Wisconsin Origination Reference Guide
- Kacey Olson
Owned by Kacey Olson
Aug 30, 2017
7 min read
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| Citation | Topic | Requirement |
| Mortgage Bankers, Loan Originators and Mortgage Brokers Act / Wis. Stat. Ann. §224.77(1)(e) | Acting on Behalf of Multiple Parties | A mortgage banker, mortgage broker or mortgage loan originator, and a member, officer, director, principal, partner, trustee or other agent of a mortgage banker or mortgage broker may not act for more than 1 party in a transaction without the knowledge and consent of all parties on whose behalf the mortgage banker is acting. |
| Mortgage Bankers, Loan Originators and Mortgage Brokers Act / Wis. Admin. Code §43.02(14) | Advance Fee Disclosure | Any transaction in which a licensee enters into an agreement or contract with a prospective borrower for the purpose of finding a loan or negotiating a land contract, loan or commitment for a loan, must include a provision or otherwise disclose that either of the following are nonrefundable: (1) a fee or charge imposed on behalf of a third party for services rendered by the third party incident to the processing of an application, such as a charge for a credit report or appraisal; or (2) a fee or deposit in whole or in part imposed on behalf of any other licensee for that person's services rendered in connection with a loan application.However this disclosure requirement does not apply to a mortgage banker or mortgage loan originator who finds a loan or negotiates a land contract, loan or commitment for a loan which will be originated by the mortgage banker or the mortgage loan originator's mortgage banker employer. |
Mortgage Bankers, Loan Originators and Mortgage Brokers Act / Wis. Admin. Code §43.02(11) Residential Mortgage Loans / Wis. Stat. Ann. §138.052(7e)(b) | Application Fee Disclosure | Prior to accepting an application or fee in connection with a loan, a mortgage banker or any other lender which receives an application for a loan must deliver to the applicant a written disclosure which clearly states all of the following: (1) whether an application fee or other charge paid by an applicant in connection with a loan application is refundable in whole or in part if the application is denied or the loan is not closed; (2) whether the terms of the agreement to make the loan, including but not limited to the interest rate and any fees charged in connection with the loan, are fixed through the date of the loan closing; and (3) if the lender may change the terms of the agreement to make the loan if the loan is not closed on or before the date agreed upon, the specific terms which the lender may change. |
| Responsible High-Cost Mortgage Lending Act / Wis. Stat. Ann. §428.203(1) | Balloon Payments | A lender may not make a covered loan that requires, or that permits the lender to require, a payment that is more than twice as large as the average of all earlier scheduled payments. This restriction does not apply to a loan under which the payment schedule is adjusted to account for seasonal or irregular income of the borrower or to a bridge loan with a maturity of less than 1 year that the borrower obtains for the purpose of facilitating the acquisition or construction of a dwelling as the borrower's principal dwelling. |
| Responsible High-Cost Mortgage Lending Act / Wis. Stat. Ann. §428.203(7) | Borrower Interest Worksheet | A lender may not make a covered loan that refinances an existing covered loan that the lender made to the same borrower, unless the refinancing takes place at least 1 year after the date on which the loan being refinanced was made or the refinancing is in the interest of the borrower. Additionally, an assignee or servicer (as defined in 12 U.S.C. §2605(i)(2)) of a covered loan may not make a covered loan that refinances the covered loan, unless the refinancing takes place at least 1 year after the date on which the loan being refinanced was made or the refinancing is in the interest of the borrower. A lender, assignee of a covered loan, or servicer may not engage in a pattern or practice of arranging for the refinancing of covered loans by affiliates or unaffiliated creditors, modifying covered loans, or any other acts for the purpose of evading this restriction. This restriction does not apply to bridge loans. |
| Consumer Transactions - Insurance / Wis. Stat. Ann. §424.304(1) | Borrower's Right to Cancel Insurance | Following the sale of any insurance product, the borrower has the right to cancel the insurance until 30 days after the policy is mailed or otherwise delivered to the borrower. The lender must provide the borrower a notice in duplicate. |
| Mortgage Bankers, Loan Originators and Mortgage Brokers Act / Wis. Admin. Code DFI-Bkg 43.02(12) & (13) | Commitment Letter (Optional Form) | Before the acceptance of a loan commitment fee, for loans secured by a lien on residential property, the licensee must disclose in writing the following information to a prospective borrower: (1) the amount of any commitment fee charged as a separate fee; (2) whether all or any part of the commitment fee is refundable; and, (3) the terms and conditions of the refund, if all or any part of the commitment fee is refundable. In addition, the licensee, at the time of or prior to the issuance of a loan commitment, must provide or disclose in writing to the prospective borrower: (1) a good faith estimate of all charges and information that is required by federal law and any regulations promulgated; (2) any time period established by the licensee for the borrower to accept a loan commitment; and (3) clearly state in all commitments which terms and conditions of the commitment, including the rate of interest and fees, will remain the same as represented in the commitment or are subject to change prior to or at closing. |
