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.
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May 28, 2010
VT Third Party Loan Servicers Must Be Licensed Effective January 1, 2011
March 20, 2010
WA Now Requires Licensure for Mortgage Servicers and their residential mortgage loan modification specialists
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
November 24, 2009
New SC Lender/Servicer License replaces SC Supervised Lender Lic effective January 1, 2010
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
October 25, 2009
MORTGAGEE LETTER 2009-42 dated 10-19-2009 says all mortgagees that service FHA insured mortgages must be FHA –approved, and this includes sub-servicing mortgagees
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).
October 22, 2009
NV Loan Servicing Registration required Effective 10-1-09
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.September 24, 2009
TX Requires Mtg Broker License for Servicers Performing Loss Mit.
TX Requires Mtg Broker License for Servicers who perform Loss Mitigation because they consider a loan modification and other forms of loss mitigation as "refinancing".
Fortunately, there is no ambiguity in Texas: any activity that meets the definition of a mortgage loan as defined in the Mortgage Broker License Act Regulation, 7 Texas
Administrative Code, Chapter 80, does require a license unless exempt under the Mortgage
Broker License Act, Finance Code Chapter 156.202.
80.2(5) "Mortgage Loan" means any indebtedness secured by a lien against, or
security interest in, one-to-four family residential real property when the property
is intended to be occupied for residential purposes whether or not the property is
acquired for investment purposes or acquired for owner occupancy. It includes
new loans and renewals, extensions, modifications, and rearrangements of such
loans. The term does not include a loan which is secured by a structure that is
suitable for occupancy as a one-to-four family residence, but is used for a
commercial purpose such as a professional office, beauty salon, or other nonresidential
use, and is not used as a residence.
From: sweller@sml.state.tx.us
Sent: Thursday, January 29, 2009 4:06 PM
To: ksimmons@thomas-law.com
Cc: hthomas@thomas-law.com; ann@thomas-law.com
Subject: RE: TX Servicer
We have determined that “loss mitigation” does require a license. Your statement “ restructuring
mortgage debt in favor of the mortgagor” implies that rates are adjusted, at the very least.
Sandra L. Weller
Director of Licensing
Texas Department of Savings
& Mortgage Lending
512-475-1350 (Main)
512-475-1360 (Fax)
sweller@sml.state.tx.us
www.sml.state.tx.us
From: Kimberly Simmons [mailto:ksimmons@thomas-law.com]
Sent: Thursday, January 29, 2009 3:56 PM
To: Sandra Weller
Cc: Herb Thomas; ann@thomas-law.com
Subject: TX Servicer
Dear Ms. Weller:
Our law firm is assisting our client, W. Mortgage obtain all required licenses in the 50 states. W. Mortgage is a third party mortgage servicer
company that enters into Servicing Agreements with private equity funds to service its mortgage loan pools with special attention to the conducting of loss mitigation procedures to rehabilitate nonperforming, defaulted closed-end residential mortgage loans with the goals of loan rehabilitation and home preservation. To accomplish these goals, W. Mortgage provides specialized mortgage loan servicing procedures. Its administration of closed-end, performing and nonperforming residential mortgage loans includes calculating principal and interest, restructuring mortgage debt in favor of the mortgagor; assessing and collecting payments from the mortgagor; deducting servicing fees from collected payments received; providing record keeping services and data to private equity investors, paying balances to private equity investors; and engaging in loss mitigation, including foreclosure in the event of default. W. Mortgage maintains separate escrow accounts for the mortgages it services and uses such accounts for property tax and property insurance premium payments only.
