Florida Mortgage 14-Hour Course

Florida Mortgage Brokering/Lending
14-Hour Professonal Continuing
Education Course
2 0 0 8 E d i t i o n

ii Bert Rodgers Schools of Real Estate, Inc.
Bert Rodgers Schools would like to inform you about recent changes to Chapter 494.0029,
F.S., Chapter 494.00295, F.S., and Florida Office Financial Regulation Rule 69V-40.0271 that
directly affect Mortgage Brokering/Lending professional continuing education and became
effective October 1, 2007.
This 14-hour course follows the new requirements and is accepted for professional continu-
ing education rule by the Florida Office of Financial Regulation (OFR) for this course.
The most significant change for the 14 hours of professional continuing education is
the addition of a comprehensive (100-question) final examination for distance edu-
cation courses. A minimum score of 75% must be achieved to pass this course.
Another significant change—that does not affect Loan Originators or Principal Represent
atives is the requirement for permitted schools to report the completion of professional con-
tinuing education courses to the OFR for licensed Mortgage Brokers. The OFR is requiring
that licensed Mortgage Brokers provide their Audit Number to the school where
they are taking their professional education. Their reporting system requires Audit
Numbers for accurate reporting. Bert Rodgers Schools is required to report education for
Mortgage Broker licenses within 5 days of the completion date.
And the final significant change affects electronically transmitted courses (Internet/online). All
electronically transmitted courses are required to be timed to verify that 14 hours was spent
on the course material. Due to these timing requirements Bert Rodgers Schools is not
currently offering this course online.
We appreciate your patience regarding these new requirements and be assured Bert Rodgers
Schools will keep providing professional continuing education that meets Florida’s require-
ments.
Thank you for allowing Bert Rodgers Schools to provide your professional continuing
education and we look forward to serving you now and in the future.
Sincerely,
Lori Rodgers, President
Dear Mortgage Professional:

Florida Mortgage Brokering/Lending 14-Hour Professional Continuing Education Course iii
Welcome to Bert Rodgers Schools!
It’s Easy to Meet Your Requirement with Bert Rodgers Schools!
Let the ease of distance learning work for you. With this book, everything you need is at your finger-
tips.
Step 1 Read the material in this book. There are Module Review Exercises at the end of each Module
to help reinforce your knowledge of the material.
Step 2 Take the required Final Examination at the end of this book.*
Step 3 Submit your Answer Sheet along with your Registration Form by mail or fax.
*A 100-question final examination is now required per Chapter 494.00295(3)(b), F.S. and Florida Office of Financial Regulation
Rule 69V-40.0271.
How Do I Receive My Certificate of Completion?
Mail: Use the enclosed envelope to send us your Answer Sheet, Registration Form, and pay-
ment. We will grade your exam and mail your certificate of completion the following busi-
ness day.
Fax or For even faster results, choose one of our convenient Priority Grading Services and receive
Email: your certificate of completion the same day or the next day.
Important Note: Do not send your certificate of completion to the Office of Financial Regulation unless otherwise requested.
Retain your certificate of completion for at least 4 years following the end of the renewal period.
Need Help?
Call us toll-free at 800-432-0320 and talk to a representative who will answer all your administrative
questions quickly and professionally. For instructional questions, please leave a message for Instructor/
Author Janine Spiegelman at ext. 368 and she will respond within one business day.
Florida statutes and department rules require all Loan Originators, Principal Representatives,
and Mortgage Brokers to complete 14 hours of professional continuing education every 2 years.
Loan Originators and Principal Representatives deadline is August 31, 2008. Mortgage
Brokers and Associates deadline is August 31, 2009.
Take full advantage of the benefits of distance education! Bert Rodgers Schools is permitted and
accredited by the Florida Office of Financial Regulation. You can study on your own schedule, at
home or work. There is no need to travel to attend class or seminars. This book contains every-
thing you need!
You will appreciate the affordability of the Bert Rodgers course. At $39.95 for 14 hours, it is a
true value. Optional Module Review Exercises are provided to ensure your comprehension of
the course material and the newly-required final examination is included!
We have been providing high quality education to Florida professionals since 1958. Rely on our
fast, friendly, professional service representatives to help with any questions you may have! We
look forward to helping you meet your education needs.

iv Bert Rodgers Schools of Real Estate, Inc.
Frequently Asked Questions
Is professional continuing education required before we can renew
our current Mortgage Lender licenses by August 31, 2008?
Yes. Mortgage Lenders, Correspondent Mortgage Lenders, and Mortgage Lenders pursuant to the Savings
Clause, must certify that their Principal Representatives and Loan Originators have completed 14 hours of profes-
sional continuing education at the time of their renewal in August 31, 2008.
When are Principal Representatives and Loan Originators required to complete their 14 hours of
professional continuing education?
14 hours of professional continuing education must be completed prior to submission of the Mortgage
Lender’s renewal form, which is due August 31, 2008. At the time of the Mortgage Lender’s renewal, they
must certify that their Principal Representatives and Loan Originators have had at least 14 hours of professional
continuing education from an accredited Mortgage Business School within the past 2 years. These are the same
persons that will be reported on licensee’s quarterly report when due.
Do I submit my certificate to the Office of Financial Regulation?
No. Do not send your certificate of continuing education to the Office. You will be required to certify at the time
of renewal that you have satisfied the continuing education requirement. In accordance with Rule 69V-40.043(5),
F.A.C., a mortgage broker is responsible for maintaining copies of the certificate of completion for all continuing
education courses completed and supply them to the Office upon request. Chapter 494.00295(1), F.S., requires
that licensees maintain records documenting compliance with this requirement for a period of 4 years.
My mortgage broker license is currently inactive as I did not renew in August 2007. Is Continuing
Education required before I can reactivate my inactive individual Mortgage Broker license for
the period 2007-2009?
Yes. You will need to obtain a reactivation form from the Office upon which you will be required to certify that you
have satisfied the continuing education requirement. Completion of this process will only reactivate your license
through August 31, 2009.
Complete at least 14 hours of professional continuing
education prior to the renewal deadline of 8/31/09. Also
required during each 2 year renewal period thereafter.
Certify completion of at least 14 hours of continuing
education for the 2007 renewal. Also required for each 2
year renewal period thereafter.
Note: The above information is subject to change without notice. Bert Rodgers Schools is not responsible for its content. Consult the source below for the most current
information. *Internet filing and payment services available where indicated.
Source: www.flofr.com/finance/mbbmlchart.htm and www.flofr.com/finance/mbchart.htm (Florida Office of Financial Regulation website)
Ensure the Principal Representatives and Loan Originators have completed at least
14 hours of continuing education prior to submission of the renewal which is due
08/31/08 for the 2008-2010 renewal period.
Certify the Principal Representatives, and every Loan Originator have completed
at least 14 hours of professional continuing education prior to submission of your
renewal which is due 08/31/08 for the 2008 - 2010 renewal period.
Compliance Requirements
MORTGAGE MORTGAGE LENDER
BROKER CORRESPONDENT MORTGAGE SAVING CLAUSE MORTGAGE LENDER
TYPE INDIVIDUALS LENDER/BRANCH LENDER/BRANCH TRANSFER/BRANCH SAVINGS CLAUSE
LICENSE TYPE MB CL ML MLST MLS
CONTINUING EDUCATION
REQUIREMENTS

RENEWAL FEE MAIN OFFICE* $150 $475 /$325 $575/$325 $575 /$325 $575
RENEWAL FORM* OFR-F-103
RENEWAL DEADLINE 8/31 of each odd 8/31 of each even 8/31 of each even
numbered year numbered year numbered year
RENEWAL/CONTINUING
EDUCATION CERTIFICATION*

REINSTATEMENT FEE* $100 + renewal fee $100 + renewal fee

REINSTATEMENT DEADLINE 2 years after end 6 months after end 6 months after end
of biennial period of biennial period of biennial period

REINSTATEMENT RETROACTIVE No No No No No

Florida Mortgage Brokering/Lending 14-Hour Professional Continuing Education Course
Bert Rodgers Schools of Real Estate
1855 Porter Lake Drive, Sarasota, Florida 34240-7893
Tel. (941) 378-2900 • Fax (941) 378-3883
Toll Free (800) 432-0320
Instructor and Administrative Support
Telephone Hours: M-F 8:30 a.m. - 5:15 p.m.
Email: MBinfo@bertrodgers.com
www.bertrodgers.com
Florida Office of Financial Regulation
Division of Finance
200 East Gaines Street
Tallahassee, FL 32399-0376
(850) 410-9895 • Fax: (850) 410-9882
(Initial license or license renewal questions)
Telephone Hours: M-F 8:00 a.m. – 5:00 p.m.
For additional information, visit the Florida Office of
Financial Regulation, Division of Finance website:
www.flofr.com/Finance/index.htm
Directory

vi Bert Rodgers Schools of Real Estate, Inc.
Acknowledgements
Bert Rodgers Schools of Real Estate, Inc. expresses our gratitude and appreciation to the
thousands of Mortgage Professionals who have completed our 14-hour course to fulfill
their continuing education requirements.
We would like to thank the author of this edition, Janine Spiegelman. We recognize her
expertise and appreciate her participation.
We also want the Student Services Department—both the customer contact employees
and those “behind the scenes” processing all the paperwork—to know how much we
appreciate their hard work, day after day, making sure our valued students are satisfied
customers.
And we certainly are grateful to our Publications Department staff. No matter what obsta-
cles you encounter in putting together these editions, you always create a product that,
year after year, our customers say is by far the best in the industry.
Finally, Bert Rodgers Schools would like to thank Julie Wild of Wild Dezign for her typeset-
ting expertise and patience, and Mark Mazzuki of Digital Ink Design Group for his cover
design of this edition and his design of all our marketing materials.
Lori J. Rodgers, President

