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Bankers Advisory, Compliance Monitor--Laura Eckstein

Uniform Power of Attorney Act

Connecticut amended its provisions concerning its Uniform Power of Attorney Act. Provisions in the bill became effective on July 1, 2017.

Agent Authority

Effective July 1, 2017, an agent under a power of attorney may perform activities on behalf of the principal or with the principal’s property. This is allowed only if the power of attorney expressly grants the agent the authority to perform such activities and exercise of the authority to perform such activities is not otherwise prohibited by another agreement or instrument to which the authority or property is subject, such as a trust agreement. Sec. 11(a). These activities include creating, amended, revoking, or terminating an inter vivos trust. The agent may also make a gift, create or change rights of survivorship, create or change a beneficiary designation, delegate authority granted under the power of attorney, waive the principal’s right to be a beneficiary of a joint and survivor annuity, exercise fiduciary powers, and disclaim property. Sec.11(a)(1)-(7).

Digital Assets

An agent may exercise all powers the principal may have over any of the principal’s digital device, digital asset, user account and electronically stored information. This includes any user account and digital asset that currently exists or may exist as technology develops. Such powers include changing and circumventing the principal’s username and password to gain access to such user accounts and information, transferring or withdrawing funds or other assets among or from such user accounts, and opening new user accounts in the principal’s name as the agent determines is necessary or advisable. Sec.11(a)(8). The principal may authorize the agent to access, manage, control, delete and terminate any electronically stored information and communications of the principal to the extent fully allowable under the federal Electronic Communications Privacy Act of 1986, the Connecticut Revised Uniform Fiduciary Access to Digital Assets Act, and any other federal, state or international privacy law or other law. Sec.11(a)(8).

Intellectual Property

An agent may act as if he or she were the owner of such property with regard to any intellectual property interests of the principal, including copyrights and contracts for payments of royalties and trademarks. Therefore, the agent is able to register ownership, transfer ownership, grant and revoke licenses, enter, terminate, and enforcing agreements, defend ownership and confer agency upon professionals to represent the principal’s interests before governmental agencies. In general, the agent is able to exercise all powers with respect to the intellectual property that the principal could exercise if present. Sec.11(a)(9).

Limit on Authority

An agent who is not an ancestor, spouse or descendant of the principal may not exercise authority under a power of attorney to create a legal obligation of support or an interest in the principal’s property. This is prohibited whether done by gift, right of survivorship, beneficiary designation, disclaimer, or otherwise. Sec.11(b).

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Discriminatory Practices Against Veterans

Connecticut amended its provisions concerning discriminatory practices against veterans. These provisions are effective on October 1, 2017.

Selling/Renting

Under the statute, it is a discriminatory practice to refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, creed, color, national origin, ancestry, sex, gender identity or expression, marital status, age, lawful source of income, or familial status or status as a veteran, known herein as a protected class. Sec. 46a-64c(a)(1). It is also prohibited to discriminate against any person in the terms, conditions, or privileges of sale or rental of a dwelling because their status as a protected class. Sec. 46a-64c(a)(2).

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One may not make, print, or publish any notice, statement, or advertisement, with respect to the sale or rental of a dwelling that indicates any preference, limitation, or discrimination based on race, creed, color, national origin, ancestry, sex, gender identity or expression, marital status, age, lawful source of income, familial status, learning disability, or physical or mental disability or status as a veteran, or an intention to make any such preference, limitation or discrimination. Sec. 46a-64c(a)(3). Additionally, it is prohibited to represent to a protected class that any dwelling is not available for inspection, sale or rental, when such dwelling is in fact available. Sec. 46a-64c(a)(4)(A).

Location

It is a violation of this subdivision for any person to restrict or attempt to restrict the choices of any buyer or renter to purchase or rent a dwelling to an area which is substantially populated, even if less than a majority, by persons of the same protected class as the buyer or renter, while such person is authorized to offer for sale or rent another dwelling which meets the housing criteria as expressed by the buyer or renter to such person, and such other dwelling is in an area which is not substantially populated by persons of the same protected class as the buyer or renter. Sec. 46a-64c(a)(4)(B).

Real Estate Transactions

Any person or entity engaging in residential real estate related transactions many not discriminate against any person in a protected class in making available such a transaction. Sec. 46a-64c(a)(7). He or she may also not deny any person in a protected class access to or membership or participation in any multiple-listing service, real estate brokers’ organization, or other service, organization, or facility relating to the business of selling or renting dwellings. Sec. 46a-64c(a)(8).

