This topic consolidates legislative summaries of new and revised state laws pertaining to licensing, originating, and servicing mortgage loans.
Effective immediately, the state of New Hampshire amended its provisions by providing for exemptions for second mortgage loans when the loan is funded by a state entity that is exempt, and is originated by a licensed loan originator in association with the first mortgage.
Ballard Spahr LLP--Anthony C. Kaye
Utah is now the third state to create a regulatory sandbox program that will test innovative financial business models.
Search our Compliance Calendar for current regulatory changes & updates.
DSNews--Seth Welborn
In recent years, New York has faced a rise of zombie properties, forcing both the state and local communities to brainstorm new ways to combat this legacy of the financial crisis. According to a new report, North Hempstead Town, New York, is considering creating a registry that would require banks and mortgage lenders to register properties that are in financial distress.
According to Daniel George, who was hired by the town as a contractor to lead the initiative, the current estimate of 100 zombie houses is expected to rise as North Hempstead conducts inspections, Newsday reports. Officials said a registry of vacant zombie homes would generate revenue for the town, as mortgage lenders pay a fee for each registration and help municipalities track down the party responsible for the property.
Meanwhile, other cities in New York are looking for ways to address their own zombie property issues. In recent years, New York has struggled with lingering foreclosure issues and urban blight related to abandoned properties. While foreclosures across New York have dropped by 46% since 2013, and the number of pending foreclosure cases in the state is down by half since 2014, New York State Comptroller Thomas P. DiNapoli warned earlier this year that “the foreclosure crisis is far from over,” adding, “New York must continue to support the programs and reforms that have helped homeowners avoid foreclosure and communities reduce blight caused by zombie properties.”
“It’s time to rethink how we deal with vacant and abandoned properties,” said a white paper published by the National Mortgage Servicing Association (NMSA). In the paper, the NMSA discussed some “common sense, practical, and affordable remedies,” aimed at reducing the costs of foreclosure practices and community blight.
According to the white paper, titled “Understanding the True Costs of Abandoned Properties: How Maintenance Can Make a Difference,” the typical foreclosed home can impose costs of around $170,000, $85,000 of which is attributable to vacant property requirements and condition.
Oregon Senate Bill 684 specifies requirements for covered entities that own, license, maintain, store, manage, collect, process, acquire or otherwise possess personal information, and for vendors that provide services to covered entities, to notify consumers of breach of security. Specifies exemptions for certain covered entities that are subject to other laws governing protections and disclosures.
These provisions are effective on January 1, 2020.
Nevada Senate Bill 382 is an act relating to real property; revising provisions governing deeds of trust; revising provisions relating to foreclosure mediation; revising provisions governing notice requirements for certain mechanics' liens; revising provisions relating to how a mortgage of real property is not deemed a conveyance; revising provisions relating to recording estates in property; revising provisions relating to common-interest ownership; and providing other matters properly relating thereto.
These provisions are effective on October 1, 2019.
The state of Nebraska enacted provisions relating to its Online Notary Public Act that include remote presentation. These provisions are effective immediately and become operative on July 1, 2020.
"We are already ahead of the game and without having to add additional FTEs."
- Julie Baril, QC Manager at Norcom Mortgage
Residential Mortgage Compliance Monitor--Elizabeth Dailey
Washington has modified its provisions regarding security breaches of personal information. These provisions are effective as of March 1, 2020.
Personal Information
The previous version of the provision stated that organizations affected by a breach only had to notify its customers after a hacker obtained the consumer’s name in combination with any of the following elements of personal information: 1) social security numbers, 2) driver’s license numbers; 3) state ID numbers; or 4) financial account information.
Under the new provision, the list of personal information types has been expanded to include: 1) full birth dates; 2) health insurance ID numbers; 3) medical history; 4) student ID numbers; 5) military ID numbers; 6) passport ID numbers; 7) usernames and passwords; 8) biometric data, such as DNA profiles and fingerprints; and 9) electronic signatures.
Notification to the Attorney General
Under the previous version of the provision, the affected organization was required to notify the Attorney General within forty-five days of a breach. This time frame has been reduced to thirty days.
Method of Notification
A new provision adds that if a breach involves a consumer’s username or password, an organization may provide notice to the consumer via email. The notice must inform the affected consumer that he or she should promptly change his or her email password and security question or answer, and take any other appropriate steps to protect the online account.
Content of Notification
Another added provision requires that an organization provide to an affected consumer a time frame of exposure of the breached personal information, if known, including the date of the breach and the date the breach was discovered.
For the full text of House Bill 1071, please refer to http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/House%20Passed%20Legislature/1071-S.PL.pdf
Minnesota House Bill 990 and Minnesota House Bill 1960 adds residential mortgage originators licensing requirements exemptions and conformity with federal truth in lending requirements.
These provisions are effective on August 1, 2019.
COLUMBIA, S.C. – The South Carolina Department of Consumer Affairs (SCDCA) announces their move to 293 Greystone Boulevard in Columbia. The agency office located on Devine Street will begin closing Wednesday, May 22 at 3 p.m. The agency will be closed on May 23 and reopen for full operation on May 24 at the Greystone Boulevard location.
Only the street address of the agency will change. The mailing address, telephone numbers and email addresses will remain the same.
