information as to the character, fitness, financial and business responsibility, background, experience and criminal records of any:

(a) Person, entity or ultimate equitable owner that owns or controls, directly or indirectly, ten percent or more of any class of stock of the applicant;

(b) Person, entity or ultimate equitable owner that is not a depository institution that lends, provides or infuses, directly or indirectly, in any way, funds to or into an applicant, in an amount equal to, or more than, ten percent of the applicant’s net worth;

(c) Person, entity or ultimate equitable owner that controls, directly or indirectly, the election of twenty-five percent or more of the members of the board of directors of the applicant; and

(d) Person, entity or ultimate equitable owner that the director finds influences management of the applicant.

(L. 1994 S.B. 718 § 7, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.827. Applicant for license must agree to maintain certain requirements as to methods of conducting business. – Each application shall be accompanied by an averment that the applicant:

(1) Will maintain at least one full-service office within the state of Missouri as provided in section 443.857;

(2) Will maintain staff reasonably adequate to meet the requirements of section 443.857;

(3) Will keep and maintain for thirty-six months the same written records as required by the federal Equal Credit Opportunity Act, 15 U.S.C. 1691, et seq., and any other information required by rules of the director;

(4) Will timely file any report required pursuant to sections 443.800 to 443.893;

(5) Will not engage, whether as principal or agent, in the practice of rejecting residential mortgage applications or varying terms or application procedures without reasonable cause, on real estate within any specific geographic area from the terms or procedures generally provided by the licensee within other geographic areas of the state;

(6) Will not engage in fraudulent home mortgage underwriting practices;

(7) Will not make payments, whether directly or indirectly, of any kind to any in-house or fee appraiser of any government or private money lending agency with which an application for a home mortgage has been filed for the purpose of influencing the independent judgment of the appraiser with respect to the value of any real estate which is to be covered by such home mortgage;

(8) Has filed tax returns, both state and federal, for the past three years or filed with the director a personal, an accountant’s or attorney’s statement as to why no return was filed;

(9) Will not engage in any activities prohibited by section 443.863;

(10) Will not knowingly misrepresent, circumvent or conceal any material particulars regarding a transaction to which the applicant is a party;

(11) Will disburse funds in accordance with the applicant’s agreements through a licensed and bonded disbursing agent or licensed real estate broker;

(12) Has not committed any crime against the laws of this state, or any other state or of the United States, involving moral turpitude, fraudulent or dishonest dealings and that no final judgment has been entered against the applicant in a civil action upon grounds of fraud, misrepresentation or deceit which has not been previously reported to the director;

(13) Will account for and deliver to any person any personal property, including, but not limited to, money, funds, deposits, checks, drafts, mortgages or any other thing of value, which has come into the applicant’s possession and which is not the applicant’s property or which the applicant is not in law or equity entitled to retain under the circumstances, at the time which has been agreed upon or is required by law, or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery;

(14) Has not engaged in any conduct which would be cause for denial of a license;

(15) Has not become insolvent;

(16) Has not submitted an application which contains a material misstatement;

(17) Has not demonstrated negligence or incompetence in the performance of any activity required to hold a license under sections 443.800 to 443.893;

(18) Will advise the director in writing of any changes to the information submitted on the most recent application for license within forty-five days of such change. The written notice must be signed in the same form as the application for the license being amended;

(19) Will comply with the provisions of sections 443.800 to 443.893, or with any lawful order or rule made thereunder;

(20) When probable cause exists, will submit to periodic examinations by the director as required by sections 443.800 to 443.893; and

(21) Will advise the director in writing of any judgments entered against, and bankruptcy petitions by, the license applicant within five days of the occurrence of the judgment or petition.

(L. 1994 S.B. 718 § 8, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.830. License refused – grounds. – The director shall refuse to license or renew a license if:

(1) It is determined that the applicant is not in compliance with any provision of sections 443.800 to 443.893;

(2) There is substantial continuity between the applicant and any violator of any provision of sections 443.800 to 443.893; or

(3) The director cannot make the findings specified in section 443.821.

(L. 1994 S.B. 718 § 9, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.833. Renewal of license, date, procedure, fee – failure to renew, license becomes inactive, reactivation – expires, when. – 1. Licenses shall be 14 renewed on the first anniversary of the date of issuance and every two years thereafter. Renewal application forms and fees shall be submitted to the director at least sixty days before the renewal date.

2. The director shall send notice at least ninety days before the licensee’s renewal date, but failure to send or receive such notice is no defense for failure to timely renew, except when an extension for good cause is granted by the director. If the director does not grant an extension and the licensee fails to submit a completed renewal application form and the proper fees in a timely manner, the director may assess additional fees as follows:

(1) A fee of five hundred dollars shall be assessed the licensee thirty days after the proper renewal date, and one thousand dollars each month thereafter, until the license is either renewed or expires pursuant to subsections 3 and 4 of this section;

(2) Such fee shall be assessed without prior notice to the licensee, but shall be assessed only in cases where the director possesses documentation of the licensee’s continuing activity for which the unrenewed license was issued.

3. A license which is not renewed by the date required in this section shall automatically become inactive. No activity regulated by sections 443.800 to 443.893 shall be conducted by the licensee when a license becomes inactive. An inactive license may be reactivated by filing a completed reactivation application with the director, payment of the renewal fee, and payment of a reactivation fee equal to the renewal fee.

4. A license which is not renewed within one year of becoming inactive shall expire.

(L. 1994 S.B. 718 § 10 subsecs. 1 to 4, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.835. Licensee ceasing activity and not desiring to be licensed, procedure – director to cancel license. – A licensee ceasing an activity or activities regulated by sections 443.800 to 443.893 and desiring to no longer be licensed shall so inform the director in writing and, at the same time, return the license and all other symbols or indicia of licensure to the director. The licensee shall include a plan for the withdrawal from a business regulated by sections 443.800 to 443.893, including a timetable for the disposition of the business. Upon receipt of such written notice, the director shall issue a certified statement canceling the license.

(L. 1994 S.B. 718 § 10 subsec. 5, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.837. Waiver of license fee for in-state and out-of-state servicers, requirements. – 1. The director may waive the licensing fee upon receipt of:

(1) An application for a residential mortgage license in Missouri;

(2) An addendum requesting waiver of the fee stating the grounds in support of such waiver, including, but not limited to, not for profit status, or the showing of undue hardship; and

(3) In the case of out-of-state servicer of loans in Missouri, the following documentation shall be required;

(a) A verification that the firm services only twenty-five or fewer loans secured by residential real estate situated in Missouri; except that, any out-of-state servicer located in the metropolitan area of the city of St. Louis and any city with at least three hundred fifty thousand inhabitants which is located in more than one county may service more than twenty-five loans provided that such servicer meets all the requirements for licensing provided for businesses located in Missouri, except the provision for a full-service office located in Missouri;

(b) An agreement not to originate, purchase or acquire additional servicing of loans secured by residential real estate situated in Missouri;

(c) An agreement to maintain a dedicated toll-free telephone number for the exclusive use by the licensee’s Missouri customers;

(d) An agreement to provide a written notice, at least annually, to the licensee’s Missouri customers advising them of the dedicated toll-free telephone number and to furnish the director with a copy of such written notice.

2. In order for a licensee to be granted a waiver pursuant to subsection 1 of this section, a request for a waiver of the filing fee shall be submitted each year along with any other required license renewal procedures.

(L. 1994 S.B. 718 § 11, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.839. Application by licensee to open additional full-service offices, fee – certificate to be issued and posted. – 1. A licensee may apply for authority to open and maintain additional offices by:

(1) Giving the director prior notice of the licensee’s intention in such form as prescribed by the director;

(2) Paying a fee to be established by the director by administrative rule.

2. Upon receipt of the notice and fee required by subsection 1 of this section, the director shall issue a certificate for the additional office. The certificate shall be conspicuously displayed in the respective additional office.

(L. 1994 S.B. 718 § 12, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.841. License to be displayed – out-of-state to produce on request – license content. – The license shall be conspicuously displayed in every Missouri office. The license shall state the full name and address of the licensee. The license shall not be transferable or assignable. A separate certificate shall be issued for display in each Missouri office.

(L. 1994 S.B. 718 § 13, A.L. 2001 S.B. 538)

443.843. Fees to be established by director – rules authorized for assessment and collection. – 1. The expenses of administering sections 443.800 to 443.893, including investigations and examinations provided for in sections 443.800 to 443.893 shall be borne by and assessed against entities regulated by sections 443.800 to 443.893. The director shall establish fees by regulation in at least the following categories:

(1) Application fees;

(2) Investigation of license applicant fees;

(3) Examination fees;

(4) Contingent fees; and

(5) Such other categories as may be required to administer sections 443.800 to 443.893.

2. In addition to any fees collected pursuant to sections 443.800 to 443.893, the director shall by rules and regulations establish schedules to apply to the assessment and collection of any necessary contingent or miscellaneous fees. Any fees established pursuant to the authority of sections 443.800 to 443.893 shall be set at an amount to produce revenue which will not substantially exceed the cost of administering sections 443.800 to 443.893.

(L. 1994 S.B. 718 § 14 subsecs. 1, 2, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

15 443.845. Residential mortgage licensing fund created – purpose – fees to be deposited in interest-bearing account to credit of fund – amount in fund subject to lapse into general revenue. – 1. There is hereby created in the state treasury the “Residential Mortgage Licensing Fund” which shall be used, upon appropriation by the general assembly, for all costs incurred by the director in administering the provisions of sections 443.800 to 443.893. The director shall transmit all fees received pursuant to sections 443.800 to 443.893 to the director of revenue for deposit in an interest-bearing account in the state treasury to the credit of the residential mortgage licensing fund. Any interest earned on the money in this fund shall be credited to the residential mortgage licensing fund.

