Compliance Newshub
State News

A federally-funded program that helps Indiana homeowners avoid foreclosures stopped taking applications at the end of June. This is to ensure all current applicants have the priority funding needed to fulfill their application needs. The fund may begin taking new applications if extra money becomes available at a later date.

More about the nationwide Hard Hit Fund initiatives, active in 18 states.

The proposal, NC House Bill 829, would prescribe a single method for determining customary and reasonable appraisal fees paid to real estate appraisers by appraisal management companies (AMCs), which would preclude the negotiation of market-based rates. The comment states that the proposed method for determining customary and reasonable fees for appraisal services “is not mandated by – and, in fact, may be inconsistent with – federal law.” The comment also expresses concern that HB-829 “may have the effect of displacing competition for the setting of appraisal fees and ultimately harming consumers in the form of higher prices.”

Note: A similar FTC warning letter was issued to Louisiana in May.

Bankers Advisory, Compliance Monitor--Ryan Peters

Michigan has amended Act 79 of 1915, concerning the required statement of marital status in written instruments conveying or mortgaging real estate, effective immediately.

The Act as amended requires that all written instruments conveying or mortgaging real estate, or any interest in real estate, executed and offered for record before April 6, 2017, must state whether any male grantors, mortgagors, or other parties executing the instrument are married or single.

Additionally, if an instrument offered for record before April 6, 2017, was recorded in the office of a register of deeds without record of marital status, and 10 years has elapsed since the recording, the record of the instrument or a transcript of it may be given in evidence in all cases and is effectual for all purposes as a legal record and the instrument must be construed to be as valid and effectual as if it had contained a statement showing the marital status of the male individual or individuals executing it.

Full Text

This rulemaking pertains to bank and credit union service contracts, minimum requirements for books and records, interpretations and rulings for loans, real estate loans, participation loans, debt for legal lending limit purposes, conditional waiver of applicability of revised statutory capital base definition, and miscellaneous amendments. 

Amended rules are effective July 19, 2017.

Allows the banking commissioner to conditionally approve a license for a mortgage loan originator of a person licensed in another state. Effective August 28, 2017.

Bankers Advisory, Compliance Monitor--Elizabeth Dailey

Nevada has updated its provisions regarding licensing, including those relating to continuing education, examination, and reporting requirements. These provisions are effective as of January 1, 2018.

Continuing Education Requirements

Section 1 has been amended to require that a mortgage broker licensee must submit to the Commissioner of Mortgage Lending (Commissioner) proof that he or she has attended at least ten hours of certified courses of continuing education during the twelve months prior to the license expiration date. This provision applies to licensees who are natural persons. If the licensee is not a natural person, this requirement applies to each natural person who supervises the daily business of the licensee. The previous requirement under this section was eight hours of continuing education.

Eliminated from this section is the requirement that licensees complete at least three hours of continuing education relating to the laws and regulations of Nevada.

Examination Requirements

Section 1.5, addressing the Commissioner’s duties in supervising licensees, has been revised to allow the Commissioner to conduct, at his or her discretion, periodic standard examinations of each mortgage broker doing business in Nevada. The Commissioner must adopt regulations proscribing a standard for determining the rating of each broker based upon the results of the examination as well as procedures for resolving any objections made by a broker of the results of the examination. This provision replaces the requirement that the Commissioner conduct annual examinations.

Reporting Requirements

A provision has been added to Section 2, allowing for the Commissioner to waive the report requirement of subsection 2 if substantially similar information is available to the Commissioner from another source. This provision refers to the required monthly report of a mortgage broker’s activity for the previous month.

Senate Bill 498 Full Text

Bankers Advisory, Compliance Monitor--Elizabeth Dailey

Nevada has amended its provisions regarding powers of sale for residential foreclosures. These provisions are effective immediately.

