Current Status Bill Number:4782 Ratification Number:526 Act Number:430 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19960320 Primary Sponsor:Easterday All Sponsors:Easterday Drafted Document Number:bbm\10681jm.96 Companion Bill Number:1281 Date Bill Passed both Bodies:19960530 Date of Last Amendment:19960529 Governor's Action:U Became law without signature of Governor Date of Governor's Action:19960620 Subject:Mortgage loan brokers, provisions
Body Date Action Description Com Leg Involved
______ ________ _______________________________________ _______ ____________
------ 19960626 Act No. A430
------ 19960620 Unsigned, became law without
signature of Governor
------ 19960613 Ratified R526
House 19960530 Concurred in Senate amendment,
enrolled for ratification
Senate 19960529 Amended, read third time,
returned to House with amendment
Senate 19960521 Amended, read second time
Senate 19960509 Recalled from Committee, 02 SBI
placed on the Calendar
Senate 19960502 Introduced, read first time, 02 SBI
referred to Committee
House 19960502 Read third time, sent to Senate
House 19960501 Amended, read second time
House 19960424 Committee report: Favorable with 26 HLCI
amendment
House 19960320 Introduced, read first time, 26 HLCI
referred to Committee
View additional legislative information at the LPITS web site.
(A430, R526, H4782)
AN ACT TO AMEND SECTION 37-5-203, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE CONSUMER PROTECTION CODE, DEBTORS' REMEDIES, AND CIVIL LIABILITY FOR VIOLATION OF DISCLOSURE PROVISIONS, SO AS TO PROVIDE THAT NOTHING IN CERTAIN PROVISIONS OF THIS SECTION SHALL BE CONSTRUED TO IMPOSE CIVIL LIABILITY OR PENALTIES ON AN ARRANGER OF CREDIT WHEN DISCLOSURE CONSTITUTING A VIOLATION OF THE FEDERAL TRUTH IN LENDING ACT IS ACTUALLY COMMITTED BY ANOTHER PERSON AND THE ARRANGER OF THE CREDIT HAS NO KNOWLEDGE OF THE VIOLATION WHEN IT OCCURRED, AND TO REQUIRE THE CREDITOR TO PROVIDE A COPY OF THE FINAL CLOSING DOCUMENTS TO THE ARRANGER OF CREDIT; TO AMEND SECTION 40-58-20, AS AMENDED, RELATING TO DEFINITIONS UNDER THE LAW REGARDING REGISTRATION OF MORTGAGE LOAN BROKERS, SO AS TO ENACT DEFINITIONS FOR "REGULAR BUSINESS HOURS", AND "SATELLITE OFFICE"; TO AMEND SECTION 40-58-65, RELATING TO MAINTAINING, AVAILABILITY, AND EXAMINATION OF RECORDS FOR THE REGULATION OF MORTGAGE LOAN BROKERS, SO AS TO PROVIDE, AMONG OTHER THINGS, THAT A REGISTERED MORTGAGE LOAN BROKER WITH AN OFFICIAL PLACE OF BUSINESS WITHIN SOUTH CAROLINA ALSO MAY MAINTAIN ONE OR MORE SATELLITE OFFICES; TO AMEND SECTION 40-58-110, AS AMENDED, RELATING TO REGISTRATION OF MORTGAGE LOAN BROKERS, FIRST TIME REGISTRANTS' PROCESSING FEE, ANNUAL RENEWAL OF REGISTRATION, RENEWAL FEE, FAILURE TO RENEW RESULTS IN CANCELLATION, AND LATE PENALTY, SO AS TO PROVIDE THAT A REGISTRANT SHALL PAY AN INITIAL FEE OF ONE HUNDRED FIFTY DOLLARS AND, THEREAFTER, A RENEWAL FEE OF ONE HUNDRED FIFTY DOLLARS FOR EACH SATELLITE LOCATION, TO PROVIDE THAT THE BROKER SHALL GIVE NOTICE IN WRITING TEN DAYS BEFORE OPENING A NEW OFFICIAL BRANCH OR SATELLITE LOCATION, AND TO PROVIDE THAT NO INITIAL FEE IS REQUIRED WHEN THE REGISTRANT GIVES NOTICE OF A CHANGE OF ADDRESS FOR AN OFFICIAL BRANCH OR SATELLITE LOCATION; TO AMEND SECTION 29-3-680, RELATING TO MORTGAGES AND DEEDS OF TRUST, FORECLOSURE, AND APPLICATION FOR ORDER OF APPRAISAL, SO AS TO PROVIDE THAT, EXCEPT IN ANY REAL ESTATE FORECLOSURE PROCEEDING RELATING TO A DWELLING PLACE OR TO A CONSUMER CREDIT TRANSACTION, A DEFENDANT AGAINST WHOM A PERSONAL JUDGMENT MAY BE TAKEN ON A REAL ESTATE SECURED TRANSACTION MAY WAIVE THE APPRAISAL RIGHTS IF THE DEBTORS, MAKERS, BORROWERS, AND/OR GUARANTORS ARE