Table of Contents
Founder
Bert Rodgers
President
Lori J. Rodgers
Administrative Vice
President
William E. Giffard
Director of
Information Systems
Alison Harner
Director of Finance
Aaron Pulone
Director of Operations
Kelli Finnigan
Project managers
Valerie Churchillo
Lisa Lacey
Instructor/AUTHOR
Janine Spiegelman
Project Coordinator
Jerry Schmitt
Student Services
supervisor
Patti Pasquini
Student Services
Colletta Finnigan
Brenda Fletcher
Mark Forsman
Jenncie Grove
Mary Killoran
Shirley Samson
Kayla Smillie
Typesetting
Wild Dezign
Printing
Action Printing
2008 FLORIDA MORTGAGE BROKERING/LENDING 14-Hour
PROFESSIONAL Continuing Education Course
w MODULE 1
Florida Mortgage Brokerage and
Lending Act Rules and Regulations | 1
w MODULE 2
Credit Scores and Credit Scoring | 27
w MODULE 3
Exotic and Nontraditional Mortgages | 33
w MODULE 4
Subprime Loans and Prepayment
Penalties | 41
w MODULE 5
Lack of Credit Documentation
Promotes Mortgage Fraud | 49
w MODULE 6
Updates on Flood and Hazard Insurance | 55
w MODULE 7
Affordable Housing | 65
w MODULE 8
New and Updated Fannie Mae/Freddie Mac
Appraisal and Property Report Forms | 71
Final Examination | 82
Instructions | 92
Registration Form
Answer Sheet

viii Bert Rodgers Schools of Real Estate, Inc.
Janine Spiegelman has been a licensed Florida Mortgage Broker since
1987 and has taught the mortgage pre-licensure course since 1999. She
has worked for the State of Florida, Department of Banking and Finance
as a Financial Examiner/Analyst II. In the mortgage field, she has held
every position possible–processor, closer, underwriter, post closer, mort-
gage broker, and wholesale account executive. She has her own real
estate brokerage and enjoys working with first-time home buyers. Janine is our continuing
education instructor for real estate and mortgage brokering/lending.
Bert Rodgers Schools of Real Estate, Inc. ©2007, 2008
All rights reserved, including the right to reproduce this manual or any portion of this manual in any form, or to use it for
teaching purposes without the express written consent of the copyright holder.
This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is
provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service.
If legal advice or other expert assistance is required, the services of a competent professional person should be sought.
Bert Rodgers Schools of Real Estate, Inc. shall not be liable in any way for failure to receive and/or process your
Registration/Affidavit Form within any specific time period. It is your responsibility to ensure that you have complied with
your license renewal requirements in a timely manner.
Bert Rodgers Schools of Real Estate, Inc. recognizes and respects its students’ privacy. Course records are confidential,
and the School does not sell or rent students’ names or other information to any company or organization.
Cover design: Digital Ink Design Group
ISBN: 1-891753-46-0
Printed in the United States of America
Author Biography
14HourBroker.indb 8 5/1/08 10:30:22 AM

© 2008 Bert Rodgers Schools of Real Estate, Inc.
Learning Objectives
After completing this module, you should be able to:
Florida Mortgage Brokerage and
Lending Act Rules and Regulations
M O D U L E 1
1. Summarize the changes made to Chapter 494
F.S. since October 1, 2006.
2. List the changes to Chapter 69V-40 Florida
Administrative Code effective March 23, 2008.
3. Summarize the organizational structure of
the Florida Department of Financial Services,
including the Financial Services Commission
and the Office of Financial Regulation.
4. Explain the powers and duties of the Financial
Services Commission and the Office of
Financial Regulation.
5. Explain the penalties, which could be imposed
for a violation of Chapter 494, F.S.
6. Identify the prohibited practices pursuant to
Chapter 494.
7. Explain the purpose for the enactment of the
Florida Fair Lending Act.
8. Identify the types of transactions covered by
the Florida Fair Lending Act.
9. Define a high-cost home loan.
10. Identify the acts prohibited by the Florida Fair
Lending Act.
11. Identify the disclosure requirements of the
Florida Fair Lending Act.
12. Explain the enforcement and penalties of any
violation of the Florida Fair Lending Act.
The Department of Financial Services regulates
mortgage broker individuals (MB), mortgage broker-
age businesses (MBB), mortgage lenders (ML), and
correspondent mortgage lenders (CL) by the use of
Florida Statutes (F.S.) and the Florida Administrative
Code (F.A.C.). Chapter 494, F.S., is known as the
Florida Mortgage Brokerage and Mortgage Lending
Act Rules and Regulations. Chapter 494 originally
became effective in October 1991, and several sig-
nificant amendments have been made since 1991.
Chapter 69V-40 of the Florida Administrative
Code (formerly Chapter 3D-40 F.A.C.) is called
Rules Regulation Mortgage Brokers. Certain minor
changes to Chapter 69V-40 were made effective on
August 2, 2002, and a few minor amendments were
made between 2003 and 2004. The purpose of this
module is to review Florida mortgage brokerage rules
and regulations including major changes effective
October 1, 2006 and October 1, 2007.
In 2002, legislation placed the regulation of bank-
ing, securities, and insurance under two appointed
officials who are selected by the Financial Services
Commission. The Financial Services Commission
serves as agency head for the Office of Financial
Regulation (OFR or Office) and the Office of
Insurance Regulation (OIR). The commission is
composed of the governor and Cabinet. The com-
mission appoints the commissioner of the OFR and
the commissioner of the OIR. Although both offices
are administratively housed within the Department
of Financial Services, they report directly to the
Financial Services Commission, headed by the newly
elected Chief Financial Officer, Alex Sink. The Office
of Financial Regulation has offices located in Miami,
Fort Lauderdale, West Palm Beach, Tampa, Orlando,
Jacksonville, Pensacola, and Fort Myers. The regional
offices are primarily responsible for conducting exam-
inations to ensure regulatory compliance by financial
institutions and financial service companies.
The Office is dedicated to safeguarding the private
financial interests of the public by licensing, char-
tering, examining, and regulating financial institu-
tions and financial service companies in the State
of Florida. The Office strives to protect consumers
from financial fraud while preserving the integrity
of Florida’s markets and financial service industries.
INTRODUCTION

Module 1
This is the Office’s mission statement found at
www.flofr.com/Director/abouttheoffice.htm
Within the Office are 2 Divisions. The first is the
Division of Financial Institutions. This division
licenses, examines, and regulates all state-authorized
or state-chartered financial institutions to ensure they
operate in a safe and sound manner and in compliance
with applicable statutes and rules. Those institutions
include commercial banks, credit card banks, credit
unions, non-deposit trust companies, savings banks,
savings and loans, and international bank offices.
The second division within the Office is the Division
of Securities and Finance. Within this division are
three Bureaus— the Bureau of Financial Regulation;
the Bureau of Securities Regulation; and the Bureau
of Regulatory Review. The Bureau of Finance
Regulation regulates retail installment sales busi-
nesses, consumer finance companies, mortgage bro-
kers and lenders, collection agencies, and money
transmitters. The bureau provides consumer protec-
tion from illegal or improper activities performed by
these companies. The Bureau of Securities Regulation
protects the public from investment and securities
fraud. The Bureau of Regulatory Review reviews all
applications for a financial services firm or a securi-
ties firm, reviews individual applications, and either
approves, places licensing restrictions, or denies licen-
sure based upon its findings (See Figure 1.1).
RECENT CHANGES IN FLORIDA STATUTES
REGULATING MORTGAGE BROKERAGE
AND MORTGAGE LENDING
The revisions, amendments, and additions that
became effective October 1, 2007.
N E W F O R 2 0 0 7
Definitions
Expands the definition of loan originator to include
account executives/wholesale representatives. There
fore, these individuals are required to be included in
the licensee’s Quarterly Reports and these loan origina-
tors must complete 14 hours of professional continuing
education biennially (Chapter 494.001(2), F.S.).
A mortgage loan application is a submission of the
borrower’s financial information in anticipation of a
credit decision regarding a specific property. If the
submission does not identify a specific property, then
the application is for a prequalification and not an
application for a mortgage loan. Once a property has
been identified, this converts it to an application for a
mortgage loan (Chapter 494.001(32), F.S.).
Clarifies that the mortgage brokerage fee includes
the total compensation to be received by a mortgage
brokerage business for acting as a mortgage broker
(Chapter 494.001(33),F.S.).
Business day means any calendar day except for
Sunday or a legal holiday (Chapter 494.001(34), F.S.).
Commissioner
Financial Regulation
Deputy Commissioner
Financial Regulation
Chief, Financial
Investigations
General Counsel Inspector General
Director
Division of Financial
Institutions
Director
Division of Securities
Office of Financial Regulation
Chief, Bank
Regulation District I
Chief, Credit Union
Regulation
Chief, Securities
Regulation
Chief, Finance
Regulation
Chief, Regulatory
Review
Chief, Money
Transmitter
Director, Cabinet
Legislative Affairs
Director
Division of Finance
Chief, Bank
Regulation District II
Chief, Regulatory
Review
Director of
Auditing
SMA III
Auditor
Figure 1.1 Source: www.flofr.com/Director/OFRorgchart.pdf
Office of Financial Regulation Flow Chart