Powers of sale for residential foreclosures are now subject to the following requirements, and must not be executed until:

1. The grantor, the person who holds the title of record, a beneficiary under a subordinate deed of trust, or any other person who has a subordinate lien or encumbrance on the property, where a trust agreement exists concerning an owner-occupied house, has failed to make good the deficiency in performance or payment within the time period prescribed by subsection 2;
2. The beneficiary, successor in interest, or trustee first executes and records, in the county where the property is located, both a notice of the breach and of the election to sell the property and a notarized affidavit of authority to exercise the power of sale. The affidavit must:
   1. Be executed under the penalty of perjury;
   2. Be based on the direct, personal knowledge of the affiant, or by the personal knowledge acquired by the affiant by review of business records;
   3. State the full name and business address of the current trustee or his or her personal representative or assignee, the current note holder, the current beneficiary of record, and the current servicer of the obligation;
   4. State that beneficiary, successor in interest, or trustee is in actual or constructive possession of the note or that he or she is entitled to enforce the obligation;
   5. State that the beneficiary, successor in interest, the servicer of the obligation, or an attorney representing any such person has sent to the obligor a written statement of:
      1. The amount of payment needed to cure the deficiency, avoid the exercise of the power of sale, and reinstate the terms of the underlying obligation;
      2. The amount in default;
      3. The principal amount of the obligation;
      4. The amount of accrued interest and late charges;
      5. A good faith estimate of all fees imposed in connection with the exercise of the power of sale; and
      6. Contain information, including a local or toll-free telephone number, for obtaining the most current amount due on the obligation.
   6. State the date, recordation number, and name of each assignee under each recorded assignment of the deed.

Failure to comply with these requirements will render the foreclosure sale void by any court of competent jurisdiction in the county where the sale took place.

Senate Bill 490 Full Text

Bankers Advisory, Compliance Monitor--Adam Faria

Louisiana has passed Senate Bill No. 236 which amends, reenacts and sets forth several provisions relating to recording fees, recording standards, the maintenance of recorded documents, and the electronic recording of documents. These provisions are effective on August 1, 2017.

SB 236 amends and reenacts R.S. 13:844 to allow for the collection of the following fees relative to the filing and recordation of documents:

For one to five page documents, one hundred dollars.
For six to twenty-five page documents, two hundred dollars.
For twenty-six to fifty page documents, three hundred dollars.
For documents in excess of fifty pages, three hundred dollars for the first fifty pages and five dollars for each subsequent page.
For indexing of all documents filed for record for each name after the tenth name that is required to be indexed, five dollars per name.
The above fees include the indexing of all documents filed for recording for up to ten names and one certified copy of the recorded document or e-certification of document.

Additionally, the following fees have been reenacted or amended:

A fee of fifty dollars for the recordation of an act or affidavit to cancel a single mortgage, lien, or privilege.
For notarizing acknowledgments of acts executed under private signature, with seal and certificate, ten dollars.
For a certificate of real estate mortgage and lien certificate with seal, for each name in which search is made, and for one definable property only, twenty dollars for the first name and ten dollars for each additional name. There shall be an additional charge of one dollar per exception in the event that more than ten exceptions are contained on a certificate.
For canceling real estate mortgage, with original note, ten dollars.
For making copies of all official documents, no more than two dollars per page.
Except as provided in R.S. 13:844(A)(1)(f)(ii), for attesting any record or copy thereof, ten dollars. For a file-stamped conformed copy, five dollars.
For documents that are to be recorded in both the mortgage and conveyance records, the applicable fee(s), outlined above, will be assessed once upon recording in the mortgage records and again upon recording in the conveyance records. This fee schedule applies to documents on either eight-and-one-half-inch-by-eleven-inch paper or on eight-and-one-half-inch-by-fourteen-inch paper; for any other size paper, there is an additional fee of twenty dollars per page. A “document” includes any exhibits, riders, or additional documents attached to a document presented for filing.

Documents presented for recording will not be accepted unless the first page of the document has a two inch top margin, one inch margin on each side, and a one inch margin on the bottom of the document. Additionally, the type shall be no less than eight point font and the first page of the document must be captioned as to the type of act.