2. Notwithstanding the provisions of section 33.080, RSMo, to the contrary, money in this fund shall not be transferred and placed to the credit of general revenue until the amount in the fund at the end of the biennium exceeds three times the amount of the appropriations from the residential mortgage licensing fund for the preceding fiscal year. The amount, if any, in the fund which shall lapse is that amount in the fund which exceeds the appropriate multiple of the appropriations from the residential mortgage licensing fund for the preceding fiscal years.

(L. 1994 S.B. 718 § 14 subsecs 3, 4, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.847. Rules, procedure to adopt, suspend, rescind and revoke. – 1. No rule or portion of a rule promulgated under the authority of sections 443.800 to 443.893 shall become effective until it has been approved by the joint committee on administrative rules in accordance with the procedures provided in this section, and the delegation of the legislative authority to enact law by the adoption of such rules is dependent upon the power of the joint committee on administrative rules to review and suspend rules pending ratification by the senate and the house of representatives as provided in this section.

2. Upon filing any proposed rule with the secretary of state, the filing agency shall concurrently submit such proposed rule to the committee, which may hold hearings upon any proposed rule or portion thereof at any time.

3. A final order of rulemaking shall not be filed with the secretary of state until thirty days after such final order of rulemaking has been received by the committee. The committee may hold one or more hearings upon such final order of rulemaking during the thirty-day period. If the committee does not disapprove such order of rulemaking within the thirty-day period, the filing agency may file such order of rulemaking with the secretary of state and the order of rulemaking shall be deemed approved.

4. The committee may, by majority vote of the members, suspend the order of rulemaking or portion thereof by action taken prior to the filing of the final order of rulemaking only for one or more of the following grounds:

(1) An absence of statutory authority for the proposed rule;

(2) An emergency relating to public health, safety or welfare;

(3) The proposed rule is in conflict with state law;

(4) A substantial change in circumstance since enactment of the law upon which the proposed rule is based.

5. If the committee disapproves any rule or portion thereof, the filing agency shall not file such disapproved portion of any rule with the secretary of state and the secretary of state shall not publish in the Missouri Register any final order of rulemaking containing the disapproved portion.

6. If the committee disapproves any rule or portion thereof, the committee shall report its findings to the senate and the house of representatives. No rule or portion thereof disapproved by the committee shall take effect so long as the senate and the house of representatives ratify the act of the joint committee by resolution adopted in each house within thirty legislative days after such rule or portion thereof has been disapproved by the joint committee.

7. Upon adoption of a rule as provided in this section, any such rule or portion thereof may be suspended or revoked by the general assembly either by bill or, pursuant to section 8, article IV of the Constitution of Missouri, by concurrent resolution upon recommendation of the joint committee on administrative rules. The committee shall be authorized to hold hearings and make recommendations pursuant to the provisions of section 536.037, RSMo. The secretary of state shall publish in the Missouri Register, as soon as practicable, notice of the suspension or revocation.

(L. 1994 S.B. 718 § 15)

443.849. Bonding requirements. – A corporate surety bond in the principal sum of twenty thousand dollars shall accompany each application for a license. The bond shall be in a form satisfactory to the director and shall be issued by a bonding company or insurance company authorized to do business in this state, to secure the faithful performance of the obligations of the applicant and the agents and subagents of the applicant in connection with the activities of originating, servicing or acquiring mortgage loans. An applicant or licensee may, in lieu of filing the bond required pursuant to this section, provide the director with a twenty thousand dollar irrevocable letter of credit, as defined in section 400.5-103, RSMo, issued by any financial institution.

(L. 1994 S.B. 718 § 16, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

*Word “a” does not appear in original rolls.

443.851. Audit required annually of licensee’s books and accounts – scope of audit – filed with director, authority for rules – alternative to audit requirements. – 1. At the end of the licensee’s fiscal year, but in no case more than twelve months after the last audit conducted pursuant to this section and section 443.853, each licensee shall cause the licensee’s books and accounts to be audited by a certified public accountant not connected with such licensee. The books and records of all licensees shall be maintained on an accrual basis. The audit shall be sufficiently comprehensive in scope to permit the expression of an opinion on the financial statements in the report and must be performed in accordance with generally accepted accounting principles and generally accepted auditing standards.

2. As used in this section and section 443.853, the term “expression of opinion” includes either:

(1) An unqualified opinion;

(2) A qualified opinion;

(3) A disclaimer of opinion; or

(4) An adverse opinion.

3. If a qualified or adverse opinion is expressed or if an opinion is disclaimed, the reasons therefor shall be fully explained. An opinion, qualified as to a scope limitation, shall not be acceptable.

4. The audit report shall be filed with the director within one hundred twenty days of the audit date. The report filed with the director shall be certified by the certified public accountant conducting the audit. The director may promulgate rules regarding late audit reports.

5. As an alternative to the audit requirements of subsections 1 to 4 of this section, a licensee may meet the 16


requirements of this section without filing an audit report by posting and maintaining a corporate surety bond, in addition to that described in section 443.849, in the amount of one hundred thousand dollars. The bond shall be in form specified by and satisfactory to the director and payable to the director and shall be issued by a bonding company or insurance company authorized to do business in this state, to secure the faithful performance of the obligations of the licensee, its agents and subagents in connection with the activities of originating, servicing or acquiring mortgage loans. A licensee may, in lieu of this bond, provide the director with a one hundred thousand dollar irrevocable letter of credit, as defined in section 400.5- 103, RSMo, issued by any financial institution.

(L. 1994 S.B. 718 § 17 subsecs. 1 to 4, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 179 merged with S.B. 538)

443.853. Failure to make an audit – director to select C.P.A. by bid to perform audit – exception, certain federal audit acceptable – workpapers of all audits to be available to director. – 1. If any licensee required to make an audit fails to cause an audit to be made, the director shall cause the audit to be made by a certified public accountant at the licensee’s expense. The director shall select such certified public accountant by advertising for bids or by such other fair and impartial means as the director establishes by regulation.

2. In lieu of an audit required by this section and section 443.851, the director may accept any audit made in conformance with the audit requirements of the United States Department of Housing and Urban Development.

3. The workpapers of the certified public accountants employed by each licensee for purposes of conducting audits required by this section and section 443.851 are to be made available to the director or the director’s designee upon request and may be reproduced by the director or the director’s designee to enable the director to carry out the purposes of sections 443.800 to 443.893.

(L. 1994 S.B. 718 § 17 subsecs. 5, 6, 7, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.855. Advertising policies to be established by director – standards required – other rules authorized. – In addition to such other rules the director may promulgate to effectuate sections 443.800 to 443.893, the director shall prescribe rules governing the advertising of mortgage loans, including, without limitation, the following requirements:

(1) Advertising for loans transacted pursuant to the requirements of sections 443.800 to 443.893 may not be false, misleading or deceptive. No person whose activities are regulated pursuant to the provisions of sections 443.800 to 443.893 may advertise in any manner so as to indicate or imply that the person’s interest rates or charges for loans are in any way recommended, approved, set or established by the state or by the provisions of sections 443.800 to 443.893;

(2) All advertisements by a licensee shall contain the name and an office address of such entity, which shall conform to a name and address on record with the director.

(L. 1994 S.B. 718 § 18, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.857. Licensee shall maintain at least one full-service office with staff, duties to handle matters relating to mortgage. – Each licensee shall maintain, in the state of Missouri, at least one full-service office with staff reasonably adequate to efficiently handle all matters relating to any proposed or existing home mortgage with respect to which such licensee is performing services.

(L. 1994 S.B. 718 § 19, A.L. 2001 S.B. 538)

443.859. Net worth requirement for licensees. – Effective May 21, 1998, every licensee shall have and maintain a net worth of not less than twenty-five thousand dollars. The director may promulgate rules with respect to net worth definitions and requirements for licensees as necessary to accomplish the purposes of sections 443.800 to 443.893. In lieu of the net worth requirement established by this section, the director may accept evidence of conformance by the licensee with the net worth requirements of the United States Department of Housing and Urban Development.

(L. 1994 S.B. 718 § 20, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.861. Transfer or sale of residential mortgage, notice to be given to mortgagor, contents. – Whenever the serving of a residential mortgage is transferred or sold by a licensee, notice shall be given to the mortgagor simultaneously with such transfer and shall include, at the minimum, where and to whom to address the mortgagor’s questions relating to the residential mortgage, the exact name, address and telephone number to whom at least the next three months’ payments are to be submitted and the total amount required of the mortgagor by the servicer for each of the months referred to in the notice.

(L. 1994 S.B. 718 § 21)

443.863. Unlawful discrimination for refusal to loan or vary terms of the loan. – It is unlawful discrimination to refuse loans or to vary the terms of loans or the application procedures for loans because of:

(1) The borrower’s race, color, religion, national origin, age, gender or marital status; or

(2) The geographic location of the proposed security.

(L. 1994 S.B. 718 § 22, A.L. 2001 S.B. 538)

443.865. Escrow accounts, placement by licensees – authority for rules. – The director may promulgate rules with respect to placement in escrow accounts by any licensee of any money, funds, deposits, checks or drafts entrusted to the licensee by any person dealing with the licensee as a residential mortgage licensee.