Mortgage Bankers, Loan Originators and Mortgage Brokers Act / Wis. Stat. Ann. §224.79(2) | Consumer Disclosure Statement for Brokerage Services | Prior to entering into a contract with an individual to provide brokerage services, a mortgage broker must give the individual a copy of the consumer disclosure statement, explain the content of the statement, and ensure that the individual initials or signs the statement, acknowledging that the individual has read and understands the statement. |
| Responsible High-Cost Mortgage Lending Act / Wis. Stat. Ann. §428.208 | Covered Loan Disclosure | At least 3 business days before making a covered loan to a borrower, a lender must ensure that the borrower has been given the covered loan disclosure, in writing and in a clear and conspicuous format. |
| Residential Mortgage Loans / Wis. Stat. Ann. §138.052(5m)(b) | Election of Property Tax Payment Method | If an escrow is required to assure the payment of property taxes, the lender originating the loan must, prior to the loan closing, provide the borrower with a written notice clearly stating that the borrower may require the escrow agent to make payments from the amount escrowed to pay property taxes. |
| Consumer Credit Transactions / Wis. Stat. Ann. §422.308 | Line of Credit Disclosure | With regard to every open-end credit plan between a creditor, wherever located, and a customer who is a resident of this state and applying for the open-end credit plan, every application for the open-end credit plan, including every application contained in an advertisement, must provide all of the following: (a) the annual percentage rate or, if the rate may vary, a statement that it may do so and of the circumstances under which the rates may increase, any limitations on the increase and the effects of the increase; (b) the date or occasion upon which the finance charge begins to accrue on a transaction; (c) whether any annual fee is charged and the amount of the fee.; and (d) whether any other charges or fees may be charged, what they may be charged for and the amounts of the charges or fees. |
| Responsible High-Cost Mortgage Lending Act / Wis. Stat. Ann. §428.207(2) | Loan Product Choice Disclosure | A lender may not include a prepayment penalty in a covered loan unless the lender offers the customer the option of choosing a loan product without a prepayment penalty. The terms of the offer must be in writing and initialed by the customer. The offer must be in a clear and conspicuous format and include the following disclosure: LOAN PRODUCT CHOICE DISCLOSURE. |
| Mortgage Bankers, Loan Originators and Mortgage Brokers Act / Wis. Stat. Ann. §224.79(1) | Mortgage Broker Agreement - Open End Transaction | Every contract between a mortgage broker and an individual under which the mortgage broker agrees to provide brokerage service to the individual relating to a residential mortgage loan must be in writing, in the form prescribed by rule by the Department. |
| Mortgage Bankers, Loan Originators and Mortgage Brokers Act / Wis. Stat. Ann. §224.77(1)(sm) | Mortgage Loan Originator Signature Required on Application | A residential mortgage loan application must be signed by the mortgage loan originator. |
| Mortgage Bankers, Loan Originators and Mortgage Brokers Act / Wis. Stat. Ann. §224.77(1)(sn) | NMLS Unique Identifier | A mortgage banker, mortgage broker, or mortgage loan originator may not fail to clearly place his, her, or its unique identifier on all residential mortgage loan application forms, solicitations, and advertisements, including business cards, Internet sites, email signature blocks, and on all other documents specified by rule of the Department. |
| Consumer Credit Transactions / Wis. Stat. Ann. §422.305 | Notice to Obligors | Must be provided at the time an obligor becomes obligated on a loan and must be a separate document. In lieu of this notice, a lender may provide an obligor a copy of each instrument, document, agreement and contract which is signed by the borrower and which evidences a borrower's obligation to pay. |
| Mortgage Bankers, Loan Originators and Mortgage Brokers Act / Wis. Stat. Ann. §224.77(1)(y) | Property Insurance in Excess of Replacement Cost | A mortgage banker, mortgage broker or mortgage loan originator, and a member, officer, director, principal, partner, trustee or other agent of a mortgage banker or mortgage broker, may not cause or require a borrower to obtain property insurance coverage in an amount exceeding the replacement cost of improvements on the property, as determined by the property insurer. |
| Miscellaneous Trade Regulations / Wis. Stat. Ann. §134.10(2) | Right to Choose Insurance Agent | A lender must advise borrowers that they have a right to choose the insurance agent or insurer through which the insurance covering the property is to be negotiated. |
| Residential Mortgage Loans / Wis. Stat. Ann. §138.056(6) | Variable Rate Loan Disclosure | Before making a variable rate loan, the lender must disclose all of the following information to at least 1 of the borrowers: (1) that the loan contract contains a variable interest rate provision; (2) an identification of any approved index used in the loan contract and the current base of the approved index; (3) the borrower's prepayment rights on receiving notice of a change in the interest rate; and (4) that a notice of any interest rate increase must be given to the borrower. |
| Precomputed Loan Law / Wis. Stat. Ann. §138.056(2) | Variable Rate Loan Term Restrictions | A variable-rate loan contract (defined as a loan secured by a first lien real estate mortgage which permits interest rates to be increased or decreased) may not have a term of more than 40 years. |