CHAPTER 5. LOAN BROKERS
IC 23-2-5
Chapter 5. Loan Brokers
IC 23-2-5-1
"Commissioner" defined
Sec. 1. As used in this chapter, "commissioner" refers to thesecurities commissioner appointed under IC 23-19-6-1(a).
As added by P.L.235-1985, SEC.1. Amended by P.L.27-2007,SEC.17.
IC 23-2-5-2
"Loan" defined
Sec. 2. As used in this chapter, "loan" means any agreement toadvance money or property in return for the promise to makepayments for the money or property.
As added by P.L.235-1985, SEC.1.
IC 23-2-5-3
Definitions
Sec. 3. (a) As used in this chapter, "loan broker license" means alicense issued by the commissioner authorizing a person to engagein the loan brokerage business.
(b) As used in this chapter, "licensee" means a person that isissued a license under this chapter.
(c) As used in this chapter, "loan broker" means any person who,in return for any consideration from any source procures, attempts toprocure, or assists in procuring, a residential mortgage loan from athird party or any other person, whether or not the person seeking theloan actually obtains the loan. "Loan broker" does not include:
(1) any supervised financial organization (as defined inIC 26-1-4-102.5), including a bank, savings bank, trustcompany, savings association, or credit union;
(2) any other financial institution that is:
(A) regulated by any agency of the United States or anystate; and
(B) regularly actively engaged in the business of makingconsumer loans that are not secured by real estate or takingassignment of consumer sales contracts that are not securedby real estate;
(3) any insurance company;
(4) any person arranging financing for the sale of the person'sproduct; or
(5) a creditor that is licensed under IC 24-4.4-2-402.
(d) As used in this chapter, "loan brokerage business" means aperson acting as a loan broker.
(e) As used in this chapter, "mortgage loan origination activities"means performing any of the following activities for compensationor gain in connection with a residential mortgage loan:
(1) Receiving or recording a borrower's or potential borrower'sresidential mortgage loan application information in any form
for use in a credit decision by a creditor.
(2) Offering to negotiate or negotiating terms of a residentialmortgage loan.
(f) As used in this chapter, "borrower's residential mortgage loanapplication information" means the address of the proposedresidential real property to be mortgaged and borrower's essentialpersonal and financial information necessary for an informed creditdecision to be made on the borrower's mortgage loan application.
(g) As used in this chapter, "mortgage loan originator" means anindividual engaged in mortgage loan origination activities. The termdoes not include a person who:
(1) performs purely administrative or clerical tasks on behalf ofa mortgage loan originator or acts as a loan processor orunderwriter;
(2) performs only real estate brokerage activities and is licensedin accordance with IC 25-34.1 or the applicable laws of anotherstate, unless the person is compensated by a creditor, a loanbroker, a mortgage loan originator, or any agent of a creditor, aloan broker, or a mortgage loan originator; or
(3) is involved only in extensions of credit relating to time shareplans (as defined in 11 U.S.C. 101(53D)).
(h) As used in this chapter, "mortgage loan originator license"means a license issued by the commissioner authorizing anindividual to act as a mortgage loan originator on behalf of a loanbroker licensee.
(i) As used in this chapter, "person" means an individual, apartnership, a trust, a corporation, a limited liability company, alimited liability partnership, a sole proprietorship, a joint venture, ajoint stock company, or another group or entity, however organized.
(j) As used in this chapter, "ultimate equitable owner" means aperson who, directly or indirectly, owns or controls ten percent(10%) or more of the equity interest in a loan broker licensed orrequired to be licensed under this chapter, regardless of whether theperson owns or controls the equity interest through one (1) or moreother persons or one (1) or more proxies, powers of attorney, orvariances.
(k) As used in this chapter, "principal manager" means anindividual who:
(1) has at least three (3) years of experience:
(A) as a mortgage loan originator; or
(B) in financial services;
that is acceptable to the commissioner; and
(2) is principally responsible for the supervision andmanagement of the employees and business affairs of a loanbroker licensee.
(l) As used in this chapter, "principal manager license" means alicense issued by the commissioner authorizing an individual to actas:
(1) a principal manager; and
(2) a mortgage loan originator;on behalf of a loan broker licensee.
(m) As used in this chapter, "bona fide third party fee", withrespect to a residential mortgage loan, includes any of the following:
(1) Fees for real estate appraisals. However, if the residentialmortgage loan is governed by Title XI of the FinancialInstitutions Reform, Recovery, and Enforcement Act (12 U.S.C.3331 through 3352), the fee for an appraisal performed inconnection with the loan is not a bona fide third party fee unlessthe appraisal is performed by a person that is licensed orcertified under IC 25-34.1-3-8.
(2) Fees for title examination, abstract of title, title insurance,property surveys, or similar purposes.
(3) Notary and credit report fees.
(4) Fees for the services provided by a loan broker in procuringpossible business for a creditor if the fees are paid by thecreditor.
