If you're reading this article, you may be asking what the benefits are of using a mortgage license service. Acquiring a license is as simple as just sending an application to the state and waiting for the license to come in, right? Well, yes and no. Due to sensitive information handled by mortgage companies, the large amounts of money handled by mortgage companies, and the increasing amount of fraud in the industry, mortgage licensing has become a very arduous task. Mortgage licensing often involved numerous steps and can take months for the state to process the application just to find out that they need a few more items. This can often go on for months. So what can a mortgage license service do for you.?
1. Experience - Provide expertise to expedite the application process.
2. Connections - Find the best service providers for surety bonds, registered agents, and document retrieval.
3. Filing - Complete the paperwork so you can focus on building your mortgage company.
Experience
A mortgage licensing service has the experience to be able to put the licensing application together for you quickly. Without assistance it can take weeks even months just to research everything that's required. You will also have an advocate with the states. A mortgage licensing company has dealt with the same people at the states numerous times and can get you the answers you need if there are any issues that come up during the process.
Connections
Knowing the right companies to work with during this process is invaluable. You will need an insurance company that provides surety bonds. You will need a registered agent company that is nationwide that can receive service of process for you. You will also need a company that can expedite document retrieval from the different Secretary of States to expedite the process. I remember working with a surety bond company many years ago that told me the company I was working for couldn't get any more bonds. They told me that the companies financials weren't good enough. I went to about 10 different companies before I found one that would be able to provide additional bonds. Without assistance finding the right connections, you could find it difficult to complete the process.
Filing
The paperwork in some states is very simple, but most states have pages and pages to complete. Some of the questions are not very clear and require additional research and making calls. A mortgage licensing service already has gone through this and can provide the answers to these tough questions. They also complete the mortgage license applications for you so you don't have to spend hours filling out paperwork.
Mortgage Licensing Conclusion
If you have trained staff to handle all of the paperwork, make the connections, and provide the expertise, then definitely handle it in-house, but if you don't I recommend considering outsourcing the mortgage licensing process. It will actually save your company money and time.
Tuesday, November 13, 2007
November 2007 Mortgage Licensing Update
There are a lot of interesting things happening to the mortgage industry due to the market flux. One of the main items of interest is the legislation currently in congress. Here is an overview of what may be coming soon.
FHA Reform
There have been a couple FHA Reform bills in congress. One of them got a lot of publicity because it passed the House with an overwhelming majority and proposed to more than double the loan limits in high median house price areas. This bill has been held up in the Senate Banking Committee and will possibly die. There was a surety bond provision in the bill that would have allowed smaller mortgage brokers to obtain a surety bond instead of getting audited financials. This provision has unfortunately died. Many companies were hoping this would pass since it is so costly to get an audited financial statement. The only option now is audited financial with a $63,000 net worth. There are still numerous other provisions that will likely be passed by Senate. The raising of the loan limits is very likely but will not be as high as the House proposed.
Mortgage Loan Officer Licensing
There is also a bill that has been passed by the Senate Banking Committee that proposes to make it mandatory for states to adopt a loan officer licensing scheme. This is very likely going to pass. It would then give each state that doesn't have its own licensing for loan officers about 2 years to put legislation and regulations together to make this happen. If the state doesn't meet the requirements of the bill, then HUD will be required to step in and set up loan officer licensing for that state. The larger short-term impact of the passage of a House bill is that the states will pick up on it as a template for new state law enactments in the coming state legislative season, which starts around the first of the year. Buckle your belts for the states to really get crazy soon.
Yield Spread Premium
The final interesting item being discussed in every mortgage company right now is the provision for "eliminating YSP." I put it in quotes, because the legislation doesn't really eliminate YSP, it just requires that the YSP be disclosed up front as an actual figure instead of just 0% to 3% like it is now on most Good Faith Estimates (GFE). This will change this a little bit, but it won't really affect the mortgage broker industry as much as some opponents to the bill say.
Conclusion
Be Ready for some exciting changes to happen in the mortgage industry soon. The government is looking to make a change to the current system and although many might argue that it won't help, it will definitely happen and change the industry forever.
FHA Reform
There have been a couple FHA Reform bills in congress. One of them got a lot of publicity because it passed the House with an overwhelming majority and proposed to more than double the loan limits in high median house price areas. This bill has been held up in the Senate Banking Committee and will possibly die. There was a surety bond provision in the bill that would have allowed smaller mortgage brokers to obtain a surety bond instead of getting audited financials. This provision has unfortunately died. Many companies were hoping this would pass since it is so costly to get an audited financial statement. The only option now is audited financial with a $63,000 net worth. There are still numerous other provisions that will likely be passed by Senate. The raising of the loan limits is very likely but will not be as high as the House proposed.
Mortgage Loan Officer Licensing
There is also a bill that has been passed by the Senate Banking Committee that proposes to make it mandatory for states to adopt a loan officer licensing scheme. This is very likely going to pass. It would then give each state that doesn't have its own licensing for loan officers about 2 years to put legislation and regulations together to make this happen. If the state doesn't meet the requirements of the bill, then HUD will be required to step in and set up loan officer licensing for that state. The larger short-term impact of the passage of a House bill is that the states will pick up on it as a template for new state law enactments in the coming state legislative season, which starts around the first of the year. Buckle your belts for the states to really get crazy soon.
Yield Spread Premium
The final interesting item being discussed in every mortgage company right now is the provision for "eliminating YSP." I put it in quotes, because the legislation doesn't really eliminate YSP, it just requires that the YSP be disclosed up front as an actual figure instead of just 0% to 3% like it is now on most Good Faith Estimates (GFE). This will change this a little bit, but it won't really affect the mortgage broker industry as much as some opponents to the bill say.
Conclusion
Be Ready for some exciting changes to happen in the mortgage industry soon. The government is looking to make a change to the current system and although many might argue that it won't help, it will definitely happen and change the industry forever.
