BILL ANALYSIS
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|Hearing Date:April 13, 2009 |Bill No:SB |
| |36 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC
DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: SB 36 Author:Calderon
As Amended:March 17, 2009Fiscal: Yes
SUBJECT: Real estate licenses: mortgages.
SUMMARY: Would bring California Real Estate Law, Finance
Lenders Law, and Residential Mortgage Lending Act into
compliance with the federal Secure and Fair Enforcement for
Mortgage Licensing Act of 2008 (the SAFE Act) by requiring those
engaging in mortgage loan origination activities to obtain a
license from Department of Corporations after meeting specified
requirements, or if a real estate licensee, obtain a license
endorsement from the Department of Real Estate after meeting
specified requirements.
NOTE : This measure was heard in the Senate Banking, Finance and
Insurance Committee on April 1, 2009, and was passed out of that
Committee by a vote of 9 to 0. The measure was referred to this
Committee to review those provisions related to the Real Estate
Law.
Existing federal law:
1)Requires pursuant to the SAFE Act all states to license
and register their mortgage loan originators through a
nationwide organization called the Nationwide Mortgage
Licensing System and Registry (NMLSR), and for any state
that does not implement a mortgage loan originator
licensing system in compliance with the SAFE Act by July
30, 2009, for the U.S. Department of Housing and Urban
Development (HUD) to establish a licensing system within
that state.
2)Provides that states deemed by the Secretary of HUD to be
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making a good faith effort to establish a state licensing
law which complies with the SAFE Act may be granted one
additional year in which to comply.
3)The SAFE Act defines the term "mortgage loan originator"
as (generally speaking) one who takes a residential
mortgage loan application or offers or negotiates terms
of a residential mortgage loan for compensation or gain.
Administrative and/or clerical employees are not included
within the definition, nor are real estate brokers who
don't broker mortgages. SAFE creates a distinction
between mortgage loan originators who are employed by
depository institutions or subsidiaries of depository
institutions, and all other mortgage loan originators.
Existing law (The Real Estate Law):
1)Establishes in the Business and Transportation Agency
(BT&H) the Department of Real Estate (DRE), the chief
officer of which is the Real Estate Commissioner and
specifies that the Commissioner, through the Department,
is responsible for the regulation of real estate
transactions and licensure of real estate agents, brokers
and salespersons.
2)Specifies that a licensed real estate broker is a person
who may solicit borrowers or lenders for or negotiate
loans or collect payments or perform services for
borrowers or lenders or note owners in connection with
loans secured directly or collaterally by liens on real
property or on a business opportunity.
3)Specifies other requirements for real estate brokers who
solicit borrowers or lenders or negotiate loans or
collect payments or perform services for borrowers or
lenders relative to loans secured by real property,
including a limited notification provision for brokers
who advance their own funds as defined.
4)Provides that the following conditions must be met for
issuance of a real estate broker's license: (a) the
applicant has successfully passed the real estate broker
license examination; (b) the applicant must have held a
real estate salesman's license for at least 2 years and
be eligible for renewal of that license within 5 years of
the application for a broker's license, and must be
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actively engaged in the business of real estate
salesperson during that time; (c) furnish a full set of
fingerprints for purposes of conducting a criminal
history record check. The Commission may waive certain
requirements based on whether the person is a licensed
attorney or has obtained additional education.
5)Requires that all real estate licensees must comply with
continuing education requirements as specified by the
Commissioner pursuant to regulations.
Existing law (California Finance Lenders Law (CFL Law), and
California Residential Mortgage Lending Act (CRML Act):
1)Establishes in the Business and Transportation Agency
(BT&H) the Department of Corporations (DOC), the chief
officer of which is the Commissioner of Corporations and
specifies that the Commissioner, through the Department,
is responsible for the licensure and regulation of
finance lenders and brokers and residential mortgage
lenders and servicers.
2)Defines a "finance lender" as any person who is engaged
in the business of making consumer loans or making
commercial loans. The business of making consumer loans
or commercial loans may include lending money and taking,
in the name of the lender, or in any other name, in whole
or in part, as security for a loan, any contract or
obligation involving the forfeiture of rights in or to
personal property, the use and possession of which
property is retained by other than the mortgagee or
lender, or any lien on, assignment of, or power of
attorney relative to wages, salary, earnings, income, or
commission. Finance lender also includes a personal
property broker as referenced in Section 1 or Article XV
of the California Constitution.
3)Provides that the following conditions must be met for
issuance of a financial lender's license: (a) submit
information on an application as required by the
Commissioner; (b) furnish a full set of fingerprints and
related information for purposes of conducting a criminal
history record check; (c) file with the application
financial statements prepared in accordance with
generally accepted accounting principles that indicated a
net worth of at least twenty-five thousand dollars
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($25,000); (d) evidence of a surety bond issued in the
amount of twenty-five thousand dollars ($25,000).
