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Bankers Advisory, Compliance Monitor--Margaret Wright

The Delaware state legislature has enacted Senate Bill No. 32 concerning the requirements for the recording of a mortgagee’s change of address for purposes of notice.

In part, the amendment adds Section 2124 to Chapter 21 of Title 25 of the Delaware Code which outlines the following:

“Any mortgagee or any assignee of a mortgage under § 2109 of this title that changes its notice address from the address stated in any mortgage or assignment of mortgage may file in the recorder of deeds office in the county in which the mortgage or any assignment has been recorded a Statement of Mortgagee Address Change. The filing of a Statement of Mortgagee Address Change is public notice to all parties interested in such mortgage or assignment of mortgage, or the property upon which it is a lien, of the address where the legal holder of such mortgage or assignment of mortgage may receive any notice. Until such time as a Statement of Mortgagee Address Change has been filed, any party having an interest in such mortgage or assignment of mortgage, or the property upon which it is a lien, is fully protected by sending all notices to the legal holder of such mortgage or assignment of mortgage at the notice address provided in the mortgage or the last assignment of record.”

Additionally, Section 2124 includes a sample form of Statement of Mortgagee Address Change which includes the information required for recording the notification.

Senate Bill No. 32 also amends Section 2111 which includes instructions for recorders on indexing Statements of Mortgagee Change of Address. A recorder may create a separate index for the recording of these documents or index the same in the index used for recorded mortgages. “If the recorder creates a separate index for Statements of Mortgagee Change of Address, it may be called the Statement of Mortgagee Change of Address Index, which must reference the mortgagor, mortgagee, record book, and page of the mortgage for which the mortgagee has changed its address, and the mortgagee’s notice address as provided in the Statement of Mortgagee Change of Address.”

View SB No. 32

Bankers Advisory, Compliance Monitor--Elizabeth Dailey

Illinois has recently made several changes to various real estate provisions.

Arrearage Payments

Illinois has added a provision regarding arrearage payments to its Residential Mortgage License Act. This provision is effective as of January 1, 2018.

The new provision states that licensees are prohibited from refusing to accept payments by mortgagors who are in arrears more than one month. Any payments made shall be applied to the unpaid balance in accordance with the licensee’s mortgage with the mortgagor.

House Bill 2965

Foreclosure

Illinois has modified two of its provisions regarding foreclosure sales, under the Illinois Counties Code and the Mortgage Foreclosure Article of the Code of Civil Procedure. Both provisions are effective immediately.

Illinois Counties Code

The first foreclosure modification affects three sections of the Illinois Counties Code. The language of Sections 4-5001, 4-12001, and 4-12001.1 has been altered so that references to “action of forcible entry and detainer” and “action for possession of property” now read “eviction action.”

House Bill 3359

Illinois Code of Civil Procedure

Another modification affects two sections of the Illinois Code of Civil Procedure. First, Section 15-1504.1 has been amended to extend its inoperative date from January 1, 2018 to January 1, 2020.

Secondly, Section 15-1507.1 has been amended to extend its inoperative date from January 1, 2017 to January 1, 2020. The repeal date of this section has been changed from March 2, 2017 to March 2, 20202. Also added to this section is a provision stating that all actions regarding the taking and remittance of fees pursuant to this section prior to its effective date are ratified, validated, and confirmed.

Senate Bill 647

County Recorder Fee Schedule

Illinois has amended provisions regarding fee schedules under the Counties Code. These provisions are effective immediately.

Section 3-5018.1, regarding predictable fee schedules, has been added to the Counties Code. Under this section, counties are required to adopt and implement a predictable fee schedule by January 1, 2019. These fee schedules shall eliminate surcharges or fees based on individual attributes of a standard document to be recorded. The new provision lists some of these prohibited attributes, including page count; number, length, or type of legal descriptions; and number of common addresses. This section also defines standard and nonstandard documents.

This provision also sets out the flat recording fees allowable for each classification of standard document. All standard documents must fall into one of the following classifications at the time of recording: deeds, leases, mortgages, easements, and miscellaneous.

House Bill 3036

Condominium Property Act

Illinois has modified several provisions under the Condominium Property Act. These provisions are effective as of January 1, 2018.

A new provision has been added to Section 1-20 of the Act. The provision states that if community instruments require approval of any mortgagee or lienholder, and such a person receives a request for approval, said person is deemed to have approved unless he or she sends a negative response to the requesting party within sixty days. Requests shall be sent via certified mail.