SB 236 also amends and reenacts Code of Civil Procedure Article 258(A) authorizing recorders to adopt and implement a plan, to be published, which provides for the acceptance and filing of electronic records of any instrument which would otherwise be recordable (excepting original maps, plats, property descriptions, or photographs related to the practice of land surveying). Article 258(D) requires recorders to adopt and implement the plan for electronic recording of documents in accordance with the provisions of Article 258(A) by January 1, 2022.

Full Text

Bankers Advisory, Compliance Monitor--Robert Harrison

The state of Maine amended its provisions under its Consumer Credit Code applicable to mortgage loan servicers. These provisions are effective on September 19, 2017 (or 90 days following adjournment of the current legislative session). Previously the code regulated the making of supervised loans and these amendments extend those regulations to the servicing of supervised loans. The amendments aim to improve the foreclosure process by regulating mortgage loan servicers. Some of the most important new amendments are as follows:

• “Creditor” now includes a mortgage loan servicer. (Sec. 1. 9-A MRSA §1-301, sub-§17)
• “Mortgage loan servicer” is now defined as a person or organization that undertakes direct collection of payments from or enforcement of rights against debtors arising from a supervised loan secured by a dwelling. (Sec. 2. 9-A MRSA §1-301, sub-§24-C)
• Unless a person is a supervised financial organization, or some other authorized financial institution or licensee pursuant to this Act the person may not engage in the business of servicing mortgage loans. (Sec. 4. 9-A MRSA §2-301)
• This Article applies to all consumer credit transactions that are made to finance or refinance the acquisition of real estate or the initial construction of a dwelling or that are secured by a first-lien mortgage on real estate and applies to the servicing of those transactions. (Sec. 10. 9-A MRSA §9-101)
• “The provisions of sections 2-301 to 2-304 control the authority of supervised lenders and mortgage loan servicers that are not supervised financial organizations to make or service loans governed by this Article.” (Sec. 11. 9-A MRSA §9-201)

Full Text Amendments

The state of Maine also amended its provisions relating to hearing and judgment under foreclosure proceedings by civil action. These provisions are effective on September 19, 2017 (or 90 days following adjournment of the current legislative session). The Act aims to protect a homeowner’s equity of redemption in a foreclosure action.

“…a writ of possession may not issue until the expiration of the period of redemption provided for in this section, except that this section does not impair the right of a mortgagee to exercise rights set forth in the mortgage or security instrument to protect the mortgaged property.” (Sec. 1. 14 MRSA §6322)

Full Text Amendment

Bankers Advisory, Compliance Monitor--Margaret Wright

House Bill 221

The Georgia state legislature recently passed House Bill 221 enacting the Uniform Power of Attorney Act (the Act).

Power of attorney is defined by the regulation as “a writing or other record that grants authority to a person to act in the place of an individual, whether or not such term is used.”

Article 1 of the Act outlines the definitions, applicability, validity, meaning, effect and termination of a power of attorney. Additionally, Article 1 outlines the appointment of agents, coagents, and successor agents, their duties, responsibilities, liability, authority, and compensation.

Article 2 of the Act includes provisions regarding the general and specific authority that a principal may give an agent in a power of attorney.

Article 3 of the Act includes the forms: “Statutory Form Power of Attorney” and “Agent’s Certification as to the Validity of Power of Attorney and Agent’s Authority.”

The Uniform Power of Attorney Act is effective as of July 1, 2017.

Entire Act

House Bill 143

The Georgia state legislature passed House Bill 143 relating to the regulation of financial institutions. The Georgia Department of Banking and Finance (the Department) issued the following bulletin in April 2017 concerning the new revisions outlined under House Bill 143:

“The bill revises statutory provisions governing most of the entities regulated by the Department – banks, credit unions, trust companies, bank holding companies, money service businesses, and mortgage lenders and brokers – as well as certain provisions addressing the Department’s general powers.

