Mich. Comp. Laws » Michigan Compiled Laws / Chapter 493 / Act 125 of 1981

Mich. Comp. Laws § 493.51

Short title; definitions.

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THE SECONDARY MORTGAGE LOAN ACT


Act 125 of 1981


493.51 Short title; definitions.

Sec. 1.

    (1) This act shall be known and may be cited as "the secondary mortgage loan act".

    (2) As used in this act:

    (a) "Broker" means a person who, directly or indirectly, does 1 or both of the following:

    (i) Serves or offers to serve as an agent for a person attempting to obtain a secondary mortgage loan.

    (ii) Serves or offers to serve as an agent for a person who makes or offers to make a secondary mortgage loan.

    (b) "Commissioner" means the commissioner of the office of financial and insurance regulation of the department of energy, labor, and economic growth or his or her authorized representatives.

    (c) "Control person" means a director or executive officer of a licensee or registrant or a person who has the authority to participate in the direction, directly or indirectly through 1 or more other persons, of the management or policies of a licensee or registrant.

    (d) "Depository financial institution" means a state or nationally chartered bank, state or federal chartered savings and loan association, savings bank, or credit union, or any other institution whose deposits are insured by an agency of the federal government.

    (e) "Employee" means an individual who meets both of the following:

    (i) Has an employment relationship acknowledged by that individual and the licensee or registrant that engages that individual to originate secondary mortgage loans.

    (ii) Is treated as an employee by the licensee or registrant that engages that individual to originate secondary mortgage loans for compliance with federal income tax laws.

    (f) "Executive officer" means an officer, member, or partner of a licensee or registrant. The term includes the chief executive officer, president, vice president, chief financial officer, controller, or compliance officer, or an individual holding any other similar position.

    (g) "Financial licensing act" means any of the financial licensing acts, as that term is defined in section 2 of the consumer financial services act, 1988 PA 161, MCL 487.2052.

    (h) "Lender" means a person who, directly or indirectly, makes or offers to make secondary mortgage loans.

    (i) "Licensed secondary mortgage loan officer" means a secondary mortgage loan officer who is licensed as a mortgage loan originator under the mortgage loan originator licensing act.

    (j) "Licensee" means a person licensed or required to be licensed under this act.

    (k) "Loan servicing customer" means a mortgagor whose secondary mortgage loan is being serviced by a servicer.

    (l) "Open-end credit" means credit extended under a plan in which both of the following apply:

    (i) The licensee or registrant reasonably contemplates repeated transactions.

    (ii) The amount of credit that may be extended to the borrower during the term of the plan is generally made available to the extent that any part of the outstanding balance is repaid.

    (m) "Originate" means any of the following:

    (i) To negotiate, arrange, or offer to negotiate or arrange a secondary mortgage loan between a lender and 1 or more individuals.

    (ii) To place, assist in placing, or find a secondary mortgage loan for 1 or more individuals.

    (n) "Person" means an individual, corporation, limited liability company, partnership, association, or other legal entity.

    (o) "Registrant" means a person that is registered or required to register as a broker, lender, or servicer under this act. The term does not include a depository financial institution.

    (p) "Secondary mortgage loan" means a loan that has a term of 90 days or more; that is made to a person for personal, family, or household purposes; and that is secured by a mortgage on an interest in real property that is used as a dwelling and is subject to a lien of 1 or more outstanding mortgages. A secondary mortgage loan may be secured by other collateral in addition to real property. Notwithstanding the place of execution, nominal or real, of a secondary mortgage loan, if the real property that secures the loan is located in this state, a secondary mortgage loan is subject to this act and all other applicable laws of this state.

    (q) "Secondary mortgage loan officer" means an individual who is an employee or agent of a broker, lender, or servicer; who originates secondary mortgage loans; and who is not an employee or agent of a depository financial institution or a subsidiary or affiliate of a depository financial institution.

    (r) "Service" means the collection or remittance for a lender, noteowner, or noteholder or a licensee's own account of 4 or more installment payments of the principal of, interest of, or an amount placed in escrow under a secondary mortgage loan, mortgage servicing agreement, or an agreement with a mortgagor.

    (s) "Servicer" means a person who, directly or indirectly, services or offers to service secondary mortgage loans.

