Add-A-State@Mortgage License Mall

a free mortgage license newsletter
containing recent developments of mortgage licenses in the 50 states
 This Edition features: Mortgage Broker News Headlines as of 4/15/99 ( click headline for explanation) for the following states:
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Effective 9/1/99, the Texas legislature has a bill pending before it that would require mortgage brokers (and potentially mortgage lenders since mortgage broker is broadly defined) to be licensed by 1/1/2000 through the Texas Finance Commissioner and maintain a Texas physical office.The Bill was approved by the Senate and sent to the House for approval on 4/19/99.
 How Do I Get Started? Complete and Fax to 214-692-7613  Purchase Order then Overnight Mail Hardcopy of Purchase Order and Check for 30% of Purchase
Illinois requires out-of-state brokers must still maintain a physical presence in Illinois with a full-service office. However, effective January 1, 1999, the amendment allows an out of state licensee to forgo an Illinois physical presence if the licensee maintains a net worth of $ 100,000, submits a certified audit and obtains a fidelity bond.

Order Total to Thomas Law Firm, P.C., 6116 N. Central Expressway, Suite 922, Dallas, TX 75206

Who Can I Talk To About My Purchase Order? Call Herb Thomas at 214-692-7611

If you are applying for a license as a Georgia Residential Mortgage Broker and your home state is a state other than Georgia and you have no physical presence in Georgia, please read the following: House Bill 1496 was passed during the 1998 legislative session and was effective on July 1, 1998. This bill states, in part, that the Department is prohibited from issuing a license or renewing a license on a mortgage broker if that broker does not have a physical location in this state if the broker's home state requires a physical location in their state in order to obtain a mortgage broker license. If you obtained a broker's license prior to July 1, l998, Georgia will not be able to renew your license until you obtain a physical location in Georgia. This location must be staffed by at least one supervised employee. It cannot be a post office box or any other place where the public receives mail, deliveries or messages.

 Where Can I Find More Information on Mortgage Broker and Mortgage Lender Licenses in the 50 States? @ Mortgage License Mall

A new law, the Mortgage Broker Licensure Act, was enacted effective November 1, 1997 (Okla. Stat. Tit. 59 Section 2071 et seq.) which requires mortgage brokers to be licensed with the Commission on Consumer Credit.
(1) Mortgage Brokers: Department of Real Estate has published new regulations on Internet Advertising. Regulation 2270 effective 8/30/98
(2) Mortgage Brokers can also be licensed as a California Finance Lender which requires experience, net worth and bonding but does not require a written exam or completion of many courses as a real estate agent. Of course, such a mortgage broker can only broker to California Finance Lenders but many of the lenders who are licenses as Mortgage Bankers (ie, Countrywide, IndyMac) have maintained their California Finance Lenders Licenses to maintain the pipeline through these mortgage brokers
Effective 1/1/99, (1) a mortgage broker licensed in Wisconsin does not have to maintain a bona fide office in Wisconsin if it files a $120,000 commercial surety bond and a current net worth of $250,000 established by a balance sheet reviewed by a CPA (2) a mortgage banker licensed in Wisconsin does not have to maintain a bona fide office in Wisconsin if it files a $300,000 commercial surety bond and a current net worth of $250,000 established by a balance sheet reviewed by a CPA (3) the new types of licenses are: mortgage banker, mortgage broker and loan originator. (Chap. 224.72(4m), Wis. Stats)
A new law permits a special type of Mortgage License in Florida (only approximately 300 in existence) called Mortgage Lender under the Savings Clause. Advantages: only $25,000 net worth rather than $250,000 net worth (required of mortgage lenders) and permits servicing beyond 90 days and sales of mortgages to non-institutional investors (unlike correspondent mortgage lenders). The new law allows the license to be transferred one time to a buyer who buys the corporation that holds the license rather than the license itself.
(1) A mortgage broker licensed in Washington must have a physical presence in Washington or within 30 miles of its borders unless the applicant or one of its principals has 2 years experience (or meets educational requirements) and passes a written exam. (2) The Department of Financial Institutions has rules that Washington has no De Minimis rule for loans without a license. The brokering of even one loan in Washington requires a license.
NEVADA To qualify for an exemption from licensing as a mortgage company (no separate mortgage broker or mortgage banker license), applicant must be approved by (1) FHA, (2) VA, and Fannie Mae.  
The Idaho Residential Mortgage Practices Act became effective on July 1, 1996. The Act charges the Department of Finance with the responsibility for licensing and regulating the mortgage activities of mortgage bankers and mortgage brokers. The Act requires that those engaged in mortgage lending or mortgage brokering activities obtain a license. New Rules and Model Forms are now available online.

