§454-3 - Licensing, requirements, application.

§454-3 Licensing, requirements,
application. (a) No person shall act as a mortgage broker or mortgage
solicitor without a license therefor as provided in this chapter, and no person
not licensed under this chapter shall charge or receive any commission, fee, or
bonus in connection with arranging for, negotiating, or selling a mortgage
loan.

(b) No mortgage broker or mortgage solicitor
license shall be granted to any person who is not eighteen years of age or
older. If the applicant is a person other than an individual, no license shall
be granted unless the applicant first registers to do business in this State
with the business registration division of the department of commerce and
consumer affairs.

(c) Every person licensed as a mortgage broker
shall deposit with the commissioner, prior to doing business, a bond in the
amount of $15,000 executed by the mortgage broker as principal and a surety
company authorized to do business in the State as a surety. The bond shall be
conditioned upon the faithful compliance of the broker with this chapter. The
bond shall run to the State for the benefit of any person injured by the
wrongful act, default, fraud, or misrepresentation of the broker or the
solicitors; provided that the aggregate liability of the surety shall not
exceed the sum of the bond. The surety may cancel the bond by giving sixty
days' notice in writing to the commissioner and shall thereafter be relieved of
any liability for any breach of condition occurring after the effective date of
cancellation. A mortgage broker's license shall not be in effect at any time
when the bond is not in full force and effect.

(d) Each application for a license or its
renewal shall be made in writing, on the forms and in the manner and
accompanied by evidence in support of the applications as prescribed by the
commissioner. The commissioner shall require information with regard to the
applicant as the commissioner may deem desirable, with due regard to the
paramount interests of the public, as to the experience, financial integrity,
and competency of the applicant as to financial transactions involving primary
or subordinate mortgage financing. In the event the commissioner orders denial
of issuance or of renewal of a license, the order shall be made only pursuant
to chapter 91.

(e) All fees shall be established and adopted
by the director in accordance with chapter 91 and shall be deposited into the
compliance resolution fund established pursuant to section 26-9(o); provided
that, in order to establish regulatory practices for residential mortgage
lending, a surcharge of $100 shall be charged to every mortgage broker and
mortgage solicitor, which surcharge shall be due on December 31, 2009. Failure
of any mortgage broker or mortgage solicitor to pay the biennial renewal fee on
or before December 31 of an even-numbered year or the surcharge shall
constitute an automatic forfeiture of the license. The forfeited license may
be restored; provided that application for restoration is made within six
months of the forfeiture and a penalty fee is paid in addition to the
delinquent license fee or surcharge. A licensee who fails to restore a license
as provided in this subsection shall apply as a new applicant.

(f) If the mortgage broker is a person other
than an individual, the license issued to it entitles one officer or member
thereof, on behalf of the corporation, partnership, association, or other
organization, to engage in the business of mortgage broker. The officer or
member shall be designated in the application for license and have two years of
experience in financial transactions involving primary or subordinate mortgage
financing, or equivalent experience as determined by the commissioner. For the
purposes of this subsection, the commissioner shall consider as equivalent
experience, two years of experience as a licensed insurance producer under
chapter 431; provided that:

(1) The licensed insurance producer only arranges
mortgage loans with one insured depository institution, as defined in 12 U.S.C.
section 1813(c)(2), that is a wholly-owned subsidiary of an insurer, or an
affiliate of an insurer with which such insurance producer has an exclusive
insurance agency relationship;

(2) The licensed insurance producer and the insured
depository institution shall certify that the insurance producer only arranges
mortgage loans with the insured depository institution and no other; and

(3) The license shall be terminated as of the date
the insurance producer ceases to arrange mortgage loans with the insured depository
institution.

(g) Upon request, the mortgage broker shall
make available for inspection the mortgage broker's license and the licenses of
any mortgage solicitors employed by the mortgage broker.

(h) Immediately upon the mortgage solicitor's
withdrawal from the employ of the mortgage broker, the mortgage broker shall
return the mortgage solicitor's license to the mortgage solicitor.

(i) Every licensed mortgage broker shall have
and maintain a principal place of business in the State for the transaction of
business. In the event the mortgage broker maintains a branch office or
offices, the commissioner, upon application and payment of a fee, shall issue a
branch office license. The mortgage broker shall designate a mortgage
solicitor who has two years of experience in financial transactions involving
primary or subordinate mortgage financing, or equivalent experience as
determined by the commissioner, to be in charge of each branch office. For the
purposes of this subsection, the commissioner shall consider as equivalent
experience, two years of experience as a licensed insurance producer under
chapter 431; provided that:

(3) The license shall be terminated as of the date
the insurance producer ceases to arrange mortgage loans with the insured
depository institution. [L 1967, c 228, §4; HRS §454-3; am L 1972, c 2, §21;
am L 1979, c 219, §5; am L 1983, c 39, §3; am L 1989, c 218, §5; am L 1990, c
40, §1; am L 1991, c 3, §5; am L 1997, c 232, §8; am L 2001, c 4, §1; am L
2004, c 14, §1; am L Sp 2009, c 32, §5]