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Who's Handling My Mortgage?
2005 NCSL Annual Meeting
Seattle, Washington
August 17, 2005
2005 Mortgage Licensing Legislation
August 4, 2005
Enactments are noted in italics
Arizona
H.B. 2236
Establishes an independent licensing structure for loan originators and authorizes the superintendent of the Department to establish rules as necessary to enforce and administer the licensing program.
S.B. 1285
Makes technical changes to the regulations regarding commercial mortgage brokers including the protocol for a licensed mortgage broker requesting inactive status for the next license year and how to regain active status as a licensed mortgage broker.
Arkansas
H.B. 2658
Signed by governor 4/5/05, Act 1679
An Act to amend the Fair Mortgage Lending Act. Relaxes the requirements for branch managers of mortgage companies to have three years’ experience and be on-site at the branch they manage. Also lists the requirements of who needs to be licensed within the mortgage company and who is exempt from the licensing requirement.
California
A.B. 790
Requires real estate brokers or salespersons who negotiate residential mortgage loans to notify the commissioner annually in writing, as specified, and to pay specified penalties if they fail to make the required notification to the commissioner.
A.B. 1347
States the intent of the Legislature to enact laws streamlining the regulation of the mortgage lending industry.
A.B. 1455
States the Legislature's intent to enact supplementary provisions to regulate mortgage and deed of trust practices.
Connecticut
H.B. 6143
Failed Joint Favorable deadline 4/15/05
Requires that a mortgagee deliver a release of mortgage to the mortgagor's designated agent or attorney, and only to the mortgagor if there is no such designated agent or attorney, to ensure that attorneys receive releases of mortgages so that they may be properly recorded.
S.B. 1219
Signed by governor 5/17/05, Public Act 05-46
Clarifies that the existing license of first mortgage, secondary mortgage, sales finance company, small loan lender and consumer collection agency licensees will not expire when a licensee files a late renewal application in accordance with the applicable statute. Also requires the commissioner to adopt regulations specifying the forms mortgagees may use to report interest due pursuant to section 49-2a of the general statutes to mortgagors and specifying a form a lender may use to give notice to homeowners of the availability of the provisions of sections 49-31d to 49-31i, inclusive, of the general statutes when the lender commences an action for foreclosure of a mortgage on residential real property.
Florida
H.B. 381
Died in committee 5/6/05
Clarifies mortgage broker and lender, and correspondent lender, license requirements, exemptions, and the license renewal process.
S.B. 304
Died on calendar 5/6/05
Clarifies application of exemption from application of specified mortgage broker licensure requirements to certain entities. Also, imposes certain costs and fees on mortgage lender that fails to pay property owner's tax or insurance premiums from escrow account.
Georgia
H.B. 498
Amends Title 7, Chapter 1, Article 13 of the Official Code of Georgia Annotated, relating to licensing of mortgage lenders and mortgage brokers, so as to provide for authorization and definition of mortgage loan officers; provides for procedures, conditions, and limitations of mortgage loan officers; and provides for powers, duties, and authority of the Department of Banking and Finance.
H.R. 822
Urges the provision of more state banking inspectors in the 2007 budget in order to more closely review mortgage companies and loans in Georgia. And, encourages the commissioner of the Department of Banking and Finance to establish a program of mandatory continuing education for all mortgage brokers in Georgia.
S.B. 82
Signed by governor 5/5/05, Act 160
Updates the financial requirements for licensure of mortgage brokers to a bond of at least $50,000 and updates the financial requirements for licensure of mortgage lenders to a bond of at least $150,000. Instead of a bond, the applicant or licensee may submit a letter of credit from a federally insured financial institution. Prohibited acts of mortgage lenders are also updated, including the misrepresentation of material facts, any practice that is not in good faith and fair dealing, and proper interaction with the department.
Hawaii
H.B. 157
S.B. 108
Exempts the sales agent of a time share plan developer from mortgage broker and solicitor licensing laws, if the developer is a licensed mortgage broker.