Applicability

The provisions of this section do not apply to the rental of a room or rooms in a single-family dwelling unit if the owner actually maintains and occupies part of such living quarters as his or her residence or a unit in a dwelling containing living quarters occupied or intended to be occupied by no more than two families living independently of each other, if the owner actually maintains and occupies the other such living quarters as his or her residence. Sec. 46a-64c(b)(1).

Nothing in this section prohibits a person engaged in the business of furnishing appraisals of real property to take into consideration factors other than race, creed, color, national origin, ancestry, sex, gender identity or expression, marital status, age, lawful source of income, familial status, learning disability, or physical or mental disability or status as a veteran. Sec. 46a-64c(e).

Violations

Complaints alleging a violation of this section will be investigated within one hundred days of filing and a final administrative disposition will be made within one year of filing. If the Commission on Human Rights and Opportunities is unable to complete its investigation or make a final administrative determination within the time frames, it will notify the complainant and the respondent in writing of the reasons for not doing so. Sec. 46a-64c(f). Any person who violates any provision of this section shall be guilty of a class D misdemeanor. Sec. 46a-64c(g).

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Hawaii passed a bill requiring the release of a security instrument evidencing the assignment of the borrower’s interest in leases and rents upon full satisfaction of the underlying mortgage loan. Under the bill, if a mortgage loan is secured by an assignment of the borrower’s interest in leases or rents to the lender or servicer, the lender or servicer must provide to the borrower a reassignment or release of such security interest (as applicable) upon full satisfaction of the mortgage loan. 

Effective July 1, 2017.

Effective August 31, 2018; applies to curative affidavits filed on or after that date.

• Notice of a nonmaterial typographical or other minor error in a deed or other recorded instrument may now be given by recording a corrective notice affidavit. 
• Obvious description errors in a recorded instrument affecting title to real property may now be cured by recording a curative affidavit with the register of deeds in every county where the real property is situated.
• The act provides a recommended form for the curative affidavit, and specifies that “no particular phrasing is required for the curative affidavit.”
• An instrument conveying or purporting to convey an interest in real property that contains a defect, irregularity, or omission shall be deemed effective to vest title as stated therein and to the same extent as though the instrument had not contained the material defect, irregularity, or omission, if both of the following conditions are met:
  • The material defect, irregularity, or omission is not corrected within seven years after the instrument was recorded.
  • The instrument is recorded by the register of deeds in the county or counties where the property is situated.

Bankers Advisory, Compliance Monitor--Laura Eckstein

Uniform Power of Attorney Act

New Hampshire enacted provisions concerning its Uniform Power of Attorney Act. These provisions are effective on January 1, 2018.

Power of Attorney

Under the Act, a power of attorney is a writing or other record that grands authority to an agent to act in the place of the principal. 564-E:102(15). When a power of attorney is created under this chapter, it will be durable, unless expressly provided that it is terminated by the incapacity of the principal 564-E:104. A power of attorney is effective when it is executed, unless the principal provides in the power of attorney that it becomes effective at a future date or upon the occurrence of a future event or contingency. 564-E:109(a).

Execution of Power of Attorney

In order to execute a general power of attorney, the principal must sign (not electronically) and it must be acknowledged before a notary public. 564-E:105(a)(1). Affixed to the power of attorney, must be a form stating: “Information concerning the power of attorney. This is an important legal document. Before signing this document you should know these important facts.” 564-E:105(a)(2). Facts included in the power of attorney are powers granted by the principal to the agent to make decisions concerning money and property. The scope of the agent’s power should be explicitly defined by the principal. 564-E:105(a)(2).

Co-Agents and Successor Agents

A principal may designate two or more persons to act as co-agents under the power of attorney. Additionally, a principal may designate one or more successor agents to act if an agent resigns, dies, becomes incapacitated, is not qualified to serve, or declines to serve. A principal may grant authority to designate one or more successor agents to an agent or other person designated by name, office, or function. 564-E:111(a)-(b).

Agent’s Duties

Duties of the agent under a power of attorney include acting in accordance with the principal’s reasonable expectations, acting in the principal’s best interest, acting in good faith, and acting only within the scope of authority granted in the power of attorney. 564-E:114(a)(1)-(3). The agent must also act loyally for the principal’s benefit. 564-E:114(b)(1).