Thursday, November 8, 2007
Mortgage License Update
Loan Officer Licensing may be a required very soon in all states. Loan Officer Licenses among other things have been introduced to in the Congress as a may to reduce fraud and increase responsiblity nationwide. If passed, this bill would require all states that do not currently have a loan officer licensing scheme to set one up. Over 30 states have already adopted a license scheme for loan officers in the last 5 years. This bill may force the remaining states to follow suit. With the Nationwide Mortgage Licensing System being organized at the same time, it could all come together very nicely to make it simple to obtain the loan officer licenses needed for each state.
Representatives Introduce Mortgage Reform Legislation
Representatives Brad Miller (D-NC), Mel Watt (D-NC) and Barney Frank (D-MA)introduced “The Mortgage Reform and Anti-Predatory Lending Act of 2007” on October 22, 2007.
Key provisions of the legislation include:
· Establishment of a federal “duty of care;”
· Required licensing for all mortgage originators, including brokers and bank officers;
· Minimum standards to ensure a borrower’s ability to repay;
· Expanded and enhanced consumer protections for high cost loans under the Home Ownership and Equity Protection Act (HOEPA); and
· Foreclosure protection for renters.
Representatives Introduce Mortgage Reform Legislation
Representatives Brad Miller (D-NC), Mel Watt (D-NC) and Barney Frank (D-MA)introduced “The Mortgage Reform and Anti-Predatory Lending Act of 2007” on October 22, 2007.
Key provisions of the legislation include:
· Establishment of a federal “duty of care;”
· Required licensing for all mortgage originators, including brokers and bank officers;
· Minimum standards to ensure a borrower’s ability to repay;
· Expanded and enhanced consumer protections for high cost loans under the Home Ownership and Equity Protection Act (HOEPA); and
· Foreclosure protection for renters.
Wednesday, November 7, 2007
CRL Nationwide Lending
CRL can provide you immediate access to originate loans nationwide while you work with Integrity Mortgage Licensing to obtain licenses for your mortgage company. All licensing for CRL was completed by Integrity Mortgage Licensing and we both highly recommend each others services. CRL was formed as a safehaven for people who want to originate loans nationwide. Their vision has always been to treat people the way that we would want to be treated.
Our industry is in turmoil. Many well established mortgage companies have gone under and taken tens of thousands of dollars with them, money that was owed to hard working originators like you. Other companies are currently months behind on commission payments. We have all been “stung” by situations like this.
CRL is dedicated to being a solution to this crisis. They are committed to a Same Day Payment philosophy and are determined to provide outstanding service to you, their customer.
This means that you will always:
1. receive your payments on time
2. get the service you need
3. know that you are being told the truth
Contact them today at SameDayPay@crl1.com or (800) 562-6058x0
Visit their website at www.crl1.com
Our industry is in turmoil. Many well established mortgage companies have gone under and taken tens of thousands of dollars with them, money that was owed to hard working originators like you. Other companies are currently months behind on commission payments. We have all been “stung” by situations like this.
CRL is dedicated to being a solution to this crisis. They are committed to a Same Day Payment philosophy and are determined to provide outstanding service to you, their customer.
This means that you will always:
1. receive your payments on time
2. get the service you need
3. know that you are being told the truth
Contact them today at SameDayPay@crl1.com or (800) 562-6058x0
Visit their website at www.crl1.com
FHA License Update
Public comments on the FHA Reform Bill in the Senate is closed today, October 22, 2007. Already passed by the House with an overwhelming majority, it is expected to pass in the Senate by mid-November. The Expanding American Homeownership Act of 2007 will bring about many changes to FHA loan origination. The most important changes are:
1. FHA Licensing - Elimination of Audited Financial Requirement for Brokers
2. FHA Loan Limit - Increase of the Low FHA Loan Limits
FHA Licensing
Currently when a small broker shop tries to get licensed to originate FHA loans, they hid a major hurdle. HUD requests that all companies have their financials audited annually showing a minimum net worth of $63,000. Smaller broker shops that do have the minimum net worth, often find it difficult to obtain audited financials since they cost around $5,000 to $10,000. They can also take several months to complete if your corporation or LLC has never been audited before. Up until now many companies have been forced to form a new corporation or LLC in order to reduce the cost of audited financials.
The new legislation being proposed will do away with the audited financial requirement. In lieu of audited financials, you can submit a surety bond. A surety bond is simple and cheap to obtain in comparison to audited financials and is actually safer for the consumer whom it is meant to protect. The president of the largest Mortgage Insurance Company in the nation told me yesterday that he has helped push this change through in congressional hearings and that he expects it to pass very soon.
FHA Loan Limit
The new legislation also proposes to increase the FHA Loan Limit. Currently the loan limit is at 87% ($362,790) of the Fannie Mae Loan Limit ($417,000) in areas with high median house prices. It is about 50% of that in low median house prices. The only exception is Hawaii, Guam and Alaska. The proposed increase passed by the house will raise the loan limits to as high as $750,000 in certain high median house price areas. This would open up FHA to assist many people in coastal areas where average house prices are about $600,000 and higher. With only Jumbo loans as an option right now, many people are finding it very difficult to obtain a loan due to the hightened underwriting guidelines.
The President is expected to sign the bill, but not at such a high amount. He has stated in public speeches that he does not plan on raising the limit above the Fannie Mae Limit of $417,000. Many people, loan originators, brokers, and borrowers are waiting patiently to see what happens in the house in November.