Florida Mortgage Brokerage and Lending Act Rules and Regulations
Cease and Desist Orders; Administrative
Fines; Refund Orders
Authorizing the Office to take administrative action
against mortgage business schools similar to other
license types (Chapters 494.0014(4) and 494.0029(1)(f),
F.S.).
Mortgage Business Schools
Mortgage business schools must conduct classes on
the basis of a 50-minute classroom hour (Chapter
494.0029(2)(g), F.S.).
Each mortgage business school is responsible for
developing procedures to confirm and for actually
confirming the identity of each student attending any
course offering (Chapter 494.0029(2)(h), F.S.).
Professional Continuing Education
Of the 14 hours of required professional continuing
education, a minimum of 4 hours shall cover the pro-
visions of Chapter 494, F.S. and the rules in Chapter
69V-40, F.A.C. The professional continuing educa-
tion requirements are waived for the license renewal
of a mortgage broker who completed the 24-hour pre-
licensing classroom education requirements within 90
days of the biennial license period immediately follow-
ing the period in which the person became licensed as
a mortgage broker. Previously, the mortgage broker
was exempt from professional continuing education
for the biennial period in which they became licensed.
Now, the time is reduced to 90 days prior to the expi-
ration of the license (Chapter 494.00295(1), F.S.).
Added that the Office can offer professional continu-
ing education programs (Chapter 494.00295(2), F.S.).
Electronically transmitted professional continuing
education courses shall require that the course par-
ticipant has logged the required number of hours for
the particular timed module; has completed a test that
comprehensively covers the course content for the
particular timed module; and has correctly answered
all test questions for the particular timed module
(Chapter 494.00295(3)(a)1.2.3, F.S.).
All distance education course participants shall suc-
cessfully complete a 100 question test with a score of
at least 75% in order to receive a certificate of course
completion. The test shall comprehensively cover the
course content (Chapter 494.00295(3)(b), F.S.).
The commission shall adopt rules pursuant to
ss.120.536(1) and 120.54 necessary to administer
(Chapters 494.00295 and 494.00295(4), F.S.).
Mortgage Broker’s License
Added the requirement that an applicant for licen-
sure as a mortgage broker needs to have a high school
diploma or its equivalent. (Chapter 494.0033(2)(a),
F.S.).
Added that the commission may adopt rules prescrib-
ing an additional fee not to exceed $50.00 for an appli-
cant to review their completed and graded mortgage
broker test. Also added that the commission may
adopt rules regarding the administration of the test-
ing process, including, but not limited to, procedures
relating to the pretest registration, test security, scor-
ing, content, result notification, retest procedures and
fees, post examination review, and challenge provisions
(Chapter 494.0033(2)(b), F.S.).
Mortgage Broker Disclosures
The mortgage brokerage business and the borrower
must sign and date a written mortgage brokerage
agreement in order for the mortgage brokerage busi-
ness to receive a mortgage brokerage fee (Chapter
494.0038(1)(a)1, F.S.).
On face-to-face interviews, the written mortgage bro-
kerage agreement must be completed, signed, and
dated, within 3 business days of receipt of an appli-
cation. For mail away applications, the licensee bears
the burden of proving that the borrower received and
approved the written mortgage brokerage agreement
and the written mortgage brokerage agreement was
sent within 3 business days of the licensee’s acceptance
of the application (Chapter 494.0038(1)(a)2., F.S.).
If the mortgage brokerage business is to receive any
payment of any kind from the lender, then the maxi-
mum total dollar amount of the payment must be
disclosed to the borrower in the written mortgage bro-
kerage agreement as described in 494.0038(1)(a)1.2.
Previously, it was disclosed as a percentage range and
not a dollar amount. The mortgage brokerage agree-
ment must state the nature of the relationship with
the lender, describe how compensation is paid by the
lender, and describe how the mortgage interest rate
affects the compensation paid to the mortgage broker-
age business (Chapter 494.0038(1)(b)1, F.S.).
The exact amount of any payment of any kind by the
lender to the mortgage brokerage business must be dis-
closed in writing to the borrower within 3 business days
after the mortgage brokerage business is made aware
of the exact amount of the payment from the lender
but not less than 3 business days before the execution
of the closing or settlement statement. The licensee
bears the burden of proving such notification was pro-
vided to the borrower (Chapter 494.0038(1)(b)2, F.S.).

Module 1
Mortgage Broker Disclosures and
Requirements of Licensees under
Chapters 494.006-494.0077
A good faith estimate signed and dated by the bor-
rower, which discloses the total amount of each of
the fees which the borrower may reasonably expect to
pay if the loan is closed, must be given within 3 busi-
ness days of receipt of the application by the mortgage
brokerage business or within a reasonable time for a
correspondent or mortgage lender. The good faith
estimate must identify the recipient of all payments
charged the borrower and, except for all fees to be
received by the mortgage brokerage business and the
mortgage lender or the correspondent lender, may be
disclosed in generic terms, such as but not limited to,
paid to lender, appraiser, officials, title company, or
any other third-party service provider. The licensee
bears the burden of proving such disclosures were pro-
vided to the borrower (Chapters 494.0038(2)(c) and
494.0067(8), F.S.).
Within 3 business days of receipt of the application
by the broker or lender, complete, written, signed and
dated by the borrower, adjustable rate mortgage loan
disclosures must be provided in a format prescribed by
ss. 226.18 and 226.19 of Regulation Z of the Board of
Governors of the Federal Reserve together with the
Consumer Handbook on Adjustable Rate Mortgages
(CHARM Booklet). The licensee bears the burden
of proving such disclosures were provided to the bor-
rower (Chapters 494.0038(3) and 494.0067(11), F.S.).
In every mortgage loan transaction, each licensee
under ss. 494.003-494.0043 or ss. 494.006-0077, shall
notify a borrower of any material changes in the terms
of a mortgage loan previously offered to the borrower
within 3 business days after being made aware of such
changes by the lender but not less than 3 business days
before the signing of the settlement or closing state-
ment. The licensee bears the burden of proving such
notification was provided and accepted by the bor-
rower. A waiver of this requirement can be granted by
the borrower to meet a bona fide personal financial
emergency. The imminent sale of the borrower’s home
at foreclosure during the 3-day period before the sign-
ing of the settlement or closing statement constitutes
an example of a bona fide personal financial emer-
gency. The borrower must provide the licensee with
a dated written statement that describes the personal
financial emergency, waives the right to receive the
notice, bears the borrower’s signature, and is not on
a printed form prepared by the licensee for the pur-
pose of such a waiver (Chapters 494.004(8)(a)(b) and
494.0067(12)(a)(b), F.S.).
Renewal of Mortgage Lender’s License; Branch
Office License Renewal and Requirements of
Licensees under Chapters 494.006-494.0077
Lenders must certify that they currently meet the
minimum net worth requirements and that their prin-
cipal representative and all of their loan originators
who are not currently licensed as mortgage brokers
have completed the 14 hours of professional continu-
ing education requirements in order to renew their
license (Chapters 494.0064(1) and 494.0067(10)(a),
F.S.).
Administrative Penalties, Fines and License
Violations
Any violation of the federal Real Estate Settlement
Procedures Act or the federal Truth in Lending Act
will also be a violation of Chapter 494, F. S. (Chapters
494.0041(2)(v) and 494.0072(2)(v), F.S.).
Added that a principal representative of a mortgage
lender or correspondent mortgage lender is subject
to disciplinary action for violations by associates or
employees in the course of an association or employ-
ment with the correspondent mortgage lender or the
mortgage lender. The principal representative is only
subject to suspension or revocation for associate or
employee actions if there is a pattern of repeated vio-
lations by associates or employees or if the principal
broker or principal representative had knowledge of
the violations (Chapter 494.0072(5), F.S.).
Mortgage Lender or Correspondent
Mortgage Lender When Acting As a
Mortgage Brokerage Business
Added that when a mortgage lender or correspon-
dent lender acts as a mortgage brokerage business, the
provisions of ss. 494.004(8) apply (Chapter 494.0073,
F.S.).
Mortgage Fraud
Created Florida Statute 817.545, Mortgage Fraud.
Defined the term “mortgage lending process” to
mean the process through which a person seeks or
obtains a residential mortgage loan, including, but not
limited to, the solicitation, application or origination,
negotiation or terms, third-party provider services,
underwriting, signing and closing, and funding of the
loan. Documents involved in the mortgage lending
process include, but are not limited to, mortgages,
deeds, surveys, inspection reports, uniform residential
loan applications, or other loan applications; appraisal
reports; HUD-1 settlement statements; supporting
personal documentation for loan applications such
as W-2 forms, verifications of income and employ-
ment, credit reports, bank statements, tax returns, and

payroll stubs; and any required disclosures (Chapter
817.545(1), F.S.).
A person commits the offense of mortgage fraud if,
with the intent to defraud, the person knowingly:
1. makes any material misstatement, misrepresenta-
tion, or omission during the mortgage lending
process with the intention that the misstatement,
misrepresentation, or omission will be relied on by
a mortgage lender, borrower, or any other person
or entity involved in the mortgage lending process;
however, omission on a loan application regarding
employment, income, or assets for a loan which
does not require this information are not consid-
ered a material omission for purposes of this sub-
section. 817.545(2)(a)
2. uses or facilitates the use of any material misstate-
ment, misrepresentation, or omission during the
mortgage lending process with the intention that
the material misstatement, misrepresentation, or
omission will be relied on by a mortgage lender,
borrower, or any other person or entity involved
in the mortgage lending process; however, omis-
sions on a loan application regarding employ-
ment, income, or assets for a loan which does
not require this information are not considered a
material omission for purposes of this subsection.
817.545(2)(b)
3. receives any proceeds or any other funds in con-
nection with the mortgage lending process that
the person knew resulted from a violation of
817.545(2)(a) or 817.545(2)(b)
817.545(2)(c)
4. files or causes to be filed with the clerk of the cir-
cuit court for any county of this state a document
involved in the mortgage lending process which
contains a material misstatement, misrepresenta-
tion, or omission. 817.545(2)(d)
An offense of mortgage fraud may not be predicated
solely upon information lawfully disclosed under fed-
eral disclosure laws, regulations, or interpretations
related to the mortgage lending process (Chapter
817.545(3), F.S.).
For the purpose of venue under 817.545 F.S., any
violation of this section is considered to have been
committed in the county in which the real property
is located or in any county in which a material act was
performed in furtherance of the violation (Chapter
817.545(4)(a)(b), F.S.).
Any person who violates 817.545(2)(a-d) F.S. com-
mits a felony of the third degree, punishable as pro-
vided in s. 775.082, s. 775.083, or s. 775.084 (Chapter
817.545(5), F.S.).
N E W F O R 2 0 0 6
Revisions, amendments, and additions that
became effective October 1, 2006.
Definition
Control person means an individual, partnership,
corporation, trust, or other organization that possesses
the power, directly or indirectly, to direct the man-
agement or policies of a company, whether through
ownership of securities, by contract, or otherwise.
A person is presumed to control a company if, with
respect to a particular company, that person:
(a) Is a director, general partner, or officer exercising
executive responsibility or having similar status or
functions;
(b) Directly or indirectly may vote 10 percent or more
of a class of voting securities or sell or direct the
sale of 10 percent or more of a class of voting secu-
rities; or
(c) In the case of a partnership, may receive upon dis-
solution or has contributed 10 percent or more of
the capital (Chapter 494.001(9)(a-c), F.S.).
Powers and Duties of the Commission and
Office
Allows the Office to require the electronic filing
of applications, renewals, and fees, unless granted
a waiver by OFR due to a hardship. Prior to this
change, the only license type that could file an
application online was a mortgage broker (Chapter
494.0011(2)(6), F.S.).
Books, Accounts, and Records; Maintenance;
Examinations by the Office
Authorizes the commission to adopt rules for the
requirements for the destruction of records main-
tained by licensees after the retention period has
expired ( Chapter 494.0016(4), F.S.).
Mortgage Business Schools
Requires permitted mortgage business schools to
electronically report to the Office the names of pupils
who have successfully completed required training
courses (Chapter 494.0029(4), F.S.).
Licensure as a Mortgage Brokerage Business;
Provides that applications are not deemed received
until all required fees are received (Chapters
494.0031(2)(a); 494.0033(2)(c), F.S.).