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Mortgage Loan Originator Licensing

New Hampshire modified its provisions concerning the licensing of mortgage loan originators from another state. The Bill allows the Banking Commissioner to conditionally approve a license for a mortgage loan originator of a person who is licensed in another state. These provisions are effective on August 28, 2017.

License Application Requirements

Under the Bill, in order for the Commissioner to issue a mortgage loan originator license, the Commissioner must make at a minimum certain findings. These findings include that the applicant has never had a mortgage loan originator license revoked in any governmental jurisdiction. 184:1 IV-c(a)(1). The applicant must not have been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court. 184:1 IV-c(a)(2). The applicant must demonstrate financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the mortgage loan originator will operate honestly, fairly, and efficiently. 184:1 IV-c(a)(5). In order to determine financial responsibility of an applicant, the Commissioner may consider bankruptcies filed within the pervious ten years, current outstanding judgments, current outstanding tax liens or other government liens and filings, foreclosure within the previous three years, and a pattern of serious delinquent accounts within the past three years. 184:1 IV-c(a)(5)(A)-(E).

Education Requirements

An applicant must also have completed at least twenty hours of education. At a minimum, the education must include at least three hours of federal law and regulations and three hours of ethics, which includes instruction on fraud, consumer, protection, and fair lending issues. 184:1 IV-c(a)(7)(A)-(B). Additionally, two hours of training related to lending standards for the non-traditional mortgage marketplace is required and two hours of New Hampshire mortgage law education, if the person did not previously pass a written test specific to New Hampshire mortgage laws. 184:1 IV-c(a)(7)(C)-(D).

The Commissioner may conditionally approve an application for a mortgage loan originator license if the applicant is currently licensed as a loan originator in another state and has met the previously described requirements of subparagraph (a)(1) through (a)(7)(C). The conditionally approved mortgage loan originator license shall expire after 60 days if the applicant fails to provide the Commissioner with proof that the applicant has obtained two hours of New Hampshire mortgage law education required by subparagraph (a)(7)(D) and passed a written test as required by subparagraph (a)(8). 184:1 IV-c(b).

Test Requirements

The written test must measure the applicant’s knowledge and comprehension in ethics and federal and state laws and regulations pertaining to mortgage origination, including instruction of fraud, consumer protection, the non-traditional mortgage market place, and fair lending issues. 184:1 IV-c(d)(2)(A)-(D). In order to pass the test, the applicant must have received a test score of at least 75%. The test may be re-taken three times, with at least 30 days between each test. After failing three consecutive tests, an applicant must wait at least six months before taking the test again. 184:1 IV-c(d)(4).

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Makes various revisions to the state’s banking laws. Among other things, the law

• applies certain mortgage servicers’ and student loan servicers’ prohibited acts to other licensees;
• requires non-depository licensees to maintain and enforce compliance policies and procedures;
• allows the banking commissioner to require the use of electronic bonds for licensed or registered individuals to participate in the Nationwide Mortgage Licensing System;
• reduces pre-licensing education requirements for mortgage loan originators, loan processors, and underwriters; and
• sets limits for money transmitters regarding virtual currency transactions and timeframes for transmitting money.

The law takes effect October 1, 2017, with provisions relating to compliance policies and procedures taking effect July 1, 2018, and pre-licensing education requirements taking effect January 1, 2019.

Bankers Advisory, Compliance Monitor--Margaret Wright

Reverse Mortgages

Oregon House Bill 2562 amends ORS 86A.196 to include the requirement that a reverse mortgage advertisement include a clear and conspicuous summary of terms of the reverse mortgage, including a statement that failing to pay property taxes, insurance, maintenance and related taxes “may subject the property to a tax lien or other encumbrance or possible foreclosure.”

Additionally, a lender shall send a notice each year to any escrow agent, title insurance company or other agent that pays property taxes from an escrow account on behalf of a reverse mortgagee and to the reverse mortgagee’s last known address at least 60 calendar days before the property taxes are due for the property that is subject to the reverse mortgage. This notice must include the statement “the person retains title to the property that is subject of the reverse mortgage until the person sells or transfers the property and is therefore responsible for paying property taxes, insurance, maintence and related taxes. Failing to pay these amounts may cause the reverse mortgage loan to become due immediately and may subject the property to a tax lien or other encumbrance or to possible foreclosure.” However, this notice requirement does not apply to lenders where the reverse mortgage contract includes a reserve account for payment of taxes.

