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[Utah Code Table of Contents]
[TITLE 70d. Table of Contents]
70D-1-1 Intent statement.
The Legislature finds that the origination and servicing
of real estate mortgage loans directly affects many businesses
and nearly all homeowners in this state. Many mortgage loans
are originated or serviced by companies which are not subject
to regulation or oversight by any Utah governmental agency.
In view of the importance of mortgage lending and servicing
to residents of this state, the Legislature finds that it
is in the public interest to strengthen the supervision and
regulation of persons and business entities which originate
and service real estate mortgage loans. The Legislature also
recognizes that real estate mortgage lending practices are
the subject of many federal laws. The Legislature does not
intend to duplicate federal laws or impose burdens on mortgage
lenders or servicers which are unnecessary in view of federal
legislation. This chapter shall be construed in order to
give effect to the purposes stated in this section.
1990
70D-1-2 Short title.
This chapter is known as the "Mortgage Lending and Servicing
Act."
1990
70D-1-3 Definitions.
As used in this chapter:
(1) "Department" means the Department of Financial Institutions.
(2) "Mortgage" means a mortgage or deed of trust affecting real property located in this state.
(3) "Mortgage lender" or "lender" means any person who in the regular course of business originates loans secured by mortgages. A person shall not be considered to be a mortgage lender, however, solely because the person, as seller, receives one or more mortgages as security for a purchase money obligation, or because the person receives mortgages as security for an obligation payable on an installment or deferred payment basis and arising out of materials furnished or services rendered in the improvement of real property.
(4) "Mortgage loan" means any loan for a term longer than two years secured by a mortgage and made for personal, family, or household purposes. "Mortgage loan" does not include a loan made by an individual to a member of his family or a loan subject to Title 70C.
(5) "Mortgage loan broker" or "broker" means any person who in the regular course of business assists a person in obtaining a mortgage loan for a fee or other consideration paid directly or indirectly. A person shall not be considered to be a mortgage loan broker, however, solely because of his activities as:
(a) a real estate broker or agent who, for a normal and customary real estate sales commission, assists a buyer in obtaining a mortgage loan in order to buy real property; or
(b) an attorney licensed to practice law in this state who, in the course of his practice as an attorney, assists a person in obtaining a mortgage loan.
(6) "Mortgage loan servicer" or "servicer" means any person who in the regular course of business assumes responsibility for servicing and accepting payments for a mortgage loan.
(7) "Mortgagor" means any person who executes a mortgage or is obligated to pay a mortgage loan.
(8) "Regular course of business" as used in this chapter
does not include a casual lender who makes less than five
mortgage loans per year.
1990
70D-1-4 Exemptions.
The provisions of this chapter do not apply to:
(1) bona fide nonprofit corporations granting first mortgage loans to promote home ownership for low and moderate income borrowers; and
(2) agencies of the federal government or of any state,
county, or municipal government or any quasi-governmental
agency granting first mortgage loans under the specific authority
of the laws of any state or the United States.
1990
70D-1-5 Notice required with loan application.
Every mortgage lender and mortgage loan broker shall give,
to each person from whom it receives or for whom it prepares
a written application for a mortgage loan, a written notice
disclosing, if such is the case, that the mortgage loan applied
for may be sold or assigned, or the servicing of the loan
may be sold or assigned, and that the mortgage loan will
not necessarily be held or serviced by the lender which originates
it. The written notice required by this section shall be
provided at the time of receipt or preparation of the application.
1990
70D-1-6 Fee restrictions.
No mortgage lender or broker may accept any fee or deposit
from an applicant for a mortgage loan unless at the time
the lender or broker accepts the fee there is a written statement
signed by the applicant stating whether or not the deposit
is refundable and describing the conditions under which all
or a portion of the deposit will be refunded to the applicant.
1990
70D-1-7 Notice upon closing - Ongoing duty to notify - Statements required.
(1) At the time of closing of any mortgage loan the lender shall notify the mortgagor in writing of the name of the initial servicer which will be servicing the loan and the address at which loan payments should be made.
(2) (a) In the event the servicing of a mortgage loan is assigned, the servicer which assigned the servicing and the successor servicer shall each mail, at least ten days before the due date of the first mortgage payment due after the assignment, a written notice to the mortgagor, at his last known address contained in the assigning servicer's records, notifying the mortgagor of the assignment of servicing and of the address at which future loan payments should be made.
