Your partner in today's ever changing lending environment

 Pennsylvania:

Gov. Edward G. Rendell, D-Pa., has signed five bills designed to protect homebuyers, strengthen oversight of the mortgage industry and end key lending practices that leave homeowners vulnerable to foreclosure.

Here are two of the bills:

H.B.2179 assures homebuyers that the persons selling mortgages have successfully passed a background check, completed training specific to state and federal mortgage laws, passed a test to prove their knowledge and are licensed by the Department of Banking. In the past, only mortgage companies had to be licensed in Pennsylvania - not their employees, the governor's office notes.

S.B.483 makes sure that Pennsylvanians who buy typical family homes cannot be trapped in unaffordable mortgages by certain prepayment penalty provisions. This law bans licensees from including prepayment penalties on mortgages of $217,873 or less, a figure that will now be adjusted for inflation every year.


Arizona:

Arizona Gov. Janet Napolitano on Monday signed into law a bill requiring state licensing of mortgage loan workers. While the state already regulates mortgage brokers and mortgage bankers, the law will require licensing of an estimated 10,000 loan originators — front-line employees of mortgage brokers and other lenders who typically interview loan applicants and act as middlemen between lenders and consumers. Supporters say it will help weed out fraud, prevent abuses and protect consumers. Opponents questioned whether it would burden business and said it won't prevent buyers from lying about their income. The issue came before the Legislature while the mortgage industry faced scrutiny because of foreclosures and other problems associated with the subprime loan crisis.


Indiana:

It appears that more than 2/3's of Indiana's mortgage brokers have failed to comply with a new requirement to assign a Principal Manager to supervise their business by July 1, 2008 and that may put hundreds of brokers at risk of losing their licenses if they can't comply by the last chance date of August 5, 2008. This requirement appears to be for mortgage brokers located inside and outside of the state.

Per the Sec. Of State, more than 600 loan broker companies, or roughly 70 percent operating in the state, have yet to conform to the new guidelines, let alone take the test, and are therefore at risk of losing their licenses if they are not in compliance by the newly extended “last chance” August 5 deadline.

 

 

 

 

On July 1, 2008 NMLS began receiving new application and transition filings in Connecticut, Mississippi, New Hampshire, North Carolina, and Vermont. Over the past two months, licensees in these states were sent letters from their regulator encouraging them to begin creating their NMLS record in anticipation of the state's participation. Licensees and new applicants are now able to submit these records through NMLS.

 

 

 

Kentucky OFI deadline has expired. posted June 21, 2008:

Licensees holding a Mortgage Company License, a Mortgage Broker License, a branch license or a Loan Originator License in Kentucky had until June 20, 2008 to transition their license onto NMLS. Licensees who missed the deadline can still transition without penalty through June 30, 2008. Anyone transitioning from July 1, 2008 through July 31, 2008 must pay a $250 late fee. No transitions will be accepted after July 31, 2008.

 

 

NYS Banking Department Deadline for Loan Officers is July 1st:
Loan officers originating in New York have until July 1, 2008, to complete and submit a Form MU4 through NMLS and mail all jurisdiction-specific items to NYS Banking Department, unless their employer was specifically granted a later deadline by the NYS Banking Department. Loan officers can complete and submit Form MU4 and jurisdiction-specific items themselves or a mortgage company that has successfully transitioned on their company license onto the NMLS can create and submit a Form MU4 on behalf of their loan officers.

 

 

 

Connecticut and Louisiana Announce Participation in NMLS:
The Connecticut Department of Banking and the Louisiana Office of Financial Institutions have issued announcements indicating their participation on NMLS starting July 1, 2008. Connecticut licensees have until September 30, 2008 and Louisiana licensees have until October 1, 2008 to transition their license(s) onto NMLS. Both agencies will begin accepting submissions through NMLS on July 1, 2008 but licensees can begin now to obtain access to NMLS and complete all necessary forms prior to that date. For more information, see the Louisiana Transition Plan. The Connecticut Transition Plan will be posted shortly.

 

 

Iowa Division of Banking deadline has expired. posted June 2, 2008:
Companies holding a Mortgage Banker License, Mortgage Banker Registrant, Mortgage Broker License or a Non-profit Mortgage Banker Registrant in Iowa had until June 1, 2008 to complete and submit a Form MU1 and relevant Form MU2s for their company and a Form MU3 for each Mortgage Branch Registration held to meet the Division's renewal process for 2008.

The Division has decided to extend the deadline to accept transitions until June 30th. Companies who missed the deadline but wish to renew their license may still transition their company and branches onto NMLS, but it must be completed by June 30th.

 

 

 

Deadline for existing loan officers to apply under the grandfather provision in Massachusetts has expired.
Existing loan officers that meet the definition of a Mortgage Loan Originator, as defined in Section 1 of Chapter 206 of the Acts of 2007, AND who were employed by a licensed Mortgage Lender or Mortgage Broker prior to November 30, 2007 had until May 27, 2008 to submit a license application through NMLS to be exempted from the requirement to complete a residential mortgage lending course prior to becoming licensed.

Starting May 28, 2008, any loan officer that has not submitted a Form MU4 through NMLS to MA Division of Banks must complete and submit a Form MU4 through NMLS to the MA Division of Banks before July 1, 2008 AND complete an approved residential mortgage lending course by August 31, 2008. Starting July 1, 2008, no individual may operate as a loan officer in MA without having a Form MU4 pending with or approved by the MA Division of Banks.

 

 

  

 

 

 

 

A lender may no longer be allowed to sell to Fannie Mae or Freddie Mac a loan if the appraisal was done by an in-house appraiser, a subsidiary or affiliate of the lender (except under certain conditions as noted below), ordered by a mortgage broker, or an entity that offers any other services other than appraisals.

 
Fannie and Freddie may require that lenders represent and warrant that appraisals prepared in connection with mortgages originated on and after January 1, 2009 conform to the Code, and that the appraisal report was obtained in a manner consistent with the Code. 

 

Also, lenders or a third-party specifically authorized by the lender (including appraisal management companies) to be responsible for selecting, retaining and providing for payment of all compensation to the appraiser. Lenders may be prohibited from accepting appraisal reports completed by an appraiser selected, retained or compensated by an unacceptable third party, including mortgage brokers and real estate agents. 

 

Check with your inhouse compliance department or attorney to see how this may impact you.   

 

 

 - SEE INDENTITY THEFT SECTION

 

 

 

 

For more information, contact Compliance Made Simple.

 

George Marentis, J.D.

303.859.8550