Mtg License News

Qualified Mortgage 3% rule Amended

Qualified Mortgage 3% rule Amended

The Qualified Mortgage/Ability to Repay 3% costs rule is amended by the Mortgage Choice Act which was approved by the US House of Representatives by unanimous vote yesterday. Read more at click



NY adopts new streamlined licensing process for mortgage

NY adopts new streamlined licensing process for mortgage

On June 5, 2014, Benjamin M. Lawsky, Superintendent of Financial Services, announced that the Department of Financial Services (DFS) is implementing a new streamlined licensing process for mortgage banking in New York.
These measures include:
1. Adoption of the Uniform State Test effective September 2, 2014.
2. Transitional License Applications for Mortgage Loan Originators.
3. Cutting Down on Unnecessary Layers of Review.
4. Dedicated Mailboxes to Answer Questions.
5. Electronic Submission of Application Materials.
6. Elimination of “Placeholder Applications.”
7. Launch of New Comprehensive Online Resource Center providing access to new industry guidebooks, information regarding new proposed regulations and New York’s adoption of the Uniform State Test, and step-by-step directions on how to apply for a license to become a mortgage banker, mortgage broker, mortgage loan servicer, or mortgage loan originator, as well as how and when to apply for a change of control of a regulated entity, how to apply for a new branch location, and more.
8. DFS will be issuing comprehensive guidebooks that help companies and individuals to not only apply for a license, but to maintain a license.
9. Eliminating Unnecessary Regulatory Requirements, Clarifying the Rules of the Road

HUD Re-certification Process is now on the LEAP System-Deadline 6/26/2014

HUD Re-certification Process is now on the LEAP System-Deadline 6/26/2014
FHA’s Lender Electronic Assessment Portal (LEAP) version 3.0 was deployed on May 27, 2014.  All of FHA’s approximately 2,900 approved lenders will now use LEAP for their annual recertifications, and to execute post-approval business updates and changes.  Mortgagee Letter 2014-09, published on May 27, 2014, provides more information regarding these processes.  The Mortgagee Letter provides specific information on the following FHA-required actions and activities that mortgagees must now execute using LEAP:

  • FHA’s Annual Recertification Process
  • Post-approval Updates and Business Changes

Please note: Lenders with a December 2013, January 2014, or February 2014 fiscal year end must complete all recertification steps in LEAP no later than 30 days from system deployment.  The recertification due date for all other lenders remains 90 days after each lender’s fiscal year end, and all lenders still have at least 30 days from the deployment of LEAP 3.0 to complete their recertifications. Please reference the documents below for additional information regarding the transition to LEAP 3.0.

NY Mtg. Banker Licensing Time May Be Cut in Half ?

NY Mtg. Banker Licensing Time May Be Cut in Half ?

New York regulator Benjamin Lawsky said Tuesday, May 20, 2014, that the New York Department of Financial Services plans to improve the time and process it takes to get a mortgage license in New York. Lawksy plans to eliminate several layers of review for mortgage bankers to apply for a license or a new branch location. On licensing, Lawsky said his goal is to cut the current four-month wait time in half for lenders to get a license in New York.  “When I heard we were one of the slowest in the country, my reaction was to do a whole reform process and make us the fastest,” he said. “I want to be number one.”

“Best Business Mobile App”

For the “Best Business Mobile App”, Click here to download “Thomas Law Mortgage Licenses” App.
Click here for YouTube video of why you will want to download this mobile app. [Coming Soon!]

For Shoppers: Beneficial Features:
1. Shop: Services described [Licensing, Compliance, Training]
2. Budget: Costs detailed [Matrix of Costs Spreadsheets]
3. Conference: scheduled by tele. & email
4. Buy: Purchase services online through Shopping Cart
5. Learn: Follow “Mtg Lic/Compliance News” on Blog
6. Access: Short cut to NMLS through “More” then “Contact Us” pages

For Clients: Beneficial Features:
1. mL2 Status: Check project status on mLicense 2.0 Project Home & Status pages 24/7 through “More” then “Contact Us” pages
2. NMLS Status: Check project status on Dashboard 7am-1am through “More” then “Contact Us” pages
3. Conference: Communicate with Herb Thomas by email or tele.
4. Access: Short cut to NMLS through “More” then “Contact Us” pages
5. Access: Short cut to Full Website
6. Access: Short cut to Free training videos
7. Learn: Follow Compliance News on Blog, Twitter, LinkedIn
8. Work Area: Full functionality of mLicense 2.0: sync’ing apps, checklists, documents submitted, order FPCs, COAs, Bonds, tests, analysis of Conditions, deadlines through “More” then “Contact Us” pages
9. Share: Share mobile app with others on Facebook, Twitter & Email

