2014 New MLO Law
Act 198 (14)
SB2817 SD2 HD1
Relating to Secure and Fair Enforcement for Mortgage Licensing Act
Highlights of the new law in effect as of July 1, 2014:
Housekeeping and Clarification
- Adds definitions for the terms elder, principal office, “offers or negotiates terms of a residential mortgage Ioan” (part of the mortgage loan originator definition), regular business hours, and sole proprietorship.
- Amends definitions for branch office, mortgage loan originator, mortgage servicer company, and principal place of business.
- Updates names of mortgage call report forms. Clarifies that the reporting requirement applies to an exempt sponsoring mortgage loan originator company (“MLOC”).
- Replaces the term “the Nationwide Mortgage Licensing System” with the system’s current name, “NMLS” in a couple of places that were missed as an oversight.
- Clarifies that an MLOC must have a separate branch manager at each branch.
- Exempts certain MLOC and mortgage servicer company information from confidentiality requirements, as it is accessible by the public through NMLS.
- Changes the name of the “sole proprietor” mortgage loan originator license to a “sole proprietorship” license, for consistency in use of the term.
- Changes the name of the license issued to a mortgage servicer company maintaining a mortgage loan origination license, to a “mortgage loan servicer loan modification” license, to be more descriptive.
- Deletes a provision reimbursing application and renewal fees to sole proprietorship MLOCs. DFI was able to change the NMLS billing system.
- Removes chapter exemptions for individuals handling mortgage loans for their family members and family property. Mortgage loans involve substantial assets and should be handled by qualified licensees.
- Adds the failure to meet initial licensing requirements at any time as grounds for license denial, suspension, revocation, condition, and non-renewal. Once issued a license, the licensee should continue to meet initial licensing standards.
- Expressly requires registration with the Department’s Business Registration Division for renewal of an MLOC or a mortgage servicer company license.
- Extends the Commissioner’s authority to issue a temporary order to cease doing business, to unlicensed persons who are in violation of Chapter 454F.
- Requires licensees to be open for business to the public during posted business hours at each location.
- Clarifies the authority of the Commissioner or the Commissioner’s authorized representatives to conduct an examination or investigation of an MLOC during regular business hours.