(L. 1994 S.B. 718 § 23, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.867. Disclosure statement required of licensees, content – filed at time of application. – At the time of application, each residential mortgage licensee which is a broker shall disclose, within the loan brokerage disclosure statement, that:

(1) The licensee does not make loans; and

(2) The funds are provided by another person which may affect availability of funds.

(L. 1994 S.B. 718 § 24, A.L. 2001 S.B. 538)

443.869. Powers and duties of director – rulemaking authority. – 1. The functions, powers and duties of the director shall include the following:

(1) To issue or refuse to issue any license as provided in sections 443.800 to 443.893;

(2) To revoke or suspend for cause any license issued pursuant to sections 443.800 to 443.893;

17


(3) To keep records of all licenses issued pursuant to sections 443.800 to 443.893;

(4) To receive, consider, investigate and act upon complaints made by any person in connection with any residential mortgage licensee in this state;

(5) To consider and act upon any recommendations from the residential mortgage board;

(6) To prescribe the forms of and receive:

(a) Applications for licenses; and

(b) All reports and all books and records required to be made by any residential mortgage licensee pursuant to the provisions of sections 443.800 to 443.893, including annual audited financial statements;

(7) To adopt rules necessary and proper for the administration of sections 443.800 to 443.893;

(8) To subpoena documents and witnesses and compel their attendance and production, to administer oaths and to require the production of any books, papers or other material relevant to any inquiry authorized by sections 443.800 to 443.893;

(9) To require information with regard to any applicant as the director may deem desirable, with due regard to the paramount interests of the public, about the experience, background, honesty, truthfulness, integrity and competency of the applicant concerning financial transactions involving primary or subordinate mortgage financing and where the applicant is an entity other than an individual, as to the honesty, truthfulness, integrity and competency of any officer or director of the corporation, association or other entity or the members of a partnership;

(10) To examine the books and records of every licensee at intervals as provided by sections 443.800 to 443.893 and the rules promulgated thereunder;

(11) To enforce the provisions of sections 443.800 to 443.893;

(12) To levy fees and charges for services performed in administering the provisions of sections 443.800 to 443.893. The aggregate of all fees collected by the director shall be deposited promptly after receipt and accompanied by a detailed statement of such receipts in the residential mortgage licensing fund;

(13) To appoint a staff which may include an executive director, examiners, supervisors, experts, special assistants and any necessary support staff as needed to effectively and efficiently administer the provisions of sections 443.800 to 443.893; and

(14) To conduct hearings for such purposes as the director deems appropriate.

2. Any rule or portion of a rule, as that term is defined in section 536.010, RSMo, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536, RSMo, and, if applicable, section 536.028, RSMo. This section and chapter 536, RSMo, are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536, RSMo, to review, to delay the effective date or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2001, shall be invalid and void.

(L. 1994 S.B. 718 § 25, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.871. Director may issue subpoenas and subpoenas duces tecum – authority to administer oaths. – The director may issue and serve subpoenas and subpoenas duces tecum to compel the attendance of witnesses and the production of all books, accounts, records and other documents and materials relevant to an examination or investigation. The director or the director’s duly authorized representative may administer oaths and affirmations to any person.

(L. 1994 S.B. 718 § 26 subsec. 1, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.873. Failure to comply with subpoenas, director may petition circuit court for compliance order, injunctive relief and other remedies authorized. – If any person does not comply with a subpoena or subpoena duces tecum issued or caused to be issued by the director, the director may petition the circuit court of the county in which the person subpoenaed resides or has the person’s principal place of business for an order requiring the subpoenaed person to appear and testify and to produce such books, accounts, records and other documents as are specified in the subpoena duces tecum. The court may grant injunctive relief restraining the person from advertising, promoting, soliciting, entering into, offering to enter into, continuing, or completing any residential mortgage financing transaction or residential mortgage servicing transaction. The court may grant such other relief, including, but not limited to, the restraint, by injunction or appointment of a receiver, of any transfer, pledge, assignment or other disposition of the person’s assets or any concealment, alteration, destruction or other disposition of books, accounts, records or other documents and materials as the court deems appropriate, until the person has fully complied with the subpoena or subpoena duces tecum and the director has completed an investigation or examination.

(L. 1994 S.B. 718 § 26 subsec. 2, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.875. Bond may be required, conditioned on compliance with subpoena, when. – When it appears to the director that the compliance with a subpoena or subpoena duces tecum issued or caused to be issued by the director pursuant to sections 443.871 to 443.877 is essential to an investigation or examination, the director, in addition to the other remedies provided for in sections 443.871 to 443.877, may apply for relief to the circuit court of the county in which the subpoenaed person resides or has the person’s principal place of business. The court shall thereupon direct the issuance of an order against the subpoenaed person requiring sufficient bond conditioned on compliance with the subpoena or subpoena duces tecum. The court shall cause to be endorsed on the order a suitable amount of bond or payment pursuant to which the person named in the order shall be freed, having a due regard to the nature of the case.

(L. 1994 S.B. 718 § 26 subsec. 3, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.877. Writ of attachment authorized on failure to comply with subpoena. – In addition to the other provisions of sections 443.871 to 443.877, the director may seek a writ of attachment or an equivalent order from the circuit court having jurisdiction over the person who has refused to obey a subpoena, who has refused to give testimony or who has refused to produce the material described in the subpoena duces tecum.

(L. 1994 S.B. 718 § 26 subsec. 4, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.879. Reports required, failure to comply, penalty. – 1. In addition to any reports required pursuant to sections 443.800 to 443.893, every licensee shall file such other reports as the director shall request.

18


2. Any licensee or any officer, director, employee or agent of any licensee who fails to file any reports required by sections 443.800 to 443.893 or who shall deliberately, willfully or knowingly make, subscribe to or cause to be made any false entry with intent to deceive the director or the director’s appointees or who shall purposely cause delay in filing such reports shall be deemed guilty of a class A misdemeanor.

(L. 1994 S.B. 718 § 27, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.881. Suspension or revocation of license, grounds – procedure, penalties. – 1. Upon written notice to a licensee, the director may suspend or revoke any license issued pursuant to sections 443.800 to 443.893 if the director makes a finding of one or more of the following in the notice that:

(1) Through separate acts or an act or a course of conduct, the licensee has violated any provision of sections 443.800 to 443.893, any rule promulgated by the director or any other law or rule of this state or the United States;

(2) Any fact or condition exists which, if it had existed at the time of the original application for such license would have warranted the director in refusing originally to issue such license;

(3) If a licensee is other than an individual, any ultimate equitable owner, officer, director or member of the licensed partnership, association, corporation or other entity has so acted or failed to act as would be cause for suspending or revoking a license to that party as an individual.

2. No license shall be suspended or revoked, except as provided in this section, nor shall any licensee be subject to any other disciplinary proceeding without notice of the licensee’s right to a hearing as provided in sections 443.800 to 443.893.

3. The director, on good cause shown that an emergency exists, may suspend any license for a period not to exceed thirty days, pending an investigation.

4. The provisions of section 443.835 shall not affect a residential mortgage licensee’s civil or criminal liability for acts committed before such licensee surrenders the license.

5. No revocation, suspension or surrender of any license shall impair or affect the obligation of any preexisting lawful contract between the licensee and any person.

6. Every license issued pursuant to sections 443.800 to 443.893 shall remain in force and effect until the license has expired without renewal, has been surrendered, revoked or suspended in accordance with the provisions of sections 443.800 to 443.893, except that, the director may reinstate a suspended license or issue a new license to a licensee whose license has been revoked if no fact or condition exists which would have warranted the director to refuse originally to issue such license pursuant to sections 443.800 to 443.893.

7. Whenever the director revokes or suspends a license issued pursuant to sections 443.800 to 443.893, the director shall execute in duplicate a written order to that effect. The director shall publish notice of such order in a newspaper of general circulation in the county in which the residential mortgage licensee’s business is located and shall serve a copy of such order upon the licensee. Such order may be reviewed by the board.

8. When the director finds any person in violation of the grounds provided in subsection 9 of this section, the director may enter an order imposing one or more of the following disciplinary actions:

(1) Revocation of the license;

(2) Suspension of the license subject to reinstatement upon satisfying all reasonable conditions the director may specify;

(3) Placement of the licensee on probation for a period of time and subject to any reasonable conditions as the director may specify;

(4) Issuance of a reprimand; and

(5) Denial of a license.