For help with FHA Licensing, Contact Integrity Mortgage Licensing at (714) 721-3963 or ssheasby@integritymortgagelicensing.com
1. FHA Licensing - Elimination of Audited Financial Requirement for Brokers
2. FHA Loan Limit - Increase of the Low FHA Loan Limits
FHA Licensing
Currently when a small broker shop tries to get licensed to originate FHA loans, they hid a major hurdle. HUD requests that all companies have their financials audited annually showing a minimum net worth of $63,000. Smaller broker shops that do have the minimum net worth, often find it difficult to obtain audited financials since they cost around $5,000 to $10,000. They can also take several months to complete if your corporation or LLC has never been audited before. Up until now many companies have been forced to form a new corporation or LLC in order to reduce the cost of audited financials.
The new legislation being proposed will do away with the audited financial requirement. In lieu of audited financials, you can submit a surety bond. A surety bond is simple and cheap to obtain in comparison to audited financials and is actually safer for the consumer whom it is meant to protect. The president of the largest Mortgage Insurance Company in the nation told me yesterday that he has helped push this change through in congressional hearings and that he expects it to pass very soon.
FHA Loan Limit
The new legislation also proposes to increase the FHA Loan Limit. Currently the loan limit is at 87% ($362,790) of the Fannie Mae Loan Limit ($417,000) in areas with high median house prices. It is about 50% of that in low median house prices. The only exception is Hawaii, Guam and Alaska. The proposed increase passed by the house will raise the loan limits to as high as $750,000 in certain high median house price areas. This would open up FHA to assist many people in coastal areas where average house prices are about $600,000 and higher. With only Jumbo loans as an option right now, many people are finding it very difficult to obtain a loan due to the hightened underwriting guidelines.
The President is expected to sign the bill, but not at such a high amount. He has stated in public speeches that he does not plan on raising the limit above the Fannie Mae Limit of $417,000. Many people, loan originators, brokers, and borrowers are waiting patiently to see what happens in the house in November.
For help with FHA Licensing, Contact Integrity Mortgage Licensing at (714) 721-3963 or ssheasby@integritymortgagelicensing.com
Best States for Mortgage Licensing
With the housing market collapsing in the last few months, are there any places in the United States left to originate mortgage loans? If you're asking this question, you're not alone. Every mortgage company in the nation is asking the same question. Fortunately the answer is yes. Here is a list of the top areas for mortgage origination:
1. Washington (Seattle Area)
2. California (San Jose and San Francisco)
3. North Carolina (Raleigh and Charlotte)
4. Texas (Dallas and San Antonio)
5. Ohio (Columbus Area)
6. Pennsylvania (Pittsburgh Area)
This information is based on a survey from Forbes Magazine and Moody's Economy.com. There analysis took into account many factors including rise in house prices, demand for houses, job market growth, and many other factors.
Contact Integrity Mortgage Licensing today and we can share with you more areas that we currently recommend and/or help you get licensed in some of the states mentioned above.
1. Washington (Seattle Area)
2. California (San Jose and San Francisco)
3. North Carolina (Raleigh and Charlotte)
4. Texas (Dallas and San Antonio)
5. Ohio (Columbus Area)
6. Pennsylvania (Pittsburgh Area)
This information is based on a survey from Forbes Magazine and Moody's Economy.com. There analysis took into account many factors including rise in house prices, demand for houses, job market growth, and many other factors.
Contact Integrity Mortgage Licensing today and we can share with you more areas that we currently recommend and/or help you get licensed in some of the states mentioned above.
Texas Company Mortgage License Applications Ready
Are you a licensed mortgage broker in the state of Texas? Does the compensation that you make on a loan go to your corporation or LLC? If so, you now need to get your mortgage corporation or LLC licensed. The applications just posted last week at: http://www.sml.state.tx.us/mortgage.html. If you're in need of assistance to file this application, please contact us at Integrity Mortgage Licensing. We will assist you with every step required to make sure you meet the 12/31/2007 deadline. After this date, if your mortgage company is not licensed, the lenders will have to pay the individual mortgage broker.
FHA Licensing May Get Easier
Expanding American Homeownership Act of 2007 has been passed by the House and will most likely be passed by the Senate and signed by the President after a few minor adjustments. This is the biggest change to FHA that has occured since it inception. If the House has it's way, this would actually change the initial purpose of FHA from being an agency formed to help low income households to an angency that helps almost all Americans to be able to own and keep their homes.
Increasing FHA Loan Limits
Why am I saying this? FHA has always been geared toward helping low income, poor areas, to be able to afford buying houses. The new bill that is now before the senate proposes to increase the loan limits from $200,000-$350,000 to as high as $700,000 in areas with high median house prices. I personally don't know any low income people that own $700k houses, except for those individuals that lied on their loan applications and "stated" that they made $10,000 per month as a janitor at Wal Mart and actually got the loan. Fortunately, Bush has stated that he will not allow this to happen. He intends to keep FHA's purpose intact. I believe the Senate will do the same. Bush plans on keeping the FHA loan limit at $417,000 or below. We should see very soon.
Elimination of Audited Financials Requirement for Brokers
This is the second largest change to FHA. If this is passed by the House, it would open the door to about 90% of the nations mortgage brokers that were previously restricted from becoming an FHA Approved Broker (Loan Correspondent) due to the cost barrier. Most people don't realize it, but audited financials can cost between $2,000 to $20,000 for the average small broker to obtain. The audited financials required by FHA must be completed by a CPA that has gone through a peer review and the minimum net worth must be $50,000 according to FHA's stringent net worth calculation guidelines. Now, the 90% of brokers that did not have the time, money, and resources to put together audited financials, can put forth a surety bond in lieu of the audited financials. A surety bond is obtained through insurance companies and covers the consumer or third parties in a transaction and is payable by the mortgage company if drawn on by the state to pay a consumer or third party. The new bill preposes a bond between $50,000 and $100,000. Most analysts would agree that something similar to this will be in the amended bill when passed by the Senate.