(n) As used in this chapter, "branch office" means any fixedphysical location from which a loan broker licensee holds itself outas engaging in the loan brokerage business.
(o) As used in this chapter, "loan processor or underwriter" meansan individual who:
(1) is employed by a loan broker licensee and acts at thedirection of, and subject to the supervision of, the loan brokerlicensee or a licensed principal manager employed by the loanbroker licensee; and
(2) performs solely clerical or support duties on behalf of theloan broker licensee, including any of the following activitieswith respect to a residential mortgage loan application receivedby the loan broker licensee:
(A) The receipt, collection, distribution, and analysis ofinformation commonly used in the processing orunderwriting of a residential mortgage loan.
(B) Communicating with a borrower or potential borrowerto obtain the information necessary for the processing orunderwriting of a residential mortgage loan, to the extentthat the communication does not include:
(i) offering or negotiating loan rates or terms; or
(ii) counseling borrowers or potential borrowers aboutresidential mortgage loan rates or terms.
(p) As used in this chapter, "real estate brokerage activity" meansany activity that involves offering or providing real estate brokerageservices to the public, including any of the following:
(1) Acting as a real estate broker or salesperson for a buyer,seller, lessor, or lessee of real property.
(2) Bringing together parties interested in the sale, lease, orexchange of real property.
(3) Negotiating, on behalf of any party, any part of a contractconcerning the sale, lease, or exchange of real property, otherthan in connection with obtaining or providing financing for thetransaction. (4) Engaging in any activity for which the person performingthe activity is required to be licensed under IC 25-34.1 or theapplicable laws of another state.
(5) Offering to engage in any activity, or to act in any capacitywith respect to any activity, described in subdivisions (1)through (4).
(q) As used in this chapter, "registered mortgage loan originator"means a mortgage loan originator who:
(1) is an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatoryagency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm CreditAdministration; and
(2) is registered with and maintains a unique identifier with theNationwide Mortgage Licensing System and Registry.
(r) As used in this chapter, "residential mortgage loan" means aloan that is secured by a mortgage, deed of trust, or other consensualsecurity interest on real estate in Indiana on which there is located orintended to be constructed a dwelling (as defined in the federal Truthin Lending Act (15 U.S.C. 1602(v)) that is or will be used primarilyfor personal, family, or household purposes.
(s) As used in this chapter, "personal information" includes anyof the following:
(1) An individual's first and last names or first initial and lastname.
(2) Any of the following data elements:
(A) A Social Security number.
(B) A driver's license number.
(C) A state identification card number.
(D) A credit card number.
(E) A financial account number or debit card number incombination with a security code, password, or access codethat would permit access to the person's account.
(3) With respect to an individual, any of the following:
(A) Address.
(B) Telephone number.
(C) Information concerning the individual's:
(i) income or other compensation;
(ii) credit history;
(iii) credit score;
(iv) assets;
(v) liabilities; or
(vi) employment history.
(t) As used in this chapter, personal information is "encrypted" ifthe personal information:
(1) has been transformed through the use of an algorithmicprocess into a form in which there is a low probability of
assigning meaning without use of a confidential process or key;or
(2) is secured by another method that renders the personalinformation unreadable or unusable.
(u) As used in this chapter, personal information is "redacted" ifthe personal information has been altered or truncated so that notmore than the last four (4) digits of:
(1) a Social Security number;
(2) a driver's license number;
(3) a state identification number; or
(4) an account number;
are accessible as part of the personal information.
(v) As used in this chapter, "depository institution" has themeaning set forth in the Federal Deposit Insurance Act (12 U.S.C.1813(c)) and includes any credit union.
(w) As used in this chapter, "state licensed mortgage loanoriginator" means any individual who:
(1) is a mortgage loan originator;
(2) is not an employee of:
(A) a depository institution;
(B) a subsidiary that is:
(i) owned and controlled by a depository institution; and
(ii) regulated by a federal financial institution regulatoryagency (as defined in 12 U.S.C. 3350(6)); or
(C) an institution regulated by the Farm CreditAdministration;
(3) is licensed by a state or by the Secretary of the United StatesDepartment of Housing and Urban Development under Section1508 of the S.A.F.E. Mortgage Licensing Act of 2008 (Title Vof P.L.110-289); and
(4) is registered as a mortgage loan originator with, andmaintains a unique identifier through, the Nationwide MortgageLicensing System and Registry.
(x) As used in this chapter, "unique identifier" means a number orother identifier that:
(1) permanently identifies a mortgage loan originator; and
(2) is assigned by protocols established by the NationwideMortgage Licensing System and Registry and the federalfinancial institution regulatory agencies to facilitate:
(A) the electronic tracking of mortgage loan originators; and
(B) the uniform identification of, and public access to, theemployment history of and the publicly adjudicateddisciplinary and enforcement actions against mortgage loanoriginators.
