There have been many changes in 2007, and we can expect more in 2008. Given that state legislators are also gathering current market conditions that affect their legislative decision-making power, we can expect numerous new laws relating to mortgage industry from every state. Especially if the US Congress decides to pass legislation requiring a minimum level of licensing in each state, which it is likely to adopt earlier this year.
The January updates are as follows:
o Update FHA licenses
o Massachusetts bond form posted
o Delayed E&O request in Colorado
o Alaska License until 7/8/08
o National mortgage licensing system published
Updating FHA licenses
With legislation recently passed by the US Parliament and the US Senate, many changes are expected to occur in 2008. The bill just passed was much more conservative than the bill on Parliament and did not include items such as a guarantee instead of an audit. finance, a dramatic increase in the FHA's loan limit, and risk-based pricing. However, it did involve some major changes to the HECM (Reverse Mortgage) loan that got many excited.
Now, two bills have been sent to the House and Senate committees to reach a compromise on differences in the bills. I would expect the Senate to hold its position and that the final bill looks very similar to a bill recently passed by the Senate, but there is still a chance that some provisions of the House bill will be passed. I expect the final bill will be sent to the President by February.
Massachusetts bond form posted
Massachusetts made some new requests for new licensees in September, one of which was a new bond request. Unfortunately, the state failed to make a new bond form available. All mortgage companies that have applied for a mortgage broker license from that date are pending. Massachusetts has finally issued a new bond form, but insurance companies have not yet approved it for issuance. A number of companies are waiting for this last item to be licensed and hope that insurance companies will start issuing guarantees on a new form soon.
The E&O delay in Colorado has been delayed
Colorado has recently issued a new application for all individual mortgage brokers (loan holders) licensed in the state to maintain E&O policies. The insurance companies that started issuing them in early December, however, one of the questions on the claim was "what percentage of the loans originated in the previous 12 months? Anyone who said more than 20% was denied or told they would have to pay thousands for the policy.
Because of this issue, Colorado issued an emergency solution that allowed individuals until 1/31/08 to obtain the required insurance, as well as increased the maximum deductible to make the bond more economical. Colorado is known for emergency rulings because the state legislature does not give enough time to the Colorado real estate department to implement the new legislation.
Alaska License until 7/7/2008
This is just a reminder to those of you who are currently making loans in Alaska. Many people can originate years without a license, however, new licensing requirements will take effect July 1, 2008. Make sure you get your applications soon if you plan to continue doing business there after the first year.
National Mortgage Licensing System (NMLS) Released
Just one last reminder for those licensed in the top 7 countries to use the system. You will need to access the system as soon as possible to update your business information. Here is a list of the first 7 states that the system will use:
about Rhode Island
o New York