What will be the affect of this Bill
Whether the FHA loan limit is increased to $700,000 in some areas or $417,000, the bill will change FHA's purpose dramatically. Many people will be looking to FHA as a place to obtain a loan that conventional lenders are not able to provide. This is possible through FHA's upfront mortgage insurance that is able to reduce the risk of higher debt-to-income and loan-to-value ratios. We will also see a huge surge of advertising for FHA when the majority of mortgage brokers are given access to be approved FHA brokers. Unfortunately, the House tends to think that this will be the solution to the current market problems. This is a great start, but I think it will take much more than this to bring an adjustment to all of the lies and deception that occured in the last 5 years in the mortgage industry.
Increasing FHA Loan Limits
Why am I saying this? FHA has always been geared toward helping low income, poor areas, to be able to afford buying houses. The new bill that is now before the senate proposes to increase the loan limits from $200,000-$350,000 to as high as $700,000 in areas with high median house prices. I personally don't know any low income people that own $700k houses, except for those individuals that lied on their loan applications and "stated" that they made $10,000 per month as a janitor at Wal Mart and actually got the loan. Fortunately, Bush has stated that he will not allow this to happen. He intends to keep FHA's purpose intact. I believe the Senate will do the same. Bush plans on keeping the FHA loan limit at $417,000 or below. We should see very soon.
Elimination of Audited Financials Requirement for Brokers
This is the second largest change to FHA. If this is passed by the House, it would open the door to about 90% of the nations mortgage brokers that were previously restricted from becoming an FHA Approved Broker (Loan Correspondent) due to the cost barrier. Most people don't realize it, but audited financials can cost between $2,000 to $20,000 for the average small broker to obtain. The audited financials required by FHA must be completed by a CPA that has gone through a peer review and the minimum net worth must be $50,000 according to FHA's stringent net worth calculation guidelines. Now, the 90% of brokers that did not have the time, money, and resources to put together audited financials, can put forth a surety bond in lieu of the audited financials. A surety bond is obtained through insurance companies and covers the consumer or third parties in a transaction and is payable by the mortgage company if drawn on by the state to pay a consumer or third party. The new bill preposes a bond between $50,000 and $100,000. Most analysts would agree that something similar to this will be in the amended bill when passed by the Senate.
What will be the affect of this Bill
Whether the FHA loan limit is increased to $700,000 in some areas or $417,000, the bill will change FHA's purpose dramatically. Many people will be looking to FHA as a place to obtain a loan that conventional lenders are not able to provide. This is possible through FHA's upfront mortgage insurance that is able to reduce the risk of higher debt-to-income and loan-to-value ratios. We will also see a huge surge of advertising for FHA when the majority of mortgage brokers are given access to be approved FHA brokers. Unfortunately, the House tends to think that this will be the solution to the current market problems. This is a great start, but I think it will take much more than this to bring an adjustment to all of the lies and deception that occured in the last 5 years in the mortgage industry.
New Massachusetts Mortgage Licensing Requirements
Massachusetts has now added new surety bond and financial requirements for mortgage broker and lender licensees.
NOTICE - MORTGAGE LENDER AND MORTGAGE BROKER APPLICANTS
Please note that the recent amendments to 209 CMR 42.00 et seq. have been finalized as of September 7, 2007. All mortgage lender and mortgage broker license applicants filing on or after September 7th must comply with the new net worth and surety bond requirements at the time of application. The amendments increase the minimum net worth requirement for licensed mortgage lenders and establish a minimum net worth requirement for licensed mortgage brokers. A surety bond requirement for both licensed entities was also established. Mortgage broker applicants must submit recent financial statements that have been audited or reviewed by a certified public accountant with their application. Please refer to 209 CMR 42.03 and/or 209 CMR 42.06 to review the amended licensing requirements.
NOTICE - MORTGAGE LENDER AND MORTGAGE BROKER APPLICANTS
Please note that the recent amendments to 209 CMR 42.00 et seq. have been finalized as of September 7, 2007. All mortgage lender and mortgage broker license applicants filing on or after September 7th must comply with the new net worth and surety bond requirements at the time of application. The amendments increase the minimum net worth requirement for licensed mortgage lenders and establish a minimum net worth requirement for licensed mortgage brokers. A surety bond requirement for both licensed entities was also established. Mortgage broker applicants must submit recent financial statements that have been audited or reviewed by a certified public accountant with their application. Please refer to 209 CMR 42.03 and/or 209 CMR 42.06 to review the amended licensing requirements.
NMLS Update - Nationwide Mortgage Licensing System
State mortgage regulators from around the country have been working since 2004 to develop a nationwide licensing system for the residential mortgage industry that will improve supervision of the mortgage industry, streamline the licensing process for mortgage companies and professionals, and enhance consumer protection.
The Nationwide Mortgage Licensing System (NMLS) is a web-based system that will allow state licensed mortgage lenders, mortgage brokers, and loan officers to apply for, amend, update or renew a license online for all participating state agencies using a single set of uniform applications. The NMLS will bring greater uniformity and transparency to the mortgage industry while maintaining and strengthening the ability of state regulators to monitor the industry and protect their citizens.
The System is scheduled to begin operation on January 2, 2008.
http://www.csbs.org/AM/Template.cfm?Section=Mortgage_Licensing
The Nationwide Mortgage Licensing System (NMLS) is a web-based system that will allow state licensed mortgage lenders, mortgage brokers, and loan officers to apply for, amend, update or renew a license online for all participating state agencies using a single set of uniform applications. The NMLS will bring greater uniformity and transparency to the mortgage industry while maintaining and strengthening the ability of state regulators to monitor the industry and protect their citizens.
The System is scheduled to begin operation on January 2, 2008.
http://www.csbs.org/AM/Template.cfm?Section=Mortgage_Licensing
New South Dakota Mortgage Licensing
South Dakota has passed SB165, which requires loan officers to be licensed as Mortgage Brokers if brokering and licensed as loan originators if working for a direct lender The bill is effective December 1, 2007.
