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Chapter 5. Administration And Powers Of The Commissioner of California Financial Code >> Division 20. >> Chapter 5.
Without limitation, the functions, powers, and duties of the
commissioner include the following:
(a) To issue or refuse to issue a license as provided by this division.
(b) To revoke or suspend for cause any license as provided by this division.
(c) To keep records of licenses issued under this division.
(d) To receive, consider, investigate, and act upon complaints made in connection with a licensee.
(e) To prescribe the forms of and receive (1) applications for licenses and (2) reports and books and records required to be made by a licensee under this division, including annual audited financial statements.
(f) To subpoena documents and witnesses and compel their attendance and production, to administer oaths, and to require the production of books, papers, or other materials relevant to any inquiry authorized by this division.
(g) To require information with regard to a license applicant that the commissioner may deem necessary, with regard for the paramount public interest in ascertaining the experience, background, honesty, truthfulness, integrity, and competency of the license applicant for financial transactions involving primary or subordinate mortgage financing, and if the license applicant is an entity other than an individual, in ascertaining the honesty, truthfulness, integrity, and competency of an officer or director of the corporation, association, or other entity, or the members of a partnership.
(h) To enforce by order any provision of this division.
(i) To levy fees, fines, and charges in an amount sufficient to cover the cost of the services performed in administering this division, as set forth by rule.
(j) To appoint examiners, supervisors, experts, and special assistants as needed to effectively and efficiently administer this division.
(a) To issue or refuse to issue a license as provided by this division.
(b) To revoke or suspend for cause any license as provided by this division.
(c) To keep records of licenses issued under this division.
(d) To receive, consider, investigate, and act upon complaints made in connection with a licensee.
(e) To prescribe the forms of and receive (1) applications for licenses and (2) reports and books and records required to be made by a licensee under this division, including annual audited financial statements.
(f) To subpoena documents and witnesses and compel their attendance and production, to administer oaths, and to require the production of books, papers, or other materials relevant to any inquiry authorized by this division.
(g) To require information with regard to a license applicant that the commissioner may deem necessary, with regard for the paramount public interest in ascertaining the experience, background, honesty, truthfulness, integrity, and competency of the license applicant for financial transactions involving primary or subordinate mortgage financing, and if the license applicant is an entity other than an individual, in ascertaining the honesty, truthfulness, integrity, and competency of an officer or director of the corporation, association, or other entity, or the members of a partnership.
(h) To enforce by order any provision of this division.
(i) To levy fees, fines, and charges in an amount sufficient to cover the cost of the services performed in administering this division, as set forth by rule.
(j) To appoint examiners, supervisors, experts, and special assistants as needed to effectively and efficiently administer this division.
(a) As often as the commissioner deems necessary and
appropriate, but at least once every 48 months, the commissioner
shall examine the affairs of each residential mortgage lender and
servicer licensee for compliance with this division. The commissioner
shall appoint suitable persons to perform the examination. The
commissioner and his or her appointees may examine the books,
records, and documents of the licensee, and may examine the licensee'
s officers, directors, employees, or agents under oath regarding the
licensee's operations. The commissioner may cooperate with any agency
of the state or federal government, other states, agencies, the
Federal National Mortgage Association, or the Federal Home Loan
Mortgage Corporation. The commissioner may accept an examination
conducted by one of these entities in place of an examination by the
commissioner under this law, unless the commissioner determines that
the examination does not provide information necessary to enable the
commissioner to fulfill his or her responsibilities under this
division.
(b) The commissioner shall provide a written statement of the findings of the examination, issue a copy of that statement to each licensee's principals, officers, or directors, and take appropriate steps to ensure correction of any violations of this division.
(c) Affiliates of a licensee are subject to examination by the commissioner on the same terms as the licensee, but only when reports from, or examination of, a licensee provides documented evidence of unlawful activity between a licensee and affiliate benefiting, affecting, or arising from the activities regulated by this division.
(d) The residential mortgage lender or servicer licensee shall pay, and the commissioner shall assess, the reasonable expenses of any examination of the licensee and affiliates, consistent with the requirements of subdivision (c) of Section 50314.
(e) The statement of the findings of an examination shall belong to the commissioner and shall not be disclosed to anyone other than the licensee, law enforcement officials, or other state or federal regulatory agencies for further investigation and enforcement. Reports required of licensees by the commissioner under this division and results of examinations performed by the commissioner under this division are the property of the commissioner.
(b) The commissioner shall provide a written statement of the findings of the examination, issue a copy of that statement to each licensee's principals, officers, or directors, and take appropriate steps to ensure correction of any violations of this division.
(c) Affiliates of a licensee are subject to examination by the commissioner on the same terms as the licensee, but only when reports from, or examination of, a licensee provides documented evidence of unlawful activity between a licensee and affiliate benefiting, affecting, or arising from the activities regulated by this division.