Several new provisions have also been added to Section 1-45 of the Act. One adopted provision requires that associations consisting of one hundred or more units use “generally accepted accounting principles” when fulfilling accounting obligations under the Act.

Another new provision under Section 1-45 states that at the end of an association’s fiscal year, any surplus of funds may be disposed of by the board of managers at its discretion. The provision then sets out various ways in which the board can choose to dispose of the funds.

A provision has been added to define the term “commercial purpose” as used in Section 1-45 of the Act. A subsequent provision goes on to state that all members of an association have the right to inspect and make copies of association records for purposes relating to the association. Exercising this right for commercial purposes is prohibited.

House Bill 189

Bankers Advisory--Elizabeth Dailey

Another modification affects two sections of the Illinois Code of Civil Procedure. First, Section 15-1504.1 has been amended to extend its inoperative date from January 1, 2018 to January 1, 2020.

Secondly, Section 15-1507.1 has been amended to extend its inoperative date from January 1, 2017 to January 1, 2020. The repeal date of this section has been changed from March 2, 2017 to March 2, 2020. Also added to this section is a provision stating that all actions regarding the taking and remittance of fees pursuant to this section prior to its effective date are ratified, validated, and confirmed.

Bankers Advisory--Elizabeth Dailey

Illinois has modified several provisions under the Condominium Property Act. These provisions are effective as of January 1, 2018.

• A new provision has been added to Section 1-20 of the Act. The provision states that if community instruments require approval of any mortgagee or lienholder, and such a person receives a request for approval, said person is deemed to have approved unless he or she sends a negative response to the requesting party within sixty days. Requests shall be sent via certified mail.
• A provision has been added to define the term “commercial purpose” as used in Section 1-45 of the Act. A subsequent provision goes on to state that all members of an association have the right to inspect and make copies of association records for purposes relating to the association. Exercising this right for commercial purposes is prohibited.
• Another new provision under Section 1-45 states that at the end of an association’s fiscal year, any surplus of funds may be disposed of by the board of managers at its discretion. The provision then sets out various ways in which the board can choose to dispose of the funds.
• Several new provisions have also been added to Section 1-45 of the Act. One adopted provision requires that associations consisting of one hundred or more units use “generally accepted accounting principles” when fulfilling accounting obligations under the Act.

Bankers Advisory--Elizabeth Dailey

Illinois has added a provision regarding arrearage payments to its Residential Mortgage License Act. This provision is effective as of January 1, 2018.

The new provision states that licensees are prohibited from refusing to accept payments by mortgagors who are in arrears more than one month. Any payments made shall be applied to the unpaid balance in accordance with the licensee’s mortgage with the mortgagor.

Bankers Advisory--Elizabeth Dailey

Illinois has amended provisions regarding fee schedules under the Counties Code. These provisions are effective immediately.

Section 3-5018.1, regarding predictable fee schedules, has been added to the Counties Code. Under this section, counties are required to adopt and implement a predictable fee schedule by January 1, 2019. These fee schedules shall eliminate surcharges or fees based on individual attributes of a standard document to be recorded. The new provision lists some of these prohibited attributes, including page count; number, length, or type of legal descriptions; and number of common addresses. This section also defines standard and nonstandard documents.

This provision also sets out the flat recording fees allowable for each classification of standard document. All standard documents must fall into one of the following classifications at the time of recording: deeds, leases, mortgages, easements, and miscellaneous.

Bankers Advisory--Elizabeth Dailey

Three sections of the Illinois Counties Code has been altered so that references to “action of forcible entry and detainer” and “action for possession of property” now read “eviction action” (The language of Sections 4-5001, 4-12001, and 4-12001.1). These provisions are effective immediately.

Bankers Advisory, Compliance Monitor--Margaret Wright

Senate Bill 254: Relating to Collection of Debts Owed to State

The Oregon state legislature has passed Senate Bill 254 which requires financial institutions to participate in a data match system established by the Department of Revenue (“the department”) to identify the accounts of delinquent debtors held at the financial institution.

“Using the data match system, not more than once per calendar quarter, each financial institution shall conduct a data match with the department that compares a list of delinquent debtors, identified by name and Social Security number or other taxpayer identification number, against a list of persons who hold accounts at the financial institution to enable the department to identify which, if any, delinquent debtors hold accounts at the financial institution. A financial institution is not required to seek or obtain any information about delinquent debtors beyond any information that is provided to the financial institution by the department.”

For the purposes of this data match requirement, a financial institution is defined as a depository institution, federal credit union or state credit union doing business in the state of Oregon.

