Texas Amends Requirements under Mortgage Broker License Act and Texas SAFE Act

On June 17, Texas Governor Rick Perry signed into law S.B. 1124, which amends the Texas Mortgage Broker License Act (now referred to as the Texas Residential Mortgage Loan Company and Residential Mortgage Loan Originator Licensing and Registration Act) to, among other things, replace the mortgage broker and loan officer licensing requirements with a residential mortgage loan company and residential mortgage loan originator licensing requirement, respectively. The bill defines "residential mortgage loan company" to include a credit union subsidiary organization, independent contractor loan processor or underwriter company, and financial services company, among others. Additionally, the bill amends the Act’s exemption provisions, changes the period of time for which a license is valid, and revises reporting requirements triggered by certain licensee changes (e.g., change of qualified individual). Finally, the bill amends the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009 to exempt certain individuals that originate residential mortgage loans exclusively for one federally chartered depository institution from the mortgage loan originator licensing requirement set forth under the Act. To be eligible for the exemption, such individuals must also, among other things, (i) originate no more than five residential mortgage loans in any 12-consecutive-month period, (ii) be contractually prohibited from soliciting, processing, negotiating, or placing a residential mortgage loan with a person other than the single federally chartered depository institution, (iii) enroll with the Texas Department of Savings and Mortgage Lending as a financial exclusive agent until the time federal law or regulation requires such individuals to register with the Nationwide Mortgage Licensing System and Registry, and (iv) be sponsored by a life insurance company or an affiliate of the company which is authorized to engage in business in Texas.