Recruiting Loan Officers Successfully

You grow your mortgage company by successfully recruiting top producing loan officers.  But you are highly vulnerable to losing your recruit during the “transition period”.  The “transition period” is after the loan officer has committed verbally to leave his current company and join your mortgage company.  But the loan officer does not want to lose the revenue of loan currently in his pipeline so he stays with his current company for another 30 days to wind down the pipeline before he gives his notice of termination to his current company.  So generally the “transition period” is 30-45 days before the top producer officially tenders his resignation.  If the “transition period” is not handled well by your mortgage company, you are vulnerable to the top producer changing his mind and staying with his current company.  The primary threat is blundering the license transition from the current company to your company by allowing inept staff to try to transition the license but they get it hung up with the licensing agency for months with no knowledge of how to get it out of the big black hole. A top producer who sees that he will have to sit out of origination/compensation for 30-60 days will bail-out and you lose all your recruiting hard work.  Even higher likelihood of bail-out is if the loan officer works for a bank and he must get a MLO license before he can originate and receive compensation with your company.  He does not know how to maneuver the process quickly so if your staff does not either, then it is a train wreck and you lose your recruit.  You need a professional to handle your top producer recruit “transition periods” so you do not lose them.  I recommend that you hire me to handle these delicate situations to assure smooth transitions without drama.  Call me at 214-692-7611 for a full description of how “transition periods” should be handled.

CFPB has issued a Compliance Guide to assist in the implementation of the TILA-RESPA Integrated Disclosure rule effective 8/1/2015


CFPB has issued a Compliance Guide to assist in the implementation of the TILA-RESPA Integrated Disclosure rule effective 8/1/2015.

The Guide:

The CFPB recently finalized the TILA-RESPA Integrated Disclosure rule, which makes mortgage disclosure easier for consumers to understand and use and helps facilitate compliance with TILA and RESPA. The rule takes effect August 1, 2015. Review the executive summary of the rule here.

Sections 1098 and 1100A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) direct the CFPB to publish rules and forms that combine certain disclosures that consumers receive in connection with applying for and closing on a mortgage loan under the Truth in Lending Act (Regulation Z) and the Real Estate Settlement Procedures Act (Regulation X). Consistent with this requirement, the CFPB is amending Regulations X and Z to establish new disclosure requirements and forms in Regulation Z for most closed-end consumer credit transactions secured by real property. In addition to combining the existing disclosure requirements and implementing new requirements imposed by the Dodd-Frank Act, the final rule provides extensive guidance regarding compliance with those requirements.

This rule is effective August 1, 2015. The final rule applies to transactions for which the creditor or mortgage broker receives an application on or after that date.

Here is a summary of the benefits to consumers of the combination of these 2 forms.



3rd party loan processors: MLO license or Exempt?

Are 3rd party loan processing companies struggling with whether to get their loan processors individually licensed?

I represent numerous companies that provide 3rd party loan processing services for large banks.  

The question:  Are 3rd party loan processing companies required to obtain MLO licenses for their loan processors or are they exempt?    

The problem: The reason this is a hot issue for loan processors is because of a little known, hidden provision of the SAFE Act that said: “(2) INDEPENDENT CONTRACTORS.—An independent contractor may not engage in residential mortgage loan origination activities as a loan processor or underwriter unless such independent contractor is a State-licensed loan originator.”   Therefore, the SAFE Act [which was adopted by each of the 50 states] stated that a Mortgage Loan Originator needs a MLO license but a W-2 “employee” loan processors is excluded while a 1009 “independent contractor” loan processors is included.  

The Solution:  If a company’s loan processors qualify as W-2 “employees” rather than 1009 “independent contractors” then they are exempt for obtaining a MLO license in the majority of the states but unfortunately not in CT or KY and a few others.

At Last! Delaware Moves Company Apps to NMLS. Come on Missouri!

At Last! Delaware has moved its Company Apps to the NMLS.  NMLS is now receiving new application and transition filings for the Lender License, Broker License, Licensed Lender and Broker Branch License for Delaware Office of the State Bank Commissioner.     Licensees and new applicants are now able to submit these records through NMLS.  Maine moved their Company Apps to the NMLS so that leaves MO as the only state that requires paper applications to be processed through the state. 

Stand-Alone Uniform State Test (UST): Deadline 3/31/2014

Warning! March 31 Deadline:You only have about 30 days to sign up and take the Stand-Alone UST Test so you can become Eligible to be a MLO in 37 states plus Puerto Rico [maybe your company will let open an office there on the beach]. There are only 25 questions and you only need 17 correct answers to pass and it only takes 45 minutes and only costs $33.00. What a bargain! Plus it will make you more valuable to your Company.

If you previously passed the Retired National Test, the 25-question Stand-alone UST is only available for enrollment until March 31, 2014. Candidates who enroll before April 1, 2014 will have the usual 180-day window to schedule and take the test. Click for instructions on how to enroll for the test. Click on the UST Adoption Map and Table  the list of state agencies and when they will adopt UST.