Louisiana Office of Financial Institutions

1
Louisiana Office of Financial Institutions

• Louisiana Secure and Fair Enforcement of Mortgage
  Licensing Act of 2009
• Or
• Louisiana S.A.F.E. Residential Mortgage Lending
• Act

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Federal S.A.F.E. Act

• Congress passed federal legislation titled
• Secure and Fair Enforcement for Mortgage
  Licensing Act of 2008
• Established minimum licensing guidelines for
  originators.
• Effective July 31, 2008
• www.csbs.org SAFE Mortgage Licensing Act

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Louisiana S.A.F.E. Residential Mortgage Lending
Act

• HB 810 of 2009 Regular Session of the Louisiana
  legislature became Act 522
• LSA-R.S. 61081 through 61099
• Enacted effective July 31, 2009
• Provides for licensure of mortgage originators,
  brokers, and lenders

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OFIs Web Address

• Download a copy of the new statute
• www.ofi.louisiana.gov

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Definitions1083

• Mortgage Loan Originator
• means an individual who for compensation or gain
  or with the expectation of compensation or gain
  takes a residential mortgage loan application or
  offers or negotiates terms of a residential
  mortgage loan.

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Definitions

• Residential Mortgage Loan
• Any loan primarily for personal, family, or
  household use that is secured by a mortgage, deed
  of trust, or other equivalent consensual security
  interest on a dwelling as defined in Reg Z or
  residential immovable property upon which is
  constructed or intended to be constructed a
  dwelling as defined in Reg Z

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Definitions

• Residential Mortgage Loan
• Now covers all loans secured by a persons
  dwelling including
• Mobile home loans without a security interest in
  the land
• Motor homes used as the persons dwelling
• Boats if used as the persons dwelling
• Vacant land if to be used to construct or move a
  persons residence on it

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R.S. 61086

• The following persons shall have until July 31,
  2010 to obtain a license in compliance with the
  Act
• A person whose activities were not subject to the
  licensing provisions of this Act on July 30, 2009
• A person engaged in residential mortgage lending
  activities which was subject to an exemption
  provided by this Chapter on July 30, 2009

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Originator ExemptionsLoan Processor or
Underwriter

• An individual engaging solely in loan processor
  or underwriting activities, who does not
  represent to the public, through advertising or
  other means including the use of business cards,
  stationary, brochures, signs, rate lists, or
  other promotional items, that such individual can
  or will perform any of the activities of a
  mortgage originator.
• Defined as a person who performs clerical or
  support duties as an employee at the direction of
  and subject to the supervision of a person
  licensed or exempt from the Act.

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Originator ExemptionsLoan Processor or
Underwriter

• Clerical or Support Duties include subsequent to
  receipt of an application
• Receipt, collection, distribution, and analysis
  or information common for the processing or
  underwriting of a residential mortgage loan
• Communicating with a consumer to obtain the
  information necessary for the processing or
  underwriting of a loan, to the extent that such
  communication does not include offering or
  negotiating loan rates or terms, or counseling
  consumers about residential loan rates or terms

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MLO Requirements for a new License

• Effective July 31, 2009
• Complete 24 hours of pre-licensing education
  approved by NMLSR (4 hours must also be approved
  by either NAMB or MBA) also a minimum of each of
  the following
• 3 hours of federal law and regulations
• 3 hours of ethics including fraud, consumer
  protection, and fair lending
• 2 hours of training relating to non-traditional
  mortgage marketplace
• 16 hours of electives

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Requirements for Licensing

• Pass the NMLSR approved written examination with
  both national and state components
• Obtain and maintain a surety bond or deposit
  account pledged to the commissioner
• Originators may be covered by a Surety Bond
  obtained by their employer or deposit account
• Obtain documents from NMLSR

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NMLS Resource Center Pagewww.nationwidelicensings
ystem.org
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State Specific Requirements
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State Specific Requirements (contd)
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Application Checklist
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Company New License Check list
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Restrictions on granting Licenses
1088(E)

• Paid all fees due to OFI
• Never had a mortgage related license revoked in
  any governmental jurisdiction
• Never convicted, pled guilty, or nolo contendere
  to a felony involving fraud, dishonesty, breach
  of trust, or money laundering
• Not convicted, pled guilty, or nolo contendere to
  ANY felony within the last seven years

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Surety Bond / Deposit

• Each applicant for licensure must provide one of
  the following in an amount which is determined by
  loan volume
• Surety Bond based upon loan volume from the
  previous year
• 0 to 99,999,999 bond amount of 25,000
• 100,000,000 or greater bond amount of 50,000
• Employer may obtain coverage for employees
• Pledged deposit in federally insured institution
  located in Louisiana in the amount of Surety Bond
  otherwise required
• For initial license, bond or deposit must be at
  least 25,000

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Surety Bond / Deposit

• S.A.F.E. requires all originators to be covered
  by a surety bond. However, employers may supply
  the bond for the originator.
• The employer must file with OFI an Employer
  Certification Affidavit for every originator.
  www.stateregulatroyregistry.org/nmls and click on
  the state license resource page, LA, new
  originator application and scroll down to bond
  information.