4)Defines a "lender" as a person that (a) is an approved
lender for the Federal Housing Administration, Veterans
Administration, Farmers Home Administration, Government
National Mortgage Association, Federal National Mortgage
Association, or Federal Home Loan Mortgage Corporation,
(b) directly makes residential mortgage loans, and (c)
makes the credit decision in the loan transactions.
5)Defines "mortgage servicer" or "residential mortgage loan
servicer" similar to that of a "lender," and that they
directly service or offer to service mortgage loans.
6)Provides that the following conditions must be met for
issuance of a finance lender, broker, residential
mortgage and servicers license: (a) submit information
on an application as required by the Commissioner; (b)
furnish a full set of fingerprints and related
information for purposes of conducting a criminal history
record check at the discretion of the Commissioner; (c)
file with the application a statement of financial
solvency prepared by an independent certified public
accountant and access to supporting credit information as
required; (d) evidence of a surety bond issued in the
amount of fifty thousand dollars ($50,000).
This bill:
1)Would amend California's Real Estate Law, CFL Law and
CRML Act in compliance with the SAFE Act. Specifically,
this measure would require mortgage loan originators, as
defined, who are licensed real estate brokers to apply
for and obtain a license endorsement from the DRE, or if
they are a mortgage loan originator employee of a
California licensed finance lender or residential
mortgage lender to obtain a mortgage loan originator
license from the DOC, as applicable, and obtain a unique
identifier, as defined, before engaging in mortgage loan
origination activities in connection with a residential
mortgage loan in California.
2)Would require applicants for a DRE license endorsement or
DOC license to complete at least 20 hours of
pre-licensing education and successfully pass an
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examination on that material, submit to a criminal
history background check and a credit check, and meet
several requirements related to their personal character,
as a condition of being approved to act as a mortgage
loan originator.
3)Would further require licensed mortgage loan originators
to renew their DRE license endorsements and DOC licenses
annually , by completing at least 8 hours of continuing
education, as specified, and continuing to meet the
minimum standards for license endorsement/ approval.
4)Would provide that the Real Estate Law sections of this
measure are operative when the Commissioner of Real
Estate issues a finding that the Nationwide Mortgage
Licensing System and Registry is capable of two-way
electronic communication with the enterprise information
system maintained by DRE.
5)Would provide that the CFL Law and CRML Act sections of
this measure are operative January 1, 2010, but would
further provide that no person is required to hold a
mortgage loan originator license under the CFL Law or
CRML Act, nor a mortgage loan originator license
endorsement under the Real Estate Law, before August 1,
2010.
FISCAL EFFECT: Unknown. This measure has been keyed
"fiscal" by Legislative Counsel.
COMMENTS:
1.Purpose. According to the Author, this measure will
ensure that California is in compliance with the SAFE
Act, and, in doing so, avoid triggering action by the
Secretary of the U.S. Department of Housing and Urban
Development (HUD) to take over regulation of California's
mortgage loan originators.
2.Background.
a. SAFE Act Compliance Necessary. On July 30, 2008,
President Bush signed the Housing and Economic
Recovery Act of 2008, whose provisions included the
SAFE Act. As indicated, the SAFE Act requires all
states to license and register their mortgage loan
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originators through a nationwide organization called
the Nationwide Mortgage Licensing System and Registry
(NMLS Registry). Any state that does not implement a
mortgage loan originator licensing system, in
compliance with the SAFE Act, by July 30, 2009, risks
direct intervention by HUD.
Under the SAFE Act, HUD is authorized to establish and
maintain a mortgage loan originator system in any
state that fails to voluntarily comply with SAFE by
July 30, 2009. States deemed by the Secretary of HUD
to be making a good faith effort to establish a state
licensing law which complies with the SAFE Act may be
granted one additional year in which to comply, before
risking HUD intervention. Avoiding HUD intervention
will be critical, if California wishes to retain its
existing authority to regulate the mortgage-related
activities of its state licensees.
The provisions of the SAFE Act were sponsored by the
Conference of State Bank Supervisors (CSBS) and
American Association of Residential Mortgage
Regulators (AARMR), two organizations which represent
state banking and mortgage lending regulators
nationwide. In 2003, CSBS and AARMR developed the
idea for the NMLS Registry. The system was officially
launched in January 2008.
Prior to enactment of the SAFE Act, participation by
states in the NMLS Registry was voluntary. Several of
the country's smaller states signed on, but lack of
participation among the country's larger states,
including California, hampered the registry's ability
to function as a truly national registry.
In sponsoring the SAFE Act, CSBS and AARMR were seeking
to drive more states to sign on to its NMLS Registry.
Under the SAFE Act, participation in NMLS Registry
remains voluntary, but states that fail to participate
will lose regulatory authority over their mortgage
loan originators, a threat so great that no large
states appear willing to risk it through
non-participation. To date, 23 states have signed on
to NMLS Registry, and most others are expected to sign
on by July 31, 2010.