Current Location through 5/22:
2221 Devine St., Ste. 200
Columbia, SC 29205
New Location beginning 5/24:
293 Greystone Blvd., Ste. 400
Columbia, SC 29210
Even though our office will be closed, consumers can still file a complaint, look up a business and find all our resources on consumer.sc.gov; businesses can also continue to use the license and complaint portals. SCDCA appreciates your patience during this time and looks forward to serving South Carolinians from our new location.
About SCDCA
The South Carolina Department of Consumer Affairs aims to protect consumers from inequities in the marketplace through advocacy, complaint mediation, enforcement and education. To file a complaint or get information on consumer issues, visit www.consumer.sc.gov or call toll-free, 1 (800) 922-1594.
DS News--Seth Welborn
California is facing a housing shortage, an issue lawmakers are seeking to resolve, but the California state senate has blocked Sen. Scott Wiener’s housing bill, putting it on hold until 2020, the San Francisco Chronicle reports.
“It doesn’t mean we’re not going to focus on solving the housing crisis,” said Sen. Anthony Portantino, noting that his committee voted to shelve Wiener’s bill, SB50, until next year. “It just means that this isn’t the right fix at this time to do that.”
“One of the challenges that SB50 had was that it wasn’t nuanced enough for jurisdictions that are already doing the right thing,” said Marina Wiant, VP of Government Affairs for the California Housing Consortium, which promotes affordable housing development. “So much energy has been focused on SB50. Time will tell where the energy will then shift.”
Other proposals, including SB330 by Sen. Nancy Skinner, overlap with aspects of SB50. SB330 would prohibit cities with high rents and low vacancy rates from placing restrictions on housing construction for the next five years, and bar those cities from capping the number of units that can receive permits, adopting new parking requirements and changing zoning laws to require less dense housing.
Many of these bills are likely to face the same problems as SB50, including opposition from local governments worried about losing control over how their communities grow. Some advocates have stated that with SB50 out of the picture, landlords and builders will have less incentive to strike a deal on preserving low-cost housing and protecting people who live there.
Wiener’s SB50 is unlikely to return to session as tate Senate President Pro Tempore announced that she will “not circumvent the decision” made by Portantino and his Senate Appropriations Committee to delay the bill until 2020.
“Regardless of my own personal feelings about this critical issue, part of my job as the leader of the Senate is to uphold the authority and decisions of committee chairs,” Atkins said in a statement. “Short of significantly amending the bill and limiting its applications in large swaths of the state, there was no path to move forward this year.”
Presented by ACES Quality Management's EVP of Compliance, Amanda Phillips, and Ballard Spahr's Reid Herlihy, Richard Andreano, Jr., and Matthew Morr.
Vermont Senate Bill 154 amends the statutes governing banking, lenders, and other financial institutions relating to licensing requirements for mortgage lenders, mortgage brokers, mortgage loan originators and mortgage servicers.
[The bill is extensive. Please see bill for complete details.]
These provisions are effective on July 1, 2019.
CLA Residential Mortgage | Compliance Monitor--Zachary Pearlstein
The state of New Jersey has recently enacted provisions relating to its Mortgage Servicers Licensing Act which include initial licensing and surety bond notification, reporting, and renewal requirements. These provisions are effective on July 29, 2019.
The New Jersey Mortgage Servicers Licensing Act requires mortgage servicers to obtain a license from the Commissioner of Banking and Insurance. Licenses must be obtained for the main office and each branch where business is conducted, unless one of the exemptions listed in the bill applies.
The bill defines “mortgage servicer” as “any person, wherever located, who, for the person or on behalf of the holder of a residential mortgage loan, receives payments of principal and interest in connection with a residential mortgage loan, records the payments on the person’s books and records and performs the other administrative functions as may be necessary to properly carry out the mortgage holder’s obligations under the mortgage agreement including, when applicable, the receipt of funds from the mortgagor to be held in escrow for payment of real estate taxes and insurance premiums and the distribution of the funds to the taxing authority and insurance company; and includes a person who makes payments to borrowers pursuant to the terms of a home equity conversion mortgage or reverse mortgage.”
The bill provides that both mortgage servicers and persons exempt from licensure are required to maintain adequate records of each residential mortgage loan transaction, and are required to produce the records upon request of the commissioner. Upon assigning the servicing rights on a residential mortgage loan, the servicer must make certain disclosures to the mortgagor, which are set forth in the bill. A mortgage servicer must also maintain a schedule of fees charged to mortgagors.
The bill requires mortgage servicers to file certain information annually with the Commissioner regarding the mortgages that it services in the state. In addition, mortgage servicers must file with the Commissioner a surety bond, fidelity bond, and evidence of coverage that meets certain standards set forth in the bill.
The bill provides that the Commissioner must issue a mortgage servicer license to an applicant if the Commissioner makes certain findings, including that the applicant has met certain financial and character and fitness requirements. However, the Commissioner also has the authority to conduct investigations and examinations of mortgage servicers and may suspend, revoke, or refuse to renew a mortgage servicer license for certain reasons set out in the bill.
Maryland Senate Bill 512 adds the following new protections for federal or state employees affected by government shutdowns:
These provisions are effective immediately (May 13, 2019).
Maryland Senate Bill 678
These provisions are effective on October 1, 2020.
