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Financial Services Law Insights and Observations

Additional States Enact SAFE Act Legislation

State Issues

Several states recently amended applicable state law to reflect compliance with the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act). TexasConnecticutNevada, and South Carolina all enacted legislation that implements the SAFE Act by providing for the licensing of all mortgage loan originators under the Nationwide Mortgage Licensing System. In addition to technical amendments, the bills prescribe loan originator requirements relating to licensing, prior and continuing education, testing, minimum net worth, and surety bond coverage. Connecticut SB 948 also, among other things, requires lenders to enter into a previously optional foreclosure mediation program with borrowers after July 1, 2009. Unless the mediation period is not required, is unavailable, has expired, or has been otherwise terminated, no judgment of strict foreclosure or foreclosure by sale can be entered prior to July 1, 2010. Most provisions of Connecticut SB 948 become effective July 31, 2009, with licensure required by April 1, 2010. South Carolina SB 673 becomes effective January 1, 2010, except that the definition of “mortgage loan originator” does not include an individual servicing a mortgage loan until July 31, 2011. Texas HB 10 becomes effective September 1, 2009. Nevada AB 523 became effective June 8, 2009, with licensure required by October 1, 2009.

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