H.B. 661
S.B. 770
Passed Senate 3/8/05
Repeals the existing law on mortgage brokers and solicitors and replaces it with provisions for more specialized regulation. Contains sections regarding the following: definitions, exemptions, prohibited acts, licensing requirements, license renewal procedure, bond requirements, continuing education requirements, record keeping requirements, rules for written agreements between a licensed mortgage broker and a borrower, disclosure of fees requirement, disclosure of loan terms, grounds for suspension of license, and powers of the commissioner.
Idaho
H.B. 72
Signed by governor 4/5/05, Chapter 261
Amends existing law relating to residential mortgage practices to remove the exemption for certain agents who act under exclusive contracts.
Illinois
H.B. 1061
Amends the Residential Mortgage License Act of 1987. Provides that the soliciting and sale of mortgages by a home builder shall be conducted only by persons who have been licensed under the Act and shall be subject to the Act; a home builder transacting mortgage business in Illinois shall be licensed under the Act and shall be subject to the Act; and a licensee may not pay, directly or indirectly, any commission, service fee, brokerage fee, or other valuable consideration to any person for services as a home builder.
H.B. 1428
Signed by governor 6/17/05, Public Act 094-0050
Provides that the definition of "mortgage lender" includes savings banks, credit unions, mortgage bankers, and entities that service mortgage loans, and deletes a provision that "mortgage lender" includes building and loan associations. Requires that, when any mortgage lender pays the property tax from an escrow account, the mortgage lender must give the borrower written notice within 45 business days after the tax payment.
H.B. 2018
Amends the Residential Mortgage License Act of 1987. Makes a technical change in a section concerning the necessity of obtaining a license.
Iowa
H.F. 115
Defined as the Iowa Mortgage Originator Licensing Act. Creates a licensing requirement for mortgage originators, as well as a list of exemptions from the new licensing requirement. Additionally, the bill details the license renewal process and the continuing education requirement for mortgage originators. The superintendent of Banking of the Department of Commerce will regulate and enforce the new requirements.
H.F. 737
Signed by governor 4/29/05
Defines mortgage brokers and bankers, as well as the exemptions from both definitions. Creates an annual registration requirement necessary for licensing as well as continuing education requirements.
Kansas
H.B. 2172
Signed by governor 6/6/05, Chapter 144
Regulates consumer and mortgage lending; provides penalties for violations and fraud.
Maine
L.D. 1303
Signed by governor 5/20/05, Chapter 164
Defines "loan officer" in a way that exempts clerical staff and loan processors. The definition also exempts sole proprietors and employees of banks and credit unions. Requires that at the time a supervised lender applies for its license to make supervised loans the company request registration of its loan officers. In addition, those loan officer registrations have to be updated during the licensing period. Finally, it authorizes the Department of Professional and Financial Regulation, Office of Consumer Credit Regulation, to suspend or revoke the registration of a loan officer independently of any action against the license or registration of a supervised lender or credit services organization. In effect, this would permit the state to track a specific individual loan officer.
Maryland
H.B. 1040
Signed by governor 5/26/05, Chapter 590
S.B. 660
Vetoed by governor as duplicative 5/26/05
Prohibits an individual from acting as a mortgage originator on or after a specified date unless the individual is a licensee or is exempt from licensing under the Act; provides that a license issued under the Act authorizes a licensee to act as a mortgage originator only under specified circumstances; prohibits a licensee from maintaining more than one license or being employed by more than one mortgage lender; provides that a mortgage lender is not required to maintain an office in the state under specified circumstances.
S.B. 159
Signed by governor 4/26/05, Chapter 132
Repeals an exemption from licensure by the commissioner of Financial Regulation for mortgage lenders that are federally approved seller-servicers; expands a specified exemption from specified record keeping requirements.
Massachusetts
H.B. 3072
Requires the licensing of mortgage lenders, with the following exceptions: lenders who make less than five mortgage loans per year; banks, credit unions, insurance companies, and the like; or any federal or state agency, nonprofit, or public primary or secondary education institution.
