Change – Change – Change
So much change has been wrought in the lending industry since what has been deemed the “mortgage debacle”. With the dust somewhat settling on the new lending landscape I thought it time to inform Investors of just a few of the regulatory changes impacting Hard Money. These changes impact the Borrower, the Mortgage Broker and the Investor.
Nationwide Mortgage Licensing System (NMLS)
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the S.A.F.E. Act) requires the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the National Credit Union Administration, and the Farm Credit Administration (collectively, the Agencies) to jointly develop and maintain a Federal registration system for those who engage in the business of residential mortgage loan origination. The statute requires these individual mortgage loan originators to be registered with the Nationwide Mortgage Licensing System and Registry (Registry), a database established previously by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators to support the licensing of mortgage loan originators by the States.
A direct result of the mortgage meltdown, NMLS was formed a few years ago to more fully qualify and register loan officers. It operates independently from, for instance, the Department of Real Estate in California. The term for a lender who has passed all the qualifications of the NMLS is a Mortgage Loan Originator (MLO).
Some of the qualifications include…
· Separate state and federal testing
· Hours of qualifying Education
· Criminal Background Check
Mortgage Brokers who have passed the above requirements receive a Unique Identifying Number. Their company too must register with the NMLS and be given a Unique Identifier Number.
Mortgage Loan Disclosure Statement (MLDS)
HUD has issued revisions to the Real Estate Settlement Procedures Act (RESPA) (Regulation X) which became effective with loan applications taken on or after January 1, 2010. These important regulatory changes impact the Good Faith Estimate (GFE) and Housing and Urban Development (HUD) Settlement Statements (HUD-1 and HUD-1A) and will place new requirements on loan originators to ensure that borrowers are better positioned to understand their mortgage transaction.
Note that the MLDS and GFE apply to non-owner occupied loans now. More on this in a future Issue.
Investors would do well to ask any Mortgage Broker they do a loan with for his or her Unique Identifier Numbers. Also inquire if they provide the MLDS within 72 hours after taking any loan application. It’s the law.
Feel free to call or email me anytime with further questions you may have regarding investing in Deeds of Trust.
Best,
Owner
Owner/Broker
Unique Identifier # 289456
Sun Pacific Mortgage & Real Estate (707) 523-2099
800 Mendocino Avenue #2, Santa Rosa, CA 95401
or email Broker at forest@sunpacmortgage.com
HARD MONEY INVESTOR SEMINAR
Attend this informal discussion of current regulations impacting Hard Money Investments. Tuesday – March 22 @ 5:30 pm at the offices of Sun Pacific Mortgage – 800 Mendocino Avenue #2, Santa Rosa. RSVP please to Loan Originator, Broker or Lynn.