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Application Fees

• New Mortgage Broker, Lender 400
• Each Branch (other than main office) 100
• Renewal Fee (main office only) 300
• New Originators 100
• Renewal Fee 100

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RENEWALS

• Renewal period in the NMLSR begins November 1st
  each year. Renewal tab appears and licensee
  attests that information is correct and pay fees.
  
• Renewal is late if submitted in NMLSR after
  December 31st but before March 1st.
• Broker/Lender late fee 200
• Originator late fee 50
• Licenses Expire January 1 unless all requirements
  are satisfied before March 1.

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Continuing Education1094 B

• Each licensed originator must complete 10 hours
  of NMLSR approved continuing education each year
  prior to renewal 2 hours must be NAMB or MBA
• 3 hours of education pertaining to federal laws
  and regulations
• 2 hours of ethics, which shall include
  instruction on fraud, consumer protection, and
  fair lending issues
• 2 hours related to lending standards for the
  nontraditional mortgage product marketplace
• 3 hours of electives

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Continuing Education for 2009

• HOWEVER specific content will not be required
  until Commissioner determines that CE through the
  NMLSR is adequately available for all Louisiana
  licensees to become compliant
• Anticipated in early 2010
• Any 10 hours of education approved by OFI will be
  sufficient for renewal of an originator license
  for 2010
• DO NOT GO TO NMLSR IN 2009 FOR CE !!

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Testing Requirements1094.1

• ALL licensed originators must obtain a passing
  grade of at least 75 on both the National and
  State Components of the S.A.F.E. compliant test
  developed by the NMLSR
• All new applicants on or after July 31, 2009 must
  obtain a passing grade on both components of the
  test before obtaining a license
• Originators which were licensed on or before July
  30, 2009 must obtain a passing grade on both
  components prior to renewal 2010

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Testing RequirementsState Component Exemption

• Everyone has to pass the National Portion of the
  SAFE test prior to renewal 2010.
• Only Originators with a passing grade on State
  test between 1/01/04 7/30/09 may be eligible
  for an exemption from the state test
• Take the National State portions early -
• A passing score is 75 correct answers

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Testing RequirementsFailing Grades

• An individual may retake one or both of the
  components of the test up to three consecutive
  times after waiting at least thirty days between
  tests
• After failing three consecutive tests the
  individual must wait at least six months before
  taking a test again
• Dont wait to take the test.

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Requirement toRetake Examinations

• An originator who fails to maintain a license for
  a period of five years or longer will be required
  to obtain a passing grade on both components
  prior to obtaining a license

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Requirements for a new applicant 1094 A

• Create a base record in the NMLSR
• 24 hours of NMLSR approved Prelicensure
  Education taken from a NMLSR approved provider.
  24 hours must include at least 4 hours of courses
  approved by either NAMB or MBA with verification
  sent to OFI.
• Must pass both the Louisiana specific portion and
  national portion of the S.A.F.E. test.

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NMLS Resource Center Pagewww.stateregulatoryregis
try.org/nmls
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Test Education Information
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Test Button
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Find a Test Center
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Prohibition on Finance ofSingle Premium Insurance

• No mortgage lender shall finance or include in
  the loan amount any single premium credit life,
  dismemberment, health and accident, mortgage life
  and disability, involuntary unemployment, or debt
  cancellation insurance sold in connection with a
  residential mortgage loan transaction
• Financing of Single Premium Private Mortgage
  Insurance Not Prohibited

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Exceptions To Prohibition on Finance of Single
Premium Insurance

• The prohibition on financing of single premium
  credit insurance does not apply to the following
• Loans with a principal balance of 50,000 or less
• Loans where the portion of the original principal
  balance attributable to the insurance premiums is
  scheduled to be fully amortized no later than the
  coverage expiration date of the insurance
  product.

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NMLSR Call Center and Website

• If you need assistance or have a question about
  how to navigate in the system, make changes to
  your record, payment of fees or submit renewals
  you should contact the Call Center.
• [phone]
• www.stateregulatoryregistry.org
• View or navigate the site

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Please Remember !!!!!!

• Keep your company information updated
• Company Contact person Email addresses
• Officers, Owners, ownership
• Branches
• Originators Relationship Sponsorship
• This is an electronic system utilizing internet
  communication. Your license depends on it.