(d) The residential mortgage lender or servicer licensee shall pay, and the commissioner shall assess, the reasonable expenses of any examination of the licensee and affiliates, consistent with the requirements of subdivision (c) of Section 50314.
(e) The statement of the findings of an examination shall belong to the commissioner and shall not be disclosed to anyone other than the licensee, law enforcement officials, or other state or federal regulatory agencies for further investigation and enforcement. Reports required of licensees by the commissioner under this division and results of examinations performed by the commissioner under this division are the property of the commissioner.
Neither the commissioner nor any employee of the Department
of Business Oversight shall be precluded from obtaining a residential
mortgage loan from a lender licensed under this division, subject to
the rules that may be adopted hereunder or pursuant to other proper
authority.
The commissioner may, from time to time, make, amend, and
rescind the rules, forms, and orders that are necessary to carry out
the provisions of this law, including rules and forms governing
applications and reports, and defining any terms, whether or not used
in this law, provided that the definitions are consistent with the
provisions of this law. For the purposes of rules and forms, the
commissioner may classify loans, persons, and matters within the
jurisdiction of the commissioner, and may prescribe different
requirements for different classes. The commissioner may, in his or
her discretion, waive a requirement of a rule or form if, in the
opinion of the commissioner, the requirement is not in the public
interest or necessary for the protection of borrowers or investors.
Upon written request from the commissioner, a licensee shall
forward authorization to release workpapers of the licensee's
independent auditor to the commissioner within two business days of
receiving the request.
The commissioner may order a licensee that opens a branch
office in this state or changes its business location or its
locations from which activities subject to this law are conducted,
without first notifying the commissioner in writing, as required by
Section 50124, to forfeit to the people of the state up to one
hundred dollars ($100) each day for the first 10 days and ten dollars
($10) for each day thereafter during which the branch office or
changed location is maintained without notifying the commissioner.
(a) Each residential mortgage lender or servicer licensee
shall file a report with the commissioner annually, on or before the
first day of March, giving the relevant information that the
commissioner reasonably requires to make the calculation required by
subdivision (a) of Section 50401. The report shall be made under oath
and in the form prescribed by the commissioner.
(b) A licensee shall make any other special reports to the commissioner that the commissioner may, from time to time, require.
(c) If any licensed residential mortgage lender or servicer subject to this division fails to make a report required by law or by the commissioner, the commissioner may immediately cause the books, records, papers, and affairs of that licensee to be thoroughly examined.
(b) A licensee shall make any other special reports to the commissioner that the commissioner may, from time to time, require.
(c) If any licensed residential mortgage lender or servicer subject to this division fails to make a report required by law or by the commissioner, the commissioner may immediately cause the books, records, papers, and affairs of that licensee to be thoroughly examined.
The commissioner may, as he or she deems necessary,
require licensees to provide reports concerning their residential
mortgage loan servicing activities, including, but not limited to,
information similar to that collected in connection with the Mortgage
Servicers Survey, first published by the Department of Business
Oversight in December 2007. The commissioner is additionally
authorized to seek and accept information provided on a voluntary
basis by residential mortgage loan servicers not subject to the
commissioner's jurisdiction. The commissioner shall post only
aggregated survey results on the department's Internet Web site, and
shall note the number of loan servicers submitting data included in
the aggregated totals and the estimated percentage of outstanding
mortgage loans to Californians that are serviced by these loan
servicers, to the extent information on the number of outstanding
loans is available from a reliable source. Nothing in this section is
intended to reduce or change the commissioner's authority to request
and demand reports under Section 50307.
The commissioner may require a licensee that employs one
or more mortgage loan originators to submit to the Nationwide
Mortgage Licensing System and Registry reports of condition, which
shall be in such form and shall contain such information as the
Nationwide Mortgage Licensing System and Registry may require.
If any person engaged in the business regulated by this
division refers in any advertising to rates of interest, charges, or
costs of loans, the commissioner shall require that they are stated
fully and clearly in the manner that he or she deems necessary to
give adequate information to prospective borrowers. If the rates or
costs advertised do not apply to loans of all classes made or
negotiated by that person, this fact shall be clearly indicated in
the advertisement. Compliance with the requirements of the federal
Truth in Lending Act and Regulation Z promulgated thereunder is
presumed to satisfy the requirements of this section.
The commissioner may require licensees to maintain a file of
all advertising copy for a period of 90 days from the date of its
use. The file shall be available to the commissioner upon request.
Nothing in this law shall preclude a person, other than a
mortgage loan originator, whose license has been suspended or
revoked, summarily or otherwise, from continuing to service
residential mortgage loans pursuant to servicing contracts in
existence at the time of the suspension for a reasonable transition
period, as determined by the commissioner, after the date of the
entry of the final decision in the case suspending or revoking the
license.
