Illinois

Illinois has started a new newsletter that is available on its website: http://www.obre.state.il.us/RESFIN/NewsLetters/MBNewsLetter042009.pdf. The newsletter details the new licensing fees that have gone effect, which are lower than they used to be. There’s a good article on enforcement actions which itemizes the most common mistakes that get mortgage companies into regulatory hot water. If you’ve ever had your books and files examined by a state banking department, you know how easy it is to find missing documents from files, advertising that is not compliant, or issues with unlicensed branches or loan originators. Such mistakes are costly to you as the banking department assesses penalties. The newsletter also reminds loan originators that it is time to renew their licenses.

Even if you are not licensed in Illinois, you may want to take a look at the newsletter or see if your state has online newsletters. Much of the information in these newsletters can be used by almost any mortgage company in any state since the licensing statutes are similar in most states and getting more uniform as more states join the NMLS.

Maryland Revises its Licensing Law

Maryland has revised its licensing statute to conform to the federal SAFE Act. The new law requires new license applicants to use the NMLS to apply, starting in early May, 2009. Existing licensees who need to renew their licenses until July 1, 2009 will use the Maryland online system to renew. Existing licensees who do not need to renew their licenses until after July 1, 2009 will be required to transition to the NMLS starting in July, 2009 and will have up to 18 months to transition. If you need to renew your license during the transition period, you will renew on the NMLS. New licenses will be for up to a 1-year period and will expire on December 31st, like all other licenses obtained through the NMLS.

The new law also requires mortgage loan originators to be individually licensed, which requires the applicant to take 20 hours of pre-licensing education, to pass an exam in order to get licensed, pass a criminal background check and a regulatory background check. A mortgage loan originator will not be approved for a license if he has had a license from another state revoked or if during the prior 7-year period pleaded guilty, nolo contendere or been convicted of a felony. If the felony was for an act involving fraud, dishonesty, breach of trust, or money laundering, the application will be denied no matter how far in the past the conviction or nolo contendere plea was. After licensing is approved, the mortgage loan originator will be required to complete 8 hours of continuing education annually.

Mortgage loan originators who are not employed by a licensee can place their license in a “nonactive” status until re-employed by a different licensee.