H.B. 3084
Repeals Sections 17B, 17C and 17D of Chapter 184 of the General Laws, as so appearing in the 2002, regarding mortgage lending restrictions. Section 17B contains required statements and information in mortgage loan applications for real estate consisting of a dwelling house of four or less separate households. Section 17C provides that a residential property value report is available to a mortgage applicant free of charge within 30 days of request, after the applicant is denied or accepted. Section 17D requires an up-front total of fees payable to the mortgagor. It also lists required documents and publications for the applicant, provided by the mortgagor, including a worksheet to calculate the settlement fees; a copy of “Settlement Costs” published by the U.S. Secretary of Housing and Urban Development, a copy of “Consumer Handbook on Adjustable Rate Mortgages” published by the Federal Home Loan Bank Board if the applicant requests information on variable mortgages, a disclosure statement regarding the mortgage application and approval process, and notification to the mortgage borrower that their mortgage application is complete or incomplete.
H.B. 3011
S.B. 562
Requires each mortgage lender, who is licensed pursuant to this chapter and who, directly or indirectly, makes more than 50 residential real estate mortgage loans in the commonwealth in any calendar year, as reported under the Home Mortgage Disclosure Act, 12 USC 1801 et seq., is obligated to help meet the housing credit needs of the communities in the commonwealth, including low and moderate income neighborhoods and residents, consistent with laws, rules and regulations of the commonwealth and the federal government relative thereto, and with safe and sound business practices.
S.B. 588
Requires the licensure of all mortgage originators in the state of Massachusetts.
Michigan
S.B. 540
Passed Senate 6/30/05
Exempts leased employees performing services as agents of mortgage broker, lender, or servicer from licensing requirement.
Minnesota
H.F. 792
Passed House 4/18/05
S.F. 1732
Adds residential mortgage originators and servicers and athlete agents to the list of licenses that are exempt from a general law that applies to licenses issued by the state, unless exempted.
H.F. 1824
Indefinitely postponed 5/19/05
S.F. 1636
Signed by governor 5/27/05, Chapter 118
Makes miscellaneous changes in regulation of banks, credit unions, and other financial institutions. Regarding mortgage originators, it prohibits a person who has been convicted of a crime involving dishonesty, breach of trust, or money laundering from working as or for a residential mortgage originator. Also applies if the person has not been convicted but has entered a pretrial diversion program in connection with such an offense. Provides for a de minimus exception and for the commissioner to grant exceptions. Provides that an exception granted by the commissioner does not obligate an employer to hire the person.
Mississippi
H.B. 785
Died in committee 2/1/05
Updates the continuing education requirement for mortgage brokers to allow courses offered by the Magnolia Mortgage Brokers and Educational Association.
Missouri
H.B. 139
Defines “continuing education,” “loan originator,” and "residential loan originator license certification course," and redefines “exempt entity.” Exempts the following from loan originator licensing: certain financial institutions and previously licensed mortgage brokers and loan originators. Adds requirements for licensing regarding reporting and notification by licensees and the director.
H.B. 990
Defines "continuing education" and establishes standards to be met in order to comply with the continuing education requirements for mortgage brokers and loan originators. Removes the definition pertaining to employed or contracted persons assisting in the activities performed by a licensed broker. Defines "loan originator" and "residential loan originator license certification course." Exempts certain financial institutions from the loan originator licensing requirements. Exempts from the licensing requirements for those persons currently holding mortgage broker or loan originator licenses prior to the effective date of the bill. Requires all license applications to include evidence of satisfactory completion of the residential loan originator license certification course and examination. Requires loan originator licensees to deliver their licenses to their current employer and notify the director of Finance in the Department of Economic Development. In the case where employment is terminated, the licensee will return his or her license to the director with a written explanation of the reasons for termination. Requires all renewal applications to include evidence of completion of all continuing education requirements.
S.B. 190
Defines “continuing education,” “loan originator,” and "residential loan originator license certification course," and redefines “exempt entity.” Exempts the following from loan originator licensing: certain financial institutions and previously licensed mortgage brokers and loan originators. Adds requirements for licensing regarding reporting and notification by licensees and the director.
