Herb Thomas Mortgage License News http://www.thomas-law.com

WA Mortgage Loan Originator (MLO) Requirements

Mortgage Loan Originator (MLO) Requirements To Conduct Business In Washington

Current requirements
The following MLOs must have an active Loan Originator License:

• All MLOs working for a Mortgage Broker Practices Act (MBPA) licensee (including employees and independent contractors)
• Independent contractor MLOs working for a Consumer Loan Act (CLA) licensee

Future requirements
Effective July 1, 2010, all MLOs (independent contractors and employees of either MBPA or CLA licensees) must have an active Loan Originator license

• The Department will begin licensing MLO employees of CLA licensees on January 1, 2010

Beginning 1/12010, non-delegated correspondent lenders licensed under the Mortgage Broker Practices Act must hold a WA Consumer Loan Act license

Converting From A WA MBPA License To WA CLA License
Beginning January 1, 2010, non-delegated correspondent lenders licensed under the Mortgage Broker Practices Act (MBPA) must hold a Consumer Loan Act (CLA) license in order to make residential mortgage loans. To avoid potential business interruption and ensure timely licensure, DFI recommends that all MBPA licensees wishing to make residential mortgage loans apply for a CLA license no later than October 31, 2009.

Instructions On How To Convert From MBPA To CLA License  http://www.dfi.wa.gov/cs/convert-consumer-loan.htm

WA Consumer Loan Companies Making Reverse Mortgages

WA Consumer Loan Companies Making Reverse Mortgages
EHB 1311 (PDF)* regulating reverse mortgages became effective July 26, 2009. While the department is conducting rulemaking on the provisions that create an approval process for proprietary reverse mortgage products, all provisions of the bill are now effective including the provisions, sections 12 and 13 that allow consumer loan companies to make HECMs.

If you have any questions, contact Cindy Fazio at 360-902-8800

Brokering WA Reverse Mortgages
License holders under both the Consumer Loan Act (CLA) and Mortgage Broker Practices Act (MBPA) can broker reverse mortgages to entities exempt from the CLA (nationally chartered entities). The lending entity must be exempt from the CLA due to RCW 31.04.125, a provision in the CLA that prohibits the compounding of interest on loans secured by real estate. Examples of exempt entities are Washington chartered banks, credit unions, their affiliates or subsidiaries and nationally chartered banks, credit unions, or their affiliates or subsidiaries

Contact Cindy Fazio, 360-902-8800 if you have questions. 

WA: New Surety Bond Requirements

Beginning January 1, 2010, the bond amounts required for WA Mortgage Broker and WA Consumer Loan licenses are changing. The bonding requirements will be determined annually by loan origination volume. Under the WA Mortgage Broker Practices Act (MBPA), the bonding amounts range from $30,000 to $60,000. Under the WA Consumer Loan Act (CLA), the bonding amounts range from $30,000 to $150,000.

http://www.dfi.wa.gov/cs/surety-bond-requirements.htm   

FHA Proposed regulations: Eliminate Loan Correspondent Approval Process & Increase Net Worth for Full Eagles to $2.5M

HUD No. 09-216 Lemar Wooley (202) 708-0685

FOR RELEASE Monday November 30, 2009

FHA PROPOSES NEW RULES TO STRENGTHEN RISK MANAGEMENT
Proposed regulations to boost lender oversight, tighten controls and streamline lender approval

WASHINGTON – The Federal Housing Administration (FHA) today proposed new regulations to further reduce risks to its single-family insurance fund as it continues to play a critical role in today’s housing market.  FHA proposes to increase the net worth requirements of FHA-approved lenders, strengthen lender approval criteria, and make lenders liable for the practices of their correspondent mortgage brokers.

 The proposed rule will permit FHA to more effectively focus its resources on lenders that pose the greatest potential threat to its insurance funds and to ensure that lenders possess the resources appropriate for the financial services they deliver.  FHA is soliciting comment for 30 days on its proposals and the comments received will be considered in the development of a final rule.