Mortgage Lenders
Requires current licensees to have a $25,000 surety bond by August 31, 2007 and for new licensees it is a requirement with the application.
Mortgage Lenders must employ licensed loan originators
Loan Originators
$150 initial, $44 for background check, $75 annual renewal (Dec 31st)
Licenses are not transferable between employers
Registration requires background check
Must have 2 years experience in the industry
9 hours of CE due every year – 1st period is 7/1/07 thru renewal time in 2008
Mortgage Brokers
There are no Mortgage Broker companies, just individuals (if you are a lender that brokers in addition to lending, you will need to license your Loan Originator's as Mortgage Brokers instead of Loan Originators
$500 initial, $350 annual renewal (Dec 31st)
License can be transferred to another employer
$25,000 surety bond is required
Must file a Bank Franchise Tax Return with the SD Dept of Revenue
2 years experience in the industry
9 hours of CE due every year – 1st period is 7/1/07 thru renewal time in 2008
Mortgage Lenders
Requires current licensees to have a $25,000 surety bond by August 31, 2007 and for new licensees it is a requirement with the application.
Mortgage Lenders must employ licensed loan originators
Loan Originators
$150 initial, $44 for background check, $75 annual renewal (Dec 31st)
Licenses are not transferable between employers
Registration requires background check
Must have 2 years experience in the industry
9 hours of CE due every year – 1st period is 7/1/07 thru renewal time in 2008
Mortgage Brokers
There are no Mortgage Broker companies, just individuals (if you are a lender that brokers in addition to lending, you will need to license your Loan Originator's as Mortgage Brokers instead of Loan Originators
$500 initial, $350 annual renewal (Dec 31st)
License can be transferred to another employer
$25,000 surety bond is required
Must file a Bank Franchise Tax Return with the SD Dept of Revenue
2 years experience in the industry
9 hours of CE due every year – 1st period is 7/1/07 thru renewal time in 2008
Nationwide Mortgage Licensing System Update
As of August 18, 2007 there have been 35 states that have signed the statement of intent to take part in the National Licensing Database. Currently 12 states are using the Uniform MU Forms for license applications and more are expected to come on board. Each state still however has their own addendum to the MU forms in order to satisfy their state requirements. The Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) are heading up the movement. They have stated that Release 1.0 of the national licensing database is over 90% complete as of 8/1/07. One of the major focuses mentioned is eliminating duplicate Continuing Education hours for loan originators by providing reciprocity between the states. This is truly an exciting time and of course, there will always be a need for experienced licensing specialists to assist you through this maze even as the states try to make it easier.
Texas Now Requires Company Mortgage Licensing
Texas legislature has passed House Bill 2783 ammending the Mortgage Broker Licensing Act to require company licensing, to allow for expedited provisional loan officer licensing, to increase the loan officer license fee from $100 to $275, and to clarify the 5 or less exemption for unlicensed companies or individuals. Company licensing will be required by January of 2008.
HB 2783: Relating to the regulation of certain persons involved in mortgage lending. The specific general changes are:
The definition of “mortgage loan” in the Mortgage Broker Licensing Act (MBLAct) has been changed to “a debt against real estate secured by a security interest against one-to-four family residential real estate created by a deed of trust, security deed, or other security instrument.” Note that “first lien” has been omitted from the initial definition found in the MBLAct.
An individual may not act or attempt to act as a loan officer unless the individual is licensed under the MBLAct and sponsored by a licensed mortgage broker and acting for the mortgage broker; or is exempt under Section 156.202.
NEW EXPEDITED PROVISIONAL LICENSE AMENDMENT:
An applicant for a loan officer license may be issued a provisional loan officer license as provided by this section only if the applicant:
During the 20 months immediately preceding the application, has at least 18 months of experience as a loan officer employed by a person exempt from the MBLAct under Section 156.202; and
Meets the qualifications for a loan officer license other than fulfilling the educational and examination requirements at the time of the application submission; and
Has had NO criminal charges and has not been convicted of a criminal offense. For purposes of this section a person is considered convicted as provided by Section 156.204 (d) of the MBLAct; and
Submitted a COMPLETE and ACCURATE application the first submission (if not, the application will then be transferred to normal processing with no fee refund); and
In addition to the regular non-refundable licensing and other fees for a regular loan officer’s license, pays an additional non-refundable fee not to exceed $100 (a rule will be proposed to the Finance Commission relating to this additional fee).
If the above is strictly adhered to, the Commissioner shall use best efforts to expedite the issuance of the provisional loan officer license on or before the later of: 1). the 10th business day after the date of receipt of a completed application; or 2). the second business day after the date of receipt of the “clean” criminal background report. Provisional licenses are valid for 90 days to allow time for the applicant to complete the educational requirements and to pass the required examination. It is imperative that these requirements are met within that 90 day timeline. The Commissioner may revoke a provisional loan officer license if it is discovered that the applicant has misrepresented the applicant’s qualification for this type license, has violated this chapter, or does not meet the qualifications for a provisional loan officer license. This revocation is NOT SUBJECT TO AN APPEAL and fees are not refundable.
HB 2783 further clarifies a license exemption with additional language regarding an owner of real property who in any 12 consecutive month period makes no more than five mortgage loans to purchasers of the property for all or part of the purchase price of the real estate against which the mortgage is secured, or an individual who makes a mortgage loan from the individual’s own funds, is not an authorized lender under Chapter 342 of the Texas Finance Code, and does not regularly engage in the business of making or brokering mortgage loans.
The maximum loan officer license fee (not inclusive of any other required fees charged) has been increased by $100 to $275.