(b) Unless the assigning servicer regularly provides the information in monthly statements to mortgagors, the notice from the assigning servicer shall also include the following information:
(i) the date and amount of all payments credited to the account within the previous 12-month period;
(ii) the balance in any escrow accounts held by the servicer; and
(iii) the total unpaid balance of the mortgage loan.
(c) The servicers may, at their option, comply with the requirements of this subsection by both signing one notice and causing it to be mailed to the mortgagor.
(d) The signatures on any notice required by this section may be printed, stamped, or other facsimile signatures.
(e) The lender and any subsequent servicer of the loan shall comply with the requirements of Section 7-17-6 .
(3) (a) Inadvertent errors in the notices required in Subsection (2) shall not be construed to waive any payments which would otherwise be due from the mortgagor.
(b) No late payment penalty may be assessed against a mortgagor with respect to a payment which is misdirected because of errors in the notices required in Subsection (2) or failure to timely mail the notices.
(4) A lender or servicer of a mortgage loan must credit to the mortgagor's account any payment received as of the date it was received or by the next banking day, unless:
(a) the payment is insufficient to pay the principal, interest, late charges, and the reserves then due;
(b) the loan has been referred to an attorney because of default; or
(c) the payment is received at an address other than the
address for payment specified in writing to the mortgagor.
1990
70D-1-8 Statement to be provided.
(1) Unless a mortgage loan servicer regularly provides the information described in Subsections (a), (b), and (c) in monthly statements to mortgagors, the servicer shall deliver to a mortgagor, within 15 days after receipt of a written request, a statement of the mortgagor's account including the following information:
(a) the date and amount of all payments credited to the account within the previous 12-month period;
(b) the balance in any escrow accounts held by the servicer; and
(c) the total unpaid balance of the mortgage loan.
(2) The first two statements requested for an account
in any 12-month period shall be provided without charge.
If more than two statements are requested for the same account
in a 12-month period, the servicer may charge a reasonable
fee for the additional statements.
1990
70D-1-9 Record retention.
Every mortgage lender, broker, and servicer shall keep
and maintain at all times in its principal place of business
the records of its mortgage loan transactions as required
by the rules of the department.
1990
70D-1-10 Notification of department - Exemptions.
(1) Except as provided in Subsection (2), no person may engage in the business of making mortgage loans nor may any person engage in the business of being a mortgage loan broker or servicer, without first filing written notification with the department and paying the fees required by this chapter.
(2) The following persons are exempt from the notification requirements contained in this chapter and from the annual fee imposed in Subsection 70D-1-12 (1):
(a) all persons authorized under Utah law or under federal law to do business as a depository institution in this state;
(b) all wholly-owned subsidiaries of depository institutions described in Subsection (2)(a); and
(c) all persons that:
(i) are required to license with the Utah Division of Real Estate pursuant to Title 61, Chapter 2c, Utah Residential Mortgage Practices Act; and
(ii) are not engaged in the business of being a mortgage
loan servicer.
2004
70D-1-11 Form of notice to department.
(1) Persons subject to the notification requirements of Section 70D-1-10 shall file notification with the department at least 30 days before commencing business as a mortgage lender, broker, or servicer in this state, and thereafter on or before January 31 of each year. All persons subject to the notification requirement which are engaged in business as a mortgage lender, broker, or servicer on July 1, 1990, need not file an initial notification but shall file notification on or before January 31, 1991. The notification shall state:
(a) the name of the person;
(b) the name in which the business will be transacted if different from that required in Subsection (a);
(c) the address of the person's principal business office, which may be outside this state;
(d) the addresses of all offices in this state at which the person conducts business as a mortgage lender, broker, or servicer;
(e) if the person conducts business as a mortgage lender, broker, or servicer but does not maintain an office in this state, a brief description of the manner in which the business is conducted;
(f) the name and address in this state of a designated agent upon whom service of process may be made; and
(g) any other information required by the rules of the department.
(2) If information in a notification becomes inaccurate
after filing, no further notification is required until January
31 the following year, unless the department specifically
requests earlier notification.
1990
70D-1-12 Notification fees - Examination fees - Fees not refundable.
(1) (a) Each person required to file notification shall pay a fee of $200 to the department with its initial notification, and shall thereafter pay to the department, on or before January 31 of each year, an annual fee in an amount to be set by rule of the department.