As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,SEC.1; P.L.1-1990, SEC.242; P.L.8-1993, SEC.314; P.L.79-1998,SEC.22; P.L.230-1999, SEC.1; P.L.14-2000, SEC.52; P.L.115-2001,SEC.1; P.L.73-2004, SEC.12; P.L.230-2007, SEC.6; P.L.145-2008,SEC.10; P.L.1-2009, SEC.130; P.L.156-2009, SEC.1; P.L.35-2010,SEC.4.
IC 23-2-5-4
License to engage in loan brokerage business required; license toact as mortgage loan originator or principal manager required;unique identifier required; evidence of compliance; criminalbackground check
Sec. 4. (a) A person may not engage in the loan brokeragebusiness in Indiana unless the person first obtains a loan brokerlicense from the commissioner. Any person desiring to engage orcontinue in the loan brokerage business shall apply to thecommissioner for a loan broker license under this chapter.
(b) An individual may not act as a mortgage loan originator inIndiana on behalf of a person licensed or required to be licensed asa loan broker under this chapter unless the individual first obtains aunique identifier from the Nationwide Mortgage Licensing Systemand Registry and a mortgage loan originator license from thecommissioner. An individual desiring to act as a mortgage loanoriginator on behalf of a person licensed or required to be licensedas a loan broker under this chapter shall apply to the commissionerfor a mortgage loan originator license under this chapter.
(c) An individual may not act as a principal manager on behalf ofa person licensed or required to be licensed as a loan broker underthis chapter unless the individual first obtains a unique identifierfrom the Nationwide Mortgage Licensing System and Registry anda principal manager license from the commissioner. Any individualdesiring to act as a principal manager on behalf of a person licensedor required to be licensed as a loan broker under this chapter shallapply to the commissioner for a principal manager license under thischapter.
(d) The commissioner may request evidence of compliance withthis section at any of the following times:
(1) The time of application for an initial license.
(2) The time of renewal of a license.
(3) Any other time considered necessary by the commissioner.
(e) For purposes of subsection (d), evidence of compliance withthis section must include a criminal background check, including anational criminal history background check (as defined inIC 10-13-3-12) by the Federal Bureau of Investigation.
(f) A unique identifier obtained by an individual from theNationwide Mortgage Licensing System and Registry undersubsection (b) or (c) may not be used for purposes other than thoseset forth in the S.A.F.E. Mortgage Licensing Act of 2008 (Title V ofP.L.110-289).
As added by P.L.235-1985, SEC.1. Amended by P.L.230-1999,SEC.2; P.L.230-2007, SEC.7; P.L.145-2008, SEC.11; P.L.156-2009,SEC.2.
IC 23-2-5-5
Applications for licenses; contents; bond; expiration; service ofprocess; criminal background checks; consumer reports; financialresponsibility Sec. 5. (a) An application for a loan broker license or renewal ofa loan broker license must contain:
(1) consent to service of process under subsection (g);
(2) evidence of the bond required in subsection (d);
(3) an application fee of two hundred dollars ($200), plus onehundred dollars ($100) for each ultimate equitable owner;
(4) an affidavit affirming that none of the applicant's ultimateequitable owners, directors, managers, or officers have beenconvicted, in any jurisdiction, of:
(A) any felony within the previous seven (7) years; or
(B) an offense involving fraud or deception that ispunishable by at least one (1) year of imprisonment;
unless such an affidavit is waived by the commissioner undersubsection (h);
(5) evidence that the applicant, if the applicant is an individual,has completed the education requirements under section 21 ofthis chapter;
(6) the name and license number for each mortgage loanoriginator to be employed by the licensee;
(7) the name and license number for each principal manager;and
(8) for each ultimate equitable owner, the followinginformation:
(A) The name of the ultimate equitable owner.
(B) The address of the ultimate equitable owner, includingthe home address of the ultimate equitable owner if theultimate equitable owner is an individual.
(C) The telephone number of the ultimate equitable owner,including the home telephone number if the ultimateequitable owner is an individual.
(D) The ultimate equitable owner's Social Security numberand date of birth, if the ultimate equitable owner is anindividual.
(b) An application for licensure as a mortgage loan originatorshall be made on a form prescribed by the commissioner. Theapplication must include the following information for the individualthat seeks to be licensed as a mortgage loan originator:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) loan broker licensee; or
(B) applicant for loan broker licensure;
for whom the individual seeks to be employed as a mortgageloan originator.
(6) Consent to service of process under subsection (g).
(7) Evidence that the individual has completed the educationrequirements described in section 21 of this chapter.
(8) An application fee of fifty dollars ($50). (9) All:
(A) registration numbers previously issued to the individualunder this chapter, if the applicant was registered as anoriginator or a principal manager under this chapter beforeJuly 1, 2009; and
(B) license numbers previously issued to the individualunder this chapter, if applicable.