Nothing in this law shall preclude a person whose license
has been suspended or revoked, summarily or otherwise, from making a
residential mortgage loan pursuant to a commitment issued by that
person prior to the suspension or revocation. A prospective borrower
who received a commitment issued by a person whose license has been
suspended or revoked may, prior to the closing of the loan, terminate
the commitment and receive a refund of all money paid to that
person.
The commissioner, in his or her discretion, may honor
requests from interested persons for interpretive opinions.
In any proceeding under this law, the burden of proving an
exemption or an exception from a definition is upon the person
claiming it.
(a) Every person subject to this division shall keep
documents and records that will properly enable the commissioner to
determine whether the residential mortgage lending or residential
mortgage loan servicing functions performed by that person comply
with the provisions of this division and with all rules and orders
made by the commissioner under this division. Upon request of the
commissioner, residential mortgage lenders and residential mortgage
loan servicers shall file an authorization for disclosure to the
commissioner of financial records of the licensed business pursuant
to Section 7473 of the Government Code.
(b) The business documents and records of every residential mortgage lender or residential mortgage loan servicer, whether required to be licensed under this division or not, are subject to inspection and examination by the commissioner at any time without prior notice. The provisions of this subdivision shall not apply to persons specified in subdivision (g) of Section 50003. Any person subject to this division shall, upon request and within the time specified in the request, allow inspection and copying of any documents and records by the commissioner or his or her authorized representative.
(c) The cost of every inspection and examination of a licensee or other person subject to this division shall be paid to the commissioner by the licensee or person examined, and the commissioner may maintain an action for the recovery of these costs in any court of competent jurisdiction. In determining the cost of any inspection or examination, the commissioner may use the estimated average hourly cost, including overhead, for all persons performing inspections or examinations of licensees or other persons subject to this division for the fiscal year. For the purpose of this subdivision only, no person other than a licensee shall be deemed to be a person subject to this division unless and until the person is determined to be a person subject to this division by an administrative hearing in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, or by a judicial hearing in any court of competent jurisdiction.
(d) Investigation and examination reports prepared by the commissioner's duly designated representatives are not public reports. Those reports may be disclosed to the officers or directors of a licensee that is the subject of the report for the purpose of corrective action by the officers or directors. Such a disclosure shall not operate as a waiver of the exemption specified in subdivision (d) of Section 6254 of the Government Code.
(b) The business documents and records of every residential mortgage lender or residential mortgage loan servicer, whether required to be licensed under this division or not, are subject to inspection and examination by the commissioner at any time without prior notice. The provisions of this subdivision shall not apply to persons specified in subdivision (g) of Section 50003. Any person subject to this division shall, upon request and within the time specified in the request, allow inspection and copying of any documents and records by the commissioner or his or her authorized representative.
(c) The cost of every inspection and examination of a licensee or other person subject to this division shall be paid to the commissioner by the licensee or person examined, and the commissioner may maintain an action for the recovery of these costs in any court of competent jurisdiction. In determining the cost of any inspection or examination, the commissioner may use the estimated average hourly cost, including overhead, for all persons performing inspections or examinations of licensees or other persons subject to this division for the fiscal year. For the purpose of this subdivision only, no person other than a licensee shall be deemed to be a person subject to this division unless and until the person is determined to be a person subject to this division by an administrative hearing in accordance with Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, or by a judicial hearing in any court of competent jurisdiction.
(d) Investigation and examination reports prepared by the commissioner's duly designated representatives are not public reports. Those reports may be disclosed to the officers or directors of a licensee that is the subject of the report for the purpose of corrective action by the officers or directors. Such a disclosure shall not operate as a waiver of the exemption specified in subdivision (d) of Section 6254 of the Government Code.
(a) The commissioner may refer the evidence that is
available concerning any violation of this law or of any rule or
order adopted under this division to the district attorney of the
county in which the violation occurred. The district attorney may,
with or without the commissioner's referral, institute criminal
proceedings under this law. The commissioner and his or her counsel,
deputies, or assistants may, upon request of the district attorney,
assist the district attorney in presenting the law or facts at the
trial.
(b) After an examination, investigation, or hearing under this division, if the commissioner deems it of public interest or advantage, he or she may certify a record to the proper prosecuting official of the county or city in which the act complained of, examined, or investigated occurred.
(b) After an examination, investigation, or hearing under this division, if the commissioner deems it of public interest or advantage, he or she may certify a record to the proper prosecuting official of the county or city in which the act complained of, examined, or investigated occurred.