9. The following acts shall constitute grounds for which the disciplinary actions specified in subsection 8 of this section may be taken:

(1) Being convicted or found guilty, regardless of pendency of an appeal, of a crime in any jurisdiction which involves fraud, dishonest dealings, or any other act involving moral turpitude;

(2) Fraud, misrepresentation, deceit or negligence in any mortgage financing transaction;

(3) A material or intentional misstatement of fact on an initial or renewal application;

(4) Failure to follow the director’s rules with respect to placement of funds in escrow accounts;

(5) Insolvency or filing under any provision of the United States Bankruptcy Code as a debtor;

(6) Failure to account or deliver to any person any property such as any money, funds, deposits, checks, drafts, mortgages or any other documents or things of value, which has come into the licensee’s possession and which is not the person’s property or which the licensee is not in law or equity entitled to retain, under the circumstances and at the time which has been agreed upon or is required by law or, in the absence of a fixed time, upon demand of the person entitled to such accounting and delivery;

(7) Failure to disburse funds in accordance with agreements;

(8) Any misuse, misapplication or misappropriation of trust funds or escrow funds;

(9) Having a license, or the equivalent, to practice any profession or occupation revoked, suspended or otherwise acted against, including the denial of licensure by a licensing authority of this state or another state, territory or country for fraud, dishonest dealings or any other act involving moral turpitude;

(10) Failure to issue a satisfaction of mortgage when the mortgage has been executed and proceeds were not disbursed to the benefit of the mortgagor and when the mortgagor has fully paid the licensee’s costs and commission;

(11) Failure to comply with any order of the director or rule made or issued pursuant to the provisions of sections 443.800 to 443.893;

(12) Engaging in activities regulated by sections 443.800 to 443.893 without a current, active license unless specifically exempted by the provisions of sections 443.800 to 443.893;

(13) Failure to pay timely any fee or charge due under the provisions of sections 443.800 to 443.893;

(14) Failure to maintain, preserve and keep available for examination, all books, accounts or other documents required by the provisions of sections 443.800 to 443.893 and the rules of the director;

(15) Refusal to permit an investigation or examination of the licensee’s or the licensee’s affiliates’ books and records or refusal to comply with the director’s subpoena or subpoena duces tecum;

(16) A pattern of substantially underestimating closing costs;

(17) Failure to comply with, or any violation of, any provision of sections 443.800 to 443.893.

10. A licensee shall be subject to the disciplinary actions specified in sections 443.800 to 443.893 for a violation of subsection 9 of this section by any officer, director, shareholder, joint venture, partner, ultimate equitable owner or employee of the licensee.

11. Such licensee shall be subject to suspension or revocation for employee actions only if there is a pattern of repeated violations by an employee or employees or the licensee has knowledge of the violation.

19 12. The procedures for the surrender of a license shall be:

(1) The director may, after ten days’ notice by certified mail to the licensee at the address set forth on the license, stating the contemplated action and, in general, the grounds for such action and the date, time and place of a hearing on the action, and after providing the licensee with a reasonable opportunity to be heard prior to such action, revoke or suspend any license issued pursuant to sections 443.800 to 443.893 if the director finds that:

(a) The licensee has failed to comply with any provision of sections 443.800 to 443.893 or any order, decision, finding, rule or direction of the director lawfully made pursuant to the authority of sections 443.800 to 443.893; or

(b) Any fact or condition exists which, if it had existed at the time of the original application for the license, clearly would have warranted the director to refuse to issue the license;

(2) Any licensee may surrender a license by delivering to the director written notice that the licensee thereby surrenders such license, but surrender shall not affect the licensee’s civil or criminal liability for acts committed prior to surrender or entitle the licensee to a return of any part of the license fee.

(L. 1994 S.B. 718 § 28, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.883. Director to maintain a staff capable of investigations – licensees to open record for investigators. – The director shall at all times maintain staff and facilities adequate to receive, record and investigate complaints and inquiries made by any person concerning sections 443.800 to 443.893 and any licensees licensed pursuant to the provisions of sections 443.800 to 443.893. Each licensee shall open the licensee’s books, records, documents and offices wherever situated to the director or the director’s appointees as needed to facilitate such investigations.

(L. 1994 S.B. 718 § 29, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.885. Report to be filed with director annually, contents. – On or before March first of each year, each licensee, except those exempt entities provided for in subsection 7 of section 443.803, shall file a report with the director which shall disclose the following information with respect to the immediately preceding calendar year:

(1) A list of home mortgages granted, issued, originated or closed during the report period, with respect to which such licensee has had any connection. The list shall show for each census tract, in regions where such census tracts have been established and by zip code in all other regions, the number and aggregate dollar amount of applications for and the number granted and aggregate dollar amount of:

(a) Conventional mortgage loans;

(b) Mortgage loans insured under the National Housing Act, 12 U.S.C. 1701, et seq.; and

(c) Mortgage loans guaranteed under the provisions of the Federal Veterans’ Benefits Act, 38 U.S.C. 3710 et seq.;

(2) List by zip code in those areas having no census tract:

(a) The total number of home mortgages on real estate situated in this state with respect to which the licensee has had any connection and which are in default on the last day of the reporting period; and

(b) The total number of claims paid during the reporting period on home mortgages with respect to which the licensee has had any connection, including the date of the first default thereon and the date each such foreclosure proceeding was instituted;

(3) If the director finds that another report that the licensee is required to compile is equivalent to the annual report of mortgage activity, then the director may accept such report as fulfilling the reporting requirements of this section;

(4) The director may also require by rule that licensees report such additional information as is necessary to assure strict compliance with the provisions of sections 443.800 to 443.893.

(L. 1994 S.B. 718 § 30, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.887. General rulemaking powers of director. – 1. In addition to such other powers as may be prescribed by sections 443.800 to 443.893, the director may promulgate rules consistent with the purpose of sections 443.800 to 443.893, including, but not limited to:

(1) Such rules in connection with the activities of licensees as may be necessary and appropriate for the protection of consumers in this state;

(2) Such rules as may be necessary and appropriate to define improper or fraudulent business practices in connection with the activities of licensees;

(3) Such rules as may define the terms used in sections 443.800 to 443.893 and as may be necessary and appropriate to interpret and implement the provisions of sections 443.800 to 443.893; and

(4) Such rules as may be necessary for the enforcement of sections 443.800 to 443.893.

2. The director may make such specific ruling, demands and findings as the director may deem necessary for the proper conduct of the mortgage lending industry.

(L. 1994 S.B. 718 § 31, A.L. 1995 H.B. 63, et al., A.L. 2001 S.B. 538)

443.889. Court action to recover compensation for services, proof that services performed by valid licensee required, exception. – Unless exempt from licensure pursuant to the provisions of sections 443.800 to 443.893, no person engaged in, or offering to engage in, any act or service for which a license is required pursuant to the provisions of sections 443.800 to 443.893 may bring or maintain any action in any court of this state to collect compensation for the performance of the licensable services without alleging and proving that the person was the holder of a valid residential mortgage license issued pursuant to the provisions of sections 443.800 to 443.893 at all times during the performance of such services.

(L. 1994 S.B. 718 § 32)

443.891. Removal or prohibition notice issued on certain findings of conduct. – Upon making any one or more of the following findings, the director may issue a notice of intent to issue an order of removal or prohibition, or an order of removal and prohibition, which order may remove a named person, persons or entity or entities from participating in the affairs of one or more licensees and may be permanent or for a specific shorter period of time. The findings required by this section may be any one or more of the following:

(1) A finding that the part or entity subject to the order has been convicted of a crime involving material financial loss to a licensee, a federally insured depository institution, a government-sponsored enterprise, a Federal 20


Home Loan Bank, a Federal Reserve Bank or any other person;

(2) A finding that the person or entity subject to the order has submitted, or caused to be submitted, any document that contains multiple willful and material misstatements of facts and includes the signature of the person or entity specified in the director’s order or that is notarized, certified, verified or is in any other way attested to as to the document’s veracity. An application for licensure or license renewal may be considered such a document.

(L. 1994 S.B. 718 § 33, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

443.893. Receiver or conservator to be appointed by court, when – attorney general’s duty. – When the director makes a finding that a receivership or conservatorship is necessary to protect consumers of a licensee from the consequences of the licensee’s failure to comply with the provisions of sections 443.800 to 443.893 or other unsafe and unsound practice, the director shall request the attorney general of this state to petition the circuit court of Cole County or of the county in which the licensee is located to appoint a receiver or conservator for purposes of protecting consumers and resolving the affairs of the licensee.

(L. 1994 S.B. 718 § 34, A.L. 1995 H.B. 63, 73 & 34)

Effective 6-13-95

REVERSE MORTGAGE

443.901. Reverse mortgage act – definitions. – 1. Sections 443.901 to 443.912 shall be known and be cited as the “Missouri Reverse Mortgage Act”.

2. For the purposes of Sections 443.901 to 443.912 the following terms mean:

(1) “Authorized lender” or “lender”, a lender authorized to engage in business as a bank, savings institution or credit union under the laws of the United States or this state, residential mortgage licensee who is licensed pursuant to sections 443.800 to 443.893, RSMo, or entity that is an exempt entity pursuant to sections 443.800 to 443.893, RSMo;

(2) “Brokered”, the act of helping to obtain for an investor or other entity, or from an investor or other entity, for a borrower, a residential mortgage loan, including a reverse mortgage loan;

(3) “Originated”, advertised, solicited, processed, for which a loan application is taken, or which is closed, committed for, or funded;

(4) “Principal” as it relates to reverse mortgages, the total of the net amount paid to, receivable by, contracted for, or paid, or payable, for the account of the borrower, and to the extent payment is deferred, additional charges permitted by Sections 443.901 to 443.912;

(5) “Reverse mortgage loan”, a loan originated, made or brokered by an authorized lender which:

(a) Is secured by residential real estate property;

(b) Provides cash advances to the borrower based upon the equity in the borrower’s owner-occupied principal residence;

(c) Requires no payment of principal or interest until the entire loan becomes due and payable; and

(d) Otherwise complies with the terms of Sections 443.901 to 443.912.