Module 1
Renewal of Mortgage Brokerage Business
License or Branch Office License
The license for a branch office must be renewed in
conjunction with the renewal of the mortgage broker-
age business license (Chapter 494.0032(1)).
Allows the Office to contract with a third party ven-
dor to administer the mortgage broker test. This will
allow the test to be conducted electronically at mul-
tiple locations several times a week versus the old
once a month process at limited locations (Chapter
494.0033(2)(b), F.S.).
Mortgage Brokerage Business Branch Offices;
Principal Place of Business Requirements
Deleted Chapter 494.0036(3), F.S. and Chapter
494.0039(3), F.S. Eliminated from the statute the
requirement to display main office, branch office, and
individual licenses.
Requirements of Licensees
Provides that each licensee shall report any change
in the principal broker, principal representative, offi-
cers, partners, members, joint venturers, directors,
control persons or any individual who is the ultimate
equitable owner of 10% or greater interest (Chapter
494.004(6). F.S.).
Provides that a change of control whether through
the power to direct management, ownership or oth-
erwise shall require an application to be submitted to
the OFR unless a waiver has been granted (Chapter
494.004(6)(a-d), F.S.).
Administrative Penalties and Fines; License
Violations
Authorizes disciplinary action if fees are paid with a bad
check. (Chapters 494.0041(2)(s) and 494.0072(2)(s), F.S.).
Provides grounds for disciplinary action when a final
judgment is entered against an applicant or licensee in
a civil action upon grounds of fraud, embezzlement,
misrepresentation, or deceit (Chapters 494.0041(2)(t)
and 494.0072(2)(t), F.S.).
Provides grounds for disciplinary action when action
is taken by other federal and state regulatory organiza-
tions located in or outside the State of Florida involving
securities, insurance, real estate, mortgage brokers and
lenders, or other related or similar industries (Chapters
494.0041(2)(u)1.2. and 494.0072(2)(u)1.2.,F.S.).
Mortgage Lender’s License Requirements;
Correspondent Mortgage Lender’s License
Requirements; Savings Clause; Branch Offices
until all required fees are received (Chapters
494.0061(2)(b), 494.0062(2)(b), 494.0065(3)(5)(b) and
494.0066(2), F.S.).
Audited financial statements of all licensed lend-
ers have to be in accordance with United States
generally accepted accounting principles (Chapters
494.0061(2)(c), 494.0062(2)(c) and 494.0065(2)(5)(c),
F.S.).
Provides under certain conditions that existing
principal representatives can be grandfathered in
without class or testing requirements (Chapters
494.0061(2)(f)(8-9) and 494.0062(2)(f)(11-12) and
494.0065(4)(c)1.2.(10), F.S.).
Renewal of Mortgage Lender’s License;
Branch Office License Renewal
Chapter 494.0064(1)(b), F.S. deleted. Eliminated the
requirement to report the continuing education of
loan associates when renewing a lender’s license.
Requirements of Licensees Under Chapters
494.006-.0077
Chapter 494.0067(1), F.S. deleted. Eliminated from
the statute the requirement to display main and
branch office licenses.
Provides that each licensee shall report any change in
the officers, partners, members, joint venturers, direc-
tors, or control persons. (Chapter 494.0067(4), F.S).
erwise shall require an application to be submitted to
the OFR unless a waiver has been granted. (Chapter
494.0067(4)(a-d),F.S).
Changes between 2002 and 2004 to the Rules
of the Florida Administrative Code
The most significant changes were that the Rules
Regulation Mortgage Brokers were moved from 3D-
40 F.A.C. to a new chapter 69V-40 F.A.C. and all ref-
erences to the Department of Banking and Finance
were replaced with the Financial Services Commission
and the Office of Financial Regulation, depending
upon the specific division of responsibility between
the departments.
Table 1.1 summarizes the significant changes to the
rules effective March 23, 2008 and Table 1.2 summa-
rizes the forms that have been renamed and readopted
effective March 23, 2008.

Changes Effective March 23, 2008 to the Rules of the Florida Administrative Code
Definitions 69V-40.001 Deleted the definition of Moral Turpitude (11) and renumbered
remaining portion of rule.
Adoption of Forms 69V-40.002 All the forms were readopted by the Office of Financial Regu-
lation (OFR) and are available by mail from the OFR or on
their website at www.flofr.com See Table 1.2
Filings received by the Office on or after March 23, 2008,
with the old forms will be returned to the filer.
Fees and Commissions 69V-40.008 Added that a good faith estimate does not supplant or substi-
tute for the agreement required by Section 494.0038(1) F.S.
Payment of Guaranty Fund Claims 69V-40.015 Repealed
Change of Address 69V-40.020 Repealed
Fictitious Name Registration 69V-40.021 Added that a mortgage business school, mortgage brokerage
business, or mortgage lender will not be permitted to use a
fictitious name unless they provide evidence to the OFR that
such fictitious name is duly registered with the Florida Secre-
tary of State pursuant to Section 865.09, F.S.
Quarterly Report Filing Requirements 69V40.022 Required the quarterly report to be filed electronically on Form
OFR-494-08 at the OFR’s website at www.flofr.com.
Added that any person may petition for a waiver of this
requirement by filing a petition pursuant to Rule 28-106.301,
Florida Administrative Code (F.A.C.). The petition shall
demonstrate a technological or financial hardship that entitles
the person to file the quarterly report in a paper format. All
reports must be filed with the OFR within 30 days after the last
day of each calendar quarter. Previously, the rule stated that it
must be received within 30 days. If the 30th day is a weekend
or official holiday, then the next business day is considered
timely filing.
Any updates to the Quarterly Report for the quarter ending
March 31, 2008, must be filed through the Regulatory Enforce-
ment and Licensing (REAL) System by the filing deadline date
of April 30, 2008.
Mortgage Broker Examination 69V-40.025 Deleted that an applicant will be provided an official admis-
sion notice to sit for the examination. Applicants will be re-
sponsible for scheduling their own test and re-test, if necessary,
through REAL. Added that specific instructions to complete
the examination will be communicated prior to the examina-
tion. Added that the OFR or its designee shall be responsible
for determining that the student taking the examination is the
actual person authorized to take the examination. Added that
cheating on an examination or violating test center or exami-
nation procedures shall be grounds for denial of licensure by
the OFR.
Added that candidates who fail the exam shall have right to
access the examination questions, their examination respons-
es, and the correct answers. Added that a passing score will
be valid for a period of 2 years from the date of passing the
examination. Previously it was 365 days.
Deleted that only those answers indicated by the candidate
on the answer sheet will be used in computing the examina-
tion score and added that test scores will be derived from the
number of correct responses.
Deleted that the notification of examination results will be
sent via U.S. Mail within 10 business days of the examination
date.
Mortgage Broker Pre-licensing
Education Requirement
69V-40.027 The full name and social security number of each student who
completes the 24 hour mortgage broker course along with the
school’s license number and the completion date was added
to the requirements and also added that this information shall
be submitted electronically to the OFR at their website www.
flofr.com

Module 1
Table 1.1 cont.
Deleted the wording of 24 hour pre-licensing. Added that
an instructor who teaches a pre-licensing course may use it
towards the satisfactory completion of the pre-licensing educa-
tion requirement.
Professional Continuing Education
Requirements for Mortgage Brokers,
Loan Originators, and Principal
Representatives
69V-40.0271 Added the word “professional” to continuing education re-
quirements. Added the requirement that each loan originator
of a mortgage lender, correspondent mortgage lender, or mort-
gage lender pursuant to the savings clause shall satisfactorily
complete 14 hours of professional continuing education.
Deleted that the continuing education requirements are
waived for the initial license renewal for mortgage brokers and
principal representatives.
Added the requirement that each permitted school shall
submit within 5 days of completion of each professional
continuing education course to the OFR at their website www.
flofr.com the full name and mortgage broker license number
or social security number of each student, the school’s name
and license number, the number of hours completed by the
student, and the completion date for individuals licensed as
mortgage brokers.
Increased the retention period of student course completion
records from 3 years to 4 years from the date of completion.
Permit for Mortgage Business School 69V-40.028 Renamed the application for Mortgage Business School Permit
to OFR-494-04.
Added that an applicant shall file an amendment to a pend-
ing application for a Mortgage Business School if the informa-
tion in the application becomes inaccurate for any reason.
The applicant has 30 days from the receipt of the application
by the OFR to file the amendment on Form OFR-494-04.
Otherwise, prior written permission from the OFR is required.
Material changes to the application may be deemed grounds
for denial by the OFR and a new application accompanied by
the appropriate filing fees may be required.
Added that a withdrawal of application will be deemed ef-
fective upon receipt by the OFR and that all fees are non-re-
fundable if withdrawn. Also, all fees are non-refundable if the
application is denied.
Added that Form OFR-494-04 is incorporated by reference
in subsection 69V-40.002(1), F.A.C.
Mortgage Business Schools Prohibited
Practices and Advertising/Publicity
69V-40.0281 Because 494.0029 was renumbered, prohibited practices are
now a violation of 494.0029(2)(c) and (d) and (f)
Mortgage Business School Permit
Renewal
69V-40.029 Because the Mortgage Business School Permit Renewal form
was repealed, the requirement to submit it with a renwal was
deleted. Added that schools teaching the 24-hour pre-licens-
ing course submit all training materials that the applicant
plans to distribute to course participants including a copy of
all teaching aids, such as flash cards, hand-outs, audio/video
materials, computer disks/cd’s, and any computer based train-
ing. Added the the OFR shall deem a renewal received upon
receipt of the requisite fees and training materials at such time
as it has been dated stamped by the Cashier’s Office of the De-
partment of Financial Services or the date the renewal process
has been completed on the OFR’s website. All renewal fees
and training materials must be received by September 30th of
the year in which the permit expires. If September 30th falls
on a Saturday, Sunday, or legal holiday pursuant to Section
110.117, F.S., the renewals received on the next business day
will be considered timely received.
Application Procedure for Mortgage
Broker License
69V-40.031 Renamed the Application for Licensure as a Mortgage Bro-
ker, Form OFR-494-03. Gave the Fingerprint card a name,
FL921050Z, and increased the fingerprint card processing fee
to $42.25 from $23.00. Added the requirement that the ap-
plicant has passed the mortgage broker examination as defined

