VA has taken the position that Mortgage Servicers that engage in Loan Modifications are considered to be engaged in "refinancings" and must obtain a VA Mortgage Broker License in order to be compliant.
From: Jonathan Orne [Jonathan.Orne@scc.virginia.gov]
Sent: Monday, March 30, 2009 8:20 AM
To: 'Herbert H. Thomas'
Cc: Susan Hancock; Joe Face; Nick Kyrus; Todd Rose
Subject: RE: Wealthbridge Mortgage: VA Mortgage Broker versus Mortgage Servicer
Mr. Thomas:
The previous position of our Bureau of Financial Institutions relating to licensure of servicers under
our Mortgage Lender and Broker Act (the Act) was based upon the supposiiton that these companies
activities were limited to receiving regular payments from borrowers on existing mortgage loans,
maintaining escrow account for real property taxes and hazard insurance relating to the security
propertry, providing monthly statements, payment books, late notices, annual escrow reconciliation
statements and annual statements of interest paid, transmitting payments to noteholders or their
representatives net of servicing fees, and engaging in various collection activities. Because of low
historical average default ratios, servicers played no role in renegotiation of loan terms of which we were aware. Since the "mortgage meltdown" began, however, it seems that servicers have been pressed into engaging in such renegotiations in an effort to reduce widespread foreclosures and mounting losses to noteholders. It is this new activity, negotiation of altered loan terms (refinancings), that brings servicers within the definition of "mortgage broker" under the Act.
Jonathan B. Orne
Senior Counsel
State Corporation Commission
13th & Main Streets
Richmond, VA 23218
(804) 371-9671
From: Herbert H. Thomas [mailto:hthomas@thomas-law.com]
Sent: Friday, March 27, 2009 5:54 PM
To: Jonathan Orne
Subject: RE: Wealthbridge Mortgage: VA Mortgage Broker versus Mortgage Servicer
Jonathan
Default management [loss mitigation] has always been an integral element
of all mortgage servicers. VA’s past position over many years has been that
mortgage servicers do not need to licensed as either a mortgage lender or a
mortgage broker. It is a radical departure from this position that all
mortgage servicers must now be licensed as a mortgage broker. It is
essential that you publish immediate notice of this change on your website
because all currently operating mortgage servicer companies are relying on
the position that they had been previously advised.
Thank you for your time and assistance on this issue. Sincerely, Herb Thomas
Herbert H. Thomas
Thomas Law Firm, P.C.
8080 N. Central Expressway, Suite 890
Dallas, Texas 75206
Telephone: 214-692-7611 ext. 102
FAX: 214-692-7613
Email: hthomas@thomas-law.com
Website: http://www.thomas-law.com