(c) An application for licensure as a principal manager shall bemade on a form prescribed by the commissioner. The applicationmust include the following information for the individual who seeksto be licensed as a principal manager:
(1) The name of the individual.
(2) The home address of the individual.
(3) The home telephone number of the individual.
(4) The individual's Social Security number and date of birth.
(5) The name of the:
(A) loan broker licensee; or
(B) applicant for loan broker licensure;
for whom the individual seeks to be employed as a principalmanager.
(6) Consent to service of process under subsection (g).
(7) Evidence that the individual has completed the educationrequirements described in section 21 of this chapter.
(8) Evidence that the individual has at least three (3) years ofexperience in the:
(A) loan brokerage; or
(B) financial services;
business.
(9) An application fee of one hundred dollars ($100).
(10) All:
(A) registration numbers previously issued to the individualunder this chapter, if the applicant was registered as anoriginator or a principal manager under this chapter beforeJuly 1, 2009; and
(B) license numbers previously issued to the individualunder this chapter, if applicable.
(d) A loan broker licensee must maintain a bond satisfactory tothe commissioner, which must cover the activities of each licensedmortgage loan originator and licensed principal manager employedby the loan broker licensee. The bond must be in one (1) of thefollowing amounts, depending on the total amount of residentialmortgage loans originated by the loan broker in the previous calendaryear:
(1) Fifty thousand dollars ($50,000) if the total amount ofresidential mortgage loans originated by the loan broker in theprevious calendar year was not greater than five million dollars($5,000,000).
(2) Sixty thousand dollars ($60,000) if the total amount ofresidential mortgage loans originated by the loan broker in theprevious calendar year was greater than five million dollars
($5,000,000) but not greater than twenty million dollars($20,000,000).
(3) Seventy-five thousand dollars ($75,000) if the total amountof residential mortgage loans originated by the loan broker inthe previous calendar year was greater than twenty milliondollars ($20,000,000).
The bond shall be in favor of the state and shall secure payment ofdamages to any person aggrieved by any violation of this chapter bythe licensee or any licensed mortgage loan originator or licensedprincipal manager employed by the licensee.
(e) The commissioner shall issue a license and license number toan applicant for a loan broker license, a mortgage loan originatorlicense, or a principal manager license if the applicant meets theapplicable licensure requirements set forth in this chapter.
(f) Licenses issued by the commissioner under this chapter expireon December 31 of the year in which they are issued.
(g) Every applicant for licensure or for renewal of a license shallfile with the commissioner, in such form as the commissioner by ruleor order prescribes, an irrevocable consent appointing the secretaryof state to be the applicant's agent to receive service of any lawfulprocess in any noncriminal suit, action, or proceeding against theapplicant arising from the violation of any provision of this chapter.Service shall be made in accordance with the Indiana Rules of TrialProcedure.
(h) Upon good cause shown, the commissioner may waive therequirements of subsection (a)(4) for one (1) or more of anapplicant's ultimate equitable owners, directors, managers, orofficers.
(i) Whenever an initial or a renewal application for a license isdenied or withdrawn, the commissioner shall retain the initial orrenewal application fee paid.
(j) At the time of application for an initial license under thischapter, the commissioner shall require each:
(1) equitable owner, in the case of an applicant for a loan brokerlicense;
(2) individual described in subsection (a)(4), in the case of anapplicant for a loan broker license; and
(3) applicant for licensure as:
(A) a mortgage loan originator; or
(B) a principal manager;
to submit fingerprints for a national criminal history backgroundcheck (as defined in IC 10-13-3-12) by the Federal Bureau ofInvestigation, for use by the commissioner in determining whetherthe equitable owner, the individual described in subsection (a)(4), orthe applicant should be denied licensure under this chapter for anyreason set forth in section 10(c) or 10(d) of this chapter. Theequitable owner, individual described in subsection (a)(4), orapplicant shall pay any fees or costs associated with the fingerprintsand background check required under this subsection. Thecommissioner may not release the results of a background check
described in this subsection to any private entity.
(k) Every three (3) years, beginning with the third calendar yearfollowing the calendar year in which an initial license is issued underthis chapter, the commissioner shall require each:
(1) equitable owner, in the case of a loan broker licensee;
(2) individual described in subsection (a)(4), in the case of aloan broker licensee; and
(3) licensed:
(A) mortgage loan originator; or
(B) principal manager;
to submit fingerprints for a national criminal history backgroundcheck (as defined in IC 10-13-3-12) by the Federal Bureau ofInvestigation, for use by the commissioner in determining whetherthe equitable owner, the individual described in subsection (a)(4), orthe licensee should be denied continued licensure under this chapterfor any reason set forth in section 10(c) of this chapter. The equitableowner, individual described in subsection (a)(4), or licensee shall payany fees or costs associated with the fingerprints and backgroundcheck required under this subsection. The commissioner may notrelease the results of a background check described in this subsectionto any private entity.
