| With the mortgage crisis still in full force, many states | | | | continuing education, as specified in the amendments, |
| are looking for a way to increase regulation on the | | | | to "covered employees." |
| mortgage industry. The first step to regulating | | | | The new regulations became effective on August 10, |
| mortgage companies is to license the companies and | | | | 2008. Under the new regulation, mortgage licensees |
| their sales people. Many new states have passed | | | | are responsible for providing initial training and continuing |
| regulations this month requiring additional licensing. | | | | education to their covered employees on at least an |
| North Carolina Passes New Mortgage Laws, Banning | | | | annual basis with respect to all laws and regulations |
| YSP and Requiring Licensing for Servicers | | | | applicable to the licensees' business. |
| Effective October 1, 2008, House Bill 2188 amends the | | | | Initial education must consist of at least twelve (12) |
| Rate Spread Home Loan Law to prohibit the payment | | | | hours relating to applicable federal laws and regulations, |
| of a yield spread premium on rate spread home loans. | | | | at least four (4) hours of which must relate to |
| Make sure to look at the definition of a rate spread | | | | applicable Virginia laws and regulations, and two (2) |
| home loan. Effective January 1, 2009, House Bill 2463 | | | | hours must relate to mortgage fraud prevention, |
| amends the Mortgage Lending Act to require the | | | | including penalties for participating in mortgage fraud. |
| licensure of mortgage loan servicers. | | | | Initial education shall be provided to individuals who |
| Delaware Requires Loan Originator Licensing | | | | were covered employees as of July 1, 2008 on or |
| Effective January 1, 2009, Loan Originators will be | | | | before May 1, 2009, and to individuals who become |
| required to be licensed in Delaware. HB 508 defines a | | | | covered employees after July 1, 2008, within 90 days |
| mortgage loan originator as an employee or | | | | of their date of hire. Continuing education must consist |
| independent contractor of a licensed Delaware | | | | of at least four (4) hours related to applicable federal |
| Mortgage Broker or Lender. The legislation requires a | | | | laws and regulations, at least two (2) hours related to |
| mortgage loan originator to apply to the Office of the | | | | applicable Virginia laws and regulations, and at least |
| State Bank Commissioner for a mortgage loan | | | | one (1) hour relating to mortgage fraud prevention, |
| originator license, establishes initial and continuing | | | | including penalties for participating in mortgage fraud. |
| education requirements for licensees, and authorizes | | | | Additionally, the regulation prohibits licensees from hiring |
| the Commissioner to adopt regulations to facilitate | | | | any individual for a position of employment who may |
| participation in the Nationwide Mortgage Licensing | | | | have access to personal identifying information or |
| System. Delaware House Bill 508 becomes effective | | | | financial information to any customer, without first |
| on January 1, 2009, but mortgage loan originators will | | | | obtaining a criminal history record from the Central |
| not be required to obtain a license until the State Bank | | | | Criminal Records Exchange that shows the |
| Commissioner adopts regulations implementing the | | | | prospective employee has not been convicted in any |
| new licensing laws. The bill requires that loan originator | | | | court of any felony, or any misdemeanor involving |
| licensees have at least 18 hours of education courses | | | | fraud, misrepresentation, or deceit under the laws of |
| within the five years prior to licensure, or within one | | | | any state or the United States. |
| year following licensure. Applicants may work as | | | | Florida Bars Criminals from Mortgage Licensing |
| mortgage loan originators upon initial employment on a | | | | Florida approved an emergency rule change to ban |
| temporary basis until the person is either licensed or | | | | individuals with criminal histories from obtaining licenses |
| the application is denied. Applicants must submit a | | | | to work in the mortgage industry. The rule prohibits the |
| $250 investigation fee and a $250 annual license fee. | | | | Florida Office of Financial Regulation from issuing a |
| Virginia Amends Regulations to Require Initial and | | | | Florida mortgage broker, mortgage lender, |
| Continuing Education | | | | correspondent lender or mortgage brokerage business |
| The Virginia State Corporation Commission recently | | | | license to an applicant for a specified period (ranging |
| issued amendments to regulations implementing the | | | | between 5 to 15 years) if the applicant or "relevant |
| Mortgage Lender and Broker Act. The new | | | | persons" of the applicant (i.e., officers, directors, |
| regulations: (i) require licensees to conduct background | | | | members, partners, control persons and joint |
| checks; (ii) prohibit licensees from hiring an individual | | | | venturers) have been found or pled guilty or no |
| who has been convicted of a felony or a | | | | contest to various felonies or misdemeanors. The rule |
| misdemeanor involving fraud, misrepresentation, or | | | | allows for mitigating factors that could lengthen or |
| deceit, without obtaining prior approval from the | | | | shorten the periods of ineligibility. The emergency rule |
| Commission of the Bureau of Financial Institutions; and | | | | will remain in effect until regular rulemaking is |
| (iii) make licensees responsible for providing initial and | | | | completed. |