An  Act concerning mortgages; relating to mortgage business and mortgage loans; amend-
ing K.S.A. 1999 Supp. 9-2204, 9-2207, 9-2208, 9-2209, 9-2212, 9-2213 and 9-2218 and
repealing the existing sections.

Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 1999 Supp. 9-2204 is hereby amended to read as
follows: 9-2204. (a) Any person required to register pursuant to this act
shall submit to the commissioner an application for registration on forms
prescribed and provided by the commissioner. The application shall con-
tain information the commissioner deems necessary to adequately iden-

      (1) The location and nature of the business to be conducted;

      (2) the identity, character and qualifications of an individual appli-

      (3) the identity, character and qualifications of the officers, directors,
members, partners and employees of the entity, if the applicant is a part-
nership, corporation or other business entity;

      (4) the name under which the applicant intends to conduct business;

      (5) other information the commissioner requires to evaluate the fi-
nancial responsibility and condition, character, qualifications, fitness of
the applicant and compliance with the provisions of this act.

      (b) Each application for registration shall be accompanied by a non-
refundable fee of not less than $100, which may be increased by rules
and regulations pursuant to K.S.A. 1999 Supp. 9-2209 and amendments

      (c) An application for registration shall be approved, and a nonas-
signable certificate of registration shall be issued to the applicant pro-

      (1) The commissioner has received the complete application and fee
required by this section; and

      (2) the commissioner determines the financial responsibility and con-
dition, character, qualifications and fitness of the applicant warrants a
belief that the business of the applicant will be conducted competently,
honestly, fairly and in accordance with all applicable state and federal

      Sec.  2. K.S.A. 1999 Supp. 9-2207 is hereby amended to read as fol-
lows: 9-2207. The commissioner may deny, suspend, revoke, or refuse to
renew the registration of a mortgage business issued pursuant to this act,
if the commissioner finds, after notice and opportunity for a hearing con-
ducted in accordance with the provisions of the administrative procedures
act, that:

      (a) The applicant or registrant has repeatedly or willfully violated any
section of this act or any rule and regulation or order lawfully made pur-
suant to this act;

      (b) facts or conditions exist which would have justified the denial of
the registration or renewal had these facts or conditions existed or been
known to exist at the time the application for registration or renewal was

      (c) the applicant or registrant has filed with the commissioner any
document or statement containing any false representation of a material
fact or fails to state a material fact;

      (d) the applicant or registrant has been convicted of any crime in-
volving fraud, dishonesty or deceit;

      (e) the applicant or registrant has engaged in or is engaging in de-
ceptive business practices;

      (f) the applicant or registrant, or an employee of the applicant or
registrant, has been the subject of any disciplinary action by this agency
or any other state or federal regulatory agency; or

      (g) a final judgment has been entered against the applicant or regis-
trant in a civil action and the commissioner finds, based upon the conduct
on which the judgment is based, that registration of such person would
be contrary to the public interest.;

      (h) the applicant or registrant, or an employee of the applicant or
registrant has been convicted of engaging in mortgage business activity
without authorization pursuant to K.S.A. 1999 Supp. 9-2203, and amend-
ments thereto or a substantially similar offense in another state; or

      (i) the applicant or registrant has refused to furnish information re-
quired by the commissioner within a reasonable period of time as estab-
lished by the commissioner.

      Sec.  3. K.S.A. 1999 Supp. 9-2208 is hereby amended to read as fol-
lows: 9-2208. (a) Every certificate of registration shall be properly dis-
played in a prominent place within the registrant's place of business in a
way that reasonably assures recognition by customers and members of
the general public who enter the registrant's place of business.

      (b) Prior to entering into any contract for the provision of services or
prior to the registrant receiving any compensation or promise of com-
pensation for a mortgage loan the registrant shall acquire from the cus-
tomer a signed acknowledgment containing such information as the com-
missioner may prescribe by rule and regulation. A copy of the
acknowledgment shall be provided to the customer.

      (c) The registrant shall identify that such registrant is registered un-
der this act in all advertising or solicitations directed to Kansas residents,
including internet solicitations. For the purpose of this subsection, ``ad-
vertising'' does not include business cards or promotional items.