(l) The commissioner shall require each applicant for licensure as:
(1) a mortgage loan originator; or
(2) a principal manager;
to submit written authorization for the commissioner or an agent ofthe commissioner to obtain a consumer report (as defined inIC 24-5-24-2) concerning the applicant.
(m) In reviewing a consumer report obtained under subsection (l),the commissioner may consider one (1) or more of the following indetermining whether an individual described in subsection (l) hasdemonstrated financial responsibility:
(1) Bankruptcies filed by the individual within the most recentten (10) years.
(2) Current outstanding civil judgments against the individual,except judgments resulting solely from medical expenses owedby the individual.
(3) Current outstanding tax liens or other government liens orfilings.
(4) Foreclosure actions filed within the most recent three (3)years against property owned by the individual.
(5) Any pattern of seriously delinquent accounts associated withthe individual during the most recent three (3) years.
As added by P.L.235-1985, SEC.1. Amended by P.L.247-1987,SEC.2; P.L.113-1992, SEC.4; P.L.11-1996, SEC.18; P.L.230-1999,SEC.3; P.L.115-2001, SEC.2; P.L.230-2007, SEC.8; P.L.3-2008,SEC.167; P.L.145-2008, SEC.12; P.L.156-2009, SEC.3.
IC 23-2-5-5.5
Written examination; subject areas; passing and retakingexamination Sec. 5.5. (a) The commissioner shall require an applicant forlicensure as:
(1) a mortgage loan originator under section 5(b) of thischapter; or
(2) a principal manager under section 5(c) of this chapter;
to pass a written examination prepared and administered by thecommissioner or an agent appointed by the commissioner andapproved by the Nationwide Mortgage Licensing System andRegistry.
(b) The written examination required by this section must measurethe applicant's knowledge and comprehension in appropriate subjectareas, including the following:
(1) Ethics.
(2) Federal laws and regulations concerning the origination ofresidential mortgage loans.
(3) State laws and rules concerning the origination of residentialmortgage loans.
(c) An individual who answers at least seventy-five percent (75%)of the questions on the written examination correctly is consideredto have passed the examination.
(d) An individual who does not pass the written examination mayretake the examination up to two (2) additional times, with eachsubsequent attempt occurring at least thirty (30) days after theindividual last sat for the examination. If an individual fails three (3)consecutive examinations, the individual must wait to retake theexamination until at least six (6) months after the individual sat forthe third examination.
(e) If an individual who has been issued a mortgage loanoriginator license or a principal manager license under this chapter:
(1) allows the individual's license to lapse; or
(2) otherwise does not maintain a valid license under thischapter;
for a period of at least five (5) years, the individual must retake thewritten examination required by this section.
As added by P.L.156-2009, SEC.4.
IC 23-2-5-6
Renewal of licenses
Sec. 6. A loan broker licensee may not continue engaging in theloan brokerage business unless the licensee's license is renewedannually. A mortgage loan originator licensee or a principal managerlicensee may not continue acting as:
(1) a mortgage loan originator; or
(2) a principal manager;
unless the licensee's license is renewed annually. A licensee underthis chapter shall renew its license by filing with the commissioner,at least thirty (30) days before the expiration of the license, anapplication containing any information the commissioner mayrequire to indicate any material change from the informationcontained in the applicant's original application or any previous
application.
As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,SEC.19; P.L.230-1999, SEC.4; P.L.115-2001, SEC.3; P.L.145-2008,SEC.13; P.L.156-2009, SEC.5.
IC 23-2-5-7
Loan broker regulation account
Sec. 7. (a) The loan broker regulation account is created in thestate general fund. The money in the loan broker regulation accountmay be used only for the regulation of loan brokers, mortgage loanoriginators, and principal managers under this chapter. The loanbroker regulation account shall be administered by the treasurer ofstate. The money in the loan broker regulation account does notrevert to any other account within the state general fund at the end ofa state fiscal year.
(b) Except as provided in subsection (c), all fees and fundsaccruing from the administration of this chapter shall be accountedfor by the commissioner and shall be deposited with the treasurer ofstate who shall deposit them in the loan broker regulation account inthe state general fund.
(c) All expenses incurred in the administration of this chaptershall be paid from appropriations made from the state general fund.However, costs of investigations incurred under this chapter shall bepaid from, and civil penalties recovered under this chapter shall bedeposited in, the securities division enforcement account createdunder IC 23-19-6-1(f). The funds in the securities divisionenforcement account shall be available, with the approval of thebudget agency, to augment and supplement the funds appropriatedfor the administration of this chapter.
As added by P.L.235-1985, SEC.1. Amended by P.L.115-2001,SEC.4; P.L.27-2007, SEC.18; P.L.156-2009, SEC.6.
