With the housing crisis worsens and the state legislators in session, we are seeing many laws are passed that effect the mortgage industry. There are so many that it is difficult to stay on top of them.
Most of these laws are directed towards increased regulation on licensing broker in mortgage and other states address the issue of improved regulatory requirements for underwriting guidelines mortgage lender. Consumer groups urge new laws, butmany people worry that it may create a problem for consumers to be able to obtain credit, if too many laws are adopted.
Here is an update of the most important laws make the mortgage industry:
FHA Licensing
The U.S. Congress continues to lag behind a bill modernizing the FHA. The hopes of the FHA License becomes easier fade slowly.
Increase Bond Maryland
Increases bonding MD are effective 6/1/08. Noticeswill be sent shortly. Bonds will be increased. It depends on the volume of loans.
Idaho Eliminates Loan Officer Bonding Requirement
Loan officers Idaho no longer need to bind $ 10K effective July 1, 2008. The notice should be sent around May
Michigan enacts law requiring a loan officer registration
On April 2, 2008 HB 5288 was approved, requiring the registration of "loan officers." Under these new laws, loan officers employed byLicensees or registrants are required to complete 24 hours of pre-licensure (unless they work as a loan officer for 4 ½ to five years earlier) and pass an initial examination. Loan officers will also be required to complete six hours of continuing education each year. Loan Registration Officer will begin on 1 January 2009.
Note – Under the new rules, Michigan 1st obligations must now end on 12/31, as the MI 2nd in preparation for joining the NMLS. Many bondriders must be completed.
Indiana Enacts First Lien Mortgage Lending Act
On March 24, the "First Lien Mortgage Lending Act (" Act ") was approved as part of HB 1359. The Act requires the approval of the first mortgage lenders and the requirements of the lien on the premises from a lender and maintenance activities. Also, under the new legislation, the Indiana Loan Brokers Act was amended to exclude mortgage lenders first lien. The First LinkMortgage law will take effect January 1, 2009.
Wisconsin enacts Bill Removing commercial loans from Licensing Act
On April 7, Wisconsin Governor James Doyle signed SB 517. This Act amends the definition of "loan" within the meaning of the Mortgage Bankers loan originators and mortgage Brokers Act (the "Act"). Currently, under the Act, a "loan" is broadly defined to include loans for commercial purposes. SB 517 restricts the definition of "loan"to mean "a personal loan, family, or household purposes which is secured by a lien or mortgage, or a similar security on the property [consisting of 1 to 4 housing units, including units condominium] located in this state. "SB 517 will come into force April 22, 2008.
Mississippi Licensed Mortgage Need to use Multistate Licensing System
On April 7, 2008 SB 2605 became law, amending the mortgage on the MississippiConsumer Protection Law (MMCPL), Miss. Code Ann. § § 81-18-1 et seq., To clarify the status and require the use of a licensing system with multiple stops. The new law requires that any entity or individual licensed MMCPL to use the system of licensing for multi-step application, renewal, assignment and any other activity required by the Commissioner of the Department of Banking and Consumer Finance. Finally, SB 2605 allows issuers of mortgage loans to work at any place licensedMississippi Company authorized for which he / she works and creates an exemption de minimis MMCPL for people who come in not more than 12 transactions of residential mortgage loans per calendar year. SB 2605 also requires individuals who possess or acquire more than 10% of an authorized entity, down from 25% to apply for a license. SB 2605 became effective April 7, 2008.
Massachusetts author loan applicants must complete 24 Hour EducationCourse
The Massachusetts Division of Banks (Division) has recently finalized and issued Regulatory Bulletin 5.1-105 describing training requirements that applicants for loans must meet donor prior to obtaining licensure. Specifically, within 2 years after approval of licensure individual candidates Massachusetts home loan must complete a training course approved with at least 24 hours of classroom-based teaching. In addition, originators of loans authorizedmust fill each year at least 8 hours of continuing education residential mortgages. Individuals are not required to meet the requirement of 24 hours of course if they (i) met the definition of mortgage originator before November 30, 2007, and (ii) a permit application before May 27, 2008 . The Division has established new training requirements to ensure that applicants are well informed about the concepts of mortgage, applicable law and specific regulationsto the occupation of mortgage origination. We note that the newsletter also describes the conditions for a company seeking approval of the division of its mortgage origination training.
NMLS the first quarter of operations are successful
The Nationwide Mortgage Licensing System (NMLS), which is a government run database licenses, completed its first quarter of operations successfully. Events of note in the first quarter:
September ·States with licenses estimated 83,144 participants on NMLS.
· MA Division of Banks is implementing its new loan right licensor through NMLS.
• Two states, Nebraska and Rhode Island were transitional periods during the first quarter. It is estimated that 78% of licensees Nebraska company and 74% of Rhode Island company dismissed transition to NMLS.
Additional functionality has been added to · NMLS March 31 that included data downloadbuilding for regulators and the first phase of reporting. The next version of the system is scheduled for June 30.
• The NMLS call center has been instrumental in helping get on licensees and navigate the system, processing an average of 400 calls per day.
NY Banking Department began Company / Branch Licenses on NMLS
Companies and individual entrepreneurs who currently hold a NY Mortgage Broker or Mortgage Banker NY registration license havefrom 1 April 2008 to September 1, 2008 to complete and submit through NMLS all MU1s necessary form, Form MU2s and MU3s form. Companies that have created their label on NMLS can begin submitting applications for permits on behalf of their loan officers, as required by New York law that took effect on 1 January this year.
The state begins DFI Consumer Loan Company Licensing on NMLS on May 1st
Companies holding a Washington State ConsumerLoan Company license have to May 1, 2008 to September 1, 2008 to complete and submit through NMLS all MU1s necessary form, Form MU2s, Form MU3s and MU4s form. WA-DFI will no longer accept applications for consumer loan company license through the paper after April 18, 2008.
The following state agencies are expected to begin participating in NMLS in 2008.
May 1
Washington Department of Financial Institutions (Consumer Loan Company Licenses)
July1st
Connecticut Department of Banking
Louisiana Officer of Financial Institutions
Mississippi Department of Banking & Consumer Finance
New Hampshire State Banking Department
North Carolina Office of the Commissioner of Banks
Vermont Department of Banking, Insurance, Securities and Health Care Administration
Washington Department of Financial Institutions (Mortgage Broker Licenses)
November 1
ArkansasSecurities Department
Indiana Department of Financial Institutions
Pennsylvania Department of Banking
Wyoming Division of Banking
Note: These lists are an indication of intent. The official announcements will be made of participation by each agency in a notice to each of their owners.