House Bill 2562

Mailing of Notices

Oregon Senate Bill 381 amends the requirement for delivery of notices including payoff statements, releases, resolution conference scheduling, foreclosure avoidance eligibility, notice of default and notice of sale to be mailed to all addresses on file with the lender for the borrower or borrower’s agent, including post office boxes.

Senate Bill 381

Proceeds of Sale

Oregon House Bill 2920 amends ORS 18.950 to require that “[u]pon receipt of the proceeds of the execution of sale of real property, a judgment creditor shall file a satisfaction document … for the amount credited against any money award portion of a judgment.”

Additionally, where a judgment debtor requests in writing that the judgment creditor file a satisfaction document and if after 10 days of receipt of the written request the document is not filed, “the court may render supplement judgment awarding reasonable attorney fees to the person making the motion, unless the judgment creditor establishes that the failure to file… was not the fault of the judgment creditor.”

House Bill 2920

Bankers Advisory, Compliance Monitor--Julio Suarez

Effective July 1, 2017, Maryland repealed and reenacted with amendments an act affecting closed end credit loans in order to eliminate duplicative disclosures. In essence, the amendments streamline the loan process by substituting the financing agreement and commitment disclosures with the Loan Estimate and Closing Disclosures.

Previously, a financing agreement – a written agreement between a borrower and a lender which sets forth the terms of a purchase/refinance loan – was required to be given to the borrower within a prescribed time. However, the amendments enacted now permit for an alternative option. Should a Loan Estimate Disclosure (“LE”) be provided to the borrower in conjunction with the timing requirements set out in 12 C.F.R. Section 1026.37, the LE will act as an alternative satisfactory option for a financing agreement.

Commitment requirements have also been amended. A commitment is a written, binding agreement between a borrower and a lender which set forth the terms of the loan being extended to the borrower. This document is required to be given within a prescribed time if any of the terms in a financing agreement are subject to change after its execution. However, the amendments now permit an alternative option. Closing Disclosures provided to the borrower and in compliance with C.F.R. Section 1026.38 will act as an alternative satisfactory option for a commitment.

For a complete reading, please follow the provided link http://mgaleg.maryland.gov/201...

The Maryland Department of Labor, Licensing and Regulation, Commissioner of Financial Regulation, adopted provisions relating mortgage loan originator (MLO) licensing requirements that include, but is not limited to, pre-licensing and continuing education requirements; applications; locations; originations under an expired license; and advertising and solicitation. 

These provisions are effective on July 31, 2017.

Bankers Advisory, Compliance Monitor--Margaret Wright

Revised Uniform Fiduciary Access to Digital Assets Act

Effective September 1, 2017, Senate Bill 1193 amends the Texas Estates Code to adopt Title 4: the Texas Revised Uniform Fiduciary Access to Digital Assets Act (the “Act”).

As defined by the Act, a digital asset is “an electronic record in which an individual has a right or interest. The term does not include an underlying asset or liability unless the asset or liability is itself an electronic record.”

The Act outlines the general procedures for access to digital assets, which includes the use of an online tool that may direct the custodian to disclose the user’s digital assets to a designated recipient. Additionally, access may be granted via “the content of an electronic communication sent or received by the user, in a will, trust, power of attorney, or other record.”

The procedure under which a custodian may disclose the digital assets of a user to a fiduciary or designated recipient is additionally outlined, including the right of a custodian to assess a reasonable administrative charge for providing access.

The Act outlines the process by which digital assets may be accessed by court order in the case of a deceased user, how an agent may access the digital assets of a user under a power of attorney, and how a trustee or guardian may access the user’s digital assets.

The Act also includes an updated Power of Attorney Form which includes the express reference to grant the agent access to digital assets and the content of an electronic communication.

View Senate Bill 1193

Residential Property Power of Sale

House Bill 1470 amends Texas Title 2, Business & Commerce Code, by adding Chapter 22: “Public Sale of Residential Real Property Under Power of Sale.” This section is applicable “only to a public sale of residential property conducted under a power of sale in a security instrument.”  Chapter 22 includes applicable definitions relating to the foreclosure sale process, contract requirements for the trustee, the information required from the winning bidder, the obligation of the trustee to provide a receipt and deliver the deed to the winning bidder, and the maintenance requirements concerning the proceeds of the sale.