IC 23-2-5-8
Repealed
(Repealed by P.L.113-1992, SEC.10.)
IC 23-2-5-9
Statute of frauds; required statement
Sec. 9. (a) To be enforceable, every contract for the services of aloan broker shall be in writing and signed by the contracting parties.
(b) At the time a contract for the services of a loan broker issigned, the loan broker shall provide a copy of the signed contract toeach of the other parties to the contract.
(c) Every contract for the services of a loan broker must includethe following statement:
"No statement or representation by a loan broker is valid orenforceable unless the statement or representation is in writing."
(d) This section does not apply to a contract that provides for thepayment of referral fees by a lender or a third party.
As added by P.L.235-1985, SEC.1. Amended by P.L.113-1992,
SEC.5; P.L.230-2007, SEC.9.
IC 23-2-5-9.1
Real estate appraisals; improper influence; ownership interest inappraisal company
Sec. 9.1. (a) As used in this section, "appraisal company" meansa business entity that:
(1) performs real estate appraisals on a regular basis forcompensation through one (1) or more owners, officers,employees, or agents; or
(2) holds itself out to the public as performing real estateappraisals.
(b) As used in this section, "immediate family", with respect to anindividual, refers to:
(1) the individual's spouse who resides in the individual'shousehold; and
(2) any dependent child of the individual.
(c) As used in this section, "real estate appraiser" means a personwho:
(1) is licensed as a real estate broker under IC 25-34.1 andperforms real estate appraisals within the scope of the person'slicense;
(2) holds a real estate appraiser license or certificate issuedunder IC 25-34.1-3-8; or
(3) otherwise performs real estate appraisals in Indiana.
(d) A person licensed under this chapter, or a person required tobe licensed under this chapter, shall not knowingly bribe, coerce, orintimidate another person to corrupt or improperly influence theindependent judgment of a real estate appraiser with respect to thevalue of any real estate offered as security for a residential mortgageloan.
(e) Except as provided in subsection (f):
(1) a person licensed under this chapter, or a person required tobe licensed under this chapter;
(2) a member of the immediate family of:
(A) a person licensed under this chapter; or
(B) a person required to be licensed under this chapter; or
(3) a person described in subdivision (1) or (2) in combinationwith one (1) or more other persons described in subdivision (1)or (2);
may not own or control a majority interest in an appraisal company.
(f) This subsection applies to a person or combination of personsdescribed in subsection (e) who own or control a majority interest inan appraisal company on June 30, 2007. The prohibition set forth insubsection (e) does not apply to a person or combination of personsdescribed in this subsection, subject to the following:
(1) The interest in the appraisal company owned or controlledby the person or combination of persons described in subsection(e) shall not be increased after June 30, 2007.
(2) The interest of a person licensed under this chapter, or of a
person required to be licensed under this chapter, shall not betransferred to a member of the person's immediate family.
(3) If the commissioner determines that any person orcombination of persons described in subsection (e) has violatedthis chapter, the commissioner may order one (1) or more of thepersons to divest their interest in the appraisal company. Thecommissioner may exercise the remedy provided by thissubdivision in addition to, or as a substitute for, any otherremedy available to the commissioner under this chapter.
As added by P.L.230-2007, SEC.10. Amended by P.L.156-2009,SEC.7.
IC 23-2-5-10
Violations; investigation by commissioner; orders and notices;hearing; denial, suspension, or revocation of license; censure;summary orders; transfer or termination of license; change ofmaterial fact or statement
Sec. 10. (a) Whenever it appears to the commissioner that aperson has engaged in or is about to engage in an act or a practiceconstituting a violation of this chapter or a rule or an order under thischapter, the commissioner may investigate and may issue, with aprior hearing if there exists no substantial threat of immediateirreparable harm or without a prior hearing, if there exists asubstantial threat of immediate irreparable harm, orders and noticesas the commissioner determines to be in the public interest, includingcease and desist orders, orders to show cause, and notices. Afternotice and hearing, the commissioner may enter an order ofrescission, restitution, or disgorgement, including interest at the rateof eight percent (8%) per year, directed to a person who has violatedthis chapter or a rule or order under this chapter.
(b) Upon the issuance of an order or notice without a prior hearingby the commissioner under subsection (a), the commissioner shallpromptly notify the respondent and, if the subject of the order ornotice is a mortgage loan originator licensee or a principal managerlicensee, the loan broker licensee for whom the mortgage loanoriginator or principal manager is employed:
(1) that the order or notice has been issued;
(2) of the reasons the order or notice has been issued; and
(3) that upon the receipt of a written request the matter will beset for a hearing to commence not later than fifteen (15)business days after receipt of the request if the original orderissued by the commissioner was a summary suspension,summary revocation, or denial of a license and not later thanforty-five (45) business days after receipt of the request for allother orders unless the respondent consents to a later date.