(a) For any licensee, a disciplinary action taken by the
State of California, another state, any agency of the federal
government, or another country for any action substantially related
to the activity regulated under this law may be a ground for
disciplinary action by the commissioner. A certified copy of the
record of the disciplinary action taken against a licensee by the
State of California, another state, any agency of the federal
government, or another country shall be conclusive evidence of the
events related therein.
(b) Nothing in this section shall preclude the commissioner from applying a specific statutory provision in this division providing for discipline against a licensee as a result of disciplinary action taken against a licensee by the State of California, another state, an agency of the federal government, or another country.
(b) Nothing in this section shall preclude the commissioner from applying a specific statutory provision in this division providing for discipline against a licensee as a result of disciplinary action taken against a licensee by the State of California, another state, an agency of the federal government, or another country.
Notwithstanding any other law, any application for
licensure, amendment to the application or registration document or
notice filed under any of the laws administered by the Department of
Business Oversight, or record otherwise required to be filed in this
state as an electronic record pursuant to a nationwide central
depository for information regarding licensees, including mortgage
loan originators, or any electronic record filed through the
Nationwide Mortgage Licensing System and Registry, shall be deemed to
be a valid original document upon reproduction to paper form by the
Department of Business Oversight.
(a) Any person who has been convicted of, or pleaded nolo
contendere to any crime specified in subdivision (b) within the past
10 years or has been held liable in any civil action by final
judgment or any administrative judgment by any public agency within
the past seven years, of any of the provisions specified in
subdivision (b), shall not serve as an officer, director, partner,
shareholder controlling 10 percent or more of the ownership
interests, trustee, or employee of a residential mortgage lender or
residential mortgage loan servicer. This subdivision shall not apply
to any person whose office, employment, ownership interest, or other
participation in the business of a licensed residential mortgage
lender or residential mortgage loan servicer commenced prior to
January 1, 1995, or whose criminal conviction, plea, or judgment
occurred prior to January 1, 1995.
(b) Subdivision (a) applies to criminal convictions of, pleas of nolo contendere to, or civil or administrative judgments entered for offenses including the following:
(1) Offenses specified in Chapter 18 (commencing with Section 3350) of Division 1.
(2) Offenses specified in Article 4 (commencing with Section 5300) of Chapter 1 of Division 2.
(3) Offenses specified in Article 8 (commencing with Section 14750) of Chapter 4 of Division 5.
(4) Offenses specified in Chapter 7 (commencing with Section 17700) of Division 6.
(5) Offenses specified in Chapter 6 (commencing with Section 18435) of Division 7.
(6) Offenses specified in provisions of the laws of the United States added or amended by the federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 (Public Law 101-73).
(7) Offenses involving robbery, burglary, theft, embezzlement, fraud, fraudulent conversion or misappropriation of property, forgery, bookmaking, receiving stolen property, counterfeiting, extortion, checks, credit cards, or computer violations specified in Section 502 of the Penal Code. For the purpose of this section, but not Section 50318, an offense does not include a conviction for which the person has obtained a certificate of rehabilitation from a court of competent jurisdiction under Section 1203.4 or 4852.13 of the Penal Code or a similar certificate of rehabilitation obtained in a foreign jurisdiction.
(c) On and after January 1, 1995, any officer, director, or other person who seeks a controlling ownership interest of 10 percent or more in the business of a licensed residential mortgage lender or residential mortgage loan servicer shall, as a condition to obtaining that interest or participation, authorize the commissioner to have access to that person's state summary criminal history information, as defined in Section 11105 of the Penal Code, for purposes of determining whether the person has a prior conviction of, or pleaded nolo contendere to, a criminal offense specified in subdivision (b).
(d) Any state summary criminal history information obtained pursuant to this section shall be kept confidential and no recipient shall disclose the contents other than for the purpose of acquisition of an ownership interest in or other participation in the business of a licensed residential mortgage lender or residential mortgage loan servicer.
(e) Any person who knowingly violates subdivision (a), including, but not limited to, any residential mortgage lender or residential mortgage loan servicer who permits an ownership interest in or other participation in the business of a residential mortgage lender or residential mortgage loan servicer in violation of subdivision (a) shall, upon conviction, be subject to punishment as set forth in Section 50500.
(f) Nothing in this section shall be construed to permit the reinstatement of any person barred by the commissioner pursuant to Section 50320 nor to prohibit the commissioner from bringing any action pursuant to Section 50320.
(g) If any provision of this section or the application of this section to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of this section that can be given effect without the invalid provision or application, and to this end the provisions of this section are severable.
(h) For purposes of this section, the term "employee" means (1) a mortgage loan originator, including a loan officer or other individual who negotiates agreements with the public, or (2) an individual with access to or responsibility for trust funds held by the licensee.