This amendment is effective September 1, 2017.

View House Bill 1470

Residential Mortgage Loan Originator Pre-Licensing Education Requirements

The Texas Legislature has passed House Bill 3342 amending Section 180.056 (h) regarding the requirement that a Residential Mortgage Loan Originator “who fails to maintain a residential mortgage loan originator license for the period of time established by rule of the rulemaking authority must retake the prelicensing education requirements prescribed by the SAFE Mortgage Licensing Act.”

This requirement is effective January 1, 2018.

View House Bill 3342

Online Notaries

The Texas Legislature passed House Bill No. 1217 concerning the appointment and performance of an online notary public and relating to the online acknowledgment of written instruments.

An online notary may take the acknowledgment by “appearing by an interactive two-way audio and video communication that meets the online notarization requirements under Subchapter C, Chapter 406, Government Code, and rules adopted under this subchapter.”

The Bill directs that the standards for online notarization shall be developed and maintained by the secretary of state and include standards for credential analysis and identity proofing.

“Credential analysis” is defined as “a process or service … through which a third person affirms the validity of a government-issued identification credential through review of public and proprietary data sources.” Similarly, “identity proofing” is defined as “a process or service … through which a third person affirms the identity of an individual through a review of personal information from public and proprietary data sources.”

This amendment is effective July 1, 2018.

View House Bill 1217

This site provides a consolidated list of all first time home buyer programs available in California.

Bankers Advisory, Compliance Monitor--Zachary Pearlstein

The state of Hawaii has recently updated several requirements for mortgage loan servicers, effective September 1, 2017.

The legislature of the state of Hawaii has amended chapter 454M of the Hawaii revised statutes by adding two new sections relating to licensed mortgage servicers. The first section relates to changes in control of a licensee, while the second section relates to the presumption of control of an entity.

The revised provisions require approval by the Commissioner of Financial Institutions (“Commissioner”) for a change in control of a licensed mortgage servicer. If a licensee wishes to make a change in control, the licensee must first request approval of the proposed change.  To do so, the licensee must submit a request in the form of an application to the Commissioner, along with a nonrefundable $500 application fee.

The Commissioner must then approve the proposed change of control if, after investigation, he or she is able to determine that the following three conditions are met: the person or persons who obtain control will be in compliance with the applicable regulations once approved; the person or persons who will obtain control have the competence, experience, character, and general fitness to control the licensee in a lawful manner; and the interests of the public will not be jeopardized by the change of control.

The revised provisions also clarify which persons associated with a mortgage servicer are presumed to exercise control and are subject to interviews, examination, and disclosure requirements. The provisions state that an individual is presumed to control an entity under two circumstances.  First, control is presumed if he or she is an executive officer of the entity.  And second, control is presumed if he or she is a director, general partner, or managing member who directly or indirectly has the right to vote ten percent or more of a class of voting securities of the entity or has the power to sell or direct the sale of ten percent or more of a class of voting securities of an entity.

Lastly, the new provisions add a definition of an “executive officer,” which is defined as “a president, chairperson of an executive committee, senior officer responsible for the business of the subject entity or organization, chief financial officer, or any other person who performs similar functions related to the subject entity or organization.”

Bankers Advisory, Compliance Monitor--Elizabeth Dailey

Nevada has modified its provisions relating to mortgage brokers and mortgage bankers. The effective date of these provisions ranges from October 1, 2017 to January 1, 2020.

Definitions

The definitions section has been updated to define terms such as “applicant,” “commercial mortgage loan,” “commercial property,” and “institutional investor.”

Surety Bond Requirement

Section 15.5 requires mortgage brokers to deposit with the Commissioner and keep in full force and effect a corporate surety bond payable to the State of Nevada. The previous section set out a template for the surety bond and required that the bond substantially follow the same form. The amended provision eliminates this requirement and instead requires the bond to take a form prescribed by the Commissioner.

Business Transactions

Section 88.5 sets out a list of activities that do not constitute the transaction of business in Nevada. Added to this list are the soliciting of business for the activities of a mortgage broker or a mortgage banker, and the arranging of mortgage loans secured by real property that is not commercial property.

Senate Bill 468 Full Text