If a hearing is not requested and not ordered by the commissioner, anorder remains in effect until it is modified or vacated by thecommissioner. If a hearing is requested or ordered, thecommissioner, after notice of an opportunity for hearing, may modifyor vacate the order or extend it until final determination. (c) The commissioner may deny an application for an initial or arenewal license, and may suspend or revoke the license of a licenseeif the applicant, the licensee, or an ultimate equitable owner of anapplicant for a loan broker license or of a loan broker licensee:
(1) has, within the most recent ten (10) years:
(A) been the subject of an adjudication or a determinationby:
(i) a court with jurisdiction; or
(ii) an agency or administrator that regulates securities,commodities, banking, financial services, insurance, realestate, or the real estate appraisal industry;
in Indiana or in any other jurisdiction; and
(B) been found, after notice and opportunity for hearing, tohave violated the securities, commodities, banking, financialservices, insurance, real estate, or real estate appraisal lawsof Indiana or any other jurisdiction;
(2) except as provided in subsection (d)(1) with respect to theloan brokerage business, has:
(A) been denied the right to do business in the securities,commodities, banking, financial services, insurance, realestate, or real estate appraisal industry; or
(B) had the person's authority to do business in thesecurities, commodities, banking, financial services,insurance, real estate, or real estate appraisal industryrevoked or suspended;
by Indiana or by any other state, federal, or foreigngovernmental agency or self regulatory organization;
(3) is insolvent;
(4) has violated any provision of this chapter;
(5) has knowingly filed with the commissioner any document orstatement that:
(A) contains a false representation of a material fact;
(B) fails to state a material fact; or
(C) contains a representation that becomes false after thefiling but during the term of a license as provided insubsection (j);
(6) has been convicted, within ten (10) years before the date ofthe application, renewal, or review, of any crime, other than afelony, involving fraud or deceit;
(7) if the person is a loan broker licensee or a principalmanager, has failed to reasonably supervise the person'smortgage loan originators or employees to ensure theircompliance with this chapter;
(8) is on the most recent tax warrant list supplied to thecommissioner by the department of state revenue; or
(9) has engaged in dishonest or unethical practices in the loanbrokerage business, as determined by the commissioner.
(d) The commissioner shall deny an application for an initial or arenewal license and shall revoke the license of a licensee if theapplicant, the licensee, or an ultimate equitable owner of an applicant
for a loan broker license or of a loan broker licensee:
(1) has had a:
(A) loan broker license issued under this chapter;
(B) mortgage loan originator license issued under thischapter;
(C) principal manager license issued under this chapter; or
(D) license that is:
(i) equivalent to a license described in clause (A), (B), or(C); and
(ii) issued by another jurisdiction;
revoked by the commissioner or the appropriate regulatoryagency in another jurisdiction, whichever applies;
(2) has been convicted of or pleaded guilty or nolo contendereto a felony in a domestic, foreign, or military court:
(A) during the seven (7) year period immediately precedingthe date of the application or review; or
(B) at any time preceding the date of the application orreview if the felony involved an act of fraud or dishonesty,a breach of trust, or money laundering;
(3) fails to maintain the bond required under section 5(d) of thischapter;
(4) fails to demonstrate the financial responsibility, character,and general fitness necessary to:
(A) command the confidence of the community in which theapplicant or licensee engages or will engage in the loanbrokerage business; and
(B) warrant a determination by the commissioner that theapplicant or licensee will operate honestly, fairly, andefficiently within the purposes of this chapter;
(5) has failed to meet the education requirements set forth insection 21 of this chapter;
(6) has failed to pass the written examination required bysection 5.5 of this chapter; or
(7) fails to:
(A) keep or maintain records in accordance with section 18of this chapter; or
(B) allow the commissioner or an agent appointed by thecommissioner to inspect or examine a loan broker licensee'sbooks and records to determine compliance with section 18of this chapter.
(e) The commissioner may do either of the following:
(1) Censure:
(A) a licensee;
(B) an officer, a director, or an ultimate equitable owner ofa loan broker licensee; or
(C) any other person;
who violates or causes a violation of this chapter.
(2) Permanently bar any person described in subdivision (1)from being:
(A) licensed under this chapter; or (B) employed by or affiliated with a person licensed underthis chapter;
if the person violates or causes a violation of this chapter.
(f) The commissioner may not enter a final order:
(1) denying, suspending, or revoking the license of an applicantor a licensee; or
(2) imposing other sanctions;
without prior notice to all interested parties, opportunity for ahearing, and written findings of fact and conclusions of law.However, the commissioner may by summary order deny, suspend,or revoke a license pending final determination of any proceedingunder this section or before any proceeding is initiated under thissection. Upon the entry of a summary order, the commissioner shallpromptly notify all interested parties that the summary order hasbeen entered, of the reasons for the summary order, and that uponreceipt by the commissioner of a written request from a party, thematter will be set for hearing to commence not later than forty-five(45) business days after receipt of the request. If no hearing isrequested and none is ordered by the commissioner, the orderremains in effect until it is modified or vacated by the commissioner.If a hearing is requested or ordered, the commissioner, after noticeof the hearing has been given to all interested persons and thehearing has been held, may modify or vacate the order or extend ituntil final determination.