      (d) No registrant shall conduct mortgage business in this state using
any name other than the name or names stated on the certificate of reg-

      Sec.  4. K.S.A. 1999 Supp. 9-2209 is hereby amended to read as fol-
lows: 9-2209. The commissioner may exercise the following powers:

      (a) Adopt rules and regulations as necessary to carry out the intent
and purpose of this act;

      (b) make investigations and examinations of the registrant's opera-
tions, books and records as the commissioner deems necessary for the
protection of the public;

      (c) charge reasonable costs of investigation or examination to be paid
by the registrant under investigation or examination;

      (d) order any registrant to cease any activity or practice which the
commissioner deems to be deceptive, dishonest, violative of state or fed-
eral law or unduly harmful to the interests of the public;

      (e) exchange any information regarding the administration of this act
with any agency of the United States or any state which regulates the
registrant or administers statutes, rules and regulations or programs re-
lated to mortgage loans; and

      (f) disclose to any person or entity that an applicant's or registrant's
certificate of registration has been denied, suspended, revoked or refused

      (g) require or permit any person to file a written statement, under
oath or otherwise as the commissioner may direct, setting forth all the
facts and circumstances concerning any apparent violation of this act, or
any rule and regulation promulgated thereunder or any order issued pur-
suant to this act; and

      (h) receive, as a condition in settlement of any investigation or ex-
amination, a payment designated for consumer education to be expended
for such purpose as directed by the commissioner.

      Sec.  5. K.S.A. 1999 Supp. 9-2212 is hereby amended to read as fol-
lows: 9-2212. (a) Except for those persons meeting the requirements of
K.S.A. 1999 Supp. 9-2202 and amendments thereto, a registrant shall not
pay compensation to, contract with or employ as an independent con-
tractor any person engaged in mortgage business who does not hold a
valid certificate of registration.

      (b) No person shall be employed by a registrant without the prior
written approval of the commissioner if such person has:

      (1) Had a certificate of registration denied, revoked, suspended or
refused renewal; or

      (2) been convicted of any crime involving fraud, dishonesty or deceit.

      Sec.  6. K.S.A. 1999 Supp. 9-2213 is hereby amended to read as fol-
lows: 9-2213. (a) Within three business days of receipt a registrant shall
deposit all fees and money received from a borrower prior to the time a
loan is consummated in an escrow account in a bank, savings bank, savings
and loan association or credit union incorporated under the laws of this
state, or organized under the laws of the United States or another state
and which has a main or branch office in this state.

      (b) For each borrower the registrant shall maintain a separate record
of all money received for any service performed or to be performed,
including any payment to a third party, setting forth:

      (1) The date the money was received;

      (2) the amount of money received;

      (3) the date the money was deposited in the escrow account; and

      (4) the date, description, and justification for each disbursement.

      (c) Upon the request of a borrower, a copy of the record required by
subsection (b) shall be provided to the borrower:

      (1) Within five business days of consummation of the loan; or

      (2) within five business days of receipt of written notice of the bor-
rower's intention to withdraw from the loan transaction.

      Sec.  7. K.S.A. 1999 Supp. 9-2218 is hereby amended to read as fol-
lows: 9-2218. (a) If the commissioner determines after notice and oppor-
tunity for a hearing pursuant to the Kansas administrative procedure act
that any registrant person has engaged, is engaging or is about to engage
in any act or practice constituting a violation of any provision of this act
or any rule and regulation or order hereunder, the commissioner by order
may require any or all of the following:

      (1) That the registrant person cease and desist from the unlawful act
or practice;

      (2) that the registrant person pay a fine not to exceed $5,000 per
incident for the unlawful act or practice; or

      (3) that the registrant person take such affirmative action as in the
judgment of the commissioner will carry out the purposes of this act.

      (b) If the commissioner makes written findings of fact that the public
interest will be irreparably harmed by delay in issuing an order under
subsection (a), the commissioner may issue an emergency cease and desist

      (1) Such emergency order, even when not an order within the mean-
ing of K.S.A. 77-502, and amendments thereto, shall be subject to the
same procedures as an emergency order issued under K.S.A. 77-536, and
amendments thereto.

      (2) Upon the entry of such an emergency order, the commissioner
shall promptly notify the registrant person subject to the order that it has
been entered, of the reasons, and that a hearing will be held upon written
request by the registrant person.

      (3) If the registrant person requests a hearing, or in the absence of
any request, if the commissioner determines that a hearing should be
held, the matter will be set for a hearing which shall be conducted in
accordance with the provisions of the Kansas administrative procedure
act. Upon completion of the hearing the commissioner shall by written
findings of fact and conclusions of law vacate, modify or make permanent
the emergency order.

      (4) If no hearing is requested and none is ordered by the commis-
sioner, the emergency order will remain in effect until it is modified or
vacated by the commissioner.

      Sec.  8. K.S.A. 1999 Supp. 9-2204, 9-2207, 9-2208, 9-2209, 9-2212,
9-2213 and 9-2218 are hereby repealed.

 Sec.  9. This act shall take effect and be in force from and after its
publication in the statute book.

Approved March 20, 2000.