Session of 2000
By Committee on Financial Institutions and Insurance

  9             AN  ACT concerning mortgage business and mortgage loans; concerning
10             an exemption for insurance agents; amending K.S.A. 1999 Supp. 9-
11             2201 and 9-2202 and repealing the existing sections.
13       Be it enacted by the Legislature of the State of Kansas:
14             Section  1. K.S.A. 1999 Supp. 9-2201 is hereby amended to read as
15       follows: 9-2201. As used in this act:
16             (a) "Bona fide office" means a registrant's physical office which meets
17       all of the following requirements:
18             (1) The office is located in this state;
19             (2) the office is not located in a personal residence;
20             (3) the office has regular hours of operation;
21             (4) the office is accessible to the public;
22             (5) the office serves as an office for the transaction of mortgage
23       business;
24             (6) the office is staffed by the registrant or an employee of the
25       registrant;
26             (7) the office is separate from any office of another registrant; and
27             (8) the office contains the books and records of the registrant or cop-
28       ies of the books and records.
29             (b) "Bona fide third party fee" means a fee for any:
30             (1) Credit report;
31             (2) appraisal;
32             (3) investigation;
33             (4) title examination;
34             (5) abstract of title;
35             (6) title insurance;
36             (7) property survey; and
37             (8) any similar document relating to real property.
38             (b) (c) "Commissioner" means the Kansas state bank commissioner.
39             (c) (d) "Employee" means any individual:
40             (1) Who is employed solely by a registrant or applicant, and who is
41       not acting as an independent contractor;
42             (2) who conducts mortgage business activities only in the name of the
43       registrant or applicant; and


  1             (3) whose conduct of mortgage business is the responsibility of the
  2       registrant or applicant.
  3             (d) (e) "Mortgage business" means engaging in, or holding out to the
  4       public as willing to engage in, for compensation or gain, or in the expec-
  5       tation of compensation or gain, directly or indirectly, the business of mak-
  6       ing, originating, servicing, soliciting, placing, negotiating, acquiring, sell-
  7       ing, or arranging for others, or offering to solicit, place, negotiate, acquire,
  8       sell or arrange for others, mortgage loans in the primary market.
  9             (e) (f) "Mortgage loan" means a loan made to a natural person which
10       is secured by a first or second mortgage or other similar instrument or
11       document, and which creates a lien on a one-to-four family dwelling,
12       located in this state, occupied or intended to be occupied for residential
13       purposes by the owner, including the renewal or refinancing of such a
14       loan.
15             (f) (g) "Person" means any individual, sole proprietorship, corpora-
16       tion, partnership, trust, association, joint venture, pool syndicate, unin-
17       corporated organization or other form of entity, however organized.
18             (g) (h) "Primary market" means the market wherein mortgage loans
19       are originated between a lender and a borrower, whether or not through
20       a mortgage broker or other means.
21             (h) (i) "Promotional items" means pens, pencils, hats and other such
22       novelty items.
23             (i) (j) "Registrant" means any individual or other entity who holds a
24       valid certificate of registration to conduct mortgage business in this state.
25             Sec.  2. K.S.A. 1999 Supp. 9-2202 is hereby amended to read as fol-
26       lows: 9-2202. The following are exempt from the registration require-
27       ments of this act:
28             (a) Any bank, bank holding company, savings bank, trust company,
29       savings and loan association, building and loan association, industrial loan
30       company or credit union regulated by an agency of the United States or
31       of any state;
32             (b) any entity directly or indirectly regulated by an agency of the
33       United States or of any state which is a subsidiary or affiliate of any entity
34       listed in subsection (a) if 25% or more of such entity's common stock is
35       owned by any entity listed in subsection (a);
36             (c) any person who is registered with the Kansas securities commis-
37       sioner as a loan broker pursuant to K.S.A. 50-1001 et seq. and amend-
38       ments thereto or who is licensed by the Kansas consumer credit com-
39       missioner as a supervised lender pursuant to K.S.A. 16a-2-301 et seq. and
40       amendments thereto;
41             (d) the United States of America, the state of Kansas, any other state,
42       or any agency or instrumentality of any governmental entity; and
43             (e) a registrant's employee.; and


  1             (f) any person who does not receive a fee or other consideration, ex-
  2       cept for a bona fide third party fee received from a registered or exempt
  3       lender after financing for the mortgage actually has been obtained. 
  4       Sec.  3. K.S.A. 1999 Supp. 9-2201 and 9-2202 are hereby repealed.
  5        Sec.  4. This act shall take effect and be in force from and after its
  6       publication in the statute book.