(g) IC 4-21.5 does not apply to a proceeding under this section.
(h) If a mortgage loan originator licensee or a principal managerlicensee seeks to transfer the licensee's license to another loan brokerlicensee who desires to have the mortgage loan originator licensee orprincipal manager licensee act as a mortgage loan originator or as aprincipal manager, whichever applies, the mortgage loan originatorlicensee or principal manager licensee shall, before the mortgageloan originator licensee or principal manager licensee acts as amortgage loan originator or as a principal manager for the newemployer, submit to the commissioner, on a form prescribed by thecommissioner, a license application, as required by section 5 of thischapter.
(i) If the employment of a mortgage loan originator licensee orprincipal manager licensee is terminated, whether:
(1) voluntarily by the mortgage loan originator licensee orprincipal manager licensee; or
(2) by the loan broker licensee employing the mortgage loanoriginator licensee or principal manager licensee;
the loan broker licensee that employed the mortgage loan originatorlicensee or principal manager licensee shall, not later than five (5)days after the termination, notify the commissioner of thetermination and the reasons for the termination.
(j) If a material fact or statement included in an application underthis chapter changes after the application has been submitted, theapplicant shall provide written notice to the commissioner of thechange. The commissioner may deny, revoke, or refuse to renew a
license applied for or held by any person who:
(1) is required to submit a written notice under this subsectionand fails to provide the required notice within two (2) businessdays after the person discovers or should have discovered thechange; or
(2) would not qualify for licensure under this chapter as a resultof the change in a material fact or statement.
As added by P.L.235-1985, SEC.1. Amended by P.L.11-1996,SEC.20; P.L.230-1999, SEC.5; P.L.14-2000, SEC.53; P.L.270-2003,SEC.3; P.L.48-2006, SEC.7; P.L.230-2007, SEC.11; P.L.145-2008,SEC.14; P.L.156-2009, SEC.8.
IC 23-2-5-11
Powers and duties of commissioner; use immunity for witnesses;certificate of compliance or noncompliance; authority to compelcompliance; multistate automated licensing system and repository
Sec. 11. (a) The commissioner may do the following:
(1) Adopt rules under IC 4-22-2 to implement this chapter.
(2) Make investigations and examinations:
(A) in connection with any application for licensure underthis chapter or with any license already granted; or
(B) whenever it appears to the commissioner, upon the basisof a complaint or information, that reasonable grounds existfor the belief that an investigation or examination isnecessary or advisable for the more complete protection ofthe interests of the public.
(3) Charge as costs of investigation or examination allreasonable expenses, including a per diem prorated upon thesalary of the commissioner or employee and actual travelingand hotel expenses. All reasonable expenses are to be paid bythe party or parties under investigation or examination if theparty has violated this chapter.
(4) Issue notices and orders, including cease and desist noticesand orders, after making an investigation or examination undersubdivision (2). The commissioner shall notify the person thatan order or notice has been issued, the reasons for it, and that ahearing will be set not later than fifteen (15) business days afterthe commissioner receives a written request from the personrequesting a hearing if the original order issued by thecommissioner was a summary suspension, summary revocation,or denial of a license and not later than forty-five (45) businessdays after the commissioner receives a written request from theperson requesting a hearing for all other orders.
(5) Sign all orders, official certifications, documents, or papersissued under this chapter or delegate the authority to sign anyof those items to a deputy.
(6) Hold and conduct hearings.
(7) Hear evidence.
(8) Conduct inquiries with or without hearings.
(9) Receive reports of investigators or other officers or
employees of the state of Indiana or of any municipalcorporation or governmental subdivision within the state.
(10) Administer oaths, or cause them to be administered.
(11) Subpoena witnesses, and compel them to attend and testify.
(12) Compel the production of books, records, and otherdocuments.
(13) Order depositions to be taken of any witness residingwithin or without the state. The depositions shall be taken in themanner prescribed by law for depositions in civil actions andmade returnable to the commissioner.
(14) Order that each witness appearing under thecommissioner's order to testify before the commissioner shallreceive the fees and mileage allowances provided for witnessesin civil cases.
(15) Provide interpretive opinions or issue determinations thatthe commissioner will not institute a proceeding or an actionunder this chapter against a specified person for engaging in aspecified act, practice, or course of business if thedetermination is consistent with this chapter. The commissionermay adopt rules to establish fees for individuals requesting aninterpretive opinion or a determination under this subdivision.A person may not request an interpretive opinion or adetermination concerning an activity that:
(A) occurred before; or
(B) is occurring on;
the date the opinion or determination is requested.