(1) The board may deny an
application for a license, refuse to renew, or revoke the license of an applicant or
licensee who has:
(a) Filed an application with the board containing material misstatements of
fact or omitted any disclosure required by this part 7;
(b) Within the last five years, been convicted of or pled guilty or nolo
contendere to a crime involving fraud, deceit, material misrepresentation, theft, or
the breach of a fiduciary duty, except as otherwise set forth in this part 7;
(c) Except as otherwise set forth in this part 7, within the last five years, had
a license, registration, or certification issued by Colorado or another state revoked
or suspended for fraud, deceit, material misrepresentation, theft, or the breach of a
fiduciary duty, and the discipline denied the person authorization to practice as:
(I) A mortgage broker or a mortgage loan originator;
(II) A real estate broker, as defined by section 12-10-201 (6);
(III) A real estate salesperson;
(IV) A real estate appraiser, as defined by section 12-10-602 (9);
(V) An insurance producer, as defined by section 10-2-103 (6);
(VI) An attorney;
(VII) A securities broker-dealer, as defined by section 11-51-201 (2);
(VIII) A securities sales representative, as defined by section 11-51-201 (14);
(IX) An investment advisor, as defined by section 11-51-201 (9.5); or
(X) An investment advisor representative, as defined by section 11-51-201
(9.6);
(d) Been enjoined within the immediately preceding five years under the laws
of this or any other state or of the United States from engaging in deceptive
conduct relating to the brokering of or originating a mortgage loan;
(e) Been found to have violated the provisions of section 12-10-721;
(f) Been found to have violated the provisions of section 12-10-713;
(g) Not demonstrated financial responsibility, character, and general fitness
to command the confidence of the community and to warrant a determination that
the individual will operate honestly, fairly, and efficiently, consistent with the
purposes of this part 7;
(h) Not completed the prelicense education requirements set forth in section
12-10-704 and any applicable rules of the board; or
(i) Not passed a written examination that meets the requirements set forth in
section 12-10-704 and any applicable rules of the board.
(2) The board shall deny an application for a license, refuse to renew, or
revoke the license of an applicant or licensee who has:
(a) (I) Had a mortgage loan originator license or similar license revoked in
any jurisdiction.
(II) If a revocation is subsequently formally nullified, the license is not
revoked for purposes of this subsection (2)(a).
(b) (I) At any time been convicted of, or pled guilty or nolo contendere to, a
felony in a domestic, foreign, or military court if the felony involved an act of fraud,
dishonesty, breach of trust, or money laundering.
(II) If the individual obtains a pardon of the conviction, the board shall not
deem the individual convicted for purposes of this subsection (2)(b).
(c) Been convicted of, or pled guilty or nolo contendere to, a felony within the
immediately preceding seven years.
(3) The board may investigate the activities of a licensee or other person that
present grounds for disciplinary action under this part 7 or that violate section 12-10-720 (1).
(4) (a) If the board has reasonable grounds to believe that a mortgage loan
originator is no longer qualified under subsection (1) of this section, the board may
summarily suspend the mortgage loan originator's license pending a hearing to
revoke the license. A summary suspension shall conform to article 4 of title 24.
(b) The board shall suspend the license of a mortgage loan originator who
fails to maintain the bond required by section 12-10-717 until the licensee complies
with that section.
(5) The board or an administrative law judge appointed pursuant to part 10 of
article 30 of title 24 shall conduct disciplinary hearings concerning mortgage loan
originators and mortgage companies. The hearings shall conform to article 4 of title
24.
(6) (a) Except as provided in subsection (6)(b) of this section, an individual
whose license has been revoked shall not be eligible for licensure for two years
after the effective date of the revocation.
(b) If the board or an administrative law judge determines that an application
contained a misstatement of fact or omitted a required disclosure due to an
unintentional error, the board shall allow the applicant to correct the application.
Upon receipt of the corrected and completed application, the board or
administrative law judge shall not bar the applicant from being licensed on the
basis of the unintentional misstatement or omission.
(7) (a) The board or an administrative law judge may administer oaths, take
affirmations of witnesses, and issue subpoenas to compel the attendance of
witnesses and the production of all relevant papers, books, records, documentary
evidence, and materials in any hearing or investigation conducted by the board or
an administrative law judge. The board may request any information relevant to the
investigation, including, but not limited to, independent credit reports obtained
from a consumer reporting agency described in the federal Fair Credit Reporting
Act, 15 U.S.C. sec. 1681a (p).
(b) Upon failure of a witness to comply with a subpoena or process, the
district court of the county in which the subpoenaed witness resides or conducts
business may issue an order requiring the witness to appear before the board or
administrative law judge; produce the relevant papers, books, records, documentary
evidence, testimony, or materials in question; or both. Failure to obey the order of
the court may be punished as a contempt of court. The board or an administrative
law judge may apply for an order.
(c) The licensee or individual who, after an investigation under this part 7, is
found to be in violation of a provision of this part 7 shall be responsible for paying
all reasonable and necessary costs of the division arising from subpoenas or
requests issued pursuant to this subsection (7), including court costs for an action
brought pursuant to subsection (7)(b) of this section.
(8) (a) If the board has reasonable cause to believe that an individual is
violating this part 7, including but not limited to section 12-10-720 (1), the board may
enter an order requiring the individual to cease and desist the violations.
(b) The board, upon its own motion, may, and, upon the complaint in writing
of any person, shall, investigate the activities of any licensee or any individual who
assumes to act in such capacity within the state. In addition to any other penalty
that may be imposed pursuant to this part 7, any individual violating any provision of
this part 7 or any rules promulgated pursuant to this article 10 may be fined upon a
finding of misconduct by the board as follows:
(I) In the first administrative proceeding, a fine not in excess of one thousand
dollars per act or occurrence;
(II) In a second or subsequent administrative proceeding, a fine not less than
one thousand dollars nor in excess of two thousand dollars per act or occurrence.
(c) All fines collected pursuant to this subsection (8) shall be transferred to
the state treasurer, who shall credit them to the division of real estate cash fund
created in section 12-10-215.
(9) The board shall keep records of the individuals licensed as mortgage loan
originators and of disciplinary proceedings. The records kept by the board shall be
open to public inspection in a reasonable time and manner determined by the board.
(10) The board shall maintain a system, which may include, without limitation,
a hotline or website, that gives consumers a reasonably easy method for making
complaints about a mortgage loan originator.
(11) The board shall promulgate rules to allow licensed mortgage loan
originators to hire unlicensed mortgage loan originators under temporary licenses.
If an unlicensed mortgage loan originator has initiated the application process for a
license, he or she shall be assigned a temporary license for a reasonable period
until a license is approved or denied. The licensed mortgage loan originator who
employs an unlicensed mortgage loan originator shall be held responsible under all
applicable provisions of law, including without limitation this part 7 and section 38-40-105, for the actions of the unlicensed mortgage loan originator to whom a
temporary license has been assigned under this subsection (11).