NOTIFIED IN WRITING BEFORE THE TRANSACTION THAT A WAIVER OF APPRAISAL RIGHTS WILL BE REQUIRED AND UPON SIGNING A STATEMENT DURING THE TRANSACTION, TO PROVIDE THAT THIS WAIVER MAY BE IN ANY DOCUMENT RELATING TO THE TRANSACTION, AND TO PROVIDE THAT THE REQUIRED LANGUAGE MUST BE ON A PAGE CONTAINING THE SIGNATURE OF THE PERSON MAKING THE WAIVER AND THE CAPITALIZED SENTENCE MUST BE UNDERLINED, IN CAPITAL LETTERS, OR DISCLOSED IN ANOTHER PROMINENT MANNER; AND TO AMEND SECTION 29-3-700, RELATING TO MORTGAGES AND DEEDS OF TRUST, FORECLOSURE, AND ORDER FOR APPRAISAL, SO AS TO DELETE THE PROVISION REQUIRING PROPERTY TO BE APPRAISED BY THREE DISINTERESTED FREEHOLDERS OF THE COUNTY IN WHICH THE PROPERTY IS LOCATED, AND TO PROVIDE INSTEAD FOR APPRAISAL BY THREE DISINTERESTED INDIVIDUALS WHO MUST BE STATE-CERTIFIED GENERAL REAL ESTATE APPRAISERS, STATE-CERTIFIED RESIDENTIAL REAL ESTATE APPRAISERS, OR STATE-LICENSED REAL ESTATE APPRAISERS.
Be it enacted by the General Assembly of the State of South Carolina:
Arranger of credit; no civil liability, penalties; etc.
SECTION 1. Section 37-5-203(6) of the 1976 Code is amended to read:
"(6) In this section, creditor includes a person who in the ordinary course of business regularly extends or arranges for the extension of credit, or offers to arrange for the extension of credit. Nothing in this subsection, however, shall be construed to impose civil liability or penalties on an arranger of credit when disclosure constituting a violation of the Federal Truth in Lending Act is actually committed by another person and the arranger of credit has no knowledge of the violation when it occurred. The creditor shall provide a copy of the final closing documents to the arranger of credit."
Definitions added
SECTION 2. Section 40-58-20 of the 1976 Code, as last amended by Act 172 of 1993, is further amended by adding:
"(12) `Regular business hours' means open for business not less than thirty hours a week, Monday through Friday.
(13) `Satellite office' means a location at which a mortgage broker may conduct mortgage loan broker business other than at a location that is open for regular business hours and is not required to be staffed full-time by one or more employees who have the authority to contract on behalf of the broker and to accept service on behalf of the broker."
Satellite offices; etc.
SECTION 3. Section 40-58-65 of the 1976 Code, as added by Act 172 of 1993, is amended to read:
"Section 40-58-65. (A) A person registered pursuant to this chapter must maintain at his usual place of business books, records, and documents pertaining to the business conducted, to enable the department to determine compliance with this chapter. A registrant with two or more registered offices may consolidate the records at any one of the registered offices. The records must be available for examination to the administrator or his designee upon request. Books and records must be maintained for at least three years.
(B) A mortgage broker doing business in this State shall maintain a sufficient physical presence in this State and his records must be maintained at the registered location in this State. At a minimum, the broker shall maintain an official place of business open during regular business hours, staffed by one or more employees who have the authority to contract on behalf of the broker and to accept service on behalf of the broker. If the official place of business is not open for business within the hours of 8:30 A.M. until 5:00 P.M., Monday through Friday, the broker shall notify the department in writing of the business hours maintained by the broker's official place of business.