Table 1.1 cont.
in Rule 69V-40.025 to be included with the Application for
Licensure as a Mortgage Broker.
If the information in the Application for Licensure as a
Mortgage Broker or any amendment thereto becomes inac-
curate, the applicant shall file an amendment correcting such
information within 30 days of the change on Form OFR-494-
03. Previously, it was 10 days. An applicant may amend the
application at any time within 30 days from the receipt of the
application by the Office.
Prior to a determination of the application, an applicant
may withdraw their application by written request and is
deemed effective upon receipt by the Office of the written
request.
Except for the fingerprint card, all applications, fees, data,
and forms required under this rule shall be filed electronically
at www.flofr.com The Office will issue a confirmation of re-
ceipt of submission and payment upon successful submission
by the applicant on the website. Any person may petition for
waiver of the electronic submission of applications, fees, data
and forms by filing a petition pursuant to Rule 28-106.301,
F.A.C. Such petition shall demonstrate a technological or fi-
nancial hardship that entitles the person to file the application,
fees, data or form in a paper format.
Added that Form OFR-494-03 and Form FL921050Z are
incorporated by reference in subsection 69V-40.002(1), F.A.C.
Mortgage Broker License Renewal
and Reactivation
69V-40.043 Renamed the Mortgage Broker License Renewal and Reactiva-
tion Form to OFR-494-07.
All applications, fees, data and forms required to be filed un-
der this rule shall be filed electronically at www.flofr.com
Any person may petition for waiver of the electronic sub-
mission of applications, fees, data and forms by filing a peti-
tion pursuant to Rule 28-106.301, F.A.C. Such petition shall
the person to file the application, fees, data or form in a paper
format.
The Office will issue a confirmation of receipt of submis-
sion of renewal payment upon successful submission by the
applicant on the website.
Brokerage Business License
69V-40.051 Renamed form to Application for Mortgage Brokerage Business
and Lender License, Form OFR-494-01. Added the require-
ment for each chief executive officer, each chief financial
officer, chief operations officer, chief legal officer, chief compli-
ance officer, control person, member, partner, and/or joint ven-
turer shall submit completed fingerprint card FL921050Z and
form OFR-494-01 to the OFR along with the nonrefundable
$42.25 fee unless they already hold an active mortgage broker’s
license with the OFR.
If an entity holds an active license under Chapter 494, F.S. it
is exempt from these provisions when it applies for a different
type of license under Chapter 494 F.S. unless there has been a
change of control of 25% or more of the ownership interest or
in the controlling interest since the initial license was approved
by the OFR. Previously the change in control was 50%.
If any information contained in the Application for Licensure
or any amendment thereto becomes inaccurate for any reason,
then the applicant shall file an amendment correcting such
information within 30 days of the change on Form OFR-494-
01. Previously, it was 10 days. An applicant may amend the
application at any time within 30 days from the receipt of the
application by the Office.

10 Module 1
Table 1.1 cont.
request.
Deleted Restoration of Civil Rights.
Mortgage Brokerage Business License
and Branch Office License Renewal
and Reactivation
69V-40.053 Deleted the requirement to submit a completed renewal and
reactivation form.
A renewal fee filed electronically on the Office’s website
shall be considered received on the date the Office issues a
confirmation of payment to the licensee via the Office’s web-
site. A confirmation is issued by the Office upon successful
submission of the renewal payment.
All applications, fees, data and forms required to be filed
under this rule shall be filed electronically at www.flofr.com
format. If the renewal payment is received in a paper format,
then the received date shall be the date stamped on the pay-
ment when received by the Department of Financial Services’
Cashier’s Office in Tallahassee, Florida.
Mortgage Brokerage Business License
and Branch Office License Renewal
and Reactivation
69V-40.053 Deleted the requirement to submit a completed renewal and
reactivation form.
A renewal fee filed electronically on the Office’s website
shall be considered received on the date the Office issues a
confirmation of payment to the licensee via the Office’s web-
site. A confirmation is issued by the Office upon successful
submission of the renewal payment.
All applications, fees, data and forms required to be filed
under this rule shall be filed electronically at www.flofr.com
Brokerage Business Branch Office
License
69V-40.058 Added to operate a branch, the applicant must complete Form
OFR-494-02, Application for Branch Office License. Added
that amendments to pending applications shall be filed within
30 days of the change and within 30 days from receipt of the
application by the Office on Form OFR-494-02. Previously, it
was 10 days to notify the Office of an amendment.
request.
Amendments, Change of Name,
Change of Entity and Change in Con-
trol or Ownership
69V-40.099 Added the word “Amendments” to the rule. Each person
licensed as a mortgage broker, mortgage brokerage business,
mortgage lender, correspondent mortgage lender, or permit-
ted mortgage business school which proposes to change its
name, form of business organization, or any other informa-
tion contained in any initial application form or any amend-
ment thereto, must file an amendment pursuant to Sections
494.004(6) and 494.0067(4), F.S. not later than 30 days after
the effective date of the change on Form OFR-494-01 for Mort-
gage Brokerage Businesses and Lenders, From OFR-494-02 for
Branch Offices, Form OFR-494-03 for Mortgage Brokers,

Florida Mortgage Brokerage and Lending Act Rules and Regulations 11
Table 1.1 cont.
and Form OFR-494-04 for Mortgage Business Schools. Any
licensee pursuant to Sections 494.0061 or 494.0062, F.S., shall
additionally provide a completed surety bond, on Form OFR-
494-05, Mortgage Brokerage and Mortgage Lending Act Surety
Bond, executed in the new name of the licensee as docu-
mented by the requirements of this subsection. Name changes
pursuant to this subsection shall not involve any change in
controlling interest of the licensed entity.
Each licensed mortgage brokerage business, mortgage
lender, or correspondent mortgage lender which proposes
to change any personnel described in Sections 494.004 and
494.0067, F.S., listed in any initial application form or any
amendment thereto must file an amendment not later than
30 days prior to the effective date of the change or within 2
business days after the date the licensee first received notice
of the change on Form OFR-494-01 for Mortgage Brokerage
Businesses and Lender. In the event the change in personnel
in Sections 494.004 and 494.0067, F.S., listed in any initial
application or any amendment thereto results in the addition
of anyone referenced in this subsection, such persons must
comply with Subsections 494.0031(2)(c) (d), 494.0061(2)(g)
(h), 494.0062(2)(g) (h), or 494.0065(5)(e) (f), F.S. unless
such person has previously complied with an entity currently
licensed under this chapter and the person is currently affili-
ated with such entity.
Applications for licensure as a mortgage brokerage business,
mortgage lender or correspondent mortgage lender required as
a result of an acquisition of a controlling interest in a licensee
pursuant to Subsection 494.004(6) 494.0067(4), F.S., must
be filed in a timely manner as to allow the Office to complete
its review of the application prior to the effective date of the
acquisition, but no later than 30 days prior to the date of such
acquisition. Such applications must be filed in accordance
with Section 494.0031, 494.0061, or 494.0062, F.S.
The Office shall waive the requirement for a licensee to
file a new application pursuant to subsections 494.004(6)
494.0067(4), F.S. when a person or group of persons propos-
ing to purchase or acquire a controlling interest in a licensee
has previously filed the information with the Office required
in Subsections 494.0031(2)(c) (d), 494.0061(2)(g) (h),
494.0062(2)(g) (h), or 494.0065(5)(e) (f), F.S., with a
mortgage brokerage business or lender currently licensed to
the office, provided that such person is currently affiliated with
the mortgage brokerage business or lender licensee or when
the acquirer is currently licensed with the office as a mortgage
broker, mortgage brokerage business or lender.
If the requirement to file a new application for a change in
controlling interest is waived pursuant to this rule, the licensee
must file an amendment as prescribed in this rule to report the
change in controlling interest.
Restoration of Civil Rights was deleted.
Added that Form OFR-494-01, Form OFR-494-02, Form
OFR-494-03, Form OFR-494-04, and Form OFR-494-05 are
Application Procedure for Transfer
in Ownership or Control of Saving
Clause Mortgage Lender
69V-40.100 Deleted the word “Change” in the rule and replaced it with
“Transfer”.
Each person who seeks to obtain a controlling ownership
or voting interest in a mortgage lender licensed pursuant to the
saving clause shall apply to the OFR by submitting a complet-
ed Application for Mortgage Brokerage Business and Lender
License, Form OFR-494-01.
Each ultimate equitable owner of 10% or greater interest,
principal representative, chief executive officer, chief financial
officer, chief operations officer, chief legal officer, chief com-