(b) The department shall set the annual renewal fee at an amount which will generate sufficient revenue to cover the department's costs of administering this chapter, but in no event shall the fee exceed $100 per renewal.
(2) If the department has probable cause to believe that a mortgage lender, broker, or servicer has violated the provisions of this chapter, the department may require the lender, broker, or servicer to make any or all of its books and records relating to its activities as a lender, broker, or servicer available to the department or its authorized representative for examination, and to reimburse the department for any travel and other reasonable and necessary costs incurred in the examination, and pay to the department a fee set by the department based on an hourly rate per each examiner, not to exceed $320 per day per examiner.
(3) No portion of any fees paid or owed to the department
under this section are refundable because a person voluntarily
or involuntarily ceases to do business as a mortgage lender,
broker, or servicer during the period covered by the fee
or prior to the time of an examination by the department
of records pertaining to preceding transactions.
1990
70D-1-13 Civil liability - Attorney's fees - Misdemeanor.
(1) A mortgage lender, broker, or servicer who violates any of the provisions of this chapter is liable to any injured party for actual damages. In any action filed to determine the liability of a mortgage lender, broker, or servicer for damages under the provisions of this chapter, the prevailing party is entitled to court costs and attorney's fees.
(2) Any person who wilfully violates any of the provisions
of this chapter is guilty of a class A misdemeanor.
1990
70D-1-14 Enforcement by department - Rulemaking - Federal loan.
(1) The department has the power, within the limitations provided by Title 63, Chapter 46b, Administrative Procedures Act, to:
(a) (i) receive and act on complaints;
(ii) take action designed to obtain voluntary compliance with this chapter; or
(iii) commence proceedings on its own initiative to enforce compliance with this chapter;
(b) counsel persons and groups on their rights and duties under this chapter;
(c) adopt, amend, and repeal rules to:
(i) restrict or prohibit lending or servicing practices which are misleading, unfair, or abusive;
(ii) promote or assure fair and full disclosure of the terms and conditions of agreements and communications between mortgage lenders or servicers and borrowers; or
(iii) promote or assure uniform application of or to resolve ambiguities in applicable state or federal laws or federal regulations; and
(d) employ hearing examiners, clerks, and other employees and agents as necessary to perform its duties under this chapter.
(2) A rule or any part of a rule adopted by the department pursuant to this chapter may not be determined by any judicial or other authority to be invalid in whole or in part unless the judicial or other authority expressly finds that the rule or a part of it:
(a) is arbitrary, capricious, constitutes an abuse of discretion;
(b) exceeds the authority granted to the department by this chapter; or
(c) is otherwise unlawful.
(3) (a) A person subject to this chapter violates this chapter if the person violates a federal law:
(i) that is applicable to the person because of the activities that make the person subject to this chapter; and
(ii) pursuant to the terms of the federal law in effect on the day the person violates the federal law.
(b) The department shall by rule, made in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, and consistent with this chapter, designate which one or more federal laws are applicable to a person described in Subsection (3)(a).
(c) (i) Notwithstanding the other provisions of this chapter, only the department may enforce or bring an action under this chapter for a violation described in this Subsection (3).
(ii) The department may bring an action under this Subsection
(3) in state court.
2006
70D-1-15 Investigation by department.
(1) If the department has probable cause to believe that a mortgage lender, broker, or servicer has violated any law, rule, or regulations relating to its business or any obligation to a mortgagor, it may make an investigation to determine if a violation has been committed. To the extent necessary for this purpose, the department may administer oaths or affirmations under penalty of perjury, and, upon its own motion or upon request of any person, may subpoena witnesses, compel their attendance, adduce evidence under penalty of perjury, and require the production of any matter which is relevant to the investigation, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things of any kind or nature and the identity and location of persons having knowledge of relevant facts, or any other matter reasonably calculated to lead to the discovery of admissible evidence.
(2) If the department requires a person to produce records which are located outside this state, the person shall either make them available to the department at a convenient location within this state or pay the reasonable and necessary expenses for the department to examine them at the place where they are maintained. The department may designate representatives, including officials of the state in which the records are located, to inspect them on its behalf.
(3) Upon failure without lawful excuse to obey a subpoena or give testimony, and upon reasonable notice to all affected persons, the department may apply to the Third District Court or to any other district court for an order compelling compliance.