The department is required to pay a fee each calendar quarter to the financial institution conducting the data match. The fee is capped at the lesser of $2,500 or actual costs when paid in the first quarter, and for each subsequent quarter the lesser of $150 or actual costs incurred by the financial institution.  This fee may be added to the debt of the debtor with proper notice to the debtor.

If a financial institution fails to participate in the data match system or fails to comply with the rules established to administer the data match system, the department may impose a civil liability penalty on the financial institution.

A financial institution may be temporarily exempt from participation in the data match system requirement if:

• “The department determines that the participation of the financial institution in the data match system would not be cost-effective for the department;
• The department determines that the financial institution’s participation in the data match system would be unduly burdensome for the financial institution; or
• The financial institution provides the department with written notice from its supervisory banking authority that it has been determined to be undercapitalized, significantly undercapitalized, or critically undercapitalized, as those terms are defined under 12 C.F.R. 325.103(b) or 12 C.F.R. 702.102(a).”

Full Text

House Bill 2356: Relating to Debt Collection Practices for Debt Buyers

The state of Oregon has passed House Bill 2356 which outlines the information that must be included initial pleading filed by a debt buyer seeking to bring legal action to collect a debt; and amends provisions concerning the licensing requirements for debt buyers.

The initial pleading for a legal action to collect the debt must include the following:

• “The original creditor’s name, written as the original creditor used the name in dealings with the debtor;
• The name, address and telephone number of the person that owns the debt and a statement as to whether the person is a debt buyer;
• The last four digits of the original creditor’s account number for the debt, if the original creditor’s account number for the debt had four or more digits;
• A detailed and itemized statement that shows:
  • The amount the debtor last paid on the debt, if the debtor made a payment, and the date of the payment;
  • The amount and date of the debtor’s last payment on the debt before the debtor defaulted or before the debt became charged-off debt, if the debtor made a payment;
  • The balance due on the debt on the date on which the debt became charged-off debt;
  • The amount and rate of interest, any fees and any charges that the original creditor imposed, if the debt buyer or debt collector knows the amount, rate, fee or charge;
  • The amount and rate of interest, any fees and any charges that the debt buyer or any previous owner of the debt imposed, if the debt buyer or debt collector knows the amount, rate, fee or charge;
  • The attorney fees the debt buyer or debt collector seeks, if the debt buyer or debt collector expects to recover attorney fees; and
  • Any other fee, cost or charge the debt buyer seeks to recover; and
• The date on which the debt buyer purchased the debt.”

A person may not engage in debt buying unless the person obtains or renews a license as outlined in the requirements of this Bill. A license is not required to be obtained or renewed if the person is:

• “A financial institution, as defined in ORS 706.008;
• A mortgage banker or a mortgage broker, both terms as defined in ORS 86A.100;
• A person that has a license the Director of the Department of Consumer and Business
• Services issued under ORS 725.140;
• A company that the director has authorized to transact trust business in this state under ORS 709.005;
• A debt management service provider, as defined in ORS 697.602;
• An attorney who is authorized to practice law in this state, if the attorney engages in debt buying only incidentally in the practice of law; or
• A person that the director exempts from the requirement by rule or order after determining that the public interest does not require the person to obtain a license.”

Full Text

Bankers Advisory, Compliance Monitor--Rhona Kyeyune

The state of Oregon enacted provisions regarding its Mortgage Loan Servicer Practices Act that include, but is not limited to, licensing application and renewal requirements and required fees. These provisions become operative on January 1, 2018.

Section 2 defines “Service a residential mortgage loan” to mean: receiving a scheduled periodic payment from a borrower under the terms of a residential mortgage loan; paying to the lender or another person principal, interest and other amounts associated with a residential mortgage loan in accordance with the terms of any contract or agreement for servicing the residential mortgage loan; or paying an amount to a borrower, if the residential mortgage loan is a home equity conversion mortgage or a reverse mortgage

The amendment requires certain persons that service residential mortgage loans to obtain or renew a license but exempts state and federally chartered banks and credit unions. It also exempts anyone who is servicing loans they originated or purchased both the loan and the servicing rights.  In addition, it exempts up to an additional servicing of 5000 loans that one did not originate or purchase.

Section 4 of the amendment specifies license application, renewal procedures and required fees. An application for a license shall be submitted to Director of the Department of Consumer and Business Services (“director”) or the director by rule may require an applicant to submit an application through the NMLS registry.

