With the mortgage industry in turmoil and state legislators in session, we can expect a lot of changes take place in the next 2 years. The Nationwide Mortgage Licensing System debut last month and is already going strong in 7 states. FHA is expected to change dramatically with the US Congress compromising on the new bill. Many countries are probably going to be to submit bills to require the lender to verify the ability of the borrower to repay the loan. This means the stated income will probably be a program of the past. States will have to increase significantly their regulations in an industry that is already over regulated. This will mean more states require the loan officer licensing and branch license
Here is an update on Mortgage Licensing issues to be aware of :.
- o Colorado explains Trigger permit
- o Nebraska Branch Licensing
- o New York Loan originator Licensing
- o Nationwide Mortgage Licensing System (NMLS) Update
- o FHA Update
Colorado explains Trigger permit
In January 7, Colorado Division of Real Estate issued position statement to try to solve the “uncertainty … the market about the need to get permission. ” The guidelines specify that “those who directly supervise individuals negotiate, establish, or offer or attempt to negotiate or source for the borrower, and for a commission or other thing of value, residential mortgage loans to satisfy and funded by the mortgage lender” will to be individually licensed as a mortgage broker. The Division goes to explain that people who hold only administrative tasks is not required to separately licensed as a mortgage broker. The position statement defines administrative tasks include: (i) the receipt, collection, distribution and analysis of information common to the processing or underwriting of mortgage; and (ii) dealings with consumers to obtain the information necessary for the processing or underwriting of credit, to the extent that such communication does not include offering or negotiating loan rates or terms, or counseling consumers about rates or terms.
Nebraska Licensing Branch
Nebraska is the first state to transition to the Nationwide Mortgage Licensing System (NMLS) with a transition period of 28 February 2008. Included in that period is a new branch license agreements for the state. Make sure to add all branch locations you want to be able to do business in Nebraska that time.
New York Loan originator rules
On December 19, the New York State Banking Department (NYSBD) issued rules implementing state new mortgage loan originator license agreement (NY CLS Bank of § 599-a and on.) that goes into effect on 1 January 2008. According to the rules, the authors of which have not previously worked in New York must apply for approval before April 1, 2008, the authors employed by or associated a New York banker or broker before 2008 are not required to submit an application to July 1, 2008. The licensing process will use the Nationwide Mortgage Licensing System (NMLS) that will start operations on January 2, 2008. Applicants will also be required to submit fingerprints , credit history and data on financial and criminal history of their disclosure.
Nationwide Mortgage Licensing System (NMLS) Update
With the release of the new Nationwide Mortgage Licensing January 2, 2008, there has been much speculation about whether the system would perform up to it’s goal to combine the licensing process, make licenses easier for licensees and regulators, and help regulators to track down the bad companies. Still be in a transition phase, we have not seen whether the final objective has been achieved, but we have had the opportunity to see what the system does and how easy it is to use. So far, I have found the system to combine the process quite significantly. Much of the time applied in many countries previously in filling out the same information over and over for each state. The system has been created fairly user friendly allowing multiple users to access companies, branches, and the original loan information to update and change for each state at the same time. Another thing that has worked well for the system’s call center. The people working there are very helpful, answering the phone instead, and try their best to answer any questions as well as possible. Personally, I had run in the state where they were still not very cooperative as most states are, but the system forced them to follow the protocol and continue and they would let it go past. Altogether, I system brings much needed changes to major problems with the current way of mortgage permit in many states.
FHA is one of the interesting things to talk about this month. The House has passed a bill that will raise the FHA loan limits to as high as 125% of the median house price, which was about $ 775,000 in California. The House bill also has a provision of a surety bond in place financial when applying for or renewing FHA Loan Correspondent (Mini-Eagle) approval. The Senate bill proposed only to raise the FHA limit on Fannie Mae conforming Loan Limit, which is $ 417,000 now. The Senate bill also did not include a surety bond provision. At present, the Senate and the House of the committee are working to compromise on these two bills. To add to the excitement, House, Senate, and Administration signed economic stimulus agreement last week that called for FHA bill to proceed quickly as well as a number of other major changes specifically help the ailing housing market. This means that the House and Senate bill is likely to be at risk in a few weeks if not sooner. The pressure is very much now and we may be heading into a recession. Expect to see some major changes FHA in the very near future.