(4) Unless otherwise required by law the department may not make public the name or identity of a person whose acts or conduct it investigates pursuant to this section or the facts disclosed in the investigation.
(5) Subsection (4) does not apply to disclosures in enforcement
proceedings conducted pursuant to this chapter.
1990
70D-1-16 Department orders.
(1) If the department determines that any person engaging in business as a mortgage lender, broker, or servicer is violating, has violated, or the department has reasonable cause to believe is about to violate any provision of this chapter or any rule of the department made under this chapter, the department may order the person to cease and desist from committing any further violations, and in the most serious instances may prohibit the person from continuing to engage in business as a mortgage lender, broker, or servicer.
(2) The department shall afford an opportunity for hearing upon request of any person alleged to have violated this chapter if the request is filed with the department within 30 days after the person requesting the hearing first receives notice of the allegations.
(3) (a) If the department determines that a practice which it has alleged is unlawful should be enjoined during the pendency of any proceedings incident to that allegation, it may issue a temporary order at the commencement of the proceedings or at any time thereafter which is fully binding on the person to whom the temporary order is directed until the proceedings are concluded or the temporary order is modified or dissolved by the department.
(b) Any person to whom a temporary order is directed may request a hearing concerning the order, which shall be held at the earliest mutually convenient time, but in no event more that ten days after the person's request is received by the department unless the department and the person requesting the hearing mutually agree to a later time.
(c) Every temporary order shall include findings and conclusions in support of it.
(d) For purposes of Section 63-46b-20 , an immediate and significant danger to the public health, safety, or welfare exists if the department finds from specific facts supported by sworn statement or the records of a person subject to the order that loan applicants or mortgagors are otherwise likely to suffer immediate and irreparable injury, loss, or damage before proceedings incident to a final order can be completed.
(4) The department may not award damages or penalties against a mortgage lender, broker, or servicer.
(5) (a) Any order issued by the department under authority of this chapter shall be in writing, be delivered to or served upon the person affected, and specify its effective date, which may be immediate or at a later date.
(b) Orders shall remain in effect until withdrawn by the
department or until terminated by a court order. The order
of the department, upon application made on or after its
effective date to the Third District Court, or in any other
district court, may be enforced ex parte and without notice
by an order to comply entered by the court.
1990
70D-1-17 Relief from department order.
Any person aggrieved by any rule, order, temporary order,
decision, ruling, or other act or failure to act by the department
under this chapter is entitled to judicial review as provided
under Title 63, Chapter 46b, the Administrative Procedures
Act.
1990
70D-1-18 Civil liability.
Nothing in this chapter is intended to limit any civil
liability which may exist against a mortgage lender, broker,
or servicer for breach of contract or other wrongs committed
against a mortgagor.
1990
70D-1-19 Definitions.
As used in this chapter:
(1) "Manufactured home" means a transportable factory built housing unit constructed on or after June 15, 1976, according to the National Manufactured Housing Construction and Safety Standards Act of 1974, in one or more sections, which, in the traveling mode, is eight body feet or more in width or 40 body feet or more in length, or when erected on site, is 400 or more square feet, and which is built on a permanent chassis and designed to be used as a dwelling with or without a permanent foundation when connected to the required utilities, and includes the plumbing, heating, air-conditioning, and electrical systems.
(2) "Mobile home" means a transportable factory built housing unit built prior to June 15, 1976, in accordance with a state mobile home code which existed prior to the National Manufactured Housing Construction and Safety Standards Act of 1974.
(3) "Permanently affixed" means anchored to, and supported
by, a permanent foundation or installed in accordance with
the manufactured housing installation standard code referred
to in Section
58-56-4
.
2004
70D-1-20 Qualification of manufactured home or mobile home as improvement to real property - Requirements - Removal from property.
(1) Except as provided in this section, for purposes of this chapter, a manufactured home or mobile home shall be considered personal property.
(2) Notwithstanding Subsection (1), for purposes of this chapter, if the requirements of this section are met, a manufactured home or mobile home shall be:
(a) considered to be an improvement to real property; and
(b) considered as real property.