(C) A registered mortgage loan broker with an official place of business within South Carolina also may maintain one or more satellite offices, provided that the:
(1) mortgage loan broker notifies the department in writing ten days before the opening of a satellite office of the location of the satellite office and notifies the department that all records from the satellite office are stored in a main or branch location in this State which is staffed by one or more employees during regular business hours;
(2) records of any pending mortgage loan application or records in which a loan closing is still in process are made available at the mortgage loan broker's main or branch location as provided in item (1) to the administrator or his designee within two business days of a written request delivered by facsimile transmission, mail, or hand-delivery by the administrator or his designee;
(3) broker notifies the department in writing within two business days of closing a satellite office.
(D) The department, at its discretion, may examine the books and records of a registrant and other specified documents to determine whether there has been substantial compliance with this chapter. Unless there is reason to believe a violation of this chapter has occurred, examinations must be limited to one each year. Records and information obtained by the department during an examination are confidential and the department must certify that it is in compliance with the Right to Financial Privacy Act (RFPA).
(E) If the mortgage loan broker fails to notify the department of the existence or closing of a satellite office, the actual operating hours of the main or branch offices where records are kept, or the whereabouts of its records, the broker is subject to a penalty of not less than fifty dollars and not more than two hundred fifty dollars. If after the assessment of such a fine within a one-year period, the administrator finds that additional violations of this section are both intentional and repeated, the mortgage loan broker is subject to all of the remedies for violations of this chapter set forth in Section 40-58-80."
Fees; notification; etc.
SECTION 4. Section 40-58-110(A) of the 1976 Code, as amended by Act 172 of 1993, is further amended to read:
"(A) In addition to the initial application for registration fee of five hundred dollars required by Section 40-58-50, first time registrants also shall pay a one-time, nonrefundable processing fee of two hundred dollars. Thereafter, a registrant shall pay an annual renewal fee of five hundred dollars. A registrant shall pay an initial fee of one hundred fifty dollars and, thereafter, a renewal fee of one hundred fifty dollars for each satellite location. The broker shall notify the department in writing ten days before opening a new, official branch or satellite location. No initial fee is required when the registrant notifies the department of a change in address for an official branch or satellite location."
Waiver of appraisal rights; etc.
SECTION 5. Section 29-3-680 of the 1976 Code is amended to read:
"Section 29-3-680. (A) In any real estate foreclosure proceeding a defendant against whom a personal judgment is taken or asked, whether he has theretofore appeared in the action or not, may within thirty days after the sale of the mortgaged property apply by verified petition to the clerk of court in which the decree or order of sale was taken for an order of appraisal.
(B) Except in any real estate foreclosure proceeding relating to a dwelling place, as defined in Section 12-37-250, or to a consumer credit transaction, as defined in Section 37-1-301(11), a defendant against whom a personal judgment may be taken on a real estate secured transaction may waive the appraisal rights as provided by this section if the debtors, makers, borrowers, and/or guarantors are notified in writing before the transaction that a waiver of appraisal rights will be required and upon signing a statement during the transaction similar to the following:
`The laws of South Carolina provide that in any real estate foreclosure proceeding a defendant against whom a personal judgment is taken or asked may within thirty days after the sale of the mortgaged property apply to the court for an order of appraisal. The statutory appraisal value as approved by the court would be substituted for the high bid and may decrease the amount of any deficiency owing in connection with the transaction. THE UNDERSIGNED HEREBY WAIVES AND RELINQUISHES THE STATUTORY APPRAISAL RIGHTS WHICH MEANS THE HIGH BID AT THE JUDICIAL FORECLOSURE SALE WILL BE APPLIED TO THE DEBT REGARDLESS OF ANY APPRAISED VALUE OF THE MORTGAGED PROPERTY.'
This waiver may be in any document relating to the transaction; however, the required language must be on a page containing the signature of the person making the waiver and the capitalized sentence must be underlined, in capital letters, or disclosed in another prominent manner."
Persons to perform appraisal
SECTION 6. Section 29-3-700 of the 1976 Code is amended to read:
"Section 29-3-700. Upon the filing of such petition and deposit with the clerk of a sufficient sum to pay the costs of the subsequent proceedings he shall issue an order that the property be appraised at its true value as of the date of sale by three disinterested individuals who must be state-certified general real estate appraisers as defined in Section 40-60-20(20), state- certified residential real estate appraisers as defined by Section 40-60-20(21), or state-licensed real estate appraisers as defined by Section 40-60-20(22), who shall not be parties to the action or connected in business with or related by blood or marriage within the sixth degree to any such party."
Time effective
SECTION 7. This act takes effect upon approval by the Governor.
Became law without the signature of the Governor -- 6/20/96.