With the Economic Stimulus bill passed, it looks like the FHA modernization bill has been held up once again. The President asked Congress to move forward with the latter bill during the signing of the Economic Stimulus bill, and many are hoping it will pass this month.
Massachusetts finally released the new bond format. The previous format released about 6 months ago has made it virtually impossible for anyone to get a bond without posting $75,000 in a business line of credit. Hartford, one of the largest surety carriers in the world, still has declined to issue the new bond stating in a press release that “the State now intends to be able to look to the bond to recover any “past due Division costs, assessments, penalties, and other obligations…all of which were outside the obligations of the prior bond form.” Most surety companies still find it too risky to issue a bond in this State, which will make it difficult for those trying to start new business and those trying to renew in the state.
FHA Licensing Update
Everyone seems to have their own opinion on the FHA modernization bill.
There are those who are very optimistic, somewhat optimistic,
and pessimistic. Some think the bill will definitely pass on March 15,
some think it will hopefully pass by August 15, and some don’t think it
will ever pass this year. I am of the persuasion that we have
no idea what Congress intends on doing so we need to move forward with
hope that it passes soon but expectation that it may never pass.
With this in mind, if you are planning on getting FHA
licensing this year and you meet the net worth requirement ($63,000
company net worth), I recommend starting the process now. If
you don’t meet the net worth requirement, I recommend looking for an
employment relationship with a company that will allow you to originate
FHA loans. There are numerous small companies that will give
you the flexibility of working as if you are running your own mortgage company while being an
employee of theirs. Hopefully we’ll know more in two weeks,
but don’t delay. Act now to start taking part in the FHA loan
Issues FAQs on Licensing Law
The Massachusetts Division of Banks just released answers to frequently
asked questions (FAQs) in regards to recent changes to that
state’s mortgage lending laws and regulations. The FAQs discuss newly
established (i) loan originator
licensing provisions, (ii) 90-day Right to Cure for residential
mortgages, and (iii) a requirement to provide counseling to subprime
borrowers. To view the FAQs in full, take a look at http://www.mass.gov/dob.
MORTGAGE LOAN ORIGINATOR LICENSE APPLICATIONS ACCEPTED
THROUGH NMLS BEGINNING FEBRUARY 19TH
Individuals who were employed by their current employer
prior to November 30, 2007 may submit a license application to the
Division through the Nationwide Mortgage Licensing System (NMLS)
between February 19, 2008
and May 27, 2008.
New Colorado Licensing Requirements
1. Pre-Licensing Education – All mortgage brokers will need to complete the pre-licensing education requirements and the requisite test. This will need to be completed by all mortgage brokers prior to January 1, 2009. Mortgage brokers who fail to complete the pre-licensing and test requirement are subject to disciplinary action regarding their license. The Director, Erin Toll, appointed a 10 member Mortgage Broker Education Task Force to help develop and determine the number of pre-licensing hours required, course content, course approval, the pre-licensing test and continuing education.
2. All mortgage brokers will need to complete a minimum of nine (9) hours of continuing education every three years.
Alaska Proposes Mortgage
Lender, Loan Originator Rules
On February 12, the Alaska Department of Commerce published a notice
proposing rules implementing the Mortgage Lending Regulation Act,
requiring licensure of mortgage lenders, brokers, and loan originators.
Fortunately the Alaska legislature gave ample time for the
state to prepare the new licensing requirements.
The act was passed last summer, but does not go into effect until July
The proposed rules cover (i) lender and broker licensing obligations
and procedures, (ii) loan originator licensure and education
requirements, (iii) record retention format and requirements for
regulated entities, (iv) outlines specific deceptive advertising
practices, and (v) enforcement powers and procedures of the Department
of Commerce. It also details applicable fees for licensure,
registration, and renewals. Full text of the rules can be found at http://www.commerce.state.ak.us/occ/pub/MTG0208.pdf.