 “With FHA’s crucial role in today’s housing market, it is critically important that we are able to manage risk and to ensure that our reserves are adequate to cover future losses,” said FHA Commissioner David Stevens.  “We are taking a number of aggressive steps to ensure that we are able to continue to support the housing market in the short-term and provide access to home ownership to the underserved in the long term, while minimizing the risk to the American taxpayer.” 

 On September 18th, Stevens announced a set of credit policy changes that will enhance FHA’s risk management function, including the hiring of a Chief Risk Officer for the first time in the agency’s 75-year history.  In addition, Stevens announced his intent to propose new regulations to further strengthen FHA’s risk management.   The proposed rule published today makes good on that promise and would:

• Strengthen and Streamline Lender Approval – Lenders seeking approval to originate underwrite, or service an FHA loan must meet the eligibility criteria for a supervised or non-supervised mortgagee.  FHA-approved Mortgagees must assume liability for all the loans they originate and/or underwrite.  While loan correspondents (mortgage brokers) will continue to be able to originate FHA-insured loans through their relationships with approved mortgagees, they will no longer receive independent approval for origination eligibility. This will require the FHA-approved mortgagee to assume responsibility and liability for the FHA-insured loan underwritten and closed by the approved mortgagee. These changes align FHA with Fannie Mae and Freddie Mac and will potentially increase the number of loan correspondents (mortgage brokers) who are eligible to participate in the origination of FHA-insured loans while providing for more effective oversight of loan correspondents through the FHA approved mortgagees.
  
  
• Strengthen the Capacity of FHA-Approved Mortgagees – Since 1993, FHA has required approved mortgagees have a net worth of at least $250,000.  To strengthen the financial capacity of FHA counterparties to ensure they can meet their obligations, the proposed rule would require mortgagees maintain a minimum of $1 million in net worth within the first year and at least $2.5 million of net worth within three years of the effective date of the rule.   These changes are consistent with industry standards and will ensure that FHA lenders are sufficiently capitalized to meet potential needs, thereby permitting FHA to mitigate losses and decrease risks to its insurance fund.

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HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development ad enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.

New SC Lender/Servicer License replaces SC Supervised Lender Lic effective January 1, 2010

There is a new SC Lender/Servicer License that replaces the SC Supervised Lender and covers all mortgage lending - both 1st and 2nd mortgages - effective 1/1/2010 - As Commissioner Bratton states below:  "If you hold a Supervised Lender License, this license will not allow you to make, service or originate any type of mortgage loan effective January 1, 2010."

 

 

August 14, 2009

All Mortgage Lenders / Servicers / Mortgage Loan Originators

ATTENTION: LICENSING DEPARTMENT

Dear Lender:

As you have probably heard, legislation (Bill S-673) was passed June 3, 2009 requiring the licensing for all types of (first and subordinate lien) mortgage lending. The legislation requires any employee that discusses mortgage loan applications, terms, or conditions with consumers be licensed and meet certain pre-licensing education and testing requirements pursuant to SAFE Legislation.

South Carolina passed this legislation for compliance with the Federal SAFE Act requirements regarding the licensing of all mortgage loan originators. This is the first time there has been a licensing requirement for first mortgage lending in South Carolina. There are requirements for companies to have surety bonds payable to the Commissioners, Office, Consumer Finance Division, SC Board of Financial Institutions in order to obtain licensing. You may view this legislation at

www.sc.gov and click on legislation and type in bill number S-673.

If you hold a Supervised Lender License, this license will not allow you to make, service or originate any type of mortgage loan effective January 1, 2010. Application through the National Mortgage Licensing System and Registry (NMLS) is required effective January 1, 2010, to obtain a license to act as a mortgage lender, servicer, or mortgage loan originator in South Carolina.

The attached information should prove helpful in pursuing the proper license for mortgage lending activity in South Carolina. Please review this information carefully and contact our office should you have any questions.