W. Mortgage does not: [1] originate, fund, close, purchase or own any mortgage loans, or [2]
make advances on any loans, or [3] refinance any loans, or [4] sell any loans, or [5] securitize any loans. It acts as a mortgage servicer of mortgage loans and will get a Mortgage Lender or Mortgage Servicer License only if your State Agency requires it. Based upon the description of our mortgage servicing operations, please confirm (or correct) our belief that W. Mortgage’s mortgage servicing company does not require a Mortgage Lender or Mortgage Servicer License issued by your agency. We have requested the same type of clarification for another client and have attached a copy of it for your convenience. Kindly respond via email (ksimmons@thomas-law.com) or facsimile (214-692-7613), so that we may expedite the licensing process if you find that a Mortgage Lender or Mortgage Servicer license is necessary. Thank you in advance for your prompt attention and assistance with this important matter. I appreciate your time and would be happy to answer additional questions if they will help you determine our legal status in your state.
Sincerely,
Kimberly Simmons
Director of Assembly
Thomas Law Firm, P.C.
8080 N. Central Expressway, Suite 890
Dallas, Texas 75206
Telephone: 214-692-7611
FAX: 214-692-7613
Email: ksimmons@thomas-law.com
Website: http://www.thomas-law.com
VA Requires Mtg Broker License for Servicers Performing Loan Mods
VA has taken the position that Mortgage Servicers that engage in Loan Modifications are considered to be engaged in "refinancings" and must obtain a VA Mortgage Broker License in order to be compliant.
From: Jonathan Orne [Jonathan.Orne@scc.virginia.gov]
Sent: Monday, March 30, 2009 8:20 AM
To: 'Herbert H. Thomas'
Cc: Susan Hancock; Joe Face; Nick Kyrus; Todd Rose
Subject: RE: Wealthbridge Mortgage: VA Mortgage Broker versus Mortgage Servicer
Mr. Thomas:
The previous position of our Bureau of Financial Institutions relating to licensure of servicers under
our Mortgage Lender and Broker Act (the Act) was based upon the supposiiton that these companies
activities were limited to receiving regular payments from borrowers on existing mortgage loans,
maintaining escrow account for real property taxes and hazard insurance relating to the security
propertry, providing monthly statements, payment books, late notices, annual escrow reconciliation
statements and annual statements of interest paid, transmitting payments to noteholders or their
representatives net of servicing fees, and engaging in various collection activities. Because of low
historical average default ratios, servicers played no role in renegotiation of loan terms of which we were aware. Since the "mortgage meltdown" began, however, it seems that servicers have been pressed into engaging in such renegotiations in an effort to reduce widespread foreclosures and mounting losses to noteholders. It is this new activity, negotiation of altered loan terms (refinancings), that brings servicers within the definition of "mortgage broker" under the Act.
Jonathan B. Orne
Senior Counsel
State Corporation Commission
13th & Main Streets
Richmond, VA 23218
(804) 371-9671
From: Herbert H. Thomas [mailto:hthomas@thomas-law.com]
Sent: Friday, March 27, 2009 5:54 PM
To: Jonathan Orne
Subject: RE: Wealthbridge Mortgage: VA Mortgage Broker versus Mortgage Servicer
Jonathan
Default management [loss mitigation] has always been an integral element
of all mortgage servicers. VA’s past position over many years has been that
mortgage servicers do not need to licensed as either a mortgage lender or a
mortgage broker. It is a radical departure from this position that all
mortgage servicers must now be licensed as a mortgage broker. It is
essential that you publish immediate notice of this change on your website
because all currently operating mortgage servicer companies are relying on
the position that they had been previously advised.
Thank you for your time and assistance on this issue. Sincerely, Herb Thomas
Herbert H. Thomas
Thomas Law Firm, P.C.
8080 N. Central Expressway, Suite 890
Dallas, Texas 75206
Telephone: 214-692-7611 ext. 102
FAX: 214-692-7613
Email: hthomas@thomas-law.com
Website: http://www.thomas-law.com
September 21, 2009
SC will have a first mortgage lender/servicer license requirement as of January 1, 2010
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.
September 09, 2009
Mortgage Servicer- Urban Myths
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.
October 14, 2008
MortgageDaily.com provides free FHA Hope for Homeownership Program Explanation
MortgageDaily.com provides free FHA Hope for Homeownership Program Explanation:
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