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Posted by Charles_Ca on 8/21/09 7:02pm Msg #301260
New requirements coming for loan originators in CA
I just got this e-mail from my good friend Steve Zipperman:
REAL ESTATE LEGAL UPDATE
FROM
THE LAW OFFICES OF
STEVEN J. ZIPPERMAN, APC
The Needs of Our Clients Always Come First NEW REQUIREMENTS FOR ALL LOAN ORIGINATORS COMING SOON
A new law signed by the President on July 30, 2008, contains significant new requirements for anyone in the residential loan business. The Secure and Fair Enforcement Mortgage Licensing Act (SAFE Act) requires all 50 states and 5 territories to put into place a system for licensing mortgage loan originators. Under the SAFE Act, each mortgage lender, broker, branch and mortgage loan originator will be required to comply with new federal requirements, as well the state requirements currently in place. HUD will oversee the SAFE Act program. In California, three bills are now pending to implement the SAFE Act within our borders, and as soon as this legislation becomes effective, this system will be implemented in California. Estimates are that this system will be implemented here in mid-to-late 2010.
WHAT THE SAFE ACT REQUIRES . . . .
“Mortgage Loan Originators” must meet certain minimum pre-licensing and continuing education requirements in order to be licensed as a loan originator. Before being able to originate loans, each applicant must take and pass a new test consisting of a national component and a state component. This new test will be in addition to current salesperson and broker licensing requirements. New tests are being developed to satisfy the SAFE Act requirements. Rather than issuing a separate license for Mortgage Loan Originators, the DRE anticipates that it will add an endorsement to the existing salesperson or broker license for each loan originator. Endorsements will have to be renewed annually, while the originator’s real estate license will remain on a four-year renewal cycle. Each applicant will also have to provide a set of fingerprints to the Nationwide Mortgage Licensing System and Registry (NMLS&R), which will obtain a criminal background history through the FBI. Applicants also will have to authorize credit reports from a consumer reporting agency as part of the application process. Information about loan originators will be shared by States in the event of complaints and/or disciplinary actions. Loan originators will have additional reporting obligations related to mortgage calls and enforcement actions. The California Department of Corporations is implementing a similar system to comply with the SAFE Act for all mortgage loan originators licensed under the California Finance Lenders Licensing Law (CFL) and California Residential Mortgage Loan Act (Mortgage Bankers).
STEVEN J. ZIPPERMAN, ESQ.
| Reply by Lee/AR on 8/21/09 7:14pm Msg #301261
Was that a typo? law...signed July... 2008? 8? n/m
| Reply by PAW on 8/21/09 7:58pm Msg #301269
Not a typo.
It became law in 2008 with an effective implementation date of January 1, 2010. In Florida, effective January 1, 2010 the definition of a mortgage broker will include the verbiage "negotiating or offering to negotiate the terms or conditions of a new or existing mortgage loan on behalf of a borrower or lender." What this means is all those unlicensed loan officers working for lenders and brokers, AND ANYONE ASSISTING BORROWERS OBTAINING A LOAN MODIFICATION will be considered "mortgage brokers" as well and must comply with the application, licensing and education requirements as set forth in Florida Statutes §494 and other statutes. If, by January 1, 2010, Loan Originators, including Loan Officers and brokers, do not have a license that they will be out of work or facing a $1,000 per day fine? (This does not include signing agents assisting title officers in the closing, only in the origination of the loan or modification.)
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