12 Module 1
Table 1.1 cont.
pliance officer, director, control person, member, partner, or
joint venturer of an entity applying for licensure as a mortgage
lender licensed pursuant to the savings clause, shall submit a
completed fingerprint card FL921050Z and Biographical Sum-
mary from Form OFR-494-01, to the OFR along with a $42.25
nonrefundable processing fee.
If the individual owner, director, principal representative,
chief executive officer, chief financial officer, chief operations
officer, chief legal officer, chief compliance officer, princi-
pal representative, control person, member, partner, or joint
venturer holds an active mortgage broker’s license with the
OFR, then he or she is exempt for the provisions to complete
the Biographical Summary, the fingerprint card, and process-
ing fee.
Reduced the percentage of change in controlling interest
from 50% to 25% or more to comply with the Biographical
Summary, fingerprint card, and processing fee.
Added that amendments to pending application for a
license for a Saving Clause Mortgage Lender must be filed
within 30 days of the change on Form OFR-494-01 within 30
days from receipt of the application by the Office. Otherwise,
the application may be amended only with prior written per-
mission from the Office. Requests to make changes which are
material to the application may be deemed by the Office to be
grounds for denial and a new application, accompanied by the
appropriate filing fees, may be required.
request.
Branch Office License for Transfer
in Ownership or Control of Saving
Clause Mortgage Lender
69V-40.105 Deleted the word “Change” in the rule and replaced it with
“Transfer”.
Each person applying for a transfer in ownership or control
of a saving clause mortgage lender shall apply to the OFR for
a license to operate a branch office by submitting a completed
Form OFR-494-02.
Added that amendments to pending applications for a
branch office license for a Saving Clause Mortgage Lender
must be filed within 30 days of the change on Form OFR-
494-02 within 30 days from receipt of the application by the
Office. Otherwise, the application may be amended only with
prior written permission from the Office. Requests to make
changes which are material to the application may be deemed
by the Office to be grounds for denial and a new application,
accompanied by the appropriate filing fees, may be required.
request.
Third-party fee Accounts 69V-40.156 Renamed Mortgage Brokerage Deposit Account Form OFR-
494-09 and incorporated by reference in subsection 69V-
40.002(1), F.A.C.
Principal Brokers 69V-40.160 Added the word “Representative” to the Principal Broker
Designation section of Form OFR-494-01. It is now called
Principal Broker/Representative Designation.
Changed the requirement from each principal broker noti-
fying the OFR to each licensee shall notify the OFR in writing
within 30 days of the termination or resignation of a principal
broker. Previously, the notification was just for termination.

Table 1.1 cont.
Branch Brokers 69V-40.165 Added the words “Employee in Charge” to the Branch Broker
Designation form OFR-494-02. It is now called Branch Bro-
ker/Employee in Charge.
Changed the requirement from each branch broker notify-
ing the OFR to each licensee shall notify the OFR in writing
within 30 days of termination or resignation of the branch
broker. Previously, it was just for termination.
Books and Records 69V-40.170 Changed the zip code for notification to 32399-0376
Mortgage Brokerage and Lending
Transaction Journal
69V-40.177 Changed the form number that the journal should be main-
tained in a format substantially similar to Form OFR-494-10.
Added that Form OFR-494-10 is incorporated by reference in
subsection 69V-40.002(1), F.A.C.
Lender License
and Lender License, Form OFR-494-01. Required new form
for the $10,000 surety bond, on Form OFR-494-05, Mortgage
Brokerage and Mortgage Lending Act Surety Bond.
Added the requirement for each principal representative,
chief executive officer, each chief financial officer, chief opera-
tions officer, chief legal officer, chief compliance officer, con-
trol person, member, partner, joint venturer, and each director
of an entity applying for licensure as a mortgage lender shall
submit completed fingerprint card FL921050Z and Biographi-
cal Summary from form OFR-494-01 to the OFR along with
the nonrefundable $42.25 processing fee.
If any ultimate equitable owner of 10% or greater interest,
pliance officer, control person, member, partner, joint venturer,
or director of the applicant holds an active mortgage broker’s
license with the OFR, then they are exempt from the provi-
sions of the fingerprint card, Biographical Summary, and the
$42.25 nonrefundable processing fee.
If an entity holds an active license under Chapter 494, F.S.
it is exempt from these provisions when it applies for a dif-
ferent type of license under Chapter 494 F.S. unless there has
been a change of control of 25% or more of the ownership
interest or in the controlling interest since the initial license
was approved by the OFR. Previously the change in control
was 50%.
If any information contained in the Application for Licen-
sure or any amendment thereto becomes inaccurate for any
reason, then the applicant shall file an amendment correcting
such information within 30 days of the change on Form OFR-
494-01. Previously, it was 10 days. An applicant may amend
the application at any time within 30 days from the receipt of
the application by the Office.
request.
Added that Forms OFR-494-01, Form OFR-494-05, and
Form FL921050Z are incorporated by reference in subsection
69V-40.002(1), F.A.C.
Mortgage Lender License, Mortgage
Lender License Pursuant to Saving
Clause, and Branch Office License
Renewal and Reactivation
69V-40.205 Renamed renewal form to Form OFR-494-06. Deleted refer-
ence to branch office renewal form.
Added the requirement that all applications, fees, data and
forms required to be filed under this rule shall be filed elec-
tronically at www.flofr.com

14 Module 1
Table 1.1 cont.
sion and renewal fee payment upon successful submission by
the applicant on the website.
Application Procedure for Correspon-
dent Mortgage Lender License
and Lender License, Form OFR-494-01. Required new form
for the $10,000 surety bond, on Form OFR-494-05, Mortgage
Brokerage and Mortgage Lending Act Surety Bond.
Added the requirement for each principal representative,
each chief executive officer, each chief financial officer, chief
operations officer, chief legal officer, chief compliance officer,
control person, member, partner, joint venturer, and each
director of an entity applying for licensure as a correspon-
dent mortgage lender shall submit completed fingerprint card
FL921050Z and Biographical Summary from form OFR-494-
01 to the OFR along with the nonrefundable $42.25 process-
ing fee.
If an entity holds an active license under Chapter 494, F.S.
it is exempt from these provisions when it applies for a dif-
ferent type of license under Chapter 494 F.S. unless there has
been a change of control of 25% or more of the ownership
interest or in the controlling interest since the initial license
was approved by the OFR. Previously the change in control
was 50%.
If any information contained in the Application for Licen-
sure or any amendment thereto becomes inaccurate for any
reason, then the applicant shall file an amendment correcting
such information within 30 days of the change on Form OFR-
494-01. Previously, it was 10 days. An applicant may amend
the application at any time within 30 days from the receipt of
the application by the Office.
request.
Added that Form OFR-494-01, Form OFR-494-05, and
Form FL921050Z are incorporated by reference in subsection
69V-40.002(1), F.A.C.

Table 1.1 cont.
Correspondent Mortgage Lender
License and Branch Office License
Renewal and Reactivation
69V-40.225 Renamed renewal form to Form OFR-494-06. Deleted refer-
ence to branch office renewal form.
Added the requirement that all applications, fees, data and
forms required to be filed under this rule shall be filed elec-
tronically at www.flofr.com
sion and renewal fee payment upon successful submission by
the applicant on the website.
Lender or Correspondent Mortgage
Lender Branch Office License
69V-40.240 Added to operate a branch, the applicant must complete Form
OFR-494-02, Application for Branch Office License. Added
that amendments to pending applications shall be filed within
30 days of the change and within 30 days from receipt of the
application by the Office on Form OFR-494-02. Previously, it
was 10 days to notify the Office of an amendment.
request.
Principal Representative 69V-40.242 Added the word “Broker” to the Principal Representative
Designation section of Form OFR-494-01. It is now called
Principal Broker/Representative Designation.
Changed the requirement from each principal representa-
tive notifying the OFR to each licensee shall notify the OFR
in writing within 30 days of the termination or resignation of
a principal broker. Previously, the notification was just for
termination.
Mortgage Brokerage and Lending
Transaction Journal
69V-40.265 Changed the form number that the journal should be main-
tained in a format substantially similar to Form OFR-494-10.
Financial Guaranty in Lieu of Uniform
Single Audit
69V-40.270 A lender electing to provide a financial guaranty in lieu of the
single line audit shall document monthly the aggregate value
of mortgage loans serviced on the renamed Form OFR-494-11.
Noninstitutional Investor Funds
Account
69V-40.285 The licensee shall maintain an updated and accurate record of
account activity on renamed Form OFR 494-12.
Compiled by Author
Note: This table only includes the rules that were updated effective March 23, 2008. This table only includes the changes/
additions/deletions to the respective rule affected. For a complete copy of the rules, go to https://www.flrules.org/gateway/
ChapterHome.asp?Chapter=69V-40

16 Module 1
PART I: GENERAL PROVISIONS
(494.001-494.00295)
The Financial Services Commission
As introduced at the beginning of this module, the
Financial Services Commission serves as agency head
for the Office of Financial Regulation (OFR or Office)
andtheOfficeofInsuranceRegulation(OIR).OFRand
OIR are administratively housed within the Depart-
ment of Financial Services, headed by the Chief
Financial Officer. The Office is responsible for con-
ducting financial investigations into allegations of sus-
pected illegal financial activities within its jurisdiction.
Powers and Duties of the Commission and
Office
The Office of Financial Regulation is responsible
for the administration and enforcement of Chapter
494.001-494.0077, F.S. The Financial Services
Commission may adopt rules pursuant to Chapters
120.563(1), F.S and 120.54, F.S to implement
Chapters 494.001-494.0077, F.S. The Commission
may adopt rules requiring electronic submission of
any forms, documents, or fees required by this act if
such rules reasonably accommodate technological or
financial hardship. The Commission may prescribe
by rule requirements and procedures for obtaining
an exemption due to a technological hardship. The
Commission may also adopt rules to accept certifica-
tion of compliance with requirements of Chapter 494,
F.S. in lieu of requiring submission of documents.
The grant or denial of any license under this chapter
must be in accordance with Chapter 120.60, F.S.
The Office:
has the power to issue and to serve subpoenas and
subpoenas duces tecum to compel the attendance of
witnesses and the production of all books, accounts,
records, and other documents and materials rel-
evant to an examination or investigation.
or its duly authorized representative, has the power
to administer oaths and affirmations to any person.
may conduct an investigation of any person when-
ever the Office has reason to believe, either upon
complaint or otherwise, that any violation of
494.001-494.0077 F.S. has been committed or is
about to be committed.
may, at intermittent periods, conduct examinations
of any licensee or other person under the provi-
•
•
•
•
MORTGAGE BROKERAGE LICENSE LAW
Chapter 494, F.S., is divided into five parts: Part I, General Provisions (494.001-494.00295); Part II, Mortgage
Brokers (494.003-494.0043); Part III, Mortgage Lenders (494.006-494.0077); Part IV, Florida Fair Lending Act
(494.0078-494.00797); and Part V, Loans Under the Florida Uniform Land Sales Practices Law (494.008).
Source: Compiled by Author
Table 1.2 Forms Readopted Effective March 23, 2008
NAME FORM NO.
Application for Mortgage Brokerage Business and Lender License OFR-494-01
Application for Branch Office License OFR-494-02
Application for Licensure as a Mortgage Broker OFR-494-03
Application for a Mortgage Business School Permit OFR-494-04
Mortgage Brokerage and Mortgage Lending Act Surety Bond OFR-494-05
Mortgage Lender License Renewal and Reactivation Form OFR-494-06
Mortgage Broker License Renewal and Reactivation Form OFR-494-07
Quarterly Report Form OFR-494-08
Mortgage Brokerage Deposit Account Form OFR-494-09
Mortgage Brokerage Transaction and Lending Journal OFR-494-10
Calculation of Aggregate Value of Mortgage Loans Serviced OFR-494-11
Non-Institutional Investor’s Funds Account Form OFR-494-12
Florida Fingerprint Card FL921050Z

