Fall 2017 States In Brief

Hawaii

The Hawaii State Legislature passed Senate Bill 950. The amendments define the term executive officer, add new sections regarding a change in control, and clarify and update licensing requirements of mortgage servicers. The Bill was effective September 1, 2017.

The Hawaii State Legislature also passed Senate Bill 951. The Bill clarifies and updates requirements for mortgage loan origination, including the duties of a qualified person, criminal history disclosures and background checks for applicants, and the requirements to control a mortgage loan originator company. The Bill was effective
September 1, 2017.

Illinois

The Governor of Illinois signed into law Senate Bill 776, which relates to the Predatory Lending Database (the “Database”) and amends the Residential Real Property Disclosure Act. The amendments change the definition of “originator” and make changes concerning the information which must be collected and submitted to the Database by a broker or originator. The Bill was effective September 15, 2017.

Maryland

The Governor of Maryland signed into law Senate Bill 1033, which amends Maryland’s rules concerning foreclosures. The revisions relate specifically to Maryland’s rules regarding a vacant and abandoned property. This legislation was effective October 1, 2017.

The Maryland Department of Labor, Licensing and Regulation, Office of the Commissioner of Financial Regulation amended its rules to conform certain terminology to mirror federal laws and regulations, and clarify the pre-licensing and continuing education requirements. The amendments also clarify the application process for obtaining a mortgage loan originator license, permit licensees to conduct mortgage lending business at certain locations different from the address appearing on the license, permit loan origination under an expired license in a limited situation, and prohibit the use of false, misleading or deceptive statements in advertising. These amendments were effective July 31, 2017.

Nevada

The Nevada legislature passed Assembly Bill 468 amending the state’s rules related to mortgage lending. Specifically, the revisions apply to licensing and record keeping requirements for mortgage brokers and mortgage
bankers. The amended rules will be effective on January 1, 2018.

The Nevada legislature also passed Senate Bill 498 related to continuing education for mortgage brokers and mortgage agents, the examination of mortgage brokers and mortgage bankers, and the authority of the Commissioner of Mortgage Lending to waive the monthly activity report of a mortgage broker or mortgage banker. The amended rules are effective on January 1, 2018.

New Hampshire

The New Hampshire legislature passed Senate Bill 81. The Bill requires applicants for a mortgage loan originator license to pass a written test. The Bill also allows the Banking Commissioner to conditionally approve a license of a person licensed in another state. The legislation was effective August 28, 2017.

New Jersey

The New Jersey legislature passed Assembly Bill 2060 amending New Jersey’s Fair Foreclosure Act requiring residential mortgage loan servicers to engage in consultations on short sales with prospective buyers, and to respond to short sale offers from buyers within certain time periods. The Bill was effective September 19, 2017.

Oregon

The Oregon legislature passed the Mortgage Loan Servicer Practices Act (the “Act”). The Act requires certain individuals that service residential mortgage loans (“Servicers”) to obtain or renew a license; specifies license application and renewal procedures and required fees; outlines the duties of a Servicer and prohibits certain activities relating to negotiating or offering to negotiate a modification of a residential mortgage loan; requires a Servicer to maintain a certain level of liquidity, operating reserves and net worth; and provides for civil penalties against any Servicer that violates or helps another person violate the Act. The relative portions of the Act become operative on January 1, 2018.

Rhode Island

The Rhode Island legislature passed Senate Bill 388 and House Bill 5397 on July 7, 2017. The Bills increase the allowable penalty for financial institutions that fail to promptly record foreclosure deeds and pay outstanding taxes. Under the new legislation, a penalty of $300 per month up to an aggregate total of $2,000 may be assessed on financial institutions that fail to promptly record foreclosure deeds and pay outstanding taxes. The Bills were effective upon passage.

The Rhode Island legislature passed Senate Bill 835 and House Bill 5695 on July 5, 2017. The Bills criminalize residential mortgage fraud. The Bills were effective upon passage.

Texas

The Texas legislature passed House Bill 2580, related to criminal history records obtained by the Savings and Mortgage Lending Commissioner. The Bill was effective on September 1, 2017.

Utah

The Utah Department of Financial Institutions/Division of Nondepository Lenders adopted a new rule that designates which federal laws the Department may enforce. The rule was effective on June, 21 2017.

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