(b) Subdivision (a) applies to criminal convictions of, pleas of nolo contendere to, or civil or administrative judgments entered for offenses including the following:
(1) Offenses specified in Chapter 18 (commencing with Section 3350) of Division 1.
(2) Offenses specified in Article 4 (commencing with Section 5300) of Chapter 1 of Division 2.
(3) Offenses specified in Article 8 (commencing with Section 14750) of Chapter 4 of Division 5.
(4) Offenses specified in Chapter 7 (commencing with Section 17700) of Division 6.
(5) Offenses specified in Chapter 6 (commencing with Section 18435) of Division 7.
(6) Offenses specified in provisions of the laws of the United States added or amended by the federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 (Public Law 101-73).
(7) Offenses involving robbery, burglary, theft, embezzlement, fraud, fraudulent conversion or misappropriation of property, forgery, bookmaking, receiving stolen property, counterfeiting, extortion, checks, credit cards, or computer violations specified in Section 502 of the Penal Code. For the purpose of this section, but not Section 50318, an offense does not include a conviction for which the person has obtained a certificate of rehabilitation from a court of competent jurisdiction under Section 1203.4 or 4852.13 of the Penal Code or a similar certificate of rehabilitation obtained in a foreign jurisdiction.
(c) On and after January 1, 1995, any officer, director, or other person who seeks a controlling ownership interest of 10 percent or more in the business of a licensed residential mortgage lender or residential mortgage loan servicer shall, as a condition to obtaining that interest or participation, authorize the commissioner to have access to that person's state summary criminal history information, as defined in Section 11105 of the Penal Code, for purposes of determining whether the person has a prior conviction of, or pleaded nolo contendere to, a criminal offense specified in subdivision (b).
(d) Any state summary criminal history information obtained pursuant to this section shall be kept confidential and no recipient shall disclose the contents other than for the purpose of acquisition of an ownership interest in or other participation in the business of a licensed residential mortgage lender or residential mortgage loan servicer.
(e) Any person who knowingly violates subdivision (a), including, but not limited to, any residential mortgage lender or residential mortgage loan servicer who permits an ownership interest in or other participation in the business of a residential mortgage lender or residential mortgage loan servicer in violation of subdivision (a) shall, upon conviction, be subject to punishment as set forth in Section 50500.
(f) Nothing in this section shall be construed to permit the reinstatement of any person barred by the commissioner pursuant to Section 50320 nor to prohibit the commissioner from bringing any action pursuant to Section 50320.
(g) If any provision of this section or the application of this section to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of this section that can be given effect without the invalid provision or application, and to this end the provisions of this section are severable.
(h) For purposes of this section, the term "employee" means (1) a mortgage loan originator, including a loan officer or other individual who negotiates agreements with the public, or (2) an individual with access to or responsibility for trust funds held by the licensee.
(a) The commissioner may, after appropriate notice and
opportunity for hearing, by order censure or suspend for a period not
exceeding 12 months, or bar from any position of employment,
management, or control any residential mortgage lender, residential
mortgage loan servicer, or mortgage loan originator, or any other
person, if the commissioner finds either of the following:
(1) That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, and (A) the violation was either known or should have been known by the person committing or causing it, or (B) the violation has caused material damage to the residential mortgage lender, residential mortgage loan servicer, mortgage loan originator, or to the public.
(2) That the person (A) has been convicted of or pleaded nolo contendere to any crime, or (B) has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense specified in subdivision (b) of Section 50317, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division.
(b) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). Upon receiving a request, the matter shall be set for hearing to commence within 30 days after receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of the notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing.
(c) Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure under the law.
(d) Persons suspended or barred under this section are prohibited from participating in any business activity of a licensed residential mortgage lender, residential mortgage loan servicer, or mortgage loan originator and from engaging in any business activity on the premises where a licensed residential mortgage lender, residential mortgage loan servicer, or mortgage loan originator is conducting its business. This subdivision shall not be construed to prohibit suspended or barred persons from having their personal transactions processed by a licensed residential mortgage lender, residential mortgage loan servicer, or mortgage loan originator.
(e) This section shall apply to any violation, conviction, plea, or judgment after the enactment of this section.
(f) If any provision of this section or the application of this section to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of this section that can be given effect without the invalid provision or application, and to this end the provisions of this section are severable.
(g) For purposes of this section, the term "employee" means (1) a mortgage loan originator, including a loan officer or other individual who negotiates agreements with the public, or (2) an individual with access to or responsibility for trust funds held by the licensee.
(1) That the censure, suspension, or bar is in the public interest and that the person has committed or caused a violation of this division or rule or order of the commissioner, and (A) the violation was either known or should have been known by the person committing or causing it, or (B) the violation has caused material damage to the residential mortgage lender, residential mortgage loan servicer, mortgage loan originator, or to the public.