(L. 1995 H.B. 63, 73 & 34 § 1)

443.903. Reverse mortgage regulations. – Notwithstanding any other provisions of law to the contrary, reverse mortgage loans shall be governed by the following:

(1) Payment in whole or in part is permitted without penalty at any time during the period of the loan;

(2) An advance made under a reverse mortgage and interest on the advances have priority over a lien filed after the closing of a reverse mortgage loan;

(3) A reverse mortgage loan may provide for an interest rate which is fixed or adjustable and may also provide for interest that is contingent on appreciation in the value of the property;

(4) If a reverse mortgage loan provides for periodic advances to a borrower, the advances may not be reduced in amount or number based on an adjustment in the interest rate;

(5) Lenders failing to make loan advances as required in the loan agreement and failing to cure the default as required in the loan agreement shall forfeit an amount equal to the greater of two hundred dollars or one percent of the amount of the loan advance the lender failed to make;

(6) The repayment requirement is also expressly subject to the following additional conditions:

(a) Temporary absences from the home not to exceed sixty consecutive days do not cause the mortgage to become due and payable;

(b) Temporary absences from the home ex-ceeding sixty consecutive days, but less than six months, do not cause the mortgage to become due and payable so long as the borrower has taken prior action which secures the home in a satisfactory manner;

(c) The lender’s right to collect reverse mortgage loan proceeds is subject to the applicable statute of limitations for loan contracts. Notwithstanding the applicable statute of limitations for loan contracts, the statute of limitations commences on the date that the mortgage becomes due and payable;

(d) The lender must prominently disclose any interest or other fees to be charged during the period that commences on the date that the mortgage becomes due and payable and ends when repayment in full is made;

(7) The following fees may be charged to the borrower, and financed by the lender, in connection with a reverse mortgage loan, except for loans insured or guaranteed by agencies of the federal government in which case federal law or regulation shall apply;

(a) A nonrefundable origination fee not to exceed two percent of the principal;

(b) Fees and charges prescribed by law actually and necessarily paid to public officials for perfecting, releasing or satisfying a security interest related to the reverse mortgage loan;

(c) Recording taxes to perfect documents;

(d) Bona fide closing costs paid to third parties, which shall include:

a. Fees or premiums for title examination, title insurance or similar purposes, including surveys;

b. Fees for preparation of a deed, settlement statement or other documents;

c. Fees for notarizing deeds and other documents;

d. Appraisal fees; and

e. Fees for credit reports;

(e) A charge for insurance against loss of, or damage to, property where no such coverage already exists;

(8) As a convenience to the borrower, reverse mortgage loan applications may be taken by the lender over the telephone or at the borrower’s home and reverse mortgage loans may be closed by mail or at a title company’s office.

(L. 1995 H.B. 63, 73 & 34, § 2)

21 443.906. Reverse mortgage may be made regardless of certain other transactions. – Reverse mortgage loans may be made or acquired without regard to the following provisions for other types of mortgage transactions:

(1) Limitations on the purpose and use of future advances or any other mortgage proceeds;

(2) Limitations on future advances to a term of years, or limitations on the term of credit line advances;

(3) Limitations on the term during which future advances take priority over intervening advances;

(4) Requirements that a maximum mortgage amount be stated in the mortgage;

(5) Prohibitions on balloon payments;

(6) Prohibitions on compound interest;

(7) Interest rate limits under the usury statutes;

(8) Requirements that a percentage of the loan proceeds must be advanced prior to loan assignment.

(L. 1995 H.B. 63, 73 & 34, § 3)

443.909. Treatment of payments for certain purposes. – Reverse mortgage loan payments made to a borrower shall be treated as proceeds from a loan and not as income for the purpose of determining eligibility and benefits under means-tested programs of aid to individuals:

(1) Undisbursed funds shall be treated as equity in a borrower’s home and not as proceeds from a loan for the purpose of determining eligibility and benefits under means-tested programs of aid to individuals;

(2) This section applies to any law relating to payments, allowances, benefits or services provided on a means-tested basis by this state, including, but not limited to, supplemental security income, low-income energy assistance, property tax relief, medical assistance and general assistance.

(L. 1995 H.B. 63, 73 & 34, § 4)

443.912. Statement regarding counseling services on reverse mortgages. – No reverse mortgage loan commitment may be made by a lender unless the loan applicant attests in writing that the applicant received from the lender at the time of initial inquiry a statement regarding the advisability and availability of independent information and counseling services on reverse mortgages. Such statement may be in a form developed by the lender or the division of finance.

(L. 1995 H.B. 63, 73 & 34, § 5)

SCHEDULE B

 

TABLE OF CONTENTS

MORTGAGE BROKER REGULATIONS

20 CSR 1140-30.010 Definitions…………………………………………………………………….25

20 CSR 1140-30.030 Licensing………………………………………………………………………25

20 CSR 1140-30.040 Operations and Supervision…………………………………………….26

20 CSR 1140-30.050 Annual Report of Mortgage Brokerage Activity

and Mortgage Servicing Activity…………………………………….26

20 CSR 1140-30.070 Advertising……………………………………………………………………27

20 CSR 1140-30.080 Loan Brokerage Practices……………………………………………….27

20 CSR 1140-30.090 Loan Application Practices………………………………………………27

20 CSR 1140-30.100 General Practices…………………………………………………………..28

20 CSR 1140-30.110 Commitment and Closing Practices………………………………….28

20 CSR 1140-30.120 Exemption Guidelines…………………………………………………….29

20 CSR 1140-31.010 General Organization – Mortgage Broker Board………………….29

20 CSR 1140-31.020 Rules of Procedure………………………………………………………..29

 

25


TITLE 20 – DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION

Division 1140- Division of Finance

Chapter 30 – Mortgage Broker Rules

20 CSR 1140-30.010 Definitions

PURPOSE: This rule establishes definitions for use in Chapter 4 CSR 140-30 Mortgage Broker Rules.

(1) As used in Chapter 4 CSR 140-30 Mortgage Broker Rules, the definitions in section 443.803, RSMo shall apply and, in addition—

(A) “Act” means the Residential Mortgage Brokers License Act, sections 443.800 through 443.893, RSMo;

(B) “Assisting” or “helping” as used in section 443.803.1(17), RSMo shall not include activities undertaken by a person in pursuit of such person’s licensed profession or occupation including, but not limited to insurance producer, attorney at law, certified public accountant, land surveyor, or professional engineer;

(C) “Commissioner” means the commissioner of finance (director of the Division of Finance) or agent thereof; (D) “Control” means the power to, directly or indirectly, affect the voting interest of twenty-five percent (25%) or more of any class of the outstanding voting shares, or partnership interest or limited liability company interest, of a licensee;

(E) “Document” for purposes of section 443.891, RSMo shall include all business and financial documents and all books and records of any type or kind whatsoever;

(F) “First tier subsidiary” shall include any corporation or limited liability company which is owned or controlled by a bank and that has its principal place of business in Missouri;

(G) “Material” shall include, but not be limited to, a misstatement or omission of fact which, if it had not been misstated or omitted, may have altered the decision, approval, determination, or finding made by the commissioner or may have caused the commissioner to act or consider acting pursuant to any of the powers vested in the commissioner; (H) “Principal place of business” means the principal place of business of the subsidiary’s parent;

(I) “Principal shareholder” means person or entity that owns or controls ten percent (10%) or more of any class of stock of the applicant or person or entity, other than a depository institution that lends, provides or infuses funds to or into the applicant in an amount equal to, or more than, ten percent (10%) of the applicant’s net worth;

(J) “State” means the state of Missouri; and

(K) “Wholesale mortgage lender” shall mean an entity or person engaged solely in purchasing existing loans without participating in the application process, negotiation or credit decision; any entity or person who provides the money for what is commonly known as “table funding” is ordinarily not a wholesale mortgage lender.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.* This rule originally filed as 4 CSR 140-30.010. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 27, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140- 30.010, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo 1994, amended 1995.

20 CSR 1140-30.030 Licensing

PURPOSE: This rule establishes guidelines for the licensing of mortgage brokers.

(1) Application for Missouri Residential Mortgage Brokers License.

(A) Applications for a license shall be in a form prescribed by the commissioner and shall include a nonrefundable license investigation fee which shall be set by the commissioner from time-to-time, not to exceed five hundred dollars ($500).

(B) Failure to meet a request for additional information within ten (10) business days may result in denial of the application. A denial under such circumstances shall not affect subsequent applications filed with the appropriate investigation fee.

(2) Initial and Renewal Missouri Residential Mortgage Brokers Licenses.

(A) Upon approval of an initial brokers license, the commissioner shall collect a nonrefundable license fee, which shall be set by the commissioner from time-to-time, not to exceed one thousand dollars ($1,000).

(B) Applications for renewal of a license shall be in a form prescribed by the commissioner. Such completed renewal application shall be received by the commissioner at least sixty (60) days prior to such licensee’s biennial renewal date. Upon approval of a biennial renewal of a brokers license, the commissioner shall collect a nonrefundable renewal license fee, which shall be set from time-to-time by the commissioner, not to exceed two thousand dollars ($2,000), half upon issuance of the license, and the balance one (1) year thereafter.

(3) Amended License Fees—Corporate Changes. The commissioner shall collect an amended license fee not to exceed five hundred dollars ($500) for each amended license required by 4 CSR 140-30.040 and for each notice of change of officers or directors or change of name or address, a fee of fifty dollars ($50).

(4) Duplicate Original License Fees. The commissioner shall collect a duplicate original license fee of fifty dollars ($50) for each duplicate original license issued.

(5) Additional Full Service Office. Each licensee which intends to operate and maintain an additional full service office, shall file a Notice of Intent to Establish an Additional Full Service Office, on a form prescribed by the commissioner, thirty (30) days prior to the proposed operation; the commissioner shall collect a fee of ten dollars ($10) at the time the notice is filed.

