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Financial Services Law Insights and Observations

New Mexico Passes Mortgage Loan Originator Licensing Act

State Issues

On April 6, New Mexico Governor Bill Richardson signed into law SB 342, the “New Mexico Mortgage Loan Originator Licensing Act” (the Act). The Act implements the mandate of the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) by providing for the licensing of all mortgage loan originators under the Nationwide Mortgage Licensing System. In addition, the act imposes a host of new requirements on loan originators, including background checks, surety bonds, testing and education requirements, fiduciary duties, and examination requirements. The Act also amends portions of the Mortgage Loan Company Act and the Home Loan Protection Act. Notably, the Act will require mortgage loan companies to become licensed (rather than merely registered) and to designate a qualified manager to oversee operations in New Mexico. The effective date for most provisions of the Act is July 31, 2009, but the mortgage loan originator licensing provisions become effective July 31, 2010.