(2) That the person (A) has been convicted of or pleaded nolo contendere to any crime, or (B) has been held liable in any civil action by final judgment, or any administrative judgment by any public agency, if that crime or civil or administrative judgment involved any offense specified in subdivision (b) of Section 50317, or any other offense reasonably related to the qualifications, functions, or duties of a person engaged in the business in accordance with the provisions of this division.
(b) Within 15 days from the date of a notice of intention to issue an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). Upon receiving a request, the matter shall be set for hearing to commence within 30 days after receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of the notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing.
(c) Upon receipt of a notice of intention to issue an order pursuant to this section, the person who is the subject of the proposed order is immediately prohibited from engaging in any activities subject to licensure under the law.
(d) Persons suspended or barred under this section are prohibited from participating in any business activity of a licensed residential mortgage lender, residential mortgage loan servicer, or mortgage loan originator and from engaging in any business activity on the premises where a licensed residential mortgage lender, residential mortgage loan servicer, or mortgage loan originator is conducting its business. This subdivision shall not be construed to prohibit suspended or barred persons from having their personal transactions processed by a licensed residential mortgage lender, residential mortgage loan servicer, or mortgage loan originator.
(e) This section shall apply to any violation, conviction, plea, or judgment after the enactment of this section.
(f) If any provision of this section or the application of this section to any person or circumstances is held invalid, that invalidity shall not affect other provisions or applications of this section that can be given effect without the invalid provision or application, and to this end the provisions of this section are severable.
(g) For purposes of this section, the term "employee" means (1) a mortgage loan originator, including a loan officer or other individual who negotiates agreements with the public, or (2) an individual with access to or responsibility for trust funds held by the licensee.
(a) If the commissioner, as a result of any examination or
from any report made to him or her, shall find that any person
subject to this division is in an insolvent condition, is conducting
business in an unsafe or injurious manner that renders further
operations hazardous to the public or to customers, has failed to
comply with the provision of Section 50317, has permitted its
tangible net worth to be lower than the minimum required by law, or
has failed to comply with the bonding requirements of Section 50205,
the commissioner may, by an order addressed to and served by
registered or certified mail, or by personal service on that person,
and on any other person having in his or her possession or control
any trust funds or other property deposited in escrow with that
person, direct discontinuance of the disbursement, in whole or in
part, of trust funds held by the licensee and order the establishment
of a separate trust account for all subsequent trust funds received
by the licensee. No person having in his or her possession any of
these funds or documents shall be liable for failure to comply with
the order unless he or she has received written notice of the order.
Subject to subdivision (b), the order shall remain in effect until
set aside by the commissioner, or the person is the subject of an
order for relief in bankruptcy.
(b) Within 15 days from the date of an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 2 of Division 3 of Title 2 of the Government Code). Upon receiving a request, the matter shall be set for hearing to commence within 30 days after the receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of the notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing. Neither the request for a hearing nor the hearing itself shall stay the order issued by the commissioner under subdivision (a).
(b) Within 15 days from the date of an order pursuant to subdivision (a), the person may request a hearing under the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 2 of Division 3 of Title 2 of the Government Code). Upon receiving a request, the matter shall be set for hearing to commence within 30 days after the receipt unless the person subject to this division consents to a later date. If no hearing is requested within 15 days after the mailing or service of the notice and none is ordered by the commissioner, the failure to request a hearing shall constitute a waiver of the right to a hearing. Neither the request for a hearing nor the hearing itself shall stay the order issued by the commissioner under subdivision (a).
Whenever, in the opinion of the commissioner, a person is
engaged, either actually or through subterfuge, in the business of
making residential mortgage loans, servicing residential mortgage
loans, or engaging in business as a mortgage loan originator, without
a license from the commissioner, the commissioner may order that
person to desist and refrain. If, within 30 days after an order is
served, a request for a hearing is filed in writing and the hearing
is not held within 60 days of the filing, the order is rescinded.
This section does not apply to persons exempted under subdivision (b)
of Section 50002.
If, after investigation, the commissioner has reasonable
grounds to believe that any licensee has violated its articles of
incorporation or any law or rule binding upon it, the commissioner
shall, by written order addressed to the licensee, direct the
discontinuance of the violation. The order shall be effective
immediately, but shall not become final except in accordance with the
provisions of Section 50323.
If, after investigation, the commissioner has reasonable
grounds to believe that any licensee is conducting business in an
unsafe or injurious manner, the commissioner shall, by written order
addressed to the licensee, direct the discontinuance of the unsafe or
injurious practices. The order shall be effective immediately, but
shall not become final except in accordance with the provisions of
Section 50323.