(6) Waiver of License Fee. Applicants which intend to request a waiver of fees per section 443.837, RSMo shall file such request at least sixty (60) days prior to the licensing or renewal date.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.* This rule originally filed as 4 CSR 140-30.030. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140- 30.030, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo 1994, amended 1995.

26 20 CSR 1140-30.040 Operations and Supervision

PURPOSE: This rule establishes operations and supervision guidelines concerning net worth, audit reports, escrow, change in business activities, change of ownership, bonding requirements, servicing, and full service offices.

(1) Net Worth.

(A) Amount. Each licensee shall maintain at least that minimum net worth set by section 443.859, RSMo as amended.

(B) Calculation. “Net worth” is total assets minus total liabilities, subject to limitations which may from time-to-time be prescribed by the commissioner to preserve the intent of the law.

(2) Late Audit Reports. Failure to timely deliver audit reports per section 443.851, RSMo shall result in suspension of the licensee’s authority to do business absent an extension by the commissioner. Applications for extensions must be in writing and filed at least fifteen (15) days prior to the deadline. The commissioner shall consider whether such request results from conditions beyond the control of the licensee. An independent auditor may be appointed by the commissioner at the licensee’s expense any time after the deadline.

(3) Escrow.

(A) Funds collected for a rate-lock fee or for payment for third party services shall be placed with a licensed and bonded disbursing agent or licensed real estate broker and shall be disclosed as a part of the licensee’s financial statement package; for purposes of this rule, a licensed and bonded disbursing agent shall include an escrow agent per section 339.600, RSMo, et seq.

(B) Where servicing includes maintenance of an escrow account for payment of taxes and/or insurance premiums, the funds shall be placed in a federally insured depository institution, to be removed and used only for—

1. Authorized payments for taxes and/or insurance premiums;

2. Refunds to the mortgagor;

3. Transferring to another institution as described in this subsection;

4. Forwarding to the appropriate servicer in case of a transfer of servicing; or

5. Compliance with a regulatory or court order.

(C) All servicing activities shall be in strict accordance with the Act and all state and federal laws.

(4) Proceedings Affecting a Licensee. Each licensee shall be required to notify the commissioner within five (5) business days of becoming the subject of any other government agency proceedings which could affect the licensee’s authority.

(5) Change in Business Activities. Each licensee shall provide the commissioner at least fourteen (14) days’ advance notice of an action to—

(A) Close a full-service office; or

(B) Discontinue brokering, originating, or servicing.

(6) Change of Ownership, Control or Name or Address of Licensee. Prior to a change of ownership or control, a change of name or address or a change of officers or directors, a licensee shall file the appropriate application and fee on a form prescribed by the commissioner.

(A) Change of Ownership or Control. An application on a form prescribed by the commissioner for a new Missouri residential mortgage brokers license shall be submitted with the fee by the prospective purchaser at least forty-five (45) days prior to the proposed change. The commissioner shall issue a new license, a finding that the proposed change of ownership or control does not require a new license or a denial.

(B) Change of Name or Address. A licensee shall file an Application for Change of Name or Address, with the fee, ten (10) business days in advance, on a form prescribed by the commissioner. The name change shall be approved unless deceptively similar to another name.

(C) Change of Officers or Directors. Within thirty (30) days of any change in a licensee’s directors or principal officers, a report of such change shall be filed on a form prescribed by the commissioner along with the appropriate fee.

(7) Bonding Requirements. Each licensee shall maintain a bond or irrevocable letter of credit in the amount of twenty thousand dollars ($20,000). If a bond, it must be issued by some insurance company licensed to do business in this state and shall be in a form approved by the commissioner; if an irrevocable letter of credit, it must be issued by a financial institution insured by the Federal Deposit Insurance Corporation and shall be in a form approved by the commissioner. The bond or irrevocable letter of credit shall be payable to the commissioner and shall be filed with the commissioner prior to the issuance of a license.

(8) Servicing. All licensees must comply with the servicing and transfer of servicing requirements established by applicable federal and state statutes and regulations.

(9) Full-Service Office.

(A) Each licensee shall maintain a full-service office consistent with section 443.857, RSMo. At a minimum, each licensee shall provide at such office a staff reasonably adequate to handle efficiently all matters relating to a loan application or existing loan. In determining whether a licensee handles such matters in a reasonably adequate manner, the commissioner shall consider consumer complaints received regarding such licensees and information obtained from examinations conducted and reports filed and whether the licensee has—

1. Provided facilities and personnel adequate to accommodate a borrower who wishes to bring all documents concerning an existing home mortgage or a mortgage application to the full-service office for examination; and

2. Maintained a supply of all required documents.

(B) If it is determined that a licensee is not in compliance with section 443.857, RSMo, the commissioner shall notify the licensee in writing detailing the requirements to achieve compliance, along with a reasonable deadline.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.* This rule originally filed as 4 CSR 140-30.040. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140-30.040, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo, amended 1995.

20 CSR 1140-30.050 Annual Report of Mortgage Brokerage Activity and Mortgage Servicing Activity

PURPOSE: This rule declares requirements for annual reports by mortgage brokers.

(1) Filing Requirements. By March 1 of each year, each licensee must file an Annual Report of Mortgage Brokerage Activity on a form provided by the commissioner. If any category(ies) requested has nothing to report, then the proper response is “none.”

(A) The Annual Report of Brokerage Activity shall include the names of the originators, dollar amount of the loans and with whom the licensee had mortgage brokerage agreements including any specific loan programs and any aggregate dollar limits. Each licensee which reports any default or foreclosure shall also furnish the name of the lender who originated the loan.

(B) Licensees which file a Home Mortgage Disclosure Act (HMDA) report may file a copy thereof in lieu of the report described herein.

(2) Verification. An affidavit, attesting to truthfulness, must accompany each Annual Report of Brokerage Activity

27 and Annual Servicing Report. This verification must be signed by the owner of a sole proprietorship, by all partners of a partnership, all directors of a corporation, or by all members of an association.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.* This rule originally filed as 4 CSR 140-30.050. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140-30.050, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo 1994, amended 1995.

20 CSR 1140-30.070 Advertising

PURPOSE: This rule creates general guidelines for advertising practices by mortgage brokers.

(1) General Prohibition. No person or other entity except a licensee or an exempt entity shall circulate or use any advertising or make any representation or give any information to any person which indicates or reasonably implies activity involving the making, servicing or brokering of loans secured by Missouri residential real estate.

(2) Definition of Advertisement. An advertisement is any message, conveyed in any format, attempting to induce, directly or indirectly, any person to enter into a residential mortgage loan or loan brokerage agreement; provided, small items bearing only a name, address and telephone number (examples: pencils, pens, buttons, pins, pocket calendars, balloons, and business cards) are excepted.

(3) Compliance with Other Laws. Every advertisement shall comply with the Act and federal and state law.

(4) Requirements. Any advertisement shall include:

(A) The name and an office address of such licensee or exempt entity, which shall conform to a name and address on record with the commissioner.

(5) Misleading and Deceptive Advertising Prohibition. Advertisements shall not be false, misleading or deceptive or indicate or imply that interest rates or charges are in any way “recommended,” “approved,” “set” or “established” by Missouri or the Act.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.* This rule originally filed as 4 CSR 140-30.070. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140- 30.070, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo 1994, amended 1995.

20 CSR 1140-30.080 Loan Brokerage Practices

PURPOSE: This rule establishes general practices guidelines for mortgage brokers in the areas of agreements and disclosures.

(1) Loan Brokerage Agreement. A loan brokerage agreement (agreement) is not required where licensee is a lender not engaged in the act of brokering. Where the licensee is acting as a broker, a written agreement shall be signed and dated by both the loan applicant (borrower) and licensee before the applicant signs an application or gives any consideration and—

(A) Carry a clear and conspicuous statement that a copy is available to the borrower or the borrower’s attorney for review prior to signing;

(B) Contain an explicit description of the services the licensee agrees to perform and include the federally required good faith estimate of costs. In the same area of the agreement shall be equally prominent language listing the circumstances which could materially affect the amounts indicated due to unforeseeable details;

(C) Carry a clear and conspicuous statement about conditions under which the borrower is obligated to pay the licensee;

(D) Truth-in-lending disclosures, transfer of servicing documents, good faith estimates of closing costs and all other documents required by state or federal law shall be provided and signed by the borrowers within three (3) days of the application;

(E) Except for a rate-lock fee agreement in accordance with 4 CSR 140-30.110, the loan brokerage agreement shall be the only agreement between the borrower and licensee with respect to a single loan unless otherwise required by federal or state law; and

(F) A copy signed by or on behalf of the licensee shall be given to the borrower.

(2) Loan Brokerage Disclosure Statement. Before the borrower signs an agreement or gives the licensee any consideration, the licensee shall give the borrower a written disclosure statement and shall obtain the customer’s signature on a duplicate of the disclosure statement near bold and conspicuous wording indicating that the customer has read and understands the statement. The statement shall prominently display the following information in the order presented:

(A) The licensee is or is not making this loan;

(B) Whether funding is provided by another entity, which may affect availability of funds;

(C) The name under which the licensee has operated during the preceding ten (10) years and, if applicable, the name of any parent or affiliated company;

(D) Whether the licensee is an individual, partnership, association, or corporation; and

(E) If the licensee brokers loans to only one (1) entity, disclosure of that fact.

(3) Combined Forms. The loan brokerage agreement and the loan brokerage disclosure statement may be combined into one (1) form.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo, Supp. 1996.* This rule originally filed as 4 CSR 140-30.080. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140-30.080, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo 1994, amended 1995.