The existing requirements and amended changes for license qualification are as follows:
Mortgage Broker must:
*Be at least 18 years of age
*U.S. citizen or legally admitted alien
*Maintain a physical office in the state of Texas
*Must prove one or more of the following:
*Have a bachelors degree from a 4 year accredited college or university in a related field, AND 18 months experience as a full-time mortgage broker or licensed loan officer with a licensed, sponsoring mortgage broker or an exempt person under section 156.202,
Active, licensed real estate broker under Chapter 1101, Texas Occupations Code,
Active, licensed attorney, or
A local recording agent or insurance solicitor or agent for a legal reserve life insurance company under Chapter 21, Insurance Code, or holds the equivalent license under Chapter 21, Insurance Code,
OR
36 months of experience with full-time employment as a licensed loan officer with a licensed, sponsoring mortgage broker or an exempt person under section 156.202.
*Provide proof of passing the required examination
*Fully comply with the tangible and non-exempt “net worth”
requirement of $25,000
*Not have been convicted of a criminal offense that the Commissioner determines directly relates to the occupation of a mortgage broker as provided by Chapter 53, Occupations Code
*Satisfy the Commissioner as t the individual’s honesty,
trustworthiness, and integrity
*Not be in violation of this chapter, a rule adopted under this chapter or any other order previously issued to the individual by the Commissioner
*Provide evidence that:
If the person has not been previously licensed as a mortgage
broker or a loan officer under this subchapter, the person has
completed 90 classroom hours of educational courses approved
by the Commissioner
OR
If the person has not been previously licensed as a mortgage
broker under this subchapter but has been licensed as a loan officer under this subchapter the person has successfully completed an additional 30 classroom hours of education courses approved by the Commissioner under this section.
If the broker has a company, it is now (as of January 2008) required be licensed as well for a fee of $175.
Loan Officer must:
Be at least 18 years of age
Be a U.S. citizen or legally admitted alien
Designate the name of the sponsoring broker
Must prove one or more of the following:
The person has received a bachelor’s degree from a 4 year accredited college or university in a related field AND has 18 months of experience in the mortgage lending field with full-time employment as a licensed mortgage broker or licensed loan officer with a licensed mortgage broker or a person exempt under section 156.202
The person is licensed in Texas as:
An active real estate broker under Chapter 1101, Texas Occupations Code,
An active, licensed attorney,
A local recording agent or insurance solicitor or agent for a legal reserve life insurance company under Chapter 21, Insurance Code or holds an equivalent license under Chapter 21, Insurance Code
OR
The person has three years of experience in the mortgage lending field with full-time employment as a licensed loan officer with a license sponsoring mortgage broker or a person exempt under Section 156.202
OR
Has successfully completed 60 classroom hours of education courses approved by the Commissioner.
OR
The person has 18 months experience as a loan officer with full-time employment as a loan officer with a person exempt under Section 156.202 AND has successfully completed 30 classroom hours of education courses approved by the Commissioner
Not have been convicted of a criminal offense that the Commissioner determines directly relates to the occupation of a loan officer as provided by Chapter 53, Occupations Code
Satisfy the Commissioner as to the individual’s good moral character, including the individual’s honesty, trustworthiness, and integrity
Provide proof of passing the required examination
Not be in violation of this chapter, a rule adopted under this chapter, or any other order previously issued to the individual by the Commissioner.
The required topics for complying with the initial licensing education requirements for mortgage brokers as well as loan officers must now cover ethics, RESPA, TILA, ECOA and the MBLAct.
During the term of any outstanding license, if the Commissioner becomes aware of any fact, not previously known to the Commissioner, that would have been grounds for denial of an original license, he may deny the renewal of a license.
If a broker operates with a company name, those companies now have to licensed. No one (mortgage broker or loan officer) can be individually licensed without their companies licensed (if they have one). In order for the company entity to become licensed, the entity must designate an individual licensed as a mortgage broker as its designated representative and pay an application fee in an amount not to exceed $175. That designated representative must the sole proprietor if the company is a sole proprietorship, be an officer of the corporation if it is a corporation, a manager of the limited liability company if it is a limited liability company, or if the company is a limited partnership the designated representative must be a general partner, an officer of a general partner that is a corporation, or a manager of a general partner that is a limited liability company.
Not later than the 10th day before a mortgage broker begins doing business under an assumed name, the broker shall file with the Commissioner a copy of an assumed name certificate for each assumed name under which the mortgage broker intends to conduct business and pay a $25 registration fee for each assumed name. A loan officer may not conduct business under any assumed name that is not the registered assumed name of the sponsoring broker.
Licensees must notify the Commissioner not later than the 10th day after the date of any change of the person’s name and pay a fee of $25 for the name change and issuance of an amended license certificate.
A business entity licensed under this chapter shall notify the Commissioner of any change of its designated representative and pay $25.00 for each change.
Regarding approved education, the Finance Commission may adopt rules establishing:
Minimum standards for courses, approved course providers and approved course instructors, and
A fee charged for each course not to exceed $200 for the review and approval of each course not provided and approved by a duly organized trade association, whose primarily purpose is that of representing residential mortgage originators. This approval is valid for a maximum of up to two years but may be less.
Additional disciplinary action authority is granted to the Commissioner against a licensee when after a hearing, it has been determined that the licensee provided false information to the Commissioner during the course of an investigation or inspection.
On notice and opportunity for a hearing, the Commissioner may suspend a person’s license if an indictment or information is filed or returned alleging that the person committed a criminal offense involving fraud, theft, or dishonesty. The suspension continues until the criminal case is dismissed or the person is acquitted, after which a final determination will be made.
A mortgage broker is now not required to be licensed to originate second lien loans under the Finance Code Chapter 342.051 if and as long as, the broker and his/her company are duly licensed with the TDSML. This does not pertain to mortgage bankers now licensed by the Office of Consumer Credit Commissioner (OCCC) under Chapter 342.051. They will continue to be licensed by and under the jurisdiction and authority of the OCCC. Second liens originated by brokers licensed with the TDSML will now be reviewed during scheduled examinations/inspections by the TDSML and not the OCCC.
