Utah Legislative Update

Utah Legislative Update

The Utah legislature recently amended its laws related to reporting and licensing requirements under the jurisdiction of the Division of Real Estate (“Division”) for residential mortgage lenders, effective May 8, 2017.


Utah House Bill 196


The Division may not issue a citation after the expiration of one year (previously six months) following the occurrence of a violation.  The Division may issue a notice to address a violation that is outside of such one year citation period.


“Business of Residential Mortgage Loans” means for compensation or in the expectation of compensation to:

  • Engage in an act that makes an individual a mortgage loan originator;
  • Make or originate a residential mortgage loan;
  • Directly or indirectly solicit a residential mortgage loan for another;
  • Unless otherwise exempt or excluded, render services related to the origination of a residential mortgage loan which now includes:
    • Receiving, collecting, or distributing information common for the processing or underwriting of a loan in the mortgage industry; or
    • Communicating with a consumer to obtain information necessary for the processing or underwriting of a residential mortgage loan; or
  • Engage in loan modification assistance.


“Business of Residential Mortgage Loans” does not include:

  • Ownership of an entity that engages in the business of residential mortgage loans if the owner does not personally perform the acts listed above;
  • Acting in one or more of the following capacities:
    • A loan wholesaler;
    • An account executive for a loan wholesaler;
    • A loan closer; or
    • Funding a loan; or
  • If employed by a person who owns or services an existing residential mortgage loan, the direct negotiation with the borrower for the purpose of loan modification.


“Uniform State Test” means the uniform state content section of the qualified written test developed by the Nationwide Multistate Licensing System and Registry (“NMLS”).


A loan processor or loan underwriter who is not a mortgage loan originator is not required to obtain a license when the loan processor or loan underwriter is:

  • Employed by, and acting on behalf of, a person or entity licensed as a loan originator; and
  • Under the direction of and subject to the supervision of a person licensed as a loan originator.


A loan processor or loan underwriter who is an independent contractor is not exempt.


The Division may not license an individual as a loan originator unless that individual first passes the qualified written national test developed by NMLS that includes the Uniform State Test content.


A person transacting the business of residential mortgage loans in Utah may not engage in any act or practice that violates appraisal independence as defined by federal law or in the policies and procedures of the Federal Home Loan Mortgage Corporation (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae).


A licensed entity must provide a report of condition identifying all lending activities on a quarterly basis to the nationwide database no later than 75 days after the last day of the reporting quarter.


A “Branch Broker” means an associate broker who manages a principal broker’s branch office under the supervision of the principal broker.


A “Dual Broker” means a principal broker of a real estate sales brokerage who obtains from the Division a dual broker license in order to function as the principal broker of a property management company that is a separate entity from the real estate sales brokerage.


A principal broker may simultaneously supervise one main office and up to two additional branch offices while a Branch Broker may simultaneously supervise up to three branch offices.


If a principal broker terminates an associate broker or sales agent, the principal broker must notify the Division and the associate broker or sales agent of the termination as required.