20 CSR 1140-30.090 Loan Application Practices

PURPOSE: This rule states the guidelines for the various loan application procedures of mortgage brokers.

(1) Borrower Information Document. Before a mortgage loan applicant (borrower) signs a completed application, the licensee shall give the borrower a Borrower Information Document. The document may be incorporated into or appended to such material as is necessary for compliance with related federal requirements. All of the following information shall be included in the document:

(A) Regulatory Disclosure Statement. The following statement: “This document is provided pursuant to the Residential Mortgage Brokers License Act and related rules. Its purpose is to list those exhibits and materials you should receive with your application with (name of licensee) which is regulated by the Missouri commissioner of finance whose phone number is (573) 751-3242”; and

(B) Significant information on the types of situations which could affect the processing of the loan but which may not be known by the licensee at the time the application was taken.

(2) Required Documentation. A licensee shall observe good faith in requiring documents from the applicant.

 

28


(3) Confirmation of Statements. Within three (3) business days of receiving an applicant’s written request, a licensee shall confirm or deny in writing any specific oral statements or promises made to the applicant.

(4) Maintenance of Records. Each licensee shall maintain an application log and shall produce it for examination by the commissioner. It shall contain at least the following concerning each application received during the previous thirty-six (36) months:

(A) Application date;

(B) Applicant’s name;

(C) Property address;

(D) Loan amount;

(E) Terms, loan program;

(F) Loan officer;

(G) If closed, disposition of the loan and servicing;

(H) The Loan Brokerage Agreement and Loan Brokerage Disclosure Statement;

(I) The Borrower Information Document; and

(J) Any other documents the commissioner may require the licensee to obtain.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.* This rule originally filed as 4 CSR 140-30.090. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140-30.090, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo 1994, amended 1995.

20 CSR 1140-30.100 General Practices

PURPOSE: This rule establishes requirements for certain practices by mortgage brokers in the areas of notices to joint borrowers, changes in loans in process, use of unauthorized brokers or lenders and the general requirement of good faith.

(1) Notice to Joint Borrowers. Any notice required by Chapter 4 CSR 140-30 shall be given to all joint applicants.

(2) Changes Affecting Loans in Process.

(A) If an applicant does not qualify, the licensee shall immediately provide a written and, when possible, an oral explanation of any other program for which the applicant may qualify.

(B) When any notice is received which materially affects a loan in process, the licensee shall immediately so notify the applicant in writing and, when possible, orally.

(3) Prohibition of Unauthorized Brokers or Lenders. No licensee shall knowingly use the services of any broker or lender not licensed or exempt.

(4) Good Faith Requirements.

(A) Any disclosure or action required by the Act or regulations shall be undertaken in good faith.

(B) A licensee shall not collect any charges unless able to demonstrate that if normal residential mortgage loan requirements are met, there is a reasonable likelihood that a loan commitment will be issued under conditions set forth.

(C) A licensee shall process applications within the time specified in the contract.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.* This rule originally filed as 4 CSR 140-30.100. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140-30.100, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo 1994, amended 1995.

20 CSR 1140-30.110 Commitment and Closing Practices

PURPOSE: This rule sets standards for mortgage brokers’ commitments and closings.

(1) Approval Notice. Immediately upon approval of a loan application, the licensee shall deliver to the applicant a written loan approval notice stating the terms and conditions of the loan, namely—

(A) The day the loan commitment expires;

(B) All economic terms of the loan and their duration; and

(C) Whether the economic terms are fixed or, if subject to change, an explanation of the time when, circumstances under which, and extent to which they may be changed.

(2) Inconsistent Conditions Prohibited. No residential mortgage loan commitment shall contain conditions inconsistent with those required by the state and federal laws in effect at the time of application, unless such conditions are less onerous to the applicant.

(3) Avoidance of Commitment. If an applicant and the real estate meet normal standards, the licensee shall not refuse to make the loan to avoid complying with agreed to terms.

(4) Delay. Any licensee which delays processing an application with the result that a borrower incurs higher costs shall be liable to the borrower for such increase in costs, including points and rates, and for a reasonable attorney’s fee.

(5) Fees and Charges Prior to Closing.

(A) Any fee paid by the borrower prior to closing shall be placed with a licensed and bonded disbursing agent or licensed real estate broker. A licensee shall not require a borrower to pay any fees or charges prior to the loan closing, except—

1. Charges to be actually and necessarily incurred for services from third parties needed to process the application; and

2. A rate-lock fee (fee), all of which must be a bona fide fee paid in full to a third party, and further provided—

A. The Rate-Lock Fee Agreement is in writing and signed by both the licensee and the applicant and states—

(I) The expiration date of the fee agreement;

(II) The amount of the loan;

(III) The maximum interest rate and maximum discount (points); and

(IV) The term of the loan; and

B. The licensee is able to demonstrate to the commissioner that—

(I) The licensee is able to perform under the terms of the fee agreement; and

(II) Subject to verification, the information submitted by the borrower indicates that the loan will be approved in accordance with the fee agreement; and

C. The fee is deposited in escrow in accordance with the requirements of 4 CSR 140-30.040, for the following distribution:

(I) The fee is paid to the lender and credited to the borrower at closing; and

(II) The fee must be refunded if the loan does not close in accordance with the fee agreement, except that the fee may be retained upon the licensee’s ability to demonstrate to the commissioner any of the following reasons: the applicant withdrew the loan application; the applicant has made a material misrepresentation on the loan application; the applicant has failed to provide documentation necessary to the processing or closing of the loan, such documents having been timely requested; and

(III) When the fee is to be retained, the licensee shall send a written notice to the borrower stating the reason for retaining the fee.

(6) Refunds on Failure to Close. If a residential mortgage loan is not closed through no fault of the applicant, all the charges described in section (5) shall be refunded to the applicant, except to the extent such charges were incurred in29


good faith by the licensee on behalf of the applicant for third party services.

(7) Licensee’s Failure to Close—Disclosure. If a loan fails, through no fault of the applicant, to close within the specified commitment period, the licensee shall provide detailed written notification to such applicant of why the loan failed to close and specify any resulting conditions which will affect the availability of such loan.

(8) Escrow Account Agreements at Closing. If the mortgage requires an escrow account for taxes and/or insurance premiums, a written Escrow Account Disclosure Agreement shall be executed at closing. Compliance with applicable federal law shall constitute compliance with this rule.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.*This rule originally filed as 4 CSR 140-30.110. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140-30.110, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo, 1994, amended 1995.

20 CSR 1140-30.120 Exemption Guidelines

PURPOSE: This rule states the guidelines for exemption from the licensing requirements for mortgage brokers.

(1) General. The exemption provision of section 443.803.1(8), RSMo shall be construed to avoid duplication of licensing and supervision by state and federal agencies. To the extent that specific conduct or business activity is not otherwise separately licensed or regulated, the provisions of section 443.803.1(8), RSMo shall be strictly construed.

(2) Interpretive Guidelines. Any person may request an interpretative ruling of the commissioner on the question whether that person is an exempt entity. Such requests shall be in writing and contain information sufficient to reasonably inform the commissioner of the basis for the exemption.

(3) Exempt List. The commissioner requests that all exempt entities file a letter disclosing exempt status and the reason therefore at the Division of Finance, Residential Mortgage Section, P.O. Box 716, Jefferson City, MO 65102.

AUTHORITY: sections 443.847, 443.869(7) and 443.887, RSMo Supp. 1996.* This rule originally filed as 4 CSR 140-30.120. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140-30.120, effective Aug. 28, 2006.

*Original authority: 443.847, RSMo 1994, amended 1995; 443.869(7), RSMo 1994, amended 1995; and 443.887, RSMo 1994, amended 1995.

TITLE 20 – DEPARTMENT OF INSURANCE, FINANCIAL INSTITUTIONS AND PROFESSIONAL REGISTRATION

Division 1140 – Division of Finance

Chapter 31 – Mortgage Broker Board

20 CSR 1140-31.010 General Organization – Mortgage Broker Board

PURPOSE: This rule complies with section 536.023, RSMo (1994) which requires each agency to adopt as a rule a description of its operation and the methods where the public may obtain information or make submissions or requests.

(1) The Residential Mortgage Board determines appeals from decisions of the commissioner of finance concerning issuance, denial, revocation, or suspension of a residential mortgage license and approves regulations promulgated by the commissioner of finance.

(2) The Residential Mortgage Board is a bipartisan board consisting of five (5) individuals appointed by the governor. Two (2) of the board members are forbidden to have any interest in any mortgage brokerage business, three (3) must be experienced in mortgage brokering and one (1) of the five (5) board members must be an attorney. The board shall designate its own chairman and secretary. A majority of the members of the board shall constitute a quorum and the decision of a majority of a quorum shall be the decision of the board. The board shall meet upon call of the chairman, or of the director, or of any two (2) members of the board, and may meet at any place in this state. (3) Information relating to the activities of the Residential Mort gage Board may be directed to the Residential Mortgage Board, 301 West High Street, P.O. Box 716, Jefferson City, MO 65102.

AUTHORITY: sections 443.816, RSMo (Cum. Supp. 1996) and 536.023, RSMo (1994).*This rule originally filed as 4 CSR 140-31.010. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140- 31.010, effective Aug. 28, 2006.

*Original authority: 443.816, RSMo (1995) and 536.023, RSMo (1975) amended 1976.