Montana
H.B. 71
Signed by governor 4/21/05, Chapter 368
Provides that an individual who is seeking licensure as a mortgage broker and who is the sole owner of an entity seeking licensure as a mortgage broker shall pay a single license application fee and a single license renewal fee; clarifies that a designated manager must be an individual licensed as a mortgage broker; and amends Sections 32-9-117 and 32-9-122, MCA.
S.B. 117
Signed by governor 3/30/05, Chapter 136
Revises mortgage broker laws. Modifies the definition of “mortgage broker” to include a person who loans money that is not secured by property purchased with the loan proceedings; increases the ownership interest in a mortgage broker entity a person must have before that ownership interest must be reported to the Department of Administration from five to ten percent; revises information included in advertising; authorizes the Department to share information with other state regulatory agencies and the Mortgage Asset Research Institute, Inc., and other similar organizations; and amends sections 32-9-103, 32-9-115, 32-9-121, and 32-9-130, MCA.
S.B. 274
Signed by governor 4/20/05, Chapter 301
Revises the Montana Mortgage Broker and Loan Originator Licensing Act to revoke an exemption for mortgage bankers acting as mortgage brokers; expands certain exemptions; requires certain mortgage bankers to be licensed as mortgage brokers; includes mortgage banker experience as qualifying experience for a mortgage broker license; and amends Sections 32-9-102, 32-9-104 and 32-9-109, MCA.
Nevada
S.B. 433
Died in committee 4/27/05
Relates to mortgage lending; prohibits the Division of Mortgage Lending of the Department of Business and Industry from issuing a license as a mortgage agent to a person unless he completes certain courses of instruction; sets forth the requirements for a course of continuing education to qualify as a certified course of continuing education for mortgage brokers, mortgage agents and mortgage bankers; expands the definitions of “mortgage agent” and “mortgage broker” to include certain persons; requires an application for a license as a mortgage broker to include certain information regarding civil or criminal proceedings brought against the applicant; revises the circumstances under which the commissioner of mortgage lending must issue a license to an applicant; increases certain fees; sets forth the circumstances under which the commissioner is not required to conduct the annual examination for mortgage brokers; and provides other matters properly relating thereto.
New Hampshire
S.B. 223
Passed House 6/1/05
Requires background checks for principals of certain financial businesses regulated by the commissioner; increases the fee for mortgage banker and broker licenses; adds agents and originators to the persons covered by mortgage licenses; allows the commissioner to accept examinations of financial condition conducted by regulators in other states and the federal government; allows the commissioner to share information with regulators in other states and the federal government; and allows the commissioner to use certain national organizations to facilitate licensing.
New Mexico
S.B. 675
Relates to licensing; creates licensing requirements for mortgage lenders and mortgage brokers; provides powers to the Director of the Financial Institutions Division of the Regulation and Licensing Department; imposes fees; enacts the Mortgage Lenders and Brokers Licensing Act; repeals the Mortgage Loan Company and Loan Broker Act; and provides penalties.
New York
A.B. 2853
Requires applicants for registration as a mortgage broker to successfully complete certain pertinent courses of instruction and to demonstrate their competency and trustworthiness; provides for exemptions; provides for continuing education requirements.
A.B. 4956
S.B. 2003
Regulates mortgage loan originators, requires registration, education requirements, and provides for suspension and revocation of a license.
A.B. 5536
Provides for the licensing of loan originators; defines a loan originator to be a natural person who is an employee of a mortgage banker or mortgage broker, and who solicits borrowers for the purpose of making mortgage loans; provides exemptions; provides for the suspension and revocation of licenses in certain circumstances.
A.B. 8064
Provides for the licensing of loan originators; defines a loan originator to be a natural person who is an employee of a mortgage banker or mortgage broker, and who solicits borrowers for the purpose of making mortgage loans.
S.B. 5137
Authorizes the superintendent of Banks to take certain supervisory actions that may apply to bank holding companies, registered mortgage brokers, licensed mortgage banker, licensed sales finance companies, licensed insurance premium finance agencies, licensed transmitter of money, and licensed budget planners.