The applicant shall submit with the application fingerprints from all of the applicant’s controllers, registered agents and managers, unique identifier, the name and address of the applicant’s registered agent, address of the applicant’s principal place of business and the name of the manager of any branch office the applicant maintains. The amendment prescribes civil penalties against persons that engage in business as residential mortgage loan servicer without a license.

The amendment requires a licensee to maintain specified liquidity, operating reserves and net worth. Section 6 provides that a licensee shall maintain in accordance with generally accepted accounting principles sufficient liquidity, operating reserves and tangible net worth to permit the licensee to adequately meet all costs, expenses and other financial requirements related to servicing residential mortgage loans in this state

Section 7 requires disclosure by a mortgage loan servicer to the director of certain significant events such as relocating or closing the licensee’s principal place of business, opening a new branch office, filing for bankruptcy or reorganization and any change in the licensee’s operations or governance.

The amendment also prescribes duties of licensee and prohibits certain activities relating to negotiating or offering to negotiate modification of terms of residential mortgage loan.

Section 13 permits the director to suspend or remove any member of licensee’s governing body or licensee’s officer who violate any provisions under the Mortgage Loan Servicer Practices Act.

Bankers Advisory, Compliance Monitor--Julio Suarez

Effective immediately, New Jersey has amended the Law Against Discrimination (LAD). These amendments extend protections over liability for service in the Armed Forces of the United States in various forms.

LAD was passed in order to protect from discrimination based on particular characteristics. These characteristics are protected against discrimination in employment, housing, places of public accommodation and credit/contracting. However, all of the characteristics are not protected to the same extent. For example, previously, age and military service were not protected from being discriminated against under housing and places of public accommodation.

However, this has now changed. Effective immediately, discrimination in all four activities, including housing and places of public accommodation, are now protected by LAD for individuals in the Armed Forces of the United States. This prohibition of discrimination based on such service includes, but is not limited to, the following industry pertinent activities:

Inquiring and creating application limitations based on the existence of service in the Armed Forces;
Extending a loan or credit, for whatever purpose;
Granting, withholding, extending or modifying in the fixing of rates, terms, conditions or provisions of any such loan;
Representing either directly or indirectly, by any employee, agent or individual who induces a transaction for the sale or rental of real property from which any person or any of the entity’s members may benefit financially, that the applicant’s service in the Armed Forces may impact a geographical area in an undesirable manner.

For a complete reading: http://www.njleg.state.nj.us/2...

Bankers Advisory, Compliance Monitor--Rhona Kyeyune

The Utah Department of Commerce, Division of Real Estate, adopted provisions relating to licensing and registration procedures under its Residential Mortgage Practices and Licensing Act (RMPLA). These provisions are effective immediately.

The purpose for the adopted provisions under Section R162-2c-201 is to make the rule consistent with the adoption of the Uniform State Test approved by statutory amendment in 2017; clarify the timing, reorder the procedures, revise the requirements for applying for a lending manager license; and to clarify the deadlines associated with an application for licensure. The changes in Section R162-2c-204 add a requirement for a division-approved continuing education course for mortgage loan originators newly licensed in Utah.

The amendment to Section R162-2c-201 of the rule eliminates the requirement that a mortgage loan originator pass a test with Utah-specific questions for licensure, and substitutes in its place a requirement for passing the nationally recognized Uniform Standard Test as sufficient for application for licensure.

The rule clarifies the timing and reorders the procedures for applying for a lending manager license. The rule also clarifies the experience required for an applicant for licensure as a lending manager and notifies an applicant that failure to adequately document their experience will result in the denial of an application for licensure.

The amendment also allows a lending manager applicant who passes one test portion of the exam but fails the other 90 days from the date on which the individual achieves a passing score on the first portion of the exam to pass the failed portion.

Furthermore, the rule provides that a lending manager applicant has 90 days from achieving a passing score on both portions of the licensing exam and 12 months from completion of pre-licensing education to submit an application for licensure.

To offset the elimination of the Utah-specific questions for licensure, the amendment to Section R162-2c-204 requires all mortgage loan originators newly licensed in Utah to complete a division-approved continuing education course prior to renewing their license at the end of the first full calendar year of licensure.

Bankers Advisory--Margaret Wright

Outlines the information that must be included initial pleading filed by a debt buyer seeking to bring legal action to collect a debt; and amends provisions concerning the licensing requirements for debt buyers. A person may not engage in debt buying unless the person obtains or renews a license as outlined in the requirements of this Bill.  

Effective date: October 6, 2017.