20 CSR 1140-31.020 Rules of Procedure

PURPOSE: The Residential Mortgage Board was established to hear appeals from certain decisions of the commissioner of finance. In order to facilitate these appeals, the board is issuing these rules of procedure.

(1) Definitions. As used in this rule, except as otherwise required by the context—

(A) Appellants shall mean persons who are appealing a decision of the commissioner of finance;

(B) Board shall mean the Residential Mortgage Board;

(C) Commissioner shall mean the commissioner of finance and director of the Division of Finance;

(D) Presiding officer shall mean the chairman of the Residential Mortgage Board or any board member designated by the presiding officer to assume those duties; and

(E) Secretary shall mean that member chosen by the board to assume those duties.

(2) Records of the Board. The secretary shall maintain a complete record of all proceedings of the board. All orders or other actions of the board shall be certified or authenticated by the signature of the secretary.

(3) Pleadings shall be bound at the top, shall be typewritten on paper eight and one-half inches by eleven inches (8 1/2″ × 11″) in size and exhibits, wherever practical, folded to that size. Typing shall be on one (1) side of the paper

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only and shall be double spaced, except that footnotes and quotations in excess of a few lines may be single spaced. Briefs shall be typewritten or printed on paper eight and one-half inches by eleven inches (8 1/2″ × 11″). Reproduction may be by any process, provided the copies are clear and permanently legible.

(4) Title and Number. Pleadings, briefs and other documents shall show the title of the proceeding and shall show the name, address, telephone number and fax number of the attorney, if any, on the flyleaf or at the end of the document. In the event the title of the proceeding contains more than one (1) name as appellant or intervenor, it shall be sufficient to show only the first of those names as it appears in the first document commencing the proceeding.

(5) Appeal Allowed. Appeals will be allowed from the decision of the commissioner as provided by law and the board shall hear the appeal. At the time the appeal is to be heard, testimony will be taken by the board on issues specifically raised by the notice of appeal and any application to intervene. The board will follow the practice of administrative agencies concerning the admissibility of evidence in contested cases as provided for in section 536.070, RSMo and may receive evidence by deposition as provided in section 536.073, RSMo.

(6) Notice of Appeal. The appellant, within ten (10) days of the commissioner mailing notice of the action shall file a notice of appeal to the board, specifically stating which finding of the commissioner the appellant challenges. The notice of appeal may be delivered to the board by mailing it to the Division of Finance at P.O. Box 716, Jefferson City, MO 65102.

(7) Docket and Hearing Calendar. The commissioner shall maintain a docket of all proceedings and each proceeding shall be assigned an appropriate case number. The commissioner shall maintain a record of proceedings filed and proceedings set for hearing which shall be available for public inspection at the office of the Division of Finance in Jefferson City, Missouri. The docket and hearing calendar shall be available for public inspection during office hours.

(8) Prehearing Conference. The presiding officer may hold prehearing conferences for the purpose of formulating or simplifying the issues, arranging for the exchange of proposed exhibits or prepared expert testimony, limitation of the number of witnesses and such other matters as may expedite orderly conduct and disposition of the proceedings.

(9) Time and Place. Notice of the day, hour and place of hearing shall be served at least ten (10) days prior to the time set on all appellants and intervenors, unless the board shall find that public necessity requires hearings be held on shorter notice. The hearing shall be held at a place determined by the presiding officer. At the direction of the board, the commissioner shall serve notice by mail to each party designated as applicant or intervenor.

(10) Limiting Number of Witnesses. To avoid unnecessary cumulative evidence, the presiding officer may limit the number of witnesses or the time for testimony on a particular issue.

(11) Who May Practice Before the Board. Only licensed attorneys from Missouri or from other states as provided, shall be permitted to practice before the board. Attorneys who are not members of the Missouri bar shall be permitted to practice before the board under the same rules and limitations as an attorney in good standing in Missouri would be permitted to practice before the corresponding board, official or other body of the state of the nonresident attorney. A party may act as his/her own attorney if s/he desires.

(12) Form and Admissibility. The board will follow in general the practice in the circuit court of the state and the common law rules on admissibility of evidence as interpreted by the courts of the state, except that the board may permit the introduction of hearsay evidence when, in its opinion, circumstances require.

(13) Ruling. The presiding officer shall rule on the admissibility of all evidence. That ruling may be reviewed by the board in determining the matter on its merits.

(14) Objections and Exceptions. When objections are made to the admission or exclusion of evidence, the grounds relied upon shall be stated briefly. Formal exception to rulings are unnecessary and need not be taken.

(15) Offer of Proof. When a party wishes to make an offer of proof for the record, that offer shall consist of a statement of the substance of the evidence to the admission of which objection has been sustained.

(16) Prepared Testimony. With the approval of the presiding officer, a witness may read into the record his/her testimony and direct examination. Before any prepared testimony is read, unless excused by the presiding officer, the witness shall deliver copies to the presiding officer, the court reporter and counsel for all parties. Admissibility of testimony shall be subject to the rules governing oral testimony. If the presiding officer deems that substantial saving of time will result without prejudice to any party, prepared testimony may be copied into the record without having the witness read it aloud; provided, however, that the witness shall be available for cross-examination by any party other than the party on whose behalf the testimony is admitted.

(17) Documentary Evidence. If relevant, material matter offered in evidence is embraced in the document containing other matter, the party offering it shall designate specifically the matter so offered. If other matter in the document would unnecessarily encumber the record, the document will not be received in evidence but at the discretion of the presiding officer, the relevant material matter may be read into the record or copies received in exhibit. Other parties will be afforded opportunity to examine these documents and to offer into evidence other portions believed material and relevant.

(18) Stipulations. The parties may file a stipulation of the facts or expected testimony and in this event the same shall be numbered and used at the hearing. This procedure is desirable wherever practical.

(19) Exhibits. Exhibits shall be legible and, wherever practical, shall be prepared either on paper not exceeding eight and one-half inches by eleven inches (8 1/2″ × 11″) in size or be bound and folded to that approximate size. Wherever practical, the sheets of each exhibit should be numbered and, where necessary, explained by index.

(20) Marking of Exhibits. Exhibits shall be marked as follows: Appellants’ exhibits shall be numbered consecutively in order of their introduction and numbered as follows: Appellant Exhibit 1 and Appellant Exhibit 2, etc. The division’s exhibits will be marked alphabetically. When exhibits are offered into evidence, the original and two (2) copies shall be furnished to the reporter and the party offering the exhibit should also be prepared to furnish a copy to each member of the board sitting.

(21) Board Records. If any document in the records of the Divi sion of Finance is offered into evidence, that document need not be produced as an exhibit unless directed otherwise by the presiding officer, but may be received into evidence by reference, provided that the particular portions of 31 that document are specifically identified and are otherwise competent, relevant and material.

(22) Judicial Notice. Official and judicial notice may be taken of those matters which may be noticed by the courts of Missouri.

(23) Additional Evidence. At the hearing, the presiding officer may require the production of further evidence upon any issue. Upon agreement of the parties, s/he may authorize the filing of specific documentary evidence as a part of the record within a fixed time after the submission, reserving exhibit numbers.

(24) Briefs. If counsel or any party requests permission to file a brief, the presiding officer shall fix the time for filing of briefs. Failure to request, at the close of the testimony, the fixing of time for filing briefs shall waive the right to subsequently file a brief.

(25) Decisions. Proceedings shall be submitted for the decision of the board after the taking of testimony and the filing of the briefs, as may be prescribed by the board or its presiding officer. The board’s formal decision and order shall be issued as soon as practicable after the proceedings have been submitted. Decisions and orders shall be served by the commissioner mailing or making personal delivery of certified copies to the parties of record. When a party to a proceeding has appeared by representative, service upon that representative shall be deemed service upon the party.

(26) Construction of Rules. These rules shall be liberally construed to secure just, speedy and inexpensive determination of all issues presented. These rules may be amended at any time by the board.

(27) Forms. The following form of Notice of Appeal is merely illustrated as a general form. The content of particular pleadings will vary depending upon the subject matter and applicable procedural rules.

BEFORE THE RESIDENTIAL MORTGAGE BOARD OF THE STATE OF MISSOURI IN THE MATTER OF THE DENIAL, REVOCATION, ETC. OF THE LICENSE OF XYZ BROKERS BY THE COMMISSIONER OF FINANCE.

NOTICE OF APPEAL

You are hereby notified that an appeal is taken from the decision of the Commissioner of Finance denying, etc. a license to the XYZ Brokers for the following reasons:

1. The Commissioner was in error in finding that (State any specific ground relied on in the appeal).

WHEREFORE, petitioner prays said license be (issued, restored, etc.) as petitioned for.

XYZ MORTGAGE BROKER

By Its Attorney

(Mailing Jurat in Standard Form)

(28) Costs. The board will obtain the services of a court reporter to transcribe the hearing. The costs of original and four (4) copies of the transcript shall be taxed against the losing party.

(29) Service of Process. The commissioner of finance or a deputy shall be the agent for service of process on the board in any appeal arising from a decision of the board.

AUTHORITY: sections 443.816, RSMo (Cum. Supp. 1996) and 536.023, RSMo (1994).* This rule originally filed as 4 CSR 140- 31.020. Emergency rule filed Nov. 25, 1996, effective Dec. 5, 1996, expired June 2, 1997. Original rule filed Nov. 25, 1996, effective May 30, 1997. Moved to 20 CSR 1140- 31.020, effective Aug. 28, 2006.

*Original authority: 443.816, RSMo (1995) and 536.023, RSMo (1975), amended 1976.


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