(a) No order issued pursuant to Section 50321 or 50322 may
become final except after notice to the affected licensee of the
commissioner's intention to make the order final and of the reasons
for the finding. The commissioner shall also notify the licensee that
upon receiving a request the matter will be set for hearing to
commence within 15 business days after receipt. The licensee may
consent to have the hearing commence at a later date. If no hearing
is requested within 30 days after the mailing or service of the
required notice, and none is ordered by the commissioner, the order
may become final without hearing and the licensee shall immediately
discontinue the practices named in the order. If a hearing is
requested or ordered, it shall be held in accordance with the
provisions of the Administrative Procedure Act (Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code), and the commissioner shall have all of the powers
granted under that act. If, upon the hearing, it appears to the
commissioner that the licensee is conducting business in an unsafe
and injurious manner or is violating its articles of incorporation or
any law of this state, or any rule binding upon it, the commissioner
shall make the order of discontinuance final and the licensee shall
immediately discontinue the practices named in the order.
(b) The licensee has 10 days after an order is made final to commence an action to restrain enforcement of the order. If the enforcement of the order is not enjoined within 10 days by the court in which the action is brought, the licensee shall comply with the order.
(b) The licensee has 10 days after an order is made final to commence an action to restrain enforcement of the order. If the enforcement of the order is not enjoined within 10 days by the court in which the action is brought, the licensee shall comply with the order.
(a) If, after investigation, the commissioner has reasonable
grounds to believe that any person has engaged or is about to engage
in any act or practice constituting a violation of any provision of
this division or any rule or order hereunder, the commissioner may,
bring an action to enjoin the acts or practices or to enforce
compliance with this law or any rule or order hereunder. The action
shall be brought in the name of the people of the State of California
in the superior court. Upon a proper showing, a permanent or
preliminary injunction, restraining order, or writ of mandate shall
be granted. A receiver, monitor, conservator, or other designated
fiduciary or officer of the court, which may include the
commissioner, may be appointed for the defendant or the defendant's
assets. Any other ancillary relief may be granted as appropriate.
A receiver, monitor, conservator, or other designated fiduciary or
officer of the court appointed by the superior court pursuant to
this section may, with the approval of the court, exercise any or all
of the powers of the defendant's officers, directors, partners,
trustees, or persons who exercise similar powers and perform similar
duties. The powers include the filing of a petition for bankruptcy.
No action at law or in equity may be maintained by any party against
the commissioner, or a receiver, monitor, conservator, or other
designated fiduciary or officer of the court, by reason of their
exercising these powers or performing these duties pursuant to the
order of, or with the approval of, the superior court.
(b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief. The ancillary relief may include, but not be limited to, restitution or disgorgement or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. The court shall have jurisdiction to award additional relief.
(b) If the commissioner determines it is in the public interest, the commissioner may include in any action authorized by subdivision (a) a claim for ancillary relief. The ancillary relief may include, but not be limited to, restitution or disgorgement or damages on behalf of the persons injured by the act or practice constituting the subject matter of the action. The court shall have jurisdiction to award additional relief.
The commissioner may immediately revoke the residential
mortgage lender's, residential mortgage loan servicer's, or mortgage
loan originator's license if the licensee fails to comply with any
order issued under Section 50318, 50319, 50321, 50322, or 50503. The
commissioner shall not revoke the license if, within 10 days from the
effective date of the revocation order, the licensee secures a court
order restraining the enforcement of the commissioner's revocation
order.
If any licensee fails to do any of the following, the
licensee shall forfeit to the people of the state a sum of up to one
hundred dollars ($100) for every day up to the 10th day: (a) to make
any report required by law or by the commissioner within 10 days from
the day designated for the making of the report, or within any
extension of time granted by the commissioner, or (b) fails to
include therein any matter required by law or by the commissioner.
Thereafter, any failure shall constitute grounds for the suspension
or revocation of the license held by the residential mortgage lender
or residential mortgage loan servicer.
(a) The commissioner may, after notice and a reasonable
opportunity to be heard, deny, decline to renew, suspend, or revoke
any license if the commissioner finds that:
(1) The licensee has violated any provision of this division or any rule or order of the commissioner thereunder.
(2) Any fact or condition exists that, if it had existed at the time of the original application for the license, reasonably would have warranted the commissioner in refusing to issue the license originally.
(b) The power of investigation and examination by the commissioner is not terminated by the denial, nonrenewal, surrender, suspension, or revocation of any license issued by him or her.
(1) The licensee has violated any provision of this division or any rule or order of the commissioner thereunder.
(2) Any fact or condition exists that, if it had existed at the time of the original application for the license, reasonably would have warranted the commissioner in refusing to issue the license originally.
(b) The power of investigation and examination by the commissioner is not terminated by the denial, nonrenewal, surrender, suspension, or revocation of any license issued by him or her.