Among other items, the bill:

1.  empowers the Department to issue stand-alone trust company charters;
2. permits all trust companies that are chartered out of state to act as a fiduciary in Georgia;
3. streamlines the legal lending limit calculation for banks;
4. authorizes the imposition of convenience fees for the handling of electronic payments;
5. clarifies the Department’s ability to examine and regulate third-party service providers;
6. modifies the age at which a minor can open a bank account only in his or her name;
7. confirms that state-chartered institutions can conduct business on Sunday;
8.  limits the ability of credit unions to accept uninsured deposits;
9. provides parity with federal credit unions by including employment within a geographic field of membership;
10. eliminates the requirement that the Department approve all fixed asset investments by credit unions;
11. enables credit unions to purchase whole loans from a financial institution; and
12. increases the required bond amount for mortgage brokers and mortgage lenders.

House Bill 143 can be viewed at: https://gov.georgia.gov/sites/gov.georgia.gov/files/related_files/document/HB%20143%202017.pdf.

The Department strongly encourages every regulated entity to review the bill to ensure a thorough understanding of all the applicable revisions.

The Department will issue proposed rules and regulations in May to, among other items, implement some of the statutory changes contained in House Bill 143.

Bankers Advisory, Compliance Monitor--Laura Eckstein

Connecticut amended its provisions relating to licensing under Senate Bill 906, which is an act concerning lead generators of residential mortgage loans. Provisions in this bill range from effective immediately to effective on January 1, 2018.

Definitions

The definition regarding advanced fees was updated. The advance fee now also includes consideration given by a consumer to a person for a residential mortgage loan. Sec. 36a-485(1). New definitions were added for the lead, lead generator, and trigger lead. Under the bill, lead is defined as “any information identifying a potential consumer of a residential mortgage loan.” Sec. 36a-485(13). A lead generator is a person with the expectation of compensation. He or she sells leads for a residential mortgage loan, generates leads for another person, or performs marketing services directing a consumer to another person for a residential mortgage loan. Sec. 36a-485(14)(A)-(C). A trigger lead refers to a situation when a consumer report triggered by an inquiry made with a consumer reporting agency in response to an application for credit is obtained. Sec. 36a-485(32).

License Requirement

Effective January 1, 2018, no person shall directly or indirectly act as a lead generator without obtaining a license under Section 36-a-489, unless he or she is exempt under the statute. Under the amended bill a licensed lead generator will not be deemed to be acting as a mortgage lender if he or she does not obtain compensation contingent upon the consummation of a residential mortgage loan or if the or she uses financial criteria particular to a consumer in order to selectively steer a consumer to a specific person for a loan. Sec. 36a-486(a).

License Issuance

The commissioner may issue a lead generator license. The application for a license as lead generator must contain the identity of the applicant, any control person of the applicant, and any information related to administrative, civil, or criminal findings by any governmental jurisdiction. The commissioner is allowed to conduct a state or national criminal history records check of the applicant and any control person of the applicant. The commissioner may also require the submission of fingerprints to the FBI or other state, national, or international criminal databases as part of the application. Sec. 36a-488(d).

License Denial

The commissioner may not issue a lead generator license to an applicant unless at a minimum it is found that the applicant demonstrates the character, reputation, integrity, and general fitness is such as to command the confidence of the community. Additionally, the applicant must not have made a material misstatement in the application. Sec. 36a-489(d)(1)(A)-(C). If the application is denied, the commissioner must notify the application and provide the reason(s) for denial. An application may be denied based on the history of criminal convictions of the applicant.

Full Text

Maryland will now allow substitution of state requirements for licensee number identifications with the use of federally required NMLSR numbers. Effective July 3, 2017.

• Allows mortgage lender and mortgage loan originator licensees that appear on notes or agreements for mortgages secured by security instruments to use either the mortgage lender licensee number or the NMLSR number.
• Allows an individual who is sending a foreclosure notice which must include a mortgage lender licensee/loan originator license number to use the NMLSR as a satisfactory substitute.