IMPORTANT NOTICE: Your attention is drawn to S.287 which was recently passed by the Vermont Legislature and is awaiting the Governor's signature. Effective January 1, 2011, S.287 will require third party loan servicers to be licensed.
IMPORTANT NOTICE: Your attention is drawn to S.287 which was recently passed by the Vermont Legislature and is awaiting the Governor's signature. Effective January 1, 2011, S.287 will require third party loan servicers to be licensed.
The
The new licensure requirements are:
[1] a Washington Consumer Loan license under the Consumer Loan Act is now required in order to service residential mortgage loans
[2] a Washington mortgage loan originator license is now required in order for individuals to perform residential mortgage loan modification services under the Consumer Loan Act and/or the Mortgage Broker Practices Act by July 1, 2011
[3] the collection of an advance fee for performing residential mortgage loan modification services is prohibited, unless the borrower has been provided with a written fee agreement summarizing all material terms
There is a new SC Lender/Servicer License that replaces the SC Supervised Lender and covers all mortgage lending - both 1st and 2nd mortgages - effective 1/1/2010 - As Commissioner Bratton states below: "If you hold a Supervised Lender License, this license will not allow you to make, service or originate any type of mortgage loan effective January 1, 2010."
August 14, 2009
All Mortgage Lenders / Servicers / Mortgage Loan Originators
ATTENTION: LICENSING DEPARTMENT
Dear Lender:
As you have probably heard, legislation (Bill S-673) was passed June 3, 2009 requiring the licensing for all types of (first and subordinate lien) mortgage lending. The legislation requires any employee that discusses mortgage loan applications, terms, or conditions with consumers be licensed and meet certain pre-licensing education and testing requirements pursuant to SAFE Legislation.
South Carolina passed this legislation for compliance with the Federal SAFE Act requirements regarding the licensing of all mortgage loan originators. This is the first time there has been a licensing requirement for first mortgage lending in South Carolina. There are requirements for companies to have surety bonds payable to the Commissioners, Office, Consumer Finance Division, SC Board of Financial Institutions in order to obtain licensing. You may view this legislation at
www.sc.gov and click on legislation and type in bill number S-673.If you hold a Supervised Lender License, this license will not allow you to make, service or originate any type of mortgage loan effective January 1, 2010. Application through the National Mortgage Licensing System and Registry (NMLS) is required effective January 1, 2010, to obtain a license to act as a mortgage lender, servicer, or mortgage loan originator in South Carolina.
The attached information should prove helpful in pursuing the proper license for mortgage lending activity in South Carolina. Please review this information carefully and contact our office should you have any questions.
Sincerely,
C. Dean Bratton
Commissioner
Enclosures
MORTGAGEE LETTER 2009-42 dated 10-19-2009: Summary: An FHA-approved servicer may enter into a sub-servicing agreement to perform loss mitigation services on behalf of another FHA-approved servicer, however, all mortgagees that service FHA insured mortgages must be FHA –approved, and this includes sub-servicing mortgagees.
MORTGAGEE LETTER 2009-42
TO: ALL APPROVED MORTGAGEES
ALL APPROVED SERVICERS
SUBJECT: Sub-Servicing of FHA-insured Mortgages
The recent mortgage crisis, and the Administration’s response to this crisis, has increased the demand for loss mitigation services. In many instances, the need for loss mitigation services may have outpaced many servicers’ capacity to process defaulted borrowers requests in a timely manner. To ensure that FHA approved mortgagees and their servicers can respond to all loss mitigation requests, this Mortgagee Letter summarizes things that mortgagees and servicing mortgagees need to keep in mind if they need to expand their servicing capacity including loss mitigation processing capacity. As a reminder, the servicing of FHA-insured loans must be performed by a mortgagee that is approved by FHA pursuant to FHA regulations. See 24 CFR §§202.5 and 203.502. The regulations do not preclude an FHA approved from performing servicing actions on behalf of another FHA-approved servicer or at the direction of an FHA-approved mortgagee. For example, an FHA-approved servicer may enter into a business arrangement to perform loss mitigation services on behalf of another FHA-approved servicer. Within the industry, those business arrangements are often referred to as sub-servicing agreements. As stated in Mortgagee Letter 93-03, issued January 7, 1993, all mortgagees that service FHA insured mortgages must be FHA –approved, and this includes sub-servicing mortgagees. Although sub-servicers presently are neither specifically identified nor tracked in any FHA system, holding mortgagees and servicing mortgagees that decide to use sub-servicing mortgagees must ensure that the sub-servicer is an FHA approved mortgagee . Under FHA’s regulations 24 CFR §203.502, “The mortgagee shall remain fully responsible to the Secretary for proper servicing, and the actions of the servicer shall be considered to be the actions of the mortgagee. The servicer shall also be fully responsible to the Secretary for its actions as a servicer.” In turn, the holding mortgagee is responsible for the actions of the sub-servicer, and the sub-servicer is responsible to the Secretary as an approved mortgagee for its actions in servicing the FHA mortgages. In summary, to meet the increased need for loss mitigation, the Department has no objection to mortgagees entering into subservicing agreements with other FHA- approved servicers to perform loss mitigation functions. As a reminder, the costs associated with subservicing are treated the same as for outsourcing in that the costs of such services may not be imposed on the FHA mortgagor or passed along to the Department on any subsequent claim for mortgage insurance benefits. This prohibition also extends to independent contractors that often target mortgagors in distress and then charge for their services. Too many distressed mortgagors have been taken advantage of by so-called loss mitigation or foreclosure avoidance “counselors”. FHA-approved mortgagees and mortgage servicers must not assist in legitimizing the services of those individuals that prey on distressed mortgagors. Questions regarding this Mortgagee Letter may be directed to HUD’s National Servicing Center (NSC) at 888-297-8685 or hsg-lossmit@hud.gov. Persons with hearing or speech impairments may access this number via TDD/TTY by calling 1-877-TDD-2HUD (1-877-833-2483).
ANNOUNCEMENT BY THE STATE OF NEVADA, DEPARTMENT OF BUSINESS AND INDUSTRY, DIVISION OF MORTGAGE LENDING, 400 W. King Street, Suite 101, Carson City, NV 89703, (775) 684-7060 Fax (775) 684-7061, www.mld.nv.gov
NV Loan Servicing Registration-
Effective 10-1-09, any person or institution, including a mortgage broker, which services loans secured by real property in Nevada, is required to register with the Division. The registration form is available on the Division’s Web site under the forms link (item #20). There is not a fee associated with the registration.SC will have a first mortgage lender/servicer license requirement as of January 1, 2010. It will be through the NMLS and they hope to post the requirements in the next month.
Urban Myth #1 - Mortage Servicers only need Collection Agency Licenses in order to service mortgage loans.
Truth #1 - 40 States require Mortgage Servicer Licenses and only 22 states require Collection Agency Licenses
Urban Myth #2 - As long as the License Application has been filed with a State, it is alright to begin servicing mortgage loans.
Truth #2 - You are in violation of state licensing law if you begin servicing activities prior to receipt of the required licenses in that state. Beware that the Licensing Applications are signed under "penalties of perjury" so yo may be commiting a crime if you state in the application that you have never done business in their state when in fact you were conducting servicing activities when the application was submitted.
MortgageDaily.com provides free FHA Hope for Homeownership Program Explanation:
The Leading Mortgage Licenser in the Country.

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