Please pay special attention to the updates regarding the timelines for new licensing requirements and please let us know if we can provide you with any additional support to make this transition as streamlined as possible.
This section of the industry is now required to be licensed under the Consumer Loan Act, chapter 31.04 RCW. This regulation is intended to support consumer protection and provide a “level the playing field across the industry”. In addition we are all awaiting the final HUD rules implementing SAFE regarding licensing, to determine if the individual employees of residential loan servicing companies will be required to be licensed as MLOs. Here is a brief overview:
What We Know: Washington State required residential mortgage loan servicing companies to be licensed as of July 1, 2010. To date we have 15 companies that are solely licensed as servicers. In addition as of July 1, 2011, the individual employees of residential mortgage servicing companies must be licensed and meet the state requirements for “Mortgage Loan Originators” unless the HUD final rules on SAFE say otherwise. The requirements for MLO licensing can be found at: http://dfi.wa.gov/cs/loan-originator-apply-license.htm
What We Will Know: HUD’s final rules on SAFE are expected to be released in May. The rules will detail the licensing requirements, if any, for individual employees of residential mortgage loan servicing companies. If HUD does not require the licensing of these individuals, DFI will not require it. Please see link to Federal Rules.Gov website: http://www.regulations.gov/#!home
What We Know: The Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 11-203, has repealed the federal preemption for subsidiaries or affiliates of banks engaging in mortgage related activities. Bank subsidiaries or affiliates conducting mortgage related activities will have to license with the state jurisdiction beginning on the transfer date, July 21, 2011, the same date that the Consumer Financial Protection Bureau (CFPB) assumes its regulatory authority under Dodd-Frank.