North Carolina
H.B. 237
Updates the Mortgage Lending Act by allowing registration of limited loan officers of defined affiliated mortgage bankers; establishes additional supervision and enforcement authority for the Commissioner of Banks.
H.B. 859
Passed House 4/4/05
S.B. 787
Revises the law governing the continuing education of mortgage brokers by establishing requirements for live broadcasts of continuing education courses.
H.B. 1259
S.B. 824
Updates the mortgage lending act by allowing registration of limited loan officers of defined affiliated mortgage bankers and establishes additional supervision and enforcement authority for the commissioner of banks.
Ohio
H.B. 113
Prohibits the registration of an applicant as a mortgage broker or loan officer, certification or licensure of an applicant as a real estate appraiser, or registration as a real estate appraiser assistant if a national criminal background check shows that the applicant has committed specified criminal offenses.
S.B. 162
Relates to civil penalties and advertisement requirements of licensed mortgage lenders; the application and civil penalties of the Mortgage Broker Law and duties and advertisements of mortgage brokers; the application of the Consumer Sales Practices Act relating to unfair and deceptive acts; the application, prohibitions, and civil penalties of the Consumer Credit Mortgage Loan Law and specifications about loans regulated under this law; and enacts consumer protection laws relating to mortgages.
S.B. 205
Relates to civil penalties and advertisement requirements of licensed mortgage lenders; the application and civil penalties of the Mortgage Broker Law and duties and advertisements of mortgage brokers; the application of the Consumer Sales Practices Act relating to unfair and deceptive acts; the application, prohibitions, and civil penalties of the Consumer Credit Mortgage Loan Law and specifications about loans regulated under this law; and to enact consumer protection laws relating to mortgages.
Oklahoma
H.B. 1452
Signed by governor 4/27/05, Chapter 112
Modifies the definition of “mortgage loan originator” and also modifies certain continuing education requirements.
H.B. 1581
Signed by governor 5/2/05, Chapter 131
Defines mortgage banker and requires that all mortgage bankers become licensed mortgage brokers.
Oregon
H.B. 2874
Requires mortgage loan originators to be certified by Department of Consumer and Business Services. Specifies certification requirements. Requires fingerprint identification in criminal records checks for loan originators. Modifies the definition of loan originator to exclude independent contractors. Requires the department to conduct regular and periodic examinations of loan originators, mortgage brokers and mortgage bankers.
Pennsylvania
H.B. 1469
Provides for the regulation and licensing of mortgage bankers and mortgage brokers; imposes additional powers and duties on the Department of Banking and the State Real Estate Commission; and provides penalties, licensee limitations, for legislative findings, for limitations on covered loan terms and practices, and for civil liability.
South Carolina
H.B. 4230
Amends Chapter 58, Title 40, Code of Laws of South Carolina, 1976, relating to the registration and regulation of mortgage loan brokers, so as to change the term from “mortgage loan broker” to “mortgage broker”, to conform the chapter accordingly, to define “processor”, to further specify the scope of responsibility of “originators”, and among other things to provide for licensure and renewal fees for originators.
S.B. 95
Signed by governor 6/13/05, Act 128
Provides a procedure for the Department of Consumer Affairs to request a hearing before the Administrative Law Court and provides that the Department may request that the Administrative Law Judge Division impose a civil fine for a violation by loan brokers. Also amends Sections 40-58-55, 40-58-80, and 40-58-90, all relating to mortgage loan brokers, to provide a procedure for a hearing before the Administrative Law Court and to provide for judicial review of the administrative law court’s order as provided in the Administrative Procedures Act and the rules governing practice before the Administrative Law Court.
South Dakota
S.B. 154
Signed by governor 3/4/05, Chapter 257
Exempts certain entities from the lending license fees, surety bond requirements and bank franchise taxes; amends provisions regarding any nonprofit United States Treasury Community Development Financial Institution, Small Business Administration Certified Development Company or Regional Loan Fund; relates to mortgage bankers and mortgage brokers; and adds provisions relating to the regional revolving loan fund.