sions of 494.001-494.0077 F.S.
may bring action through its own counsel in the
name and on behalf of the state against any person
who has violated or is about to violate any provi-
sion of 494.001-494.0077 F.S. or any rule of the
commission or order of the Office issued under
494.001-494.0077 F.S. to enjoin the person from
continuing in or engaging in any act in furtherance
of the violation.
has the power to issue and serve upon any person
an order to cease and desist and to take corrective
action whenever it has reason to believe the per-
son is violating, has violated, or is about to violate
any provision of 494.001-494.0077 F.S., any rule
or order issued under 494.001-494.0077 F.S., or
any written agreement between the person and the
Office. All procedural matters relating to issuance
and enforcement of such a cease and desist order
are governed by the Administrative Procedure Act.
has the power to order the refund of any fee
directly or indirectly assessed and charged on a
mortgage loan transaction which is unauthorized or
exceeds the maximum fee specifically authorized in
494.001-494.0077 F.S.
may prohibit the association by a mortgage broker
business, or the employment by a mortgage lender
or correspondent mortgage lender, of any person
who has engaged in a pattern of misconduct while
an associate of a mortgage brokerage business or
an employee of a mortgage lender or correspon-
dent mortgage lender. For the purpose of this sub-
section, the term “pattern of misconduct” means
the commission of three or more violations of ss.
494.001-494.0077 or the provisions of Chapter 494
in effect prior to October 1, 1991, during any one
year period or any criminal conviction for violating
ss. 494.001-494.0077 or the provisions of Chapter
494 in effect prior to October 1, 1991.
Penalties
Chapter 494.0018 provides whoever knowingly vio-
lates any provision of Chapters 494.0041(2)(e), (f), or
(g); 494.0072 (2)(e), (f), or (g); or 494.0025 (1), (2),
(3), (4), or (5), is guilty of a felony of the third degree,
except that any person convicted of a violation of any
provision of 494.001-494.0077 F.S., in which viola-
tion the total value of money and property unlawfully
obtained exceeded $50,000 and there were five or more
victims, is guilty of a felony of the first degree. All the
violations are punishable as provided in Chapters
775.082 F.S., 775.083 F.S., or 775.084 F.S. Each such
violation constitutes a separate offense. In addition, if
a mortgage transaction is made in violation of any pro-
vision of Chapters 494.001-494.0077 F.S., the person
making the transaction and every licensee, director,
•
•
•
•
or officer who participated in making the transaction
are jointly and severally liable to every party to the
transaction in an action for damages incurred by the
party or parties. However, a person is not liable under
this section upon showing that such person’s licens-
ees, officers, and directors who participated in making
the transaction, if any, acted in good faith and with-
out knowledge and, with the exercise of due diligence,
could not have known of the act committed in viola-
tion of Chapters 494.001-494.0077, F.S.
Prohibited Practices
Chapter 494.0025 F.S. provides that it is unlawful for
any person:
(1) To act as a mortgage lender in this state without
a current, active license issued by the Office pur-
suant to 494.006-494.0077, F.S.
(2) To act as a correspondent mortgage lender in
this state without a current, active license issued
by the Office pursuant to 494.006-494.0077,
F.S.
(3) To act as a mortgage broker in this state without
a current, active license issued by the Office pur-
suant to 494.003-494.0043, F.S.
(4) In any practice or transaction or course of busi-
ness relating to the sale, purchase, negotiation,
promotion, advertisement, or hypothecation of
mortgage transactions, directly or indirectly:
(a) To knowingly or willingly employ any device,
scheme, or artifice to defraud;
(b) To engage in any transaction, practice, or
course of business which operates as a fraud
upon any person in connection with the pur-
chase or sale of any mortgage loan; or
(c) To obtain property by fraud, willful misrep-
resentation of a future act, or false promise.
(5) In any matter within the jurisdiction of the
Office, to knowingly and willfully falsify, con-
ceal, or cover up by a trick, scheme, or device a
material fact, make any false or fraudulent state-
ment or representation, or make or use any false
writing or document, knowing the same to con-
tain any false or fraudulent statement or entry.
(6) To violate 655.922(2) F.S., subject to 494.001-
494.0077 F.S.
(7) Who is required to be licensed under ss. 494.006
- 494.0077, to fail to report to the Office the
failure to meet the net worth requirements of
494.0061 F.S., 494.0062 F.S., or 494.0065 F.S.
within 48 hours after the person’s knowledge of
such failure or within 48 hours after the person
should have known of such failure.

18 Module 1
(8) To pay a fee or commission in any mortgage loan transaction to any person or entity other than a mortgage
brokerage business, mortgage lender, or correspondent mortgage lender, operating under an active license,
or a person exempt from licensure under this chapter.
(9) To record a mortgage brokerage agreement or any other document, not rendered by a court of competent
jurisdiction, which purports to enforce the terms of the mortgage brokerage agreement.
(10) To use the name or logo of a financial institution, as defined in 655.005(1), F.S., or its affiliates or subsid-
iaries when marketing or soliciting existing or prospective customers if such marketing materials are used
without the written consent of the financial institution and in a manner that would lead a reasonable person
to believe that the material or solicitation originated from, was endorsed by, or is related to or the responsi-
bility of the financial institution or its affiliates or subsidiaries.
PART II AND III: MORTGAGE BROKERS
AND MORTGAGE LENDERS
In 494.0078, F.S. the Florida Legislature found that:
“abusive mortgage lending has become a problem
in this state even though most high-cost home loans
do not involve abusive mortgage practices. One of
the most common forms of abusive lending is the
making of loans that are equity-based rather than
income-based. The financing of points and fees
in these loans provides immediate income to the
originator and encourages creditors to repeatedly
refinance home loans. As long as there is sufficient
equity in the home, an abusive creditor benefits even
if the borrower is unable to make the payments and
is forced to refinance. The financing of high points
and fees causes the loss of equity in each refinanc-
ing and often leads to foreclosure.
Abusive lending has threatened the viability of
Allows the Office to contract with a third party ven-
dor to administer the mortgage broker test.
until all required fees are received. Authorizes dis-
ciplinary action if fees are paid with a bad check.
Provides that each licensee shall report any change
in the principal broker, principal representative,
officers, partners, members, joint venturers, direc-
tors, control persons or any individual who is the
ultimate equitable owner of 10% or greater inter-
est.
erwise shall require an application to be submitted
to OFR unless a waiver has been granted.
Audited financial statements of all licensed lend-
ers have to be in accordance with U.S. generally
accepted accounting principles.
Provides under certain conditions that existing
•
•
•
•
•
•
principal representatives can be grandfathered in
without class or testing requirements.
Eliminates the requirement to display main and
branch office licenses.
Eliminates the requirement to display individual
mortgage broker licenses.
Eliminates the requirement to report the continu-
ing education of loan “Associates” when renewing
a lender’s license.
Provides grounds for disciplinary action when a
final judgment is entered against an applicant or
licensee in a civil action upon grounds of fraud,
embezzlement, misrepresentation, or deceit.
Provides grounds for disciplinary action when
action is taken by other federal and state regula-
tory organizations located in or outside the State of
Florida involving securities, insurance, real estate,
and lending activities.
•
•
•
•
•
All the relevant changes made to Chapter 494, F.S. were discussed at the beginning of this module. Included here
is a brief recap of the changes to Chapter 494.003-494.0077, F.S.
PART IV: FLORIDA FAIR LENDING ACT
ABUSIVE MORTGAGE LENDING