Effective 9/1/07 (NOTE: Company licensing requirement effective January 2008).
HB 2783: Relating to the regulation of certain persons involved in mortgage lending. The specific general changes are:
The definition of “mortgage loan” in the Mortgage Broker Licensing Act (MBLAct) has been changed to “a debt against real estate secured by a security interest against one-to-four family residential real estate created by a deed of trust, security deed, or other security instrument.” Note that “first lien” has been omitted from the initial definition found in the MBLAct.
An individual may not act or attempt to act as a loan officer unless the individual is licensed under the MBLAct and sponsored by a licensed mortgage broker and acting for the mortgage broker; or is exempt under Section 156.202.
NEW EXPEDITED PROVISIONAL LICENSE AMENDMENT:
An applicant for a loan officer license may be issued a provisional loan officer license as provided by this section only if the applicant:
During the 20 months immediately preceding the application, has at least 18 months of experience as a loan officer employed by a person exempt from the MBLAct under Section 156.202; and
Meets the qualifications for a loan officer license other than fulfilling the educational and examination requirements at the time of the application submission; and
Has had NO criminal charges and has not been convicted of a criminal offense. For purposes of this section a person is considered convicted as provided by Section 156.204 (d) of the MBLAct; and
Submitted a COMPLETE and ACCURATE application the first submission (if not, the application will then be transferred to normal processing with no fee refund); and
In addition to the regular non-refundable licensing and other fees for a regular loan officer’s license, pays an additional non-refundable fee not to exceed $100 (a rule will be proposed to the Finance Commission relating to this additional fee).
If the above is strictly adhered to, the Commissioner shall use best efforts to expedite the issuance of the provisional loan officer license on or before the later of: 1). the 10th business day after the date of receipt of a completed application; or 2). the second business day after the date of receipt of the “clean” criminal background report. Provisional licenses are valid for 90 days to allow time for the applicant to complete the educational requirements and to pass the required examination. It is imperative that these requirements are met within that 90 day timeline. The Commissioner may revoke a provisional loan officer license if it is discovered that the applicant has misrepresented the applicant’s qualification for this type license, has violated this chapter, or does not meet the qualifications for a provisional loan officer license. This revocation is NOT SUBJECT TO AN APPEAL and fees are not refundable.
HB 2783 further clarifies a license exemption with additional language regarding an owner of real property who in any 12 consecutive month period makes no more than five mortgage loans to purchasers of the property for all or part of the purchase price of the real estate against which the mortgage is secured, or an individual who makes a mortgage loan from the individual’s own funds, is not an authorized lender under Chapter 342 of the Texas Finance Code, and does not regularly engage in the business of making or brokering mortgage loans.
The maximum loan officer license fee (not inclusive of any other required fees charged) has been increased by $100 to $275.
The existing requirements and amended changes for license qualification are as follows:
Mortgage Broker must:
*Be at least 18 years of age
*U.S. citizen or legally admitted alien
*Maintain a physical office in the state of Texas
*Must prove one or more of the following:
*Have a bachelors degree from a 4 year accredited college or university in a related field, AND 18 months experience as a full-time mortgage broker or licensed loan officer with a licensed, sponsoring mortgage broker or an exempt person under section 156.202,
Active, licensed real estate broker under Chapter 1101, Texas Occupations Code,
Active, licensed attorney, or
A local recording agent or insurance solicitor or agent for a legal reserve life insurance company under Chapter 21, Insurance Code, or holds the equivalent license under Chapter 21, Insurance Code,
OR
36 months of experience with full-time employment as a licensed loan officer with a licensed, sponsoring mortgage broker or an exempt person under section 156.202.
*Provide proof of passing the required examination
*Fully comply with the tangible and non-exempt “net worth”
requirement of $25,000
*Not have been convicted of a criminal offense that the Commissioner determines directly relates to the occupation of a mortgage broker as provided by Chapter 53, Occupations Code
*Satisfy the Commissioner as t the individual’s honesty,
trustworthiness, and integrity
*Not be in violation of this chapter, a rule adopted under this chapter or any other order previously issued to the individual by the Commissioner
*Provide evidence that:
If the person has not been previously licensed as a mortgage
broker or a loan officer under this subchapter, the person has
completed 90 classroom hours of educational courses approved
by the Commissioner
OR
If the person has not been previously licensed as a mortgage
broker under this subchapter but has been licensed as a loan officer under this subchapter the person has successfully completed an additional 30 classroom hours of education courses approved by the Commissioner under this section.
If the broker has a company, it is now (as of January 2008) required be licensed as well for a fee of $175.
Loan Officer must:
Be at least 18 years of age
Be a U.S. citizen or legally admitted alien
Designate the name of the sponsoring broker
Must prove one or more of the following:
The person has received a bachelor’s degree from a 4 year accredited college or university in a related field AND has 18 months of experience in the mortgage lending field with full-time employment as a licensed mortgage broker or licensed loan officer with a licensed mortgage broker or a person exempt under section 156.202
The person is licensed in Texas as:
An active real estate broker under Chapter 1101, Texas Occupations Code,
An active, licensed attorney,
A local recording agent or insurance solicitor or agent for a legal reserve life insurance company under Chapter 21, Insurance Code or holds an equivalent license under Chapter 21, Insurance Code
OR
The person has three years of experience in the mortgage lending field with full-time employment as a licensed loan officer with a license sponsoring mortgage broker or a person exempt under Section 156.202
OR
Has successfully completed 60 classroom hours of education courses approved by the Commissioner.
OR
The person has 18 months experience as a loan officer with full-time employment as a loan officer with a person exempt under Section 156.202 AND has successfully completed 30 classroom hours of education courses approved by the Commissioner
Not have been convicted of a criminal offense that the Commissioner determines directly relates to the occupation of a loan officer as provided by Chapter 53, Occupations Code
Satisfy the Commissioner as to the individual’s good moral character, including the individual’s honesty, trustworthiness, and integrity
Provide proof of passing the required examination
Not be in violation of this chapter, a rule adopted under this chapter, or any other order previously issued to the individual by the Commissioner.
