California recently adopted several mortgage related bills.
CA Senate Bill 36 became effective October 11, 2009 and includes the following revisions and adoptions:
Adopts new sections covering:
licensing requirements for loan processors and underwriters;
application requirements including fingerprinting, personal history, and independent credit reports;
minimum standards that must be met by mortgage loan originator licensing applicants;
pre-licensing and continuing education requirements and testing requirements;
license renewal requirements for mortgage loan originators;
requirement for mortgage loan originators to include their unique identifier on application forms, advertisements, and other required documents;
prohibited acts and practices for mortgage loan originators and potential penalties for violations;
requirements for submission of reports of condition;
notification requirements and licensing requirements for mortgage loan originators and real estate brokers;
minimum standards that must be met by mortgage loan originator licensing applicants and the minimum standards for renewal of an endorsement as a mortgage loan originator;
requirements for real estate brokers to submit annually a business activities report and detailing what must be contained in the report;
record retention requirements; and
requirement that mortgage loan originators to obtain and maintain a license and a unique identifier and prohibiting residential mortgage lenders or servicers from employing a mortgage loan originator whose license or license endorsement has lapsed.
Revises current statutes to add or amend:
requirement that a licensee’s unique identifier be included on advertisements and certain disclosures;
requirement that applications for endorsement to act as a mortgage loan originator must be made electronically or in writing as directed by the Commissioner;
minimum net worth requirements for licensees employing one or more mortgage loan originators;
requirement for mortgage loan originators to obtain and maintain a license and a unique identifier and prohibiting finance lenders or brokers from employing a mortgage loan originator whose license or license endorsement has lapsed;
that it is a violation for a person to knowingly make a false statement to the NMLSR; that mortgage loan originator licenses must be renewed annually after the payment of an annual assessment;
notification requirements; and
Repeals CA BUS & PROF § 10131.8 and CA FIN § 50705.
Section 87 of CA Senate Bill 36 states the deadline for mortgage loan originators to obtain a license.
CA Assembly Bill 329 becomes effective on January 1, 2010. This bill revises the required notice that must be provided to a reverse mortgage loan application prior to the applicant receiving counseling. It also adds a requirement that a lender provide the borrower with a written checklist prior to the borrower’s meeting with a counselor, details what must be included in the checklist, and states other checklist requirements.
CA Senate Bill 94 became effective on October 11, 2009. This bill adopts a new section stating what fees and compensation may not be received for loan modifications or other forms of loan forbearance. Senate Bill 94 also adopts a new section stating what acts are prohibited in relation to loan modifications or other forms of loan forbearance and stating what acts are permitted if the person who offers the loan modification or forbearance is offering it for a loan that is owned or serviced by that person. This bill also amends sections to add an exemption for certain counseling organizations approved by HUD that provide loan modification counseling services for no cost to the borrower and to add a prohibition regarding making materially false or misleading statements or representations to a borrower about the terms or conditions of that borrower’s loan, when making or brokering the loan.
CA Assembly Bill 260 becomes effective on January 1, 2010. This bill adds that the commissioner may suspend, revoke, or deny issuance of a license for violations of RESPA, TILA, HOEPA, regulations promulgated under RESPA, TILA, or HOEPA, and for violating or failing to comply with Chapter 2 of Title 14 of Part 4 of Division 3 of the California Civil Code. Assembly Bill 260 also adopts new sections stating that any violations of RESPA, TILA, HOEPA, or related regulations will be violations of the California Finance Lenders Law and the California Residential Mortgage Lending Act. This bill also adopts a new section stating that mortgage brokers providing mortgage brokerage services to a borrower have a fiduciary duty to the borrower, stating what is included in the fiduciary duty, and providing definitions for licensed person, mortgage broker, mortgage brokerage services, and residential mortgage loan. In addition, this bill adopts new sections regarding higher-priced mortgage loans stating what the maximum amount is for prepayment penalties, prohibited acts, permissible fees, document requirements, and potential penalties for violations.
CA Senate Bill 237 becomes effective on January 1, 2010. This bill adds six prohibited acts related to improperly influencing or attempting to improperly influence an appraisal.
CA Senate Bill 239 becomes effective on January 1, 2010. This bill repeals CA PENAL § 532f and then adopts CA PENAL § 532f stating what acts are considered mortgage fraud, the related voluntary and mandatory disclosure requirements, and that this offense is punishable by a maximum of 1 year in the state prison or county jail.