History: 1981, Act 125, Imd. Eff. July 23, 1981 ;-- Am. 1989, Act 66, Imd. Eff. June 16, 1989 ;-- Am. 1995, Act 164, Eff. Mar. 28, 1996 ;-- Am. 1997, Act 91, Imd. Eff. Aug. 1, 1997 ;-- Am. 2002, Act 392, Imd. Eff. May 30, 2002 ;-- Am. 2008, Act 325, Imd. Eff. Dec. 18, 2008 ;-- Am. 2009, Act 14, Imd. Eff. Apr. 9, 2009 ;-- Am. 2009, Act 77, Eff. July 31, 2010

Compiler's Notes:

    For transfer of authority, powers, duties, functions, and responsibility of the financial institutions bureau and the commissioner of the financial institutions bureau to the commissioner of the office of financial and insurance services and the office of financial and insurance services by type III transfer, see E.R.O. No. 2000-2, compiled at MCL 445.2003 of the Michigan compiled laws.

    For references to office of financial and insurance regulation to be deemed as department of insurance and financial services, and abolishment of office of financial and insurance regulation, see E.R.O. No. 2013-1, compiled at MCL 550.991.

    For references to commissioner of office of financial and insurance regulation to be deemed as references to director of department of insurance and financial services, and abolishment of office of commissioner of office of financial and insurance regulation, see E.R.O. No. 2013-1, compiled at MCL 550.991.

PopularName Notes:

Secondary Mortgage Loan Act
Notes of Decisions
Cited in 20 cases (4 in the last 5 years), 1982–2022 · leading case: Worthy v. World Wide Financial Services, Inc.
Sort: Relevance Newest Treatment
Worthy v. World Wide Financial Services, Inc. (2004) mied · cites it 4× “§ 493.51. Finally, Plaintiff claims that the foreclosure sale should be voided because (1) the adjournment of the foreclosure proceeding violated the automatic stay under the bankruptcy code; and (2) *505 the notice of foreclosure incorrectly stated he was a woman.”
Barclae v. Zarb (2013) michctapp “(3) As used in subsection (2), “financial institution” means a state or national chartered bank, a state or federal chartered savings bank or savings and loan association, a state or federal chartered credit union, a person licensed or registered under the mortgage brokers,…”
Wachovia Bank, N.A. v. Watters (2004) miwd “LAW § 493.51 et seq. Under these statutes, Wachovia Mortgage is required to register with the State of Michigan, but is not required to obtain a license to operate in the state.”
Mitchell v. Trustees of United States Mutual Real Estate Investment Trust (1985) michctapp “, defines a secondary mortgage loan to be a loan which, among other requirements, is secured by a mortgage upon an interest in real property if the property is subject to the lien of one or more prior mortgages.”
Kevelighan v. Trott & Trott, P.C. (2010) mied “§ 493.51(o). None of the underlying mortgages in this case are secondary mortgages.”
Knight v. Ocwen Loan Servicing, LLC (2018) mied “LAWS § 493.51. Dkt. No. 32, pp. 13-14 (Pg. ID 319); see also Dkt.”
Selman v. Manor Mortgage Co. (1982) mied “§ 493.51 et seq., which regulates second mortgage loans.”
Walker v. Michael W. Colton Trust (1999) mied “§ 493.51 et *593 seq. (Michigan Secondary Mortgage Act); M.”
Lee v. Cincinnati Capital Corporation (2021) mied · cites it 10× “The following claims are asserted against Defendant: 1) “Violation of the SMLA, Mich. Comp. Laws Ann. § 493.51 , et seq.” (Count I); 2) “Unjust Enrichment/Restitution” (Count II); 3) “Violation of Truth-in-Lending Act, 15 U.”
Lee v. Cincinnati Capital Corporation (2020) mied · cites it 9× “This complaint is against Defendants for violations of the Secondary Mortgage Loan Act, Mich. Comp. Laws Ann. § 493.51 , et seq., (“SMLA”), the Truth-in-Lending Act 15 U.”
Lee v. Cincinnati Capital Corporation (2022) mied · cites it 6× “It included the following claims: 1) “Violation of the SMLA, Mich. Comp. Laws Ann. § 493.51 , et seq.” (Count I); 2) “Unjust Enrichment/Restitution” (Count II); 3) “Violation of Truth-in-Lending Act, 15 U.”
Lee v. Cincinnati Capital Corporation (2020) mied · cites it 4× “It asserts the following claims: 1) “Violation of the SMLA, Mich. Comp. Laws Ann. § 493.51 , et seq.” (Count I); 2) “Unjust Enrichment/Restitution” (Count II); 3) “Violation of Truth-in-Lending Act, 15 U.”
Show all 20 citing cases →
— Mich. Comp. Laws § 493.51(2)(p) — 1 case
Wilmington Savings Fund Society Fsb v. Alex Schmidt (2021) michctapp
— Mich. Comp. Laws § 493.51(o) — 1 case
Kevelighan v. Trott & Trott, P.C. (2010) mied “§ 493.51(o). None of the underlying mortgages in this case are secondary mortgages.”
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