Effective 3/17/99, Mortgage brokers licensed in Ohio must have an office location in Ohio. (O.R.C. 1322.02) Ohio Mortgage Broker Act Revised = Am. H.B. 522 was recently enacted by the Ohio Legislature and signed by Governor George V. Voinovich. The bill is effective March 17, 1999, and amends Ohio Revised Code Chapter 1322 and sections of the Ohio Mortgage Broker Act.This article provides a brief overview of the revisions. A letter was sent to all Ohio Mortgage Broker Act registrants describing the changes.As revised, the Ohio Mortgage Broker Act contains the following provisions: * Registrants will be required to maintain an office in Ohio, and a photograph must be submitted with the application. * The definition of employee specifically excludes independent contractors.* A detailed definition of “originate” has been added.* Applicants must list all persons that own five percent or more of the applicant-entity, and the designated manager must be a natural person who owns five percent. * Designated managers must have three years experience in mortgage lending or three years of other experience related to mortgage loans that the Superintendent of Financial Institutions deems qualified.* Net worth or letter of credit requirements have been replaced by a $25,000 surety bond requirement. * Penalty provisions now include a fine of no more than $1,000 per day of violation, or $2,000 per day if a pattern of abuse exists.There is no grace period for late renewals. If not renewed by April 30, a new application is required. Anyone with questions on the revised requirements should contact J. Scott Meszaros at (614) 644-7500.

Ohio Mortgage Banker HUD Exemption: Section 1322.01 of the Ohio Revised Code exempts "mortgage bankers" who are lenders or correspondents approved by the U.S. Department of Housing and Urban Development (HUD) from the provisions of the Ohio Mortgage Broker Act. Simply stated, such entities can provide mortgage broker services in Ohio without a Certificate of Registration from the Division of Financial Institutions. A list of HUD approved lenders can be found at http://w w w .h u d .g o v /lenders1.html.

Alert to Ohio Mortgage Brokers! The Division of Financial Institutions has received several reports that businesses operating primarily as mortgage brokers have obtained certificates of registration under the Ohio
Mortgage Loan Act. By doing so, they believe they have been exempted from the provisions of the Ohio Mortgage Broker Act, Chapter 1322 of the Ohio Revised Code. Section 1322.01(E)(1) of the Ohio Mortgage Broker Act excludes the following from the definition of “mortgage broker”: “A person that makes or collects loans, to the extent these
activities are subject to licensure or registration by this state;” The division considers this language to mean that only those Mortgage Loan Act
registrants who are actively engaged in the business of making and/or servicing loans pursuant to the Ohio Mortgage Loan Act are excluded from the definition of “mortgage broker” and the registration requirements
of the Ohio Mortgage Broker Act. The act of registering as a lender under
the Mortgage Loan Act does not exclude a business from registration or regulation under the Ohio Mortgage Broker Act because the registrant must also regularly make or service loans. Registration under the Mortgage
Loan Act is required to make or collect loans secured by other than first liens against real estate made by non-depository lenders. However,
loans secured by personal property and unsecured loans may be made under the Act. The Mortgage Loan Act does not apply to loans made by
state or federally chartered banks, savings banks, savings and loans or credit unions. The division’s consumer finance examiners will be paying particular attention to Ohio Mortgage Loan Act registrants who appear to be primarily engaged in the business of mortgage brokering and who do not appear to be actively engaged in the business of making loans. Businesses may not circumvent regulation under the Mortgage Broker Act simply by registering under the Mortgage Loan Act. Furthermore, businesses may not register one branch office as a lending office under the Mortgage Loan
Act and then claim exemption from the Ohio Mortgage Broker Act for other branches which are not registered premises with the division.
Questions about the division’s position on this issue can be referred to Staff Attorney Glen Littlejohn at (614) 644-6530.