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West Virginia amends mortgage loan originator definition; adjusts allowable final installment payment on mortgage loans
On March 25, the West Virginia governor signed SB 651, which amends the definition of a mortgage loan originator “with respect to retailers of manufactured or modular homes and their employees” under the West Virginia Safe Mortgage Licensing Act. Among other things, SB 651 states that retailers of manufactured or modular homes (or the retailers’ employees) do not qualify as a mortgage loan originators provided they meet certain criteria, including that they (i) provide written disclosures to consumers of “any corporate affiliation with any mortgage lender” (including “at least one unaffiliated mortgage lender,” if they do have a corporate affiliation); (ii) do not directly negotiate loan terms with consumers or mortgage lenders; and (iii) do not represent that they can perform the activities of a mortgage loan originator. The amendments take effect June 2.
Also on March 25, the governor signed HB 4411, which adjusts the allowable final installment payment on a mortgage loan to be “a lesser amount or no more than $5 greater than any previous payment installment.” This adjustment does not apply to “any mortgage modification or refinancing loan made in participation with and in compliance with the federal Making Homes Affordable program, or any other mortgage modification or refinancing loan eligible under any government sponsored enterprise requirements or funded through any federal or state program or litigation settlement.” The adjustment takes effect May 27.
Texas regulator issues MLO work location guidance
On March 20, the Texas Department of Savings and Mortgage Lending issued a statement temporarily suspending any requirement that a physical office of a licensed mortgage entity be open to the public during posted normal business hours. Additionally, licensed MLOs may work from home or another remote location, as long as (i) strict security of information is maintained; (ii) all physical business records are kept at a licensed office; and (iii) consumers are not allowed to go to the MLO’s home.
Wisconsin DFI provides Covid-19 guidance
In March, the Wisconsin Department of Financial Institutions, Division of Banking (Division) issued guidance to state licensed mortgage loan originators (MLO) regarding working from a location that is not licensed or registered in light of Covid-19. Effective immediately, the Division will allow MLOs to work from home provided they comply with a number of provisions, including (i) the sponsoring licensed entity must notify the Division which MLOs will be working from home and keep a list of all such MLOs to be available upon request; (ii) the MLO may not maintain physical business records at home; and (iii) MLOs may not conduct business with consumers at the home location. Additional resources for financial services companies regarding Covid-19 may be found at the Department of Financial Institutions webpage here.
Nebraska Dept. of Banking and Finance to allow office relocations for MLOs
In March, the Nebraska Department of Banking and Finance released a form application for mortgage loan originators, processors, and underwriters to apply for a temporary office relocation due to Covid-19 quarantine procedures. This follows March 12 guidance from the department to temporarily allow licensed, sponsored MLOs to work from an unlicensed branch upon notification by the sponsor, and approval by the Department.
Colorado Dept. of Regulatory Agencies relaxes MLO work location rules
On March 16, the Colorado Department of Regulatory Agencies sent an email reiterating that Colorado mortgage loan originatos (MLO) may perform licensed activities at a location other than at their registered work location. The Division notes that Colorado does not have any requirements regarding specific work locations at either the company or individual MLO level.
Alabama allows MLOs to work from home
On March 12, the Alabama State Banking Department issued a statement reminding all licensees to update business continuity plans. In addition, the statement also allows licensees to relocate offices or to permit Mortgage Loan Originators to work from home to help prevent the spread of Covid-19. The Department encourages licensees to maintain compliance with all applicable laws and regulations, and to notify the Department of any relocation, closure or remote work.
On March 16, the Alabama Governor issued a statement expressing confidence in the measures that financial institutions have put in place. The statement notes that Alabama banks are required to have business continuity plans in place to address emergency situations.
Wisconsin Dept. of Financial Institutions issues Covid-19 guidance; allows MLOs to work from home
The Wisconsin Department of Financial Institutions, Division of Banking published a website providing regulated entities with Covid-19 information and resources. The Division also noted that it will take a no-action position concerning a licensed mortgage loan originator working from a location that is not the licensed or registered office or branch office upon compliance with certain criteria.
Washington Dept. of Financial Institutions issues work from home guidance
On March 5, the Washington Department of Financial Institutions, Division of Consumer Services issued interim regulatory guidance expressing the Department’s intent to temporarily allow licensed mortgage loan originators to work from home, whether located in Washington State or another state, even if the home is not a licensed branch provided certain conditions are met. The Department also published a website providing Covid-19 resources for DFI licensees.
Vermont Dept. of Financial Regulation allows MLOs to work from home
On March 13, the Vermont Department of Financial Regulation issued a memorandum advising licensees and sponsoring companies that the Department will not take action against licensed mortgage loan originators and their sponsoring company if the MLO works from home so long as certain requirements are met.
South Dakota Division of Banking issues work from home guidance
On March 12, the South Dakota Division of Banking issued Memorandum 11-003 providing interim regulatory guidance allowing licensed mortgage loan originators to work from home, whether located in South Dakota or another state, even if the home is not a previously authorized location, so long as certain conditions are met.