Except in the case of an exempt person, whenever the
commissioner deems it to be necessary for the public interest, the
commissioner has continuous authority to exercise the powers set
forth in this division. These powers may be exercised whether or not
an application for a license has been filed with the commissioner,
any license has been issued, or if issued, has been surrendered,
suspended, or revoked.
(a) In making an investigation or examination authorized by
this division, the commissioner may, for a reasonable time not
exceeding 30 days, control access to any documents and records of the
licensee pertaining to the business of any residential mortgage
lender or residential mortgage loan servicer. The commissioner may
place a keeper in exclusive charge of the documents and records in
the place where they are usually kept. During the period of control,
no director, officer, partner, or employee shall remove or attempt to
remove any of the documents except pursuant to a court order or with
the consent of the commissioner. However, the directors, officers,
partners, and employees of the residential mortgage lender or
residential mortgage loan servicer may examine the documents or
records. The licensee's employees shall be permitted to make entries
in the documents or records to reflect current transactions. Unless
the commissioner has reasonable grounds to believe the documents or
records of the licensee have been, or are at risk of being altered or
destroyed for purposes of concealing a violation of this division,
the licensee shall have access to the documents or records as
necessary to conduct its ordinary business affairs.
(b) For the purpose of any investigation, examination, or proceeding under this division, the commissioner or any officer designated by the commissioner may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any documents or records that the commissioner deems relevant.
(c) In case of refusal to obey a subpoena issued to a director, officer, partner, or employee of a licensee, the superior court may issue an order requiring that person to appear before the commissioner. When before the commissioner, the director, officer, partner, or employee shall produce documentary evidence or give evidence on the matter under investigation. Failure to obey the order of the court may be punished by the court as contempt.
(d) No person is excused from testifying or from producing any document or record before the commissioner, on the ground that the testimony or evidence required by the commissioner may tend to incriminate the person or subject him or her to a penalty or forfeiture. However, no individual may be penalized for any matter concerning which he or she is compelled to testify or produce evidence, after validly claiming the privilege against self-incrimination. However, individual testimony is not exempt from prosecution and punishment for perjury or contempt committed in testifying.
(b) For the purpose of any investigation, examination, or proceeding under this division, the commissioner or any officer designated by the commissioner may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any documents or records that the commissioner deems relevant.
(c) In case of refusal to obey a subpoena issued to a director, officer, partner, or employee of a licensee, the superior court may issue an order requiring that person to appear before the commissioner. When before the commissioner, the director, officer, partner, or employee shall produce documentary evidence or give evidence on the matter under investigation. Failure to obey the order of the court may be punished by the court as contempt.
(d) No person is excused from testifying or from producing any document or record before the commissioner, on the ground that the testimony or evidence required by the commissioner may tend to incriminate the person or subject him or her to a penalty or forfeiture. However, no individual may be penalized for any matter concerning which he or she is compelled to testify or produce evidence, after validly claiming the privilege against self-incrimination. However, individual testimony is not exempt from prosecution and punishment for perjury or contempt committed in testifying.
The authority to make or conduct any examination or
investigation may be delegated by the commissioner to any deputy,
investigator, examiner, or auditor appointed for that purpose. An
individual appointed by the commissioner for this purpose may
administer oaths and subpoena witnesses, and take their testimony.
The appointment shall be made by an instrument in writing signed by
the commissioner. Upon any examination or investigation, the
instrument shall be produced by the appointed individual at any time
upon demand.
All hearings provided for in this division shall be
conducted in accordance with the provisions of Chapter 5 (commencing
with Section 11500) of Part 1 of Division 3 of Title 2 of the
Government Code. The commissioner has all the powers granted therein.
Every order, decision, license, or other official act of the
commissioner is subject to review, in accordance with law.
(a) The commissioner shall apply the guidance on
nontraditional mortgage product risks published on November 14, 2006,
by the Conference of State Bank Supervisors and the American
Association of Residential Mortgage Regulators, and the Statement on
Subprime Mortgage Lending published on July 17, 2007, by the
aforementioned entities and the National Association of Consumer
Credit Administrators, to licensees.
(b) The commissioner may adopt emergency and final rules to clarify the application of this section as soon as possible.
(c) A licensee shall adopt and adhere to policies and procedures that are reasonably intended to achieve the objectives set forth in the documents described in subdivision (a). A licensed mortgage loan originator shall adhere to policies and procedures developed by his or her employer in accordance with this division and applicable federal law and regulation.
(b) The commissioner may adopt emergency and final rules to clarify the application of this section as soon as possible.
(c) A licensee shall adopt and adhere to policies and procedures that are reasonably intended to achieve the objectives set forth in the documents described in subdivision (a). A licensed mortgage loan originator shall adhere to policies and procedures developed by his or her employer in accordance with this division and applicable federal law and regulation.