many communities and caused decreases in home
ownership. While the marketplace appears to oper-
ate effectively for conventional mortgages, too many
homeowners find themselves victims of overreach-
ing creditors who provide loans with unnecessarily
high costs and terms that are unnecessary to secure
repayment of the loan. The Legislature finds that as
competition and self-regulation have not eliminated
the abusive terms from home-secured loans, the
consumer protection provisions of this act are neces-
sary to encourage fair lending.”
DEFINITIONS
Chapter 494.0079, F.S. sets forth the following defini-
tions.
Affliate: Any company that controls, is controlled by,
or is in common control with another company, as set
forth in 12 U.S.C. 1841 et seq. and the regulations
adopted thereunder.
Annual percentage rate (APR): The annual percent-
age rate for the loan calculated according to the provi-
sions of 15 U.S.C. 1606 and the regulations adopted
thereunder by the Federal Reserve Board.
Borrower: Any natural person obligated to repay a
loan, including, but not limited to, a co-borrower, co-
signor, or guarantor.
Bridge loan: A loan with a maturity of less than 18
months that only requires the payment of interest
until such time as the entire unpaid balance is due and
payable.
Commission: The Financial Services Commission.
Office: The Office of Financial Regulation of the
commission.
Lender: Any person who makes a high-cost home
loan or acts as a mortgage broker or lender, finance
company, or retail installment seller with respect to a
high-cost home loan, but shall not include any entity
chartered by the United States Congress when engag-
ing in secondary market mortgage transactions as an
assignee or otherwise.
Residential mortgage transaction: A transaction
in which a mortgage, deed of trust, purchase money
security interest arising under an installment sales
contract, or equivalent consensual security interest is
created or retained against the consumer’s dwelling to
finance the acquisition or initial construction of such
dwelling. (15 U.S.C.) 1602(w)
HIGH-COST HOME LOANS
Definition
The provisions of the Florida Fair Lending Act deal
primarily with high-cost home loans.
High-cost home loans are defined by 15 U.S.C.
1602(aa), which provides in pertinent part as follows:
(1) A mortgage referred to in this subsection means a
consumer credit transaction that is secured by the
consumer’s principal dwelling, other than a resi-
dential mortgage transaction, a reverse mortgage
transaction, or a transaction under an open end
credit plan, if—
(A) the annual percentage rate at consummation
of the transaction will exceed by more than 10
percentage points the yield on Treasury secu-
rities having comparable periods of maturity
on the fifteenth day of the month immediately
preceding the month in which the application
for the extension of credit is received by the
creditor; or
(B) the total points and fees payable by the con-
sumer at or before closing will exceed the
greater of—
(i) 8 percent of the total loan amount; or
(ii) $547.00, for the year 2007.
(2) (A) After the 2-year period beginning on the
effective date of the regulations promulgated
under section 155 of the Riegle Community
Development and Regulatory Improvement
Act of 1994, and no more frequently than bien-
nially after the first increase or decrease under
this subparagraph, the Board may by regula-
tion increase or decrease the number of per-
centage points specified in paragraph (1)(A),
if the Board determines that the increase or
decrease is—
(i) consistent with the consumer protections
against abusive lending provided by the
amendments made by subtitle B of title I
of the Riegle Community Development
and Regulatory Improvement Act of 1994;
and
(ii) warranted by the need for credit.
(B) An increase or decrease under subparagraph
(A) may not result in the number of percent-
age points referred to in subparagraph (A)
being—
(i) less that 8 percentage points; or
(ii) greater than 12 percentage points.
(C) In determining whether to increase or decrease
the number of percentage points referred to
in subparagraph (A), the Board shall consult
with representatives of consumers, including
low-income consumers, and lenders.
(3) The amount specified in paragraph (1)(B)(ii) shall
be adjusted annually on January 1 by the annual
percentage change in the Consumer Price Index,
as reported on June 1 of the year preceding such
adjustment.

20 Module 1
(4) For purposes of paragraph (1)(B), points and fees
shall include—
(A) all items included in the finance charge, except
interest or the time-price differential;
(B) all compensation paid to mortgage brokers;
(C) each of the charges listed in section1605(e) of
this title (except an escrow for future payment
of taxes), unless—
(i) the charge is reasonable;
(ii) the creditor receives no direct or indirect
compensation; and
(iii) the charge is paid to a third party unaffili-
ated with the creditor; and
(D) such other charges as the Board determines to
be appropriate.
PROHIBITED ACTS
Chapter 494.00791,F.S. provides for prohibited acts
involving high-cost loans.
(1) Prepayment Penalties
(a) A high-cost home loan may not contain
terms that require a borrower to pay a pre-
payment penalty for paying all or part of the
loan principal before the date on which the
payment is due.
(b) Notwithstanding paragraph (a), a lender
making a high-cost home loan may include
in the loan contract a prepayment fee or
penalty, for up to the first 36 months after
the date of consummation of the loan, if:
1. The borrower has also been offered a
choice of another product without a pre-
payment penalty.
2. The borrower has been given, at least 3
business days prior to the loan consum-
mation, a written disclosure of the terms
of the prepayment fee or penalty by the
lender, including the benefit the bor-
rower will receive for accepting the pre-
payment fee or penalty through either
a reduced interest rate on the loan or
reduced points or fees.
(2) Default Interest Rate
A high-cost home loan may not provide for a
higher interest rate after default on the loan.
However, this prohibition does not apply to
interest rate changes in a variable rate loan oth-
erwise consistent with the provisions of the loan
documents, provided the change in interest rate
is not triggered by a default or the acceleration
of the interest rate.
(3) Balloon Payments
A high-cost home loan having a term of less than
10 years may not contain terms under which the
aggregate amount of the regular periodic pay-
ments would not fully amortize the outstanding
principal balance. However, this prohibition
does not apply when the payment schedule is
adjusted to account for the seasonal or irregular
income of the borrower or if the loan is a bridge
loan.
(4) Negative Amortization
A high-cost home loan may not contain terms
under which the outstanding principal balance
will increase at any time over the course of the
loan because the regular periodic payments do
not cover the full amount of the interest due.
(5) Prepaid Payments
A high-cost home loan may not include terms
under which more than two periodic payments
required under the loan are consolidated and
paid in advance from the loan proceeds provided
to the borrower.
(6) Extending Credit Without Regard To The
Payment Ability Of The Borrower
A lender making a high-cost home loan shall not
engage in any pattern or practice of extending
high-cost home loans to borrowers based upon
the borrowers’ collateral without regard to the
borrowers’ ability to repay the loan, including
the borrowers’ current and expected income,
current obligations, and employment.
(7) Payments To A Home Contractor
A lender shall not make any payments to a con-
tractor under a home improvement contract
from amounts of a high-cost home loan other
than:
(a) In the form of an instrument that is payable
to the borrower or jointly to the borrower
and the contractor; or
(b) At the election of the borrower by a third-
party escrow agent in accordance with terms
established in a written agreement signed by
the borrower, the lender, and the contractor
prior to the date of payment.
(8) Due-On-Demand Clause
A high-cost home loan may not contain a provi-
sion that permits the lender, in its sole discre-
tion, to call or accelerate the indebtedness. This
provision does not prohibit acceleration of the
loan due to the borrower’s failure to abide by
the terms of the loan, or due to fraud or material
misrepresentation by the consumer in connec-
tion with the loan.
(9) Refinancing Within an 18-Month Period
(a) A lender, its affiliate, or an assignee shall not
refinance any high-cost home loan to the
same borrower within the first 18 months
of the loan when the refinancing does not
have a reasonable benefit to the borrower

considering all of the circumstances, includ-
ing, but not limited to, the terms of both the
new and refinanced loans, the cost of the
new loan, and the borrower’s circumstances.
(b) A lender or assignee shall not engage in
acts or practices to evade this requirement,
including a pattern or practice of arrang-
ing for the refinancing of the lender’s or
assignee’s own loans by affiliated or unaffili-
ated lenders or modifying a loan agreement,
whether or not the existing loan is satisfied
and replaced by the new loan, and charging
a fee.
(10) Open-Ended Loans
A lender shall not make any loan as an open-
ended loan in order to evade the provisions of
this act unless such open-ended loans meet the
definition in 12 C.F.R. s. 226.2(a)(20).
(11) Recommendation of Default
A lender shall not recommend or encourage
default on an existing loan or other debt prior
to and in connection with the closing or planned
closing of a high-cost home loan that refinances
all or any portion of such existing loan or debt.
(12) Prohibited Door-To-Door Loans
A high-cost home loan may not be made as a
direct result of a potential or future lender or
its representative offering or selling a high-cost
home loan at the residence of a potential bor-
rower without a prearranged appointment with
the potential borrower or the expressed invita-
tion of the potential borrower. This subsection
does not apply to mail solicitations that may be
received by the potential borrower.
(13) Late Payment Fees
A lender may not charge a late payment fee for
a high-cost home loan except as provided in this
subsection. A late payment fee:
(a) may not be in excess of 5 percent of the
amount of the payment past due.
(b) may only be assessed for a payment past due
for 15 days or more.
(c) may not be charged more than once with
respect to a single late payment. If a late
payment fee is deducted from a payment
made on the loan and such deduction causes
a subsequent default on a subsequent pay-
ment, no late payment fee may be imposed
for such default. If a late payment fee has
been imposed once with respect to a par-
ticular late payment, no such fee shall be
imposed with respect to any future payment
which would have been timely and suffi-
cient, but for the previous default.
(14) Modification or Deferral Fees
A lender may not charge a borrower any fees
or other charges to modify, renew, extend, or
amend a high-cost home loan or to defer any
payment due under the terms of a high-cost
home loan on a minimum of one modifica-
tion, renewal, extension, or deferral per each 12
months of the length of the loan.
HIGH-COST LOAN DISCLOSURES
Chapter 494.00792 F. S. provides:
(1) In addition to other disclosures required by law
and in conspicuous type:
(a) Notice to borrower. A lender making a
high-cost home loan shall provide a notice
to a borrower in substantially the following
form:
If you obtain this high-cost home loan,
the lender will have a mortgage on your
home. You could lose your home and any
money you have put into it if you do not
meet your obligations under the loan.
Mortgage loan rates and closing costs and
fees vary based on many factors, includ-
ing your particular credit and financial
circumstances, your employment history,
the loan-to-value requested, and the type
of property that will secure your loan. The
loan rate and fees could also vary based
upon which lender or broker you select.
As a borrower, you should shop around
and compare loan rates and fees. You
should also consider consulting a quali-
fied independent credit counselor or other
experienced financial adviser regarding
the rates, fees, and provisions of this mort-
gage loan before you proceed. You should
contact the United States Department of
Housing and Urban Development for a
list of credit counselors available in your
area. You are not required to complete
this agreement merely because you have
received these disclosures or have signed
a loan application. Borrowing for the
purpose of debt consolidation can be an
appropriate financial management tool.
However, if you continue to incur sig-
nificant new credit card charges or other
debts after this high-cost home loan is
closed and then experience financial dif-
ficulties, you could lose your home and
any equity you have in it if you do not
meet your mortgage loan obligations.
Remember that property taxes and home-
owners’ insurance are your responsibility.
Not all lenders provide escrow services
for these payments. You should ask your
lender about these services. Also, your
payments on existing debts contribute to
your credit rating. You should not accept
any advice to ignore your regular pay-
ments to your existing creditors.

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