The required topics for complying with the initial licensing education requirements for mortgage brokers as well as loan officers must now cover ethics, RESPA, TILA, ECOA and the MBLAct.
During the term of any outstanding license, if the Commissioner becomes aware of any fact, not previously known to the Commissioner, that would have been grounds for denial of an original license, he may deny the renewal of a license.
If a broker operates with a company name, those companies now have to licensed. No one (mortgage broker or loan officer) can be individually licensed without their companies licensed (if they have one). In order for the company entity to become licensed, the entity must designate an individual licensed as a mortgage broker as its designated representative and pay an application fee in an amount not to exceed $175. That designated representative must the sole proprietor if the company is a sole proprietorship, be an officer of the corporation if it is a corporation, a manager of the limited liability company if it is a limited liability company, or if the company is a limited partnership the designated representative must be a general partner, an officer of a general partner that is a corporation, or a manager of a general partner that is a limited liability company.
Not later than the 10th day before a mortgage broker begins doing business under an assumed name, the broker shall file with the Commissioner a copy of an assumed name certificate for each assumed name under which the mortgage broker intends to conduct business and pay a $25 registration fee for each assumed name. A loan officer may not conduct business under any assumed name that is not the registered assumed name of the sponsoring broker.
Licensees must notify the Commissioner not later than the 10th day after the date of any change of the person’s name and pay a fee of $25 for the name change and issuance of an amended license certificate.
A business entity licensed under this chapter shall notify the Commissioner of any change of its designated representative and pay $25.00 for each change.
Regarding approved education, the Finance Commission may adopt rules establishing:
Minimum standards for courses, approved course providers and approved course instructors, and
A fee charged for each course not to exceed $200 for the review and approval of each course not provided and approved by a duly organized trade association, whose primarily purpose is that of representing residential mortgage originators. This approval is valid for a maximum of up to two years but may be less.
Additional disciplinary action authority is granted to the Commissioner against a licensee when after a hearing, it has been determined that the licensee provided false information to the Commissioner during the course of an investigation or inspection.
On notice and opportunity for a hearing, the Commissioner may suspend a person’s license if an indictment or information is filed or returned alleging that the person committed a criminal offense involving fraud, theft, or dishonesty. The suspension continues until the criminal case is dismissed or the person is acquitted, after which a final determination will be made.
A mortgage broker is now not required to be licensed to originate second lien loans under the Finance Code Chapter 342.051 if and as long as, the broker and his/her company are duly licensed with the TDSML. This does not pertain to mortgage bankers now licensed by the Office of Consumer Credit Commissioner (OCCC) under Chapter 342.051. They will continue to be licensed by and under the jurisdiction and authority of the OCCC. Second liens originated by brokers licensed with the TDSML will now be reviewed during scheduled examinations/inspections by the TDSML and not the OCCC.
Effective 9/1/07 (NOTE: Company licensing requirement effective January 2008).
Nevada Rescinds Friends and Family Exemption
Nevada has always allowed individuals without a Nevada mortgage broker or solicitors license to originate loans on residential property in Nevada if the loan was not solicited and the borrower was a previous client, a friend, or a family member.
Due to the passage of AB375 in the 2007 Legislative Session, effective 10/1/07 the provisions of NRS 80.015 are amended to limit the unsolicited origination of mortgage loans in Nevada by unlicensed/non-exempt companies to commercial properties only. After 10/1/07 all Nevada 1 to 4 family residence mortgage loan originations will be subject to all applicable licensing or exemption requirements prescribed by law.
NRS 80.015 contains a list of activities that do not constitute “doing business” in this state including “[c]reating or acquiring indebtedness, mortgages and security interests in real or personal property.” NRS 80.015(1)(g). However, a person is considered doing business in Nevada and is subject to applicable licensing requirements pursuant to chapter 645A, 645B or 645E of NRS or title 55 or 56 of NRS if the person:
“(a) Maintains an office in this state for the transaction of business;
(b) Solicits or accepts deposits in the State, except pursuant to the provisions of chapter 666 or 666A of NRS;
((c) & (d) added pursuant to AB 375, effective 10-1-07)
(c) Solicits business for the activities of a mortgage broker as defined by NRS 645B.0127 or the activities of a mortgage banker as defined by NRS 645E.100; or
(d) Arranges a mortgage loan secured by real property which is not commercial property as defined by NRS 645E.040"
Due to the passage of AB375 in the 2007 Legislative Session, effective 10/1/07 the provisions of NRS 80.015 are amended to limit the unsolicited origination of mortgage loans in Nevada by unlicensed/non-exempt companies to commercial properties only. After 10/1/07 all Nevada 1 to 4 family residence mortgage loan originations will be subject to all applicable licensing or exemption requirements prescribed by law.
NRS 80.015 contains a list of activities that do not constitute “doing business” in this state including “[c]reating or acquiring indebtedness, mortgages and security interests in real or personal property.” NRS 80.015(1)(g). However, a person is considered doing business in Nevada and is subject to applicable licensing requirements pursuant to chapter 645A, 645B or 645E of NRS or title 55 or 56 of NRS if the person:
“(a) Maintains an office in this state for the transaction of business;
(b) Solicits or accepts deposits in the State, except pursuant to the provisions of chapter 666 or 666A of NRS;
((c) & (d) added pursuant to AB 375, effective 10-1-07)
(c) Solicits business for the activities of a mortgage broker as defined by NRS 645B.0127 or the activities of a mortgage banker as defined by NRS 645E.100; or
(d) Arranges a mortgage loan secured by real property which is not commercial property as defined by NRS 645E.040"
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