Sincerely,

C. Dean Bratton

Commissioner

Enclosures

WY Division of Banking is proposing to amend the Residential Mortgage Practices Act rules

Proposed Rules WY Department of Audit, Division of Banking: The WY Division of Banking is proposing to amend the Residential Mortgage Practices Act rules Chapters 1 and 2 and promulgate new Chapter 3.  The notice of intent to adopt rules and regulations will be published in the Cheyenne Tribune-Eagle and the Casper Star Tribune newspapers on September 25 and October 2, 2009. 

Following is a description of the proposed rules.

The Residential Mortgage Practices Act was amended during the 2009 Legislative Session to add licensing requirements for loan originators who conduct first lien mortgage lending activities with individuals who are obtaining mortgage loans for Wyoming dwellings.  The Division of Banking is proposing to amend definitions in Chapter 1, establish surety bond amounts in Chapter 2, and license application and licensee fee requirements in Chapter 3.   

These rules are promulgated pursuant to the authority provided in Wyoming Statutes 40-23-103(a), 40-23-110(a)(ii) and pursuant to the Wyoming Administrative Procedure Act. 

Please call our office with any questions you may have.  If you wish to comment on the proposed rules, please forward your written statement to our office by 5:00 p.m., Monday, November 9, 2009.

Memorandum and Notice of Intent to Adopt Rules: The memorandum  http://audit.state.wy.us/banking/mortgage/Mortgage_Act_Rules_Ch1_2_3_Comment_letter.pdf  which explains the purpose of the rules.  The notice of intent   http://audit.state.wy.us/banking/mortgage/Mortgage_Act_Rules_Ch1_2_3_Notice_of_intent.pdf to adopt rules which was published in the Casper Star Tribune and the Cheyenne Tribune Eagle on September 25 and October 2, 2009.  Residential Mortgage Practices Act Proposed Amended (Chapters 1 and 2) and New (Chapter 3) Rules Chapters 1, 2 and 3     http://audit.state.wy.us/banking/mortgage/Mortgage_Act_Rules_Amend_Ch_1_2_New_Ch3_Sept_09_Strike_and_Underline.pdf

Legislation is being proposed to modernize Wyoming's collection agency statutes

PROPOSED LEGISLATION - 2009

Legislation is being proposed to modernize Wyoming's collection agency statutes.  Changes are being recommended in the following areas: - Transfer licensing and regulation of collection agencies from Collection Agency Board to Division of Banking - License application to include background checks for the collection agency owners and persons in charge - Increase surety bond to $25,000 - Eliminate the requirement for resident managers - Uniform license renewal date - December 31 - Change renewal application requirements to include updates to original application and financial statement - Provide for examinations of collection agencies - Provide for restitution to consumers for overcharged fees - Change in control of a license - 25 % change in ownership - Record retention schedule  The proposed legislation modernizes Wyoming's collection agency regulation by: - Enhancing efficiencies in the licensing area, - Ensuring that persons using the services of a collection agency are properly represented and - Protecting Wyoming consumers from improper and abusive methods used by some collection agencies. Send your questions or comments to:  maitchison@wyaudit.state.wy.us Proposed legislation  http://audit.state.wy.us/banking/cab/10LSO-0071_w6.pdf

AL - PA - OK: In-State Physical Office Requirement Has Been Eliminated But MO Now Has One Since its HUD Exemption is Gone

New HI Mortgage Servicer License

Report Title:

Mortgage Servicers; Regulation

Description:

Provides for the licensing and regulation of mortgage servicers that service residential mortgage loans secured by real property located in the State of Hawaii. Specifies prohibited practices for mortgage servicers. Effective 7/1/2010. (HB1071 CD1)

 

-2 License required. (a) No person except those exempted under this chapter shall engage in the business of mortgage servicing without a license as provided in this chapter.

(b) A person is engaged in the business of mortgage servicing if the person provides those services in this state even if the person providing services has no physical presence in the state.

(c) In the event of a delinquency or other act of default

on the part of the borrower, the servicer shall act in good faith to inform the borrower of the facts concerning the loan and the nature and extent of the delinquency or default, and, if the borrower replies, shall negotiate with the borrower, subject to the servicer's duties and obligations under the mortgage servicing contract, if any, to attempt a resolution or workout relating to the delinquency.