(3) A manufactured home or mobile home shall be considered to be an improvement to real property if:
(a) the manufactured home or mobile home is permanently affixed to real property;
(b) the person seeking to have the manufactured home or mobile home considered to be an improvement to real property:
(i) owns the manufactured home or mobile home; and
(ii) (A) owns the real property to which the manufactured home or mobile home is permanently affixed; or
(B) leases the real property to which the manufactured home or mobile home is permanently affixed and the real property is financed in accordance with Subsection (4); and
(iii) meets the requirements of Subsections (5) and (6); and
(c) in accordance with Subsection (7), the following are recorded by the county recorder:
(i) the affidavit of affixture described in Subsection (7); and
(ii) the receipt of surrender described in Subsection (7).
(4) For purposes of Subsection (3)(b)(ii)(B), a manufactured home or mobile home shall be financed in accordance with the guidelines established by:
(a) the Federal Home Loan Mortgage Corporation;
(b) the Federal National Mortgage Association;
(c) the United States Department of Agriculture; or
(d) another entity that requires as part of the entity's financing program restrictions:
(i) on:
(A) ownership; and
(B) actions affecting title and possession; and
(ii) if the restrictions described in Subsection (4)(d)(i) are similar to restrictions imposed by one or more of the entities described in Subsections (4)(a) through (c).
(5) (a) An owner of a manufactured home or mobile home seeking to have the manufactured home or mobile home considered to be an improvement to real property and considered real property shall complete an affidavit of affixture.
(b) An affidavit of affixture described in Subsection (5)(a) shall contain:
(i) the vehicle identification numbers of the manufactured home or mobile home;
(ii) the legal description of the real property to which the manufactured home or mobile home is permanently affixed;
(iii) a statement certified by the assessor of the county in which the manufactured home or mobile home is located that the owner of the manufactured home or mobile home:
(A) is not required to pay personal property tax in this state on the manufactured home or mobile home; or
(B) if the manufactured home or mobile home is subject to personal property tax in this state, has paid all current and prior year personal property taxes assessed on the manufactured home or mobile home;
(iv) a description of any security interests in the manufactured home or mobile home; and
(v) a receipt of surrender issued by the Motor Vehicle Division of the State Tax Commission in accordance with Subsection (6).
(6) (a) The Motor Vehicle Division of the State Tax Commission shall issue a receipt of surrender under Subsection (5)(b)(v) if an owner described in Subsection (5) surrenders to the Motor Vehicle Division the:
(i) manufacturer's original certificate of origin; or
(ii) title to the manufactured home or mobile home.
(b) After issuing the receipt of surrender in Subsection (6)(a), the Motor Vehicle Division shall maintain a permanent record of:
(i) the receipt of surrender; and
(ii) the certificate or title described in Subsection (6)(a)(ii).
(7) (a) An owner shall present to the county recorder:
(i) the affidavit of affixture described in Subsection (5); and
(ii) the receipt of surrender described in Subsection (6).
(b) A county recorder who receives an affidavit of affixture and receipt of surrender described in Subsection (7)(a) shall record the receipt of surrender and affidavit of affixture.
(c) An owner of property described in Subsection (5) shall provide a copy of the recorded affidavit of affixture to:
(i) the Motor Vehicle Division of the Tax Commission; and
(ii) the assessor of the county in which the manufactured home or mobile home is located.
(8) A lien on the manufactured home or mobile home that is considered to be an improvement to real property shall be perfected in the manner provided for the perfection of a lien on real property.
(9) If a manufactured home or mobile home owner separates the manufactured home or mobile home from the real property, the owner may acquire a new title by submitting to the Motor Vehicle Division of the State Tax Commission:
(a) a recorded affidavit that the manufactured home or mobile home has been removed from the real property; and
(b) an application for a new title.
(10) The determination of whether a manufactured home
or mobile home is considered real property or personal property
under this section may not be considered in determining whether
the manufactured home or mobile home is real property or
personal property for purposes of taxation under Title 59,
Chapter 2, Property Tax Act.
2004
70D-1-21 Ordinance or law by political subdivision prohibited.
(1) No county subject to Title 17, and no municipality subject to Title 10, shall enact any ordinance or law that regulates the terms of home loans or that makes the eligibility of any person to do business with the county or municipality dependent upon the terms of home loans originated or serviced by such person.
(2) The prohibition in Subsection (1) does not apply to
terms of loans funded in whole or in part with money provided
or administered by the county or municipality.
2004