Tennessee
H.B. 660
S.B. 1345
Concerns mortgages; removes from definition of "mortgage loan broker" person who for compensation processes or offers to process mortgage loans for others; allows registrants in good standing an alternative method of registering mortgage loan originators.
H.B. 662
Substituted by S.B. 1376 5/26/05
S.B. 1346
Signed by governor 6/18/05, Act 463
Concerns mortgages; removes from definition of "mortgage loan broker" person who for compensation processes or offers to process mortgage loans for others.
H.B. 717
Withdrawn 2/10/05
S.B. 726
Withdrawn 2/17/05
Concerns mortgages; permits mortgage loan originator and licensee or registrant to mutually agree whether the loan originator is an employee or independent contractor of the licensee or registrant.
H.B. 933
S.B. 1322
Increases investigation fee for license to be a mortgage lender, mortgage loan broker, mortgage loan servicer, or mortgage loan originator from $100 to $150.
H.B. 1527
S.B. 1998
Withdrawn 3/28/05
Adds certain mortgage loan originators to the excluded service category concerning liability for federal tax on the remuneration paid for service for a licensee under the Tennessee Residential Lending, Brokerage and Servicing Act.
H.B. 1715
Requires mortgage lenders to take certain actions when offering mortgage loans or refinancing existing mortgage loans.
H.B. 2292
S.B. 2227
Increases license fee and renewal from $500 to $750 for persons making mortgage loans.
H.B. 3539
S.B. 3455
Signed by governor 5/24/04, Public Law Chapter 747
Establishes registration requirements for mortgage loan originators; revises other provisions governing residential lending, brokerage and services.
S.B. 473
Revises definition of "mortgage loan originator."
Texas
H.B. 955
Signed by governor 6/18/05, Chapter 1018
Amends the Finance Code so that the regulations pertaining to mortgage brokers do not apply to mortgage bankers registered under Chapter 157; grants the commissioner power to deny the renewal of a mortgage broker license if the listed criteria are met; and guidelines are established for restitution.
H.B. 1542
S.B. 988
Signed by governor 6/17/05
Relates to education courses required for a mortgage broker or loan officer license.
H.B. 2349
Relates to registration of a loan officer employed by a mortgage banker.
S.B. 1141
Amends the definition of “mortgage loan”. Also, gives the commissioner exclusive jurisdiction to discipline any licensed mortgage broker or loan officer if the commissioner determines their actions violated Chapter 342.
Vermont
H.B. 479
Signed by governor 5/9/05, Act 18
Requires Vermont financial institutions, licensed lenders, mortgage brokers, sales finance companies, money transmitters, credit unions, and debt adjusters to comply with the provisions of the federal truth in lending act, the federal real estate settlement procedures act, or the federal bank secrecy act.
S.B. 62
Signed by governor 6/1/05, Act 36
Eliminates duplicate licensing requirements for debt adjusters and licensed lenders; clarifies the treatment of licensed lender application and license fees; increases the bond amount requirements for licensed lenders and mortgage brokers; clarifies the definition of "debt adjuster" to require licensing in connection with debts involving one or more creditors; corrects an improper cross-reference to the subchapter defining bank trust powers; authorizes reciprocal out-of-state activities by Vermont financial institutions; and clarifies the list of exempt securities.
West Virginia
H.B. 2394
S.B. 128
Provides for mortgage license provisional approval; requires the disclosure of fees in a mortgage loan; and, shortens the time in which a person adversely affected by an order of the state commissioner of banking has to appeal, while lengthening the time in which a hearing must be provided to an aggrieved person who has filed an appeal.
Wyoming
S.F. 13
Signed by governor 2/25/05, Chapter 117
Creates the Wyoming Residential Mortgage Practices Act to regulate mortgage lenders and brokers; provides definitions; provides requirements and fees; requires reporting; provides for enforcement; provides for civil and criminal penalties; and provides for rulemaking.
 Financial Services Committee 2005 Annual Meeting Agenda
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