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In promotional material regarding the NMLS Registry,
CSBS and AARMR describe the system, as follows:
"Through NMLS Registry, licensed mortgage lenders,
bankers, broker companies and loan officers in
participating states are able to complete a single
uniform form electronically, regardless of the number
of states in which they are licensed. This
information is housed in a secure centralized
repository available to mortgage regulators.
Licensees are able to access their own record 7 days a
week through the NMLS Registry website to update,
amend and renew their licenses, or apply for new
licenses?As mortgage companies and/or individuals
create a record for themselves and submit [it] to
their regulators, NMLS Registry will permanently
assign a unique identifying number to each record.
The unique identifying number allows regulators to
definitively track companies and professionals across
states and over time."
b. What the Safe Act Specifically Requires. Under the
SAFE Act, mortgage loan originators who are not
employed by a depository institution or a subsidiary
of a depository institution must be both licensed by
their state and registered on NMLS Registry. License
applicants must undergo background checks, submit to
credit checks, complete and successfully pass
pre-licensing education courses approved by NMLS
Registry, meet specific personal character
requirements specified in the SAFE Act, and, once
licensed, must complete annual continuing education
courses approved by NMLS Registry and submit
as-yet-unspecified call reports to NMLS Registry
annually.
Mortgage loan originators employed by depository
institutions or their subsidiaries must register on
NMLS Registry, using rules to be established by the
Federal Financial Institutions Examination Council
(FFIEC), but need not be licensed. Registrants will
have to undergo background checks, but are not
required to submit to credit checks, nor comply with
the education requirements that apply to mortgage loan
originators who are required to be licensed under the
Act. The SAFE Act allows the five federal banking
agencies, through the FFIEC, to establish de minimis
exceptions from the rules to register. However,
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because the FFIEC's regulations have not yet been
released, the details of their contents are uncertain.
c. How this Measure Implements the Requirements of the
SAFE Act.
i. Changes to the Real Estate Law . Under existing
California law, licensed real estate salespersons
and licensed real estate brokers may engage in
activities that are defined in the SAFE Act as
mortgage loan origination. Real estate licenses may
be issued to individuals or to corporations. The
SAFE Act will require these already-licensed
individuals and corporations to obtain special
mortgage loan originator license endorsements in
order to continue engaging in activities for which
no special license endorsement is currently
required.
The SAFE Act requirements are similar to, but somewhat
different from, the requirements for licensure under
the Real Estate Law. For example, real estate
licensees must complete both pre-licensing education
and continuing education classes, and must undergo
background checks, all of which are required under
the SAFE Act. However, the personal character
requirements under California's Real Estate Law are
different than those under the SAFE Act (more
stringent in certain places, less stringent in
others), and California's real estate license cycle
is four years long, rather than annual (thus, under
existing California law, continuing education
requirements must be satisfied over a four year
period, rather than once annually).
Under the SAFE Act, licensed real estate salespersons
and brokers who wish to continue engaging in
mortgage loan origination activities must undergo
brand new background checks and take different
education classes in order to satisfy the SAFE Act
mortgage loan originator licensing requirements.
They will also have to continue to meet the SAFE
Act's personal character requirements on an annual
basis, in order to remain eligible to retain their
license endorsements. Corporations engaged in
mortgage loan origination will have to register with
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NMLS Registry and obtain a license endorsement for
their company. Corporations licensed under the Real
Estate Law will also have to ensure that each of
their mortgage loan originator employees obtains an
individual mortgage loan originator license
endorsement.
ii. Changes to the CFL Law and the CRML Act . The
SAFE Act will impact CFL Law and CRML Act licensees
very differently than it will impact Real Estate Law
licensees. Under existing law, DOC licenses
financial lender and residential mortgage lender
corporations under the CFL Law and CRML Act and
requires background checks on the persons
controlling these corporations. Individual
employees of these corporations are not licensed ,
nor are they subject to background checks (unless,
as noted above, they are controlling persons in the
organization). Pre-licensing education and
continuing education are not required.
Under the SAFE Act, every CFL Law and CRML Act
employee who performs activities that meet the SAFE
Act definition of a mortgage loan originator must be
both licensed by California and registered on NMLS
Registry. Thus, employees who were previously
untracked by the state will now be required to
undergo a background check, submit to a credit
check, complete pre-licensing education classes, and
satisfy the SAFE Act's personal character
requirements to obtain their licenses. They will
also have to comply with annual continuing education
requirements and continue to meet the SAFE Act's
personal character requirements in order to remain
eligible to retain their licenses. These
requirements represent a significant change for CFL
Law and CRML Act licensees, who have not previously
had to ensure that their mortgage loan originator
employees were licensed.
This measure does not contain any amendments to the
Banking Law or Credit Union Law, because the
Department of Financial Institutions (DFI) does not
believe any changes to these statutes are required.
Instead, the DFI anticipates directing its licensees
to follow the regulations that will be issued by
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FFIEC, using regulatory authority the Department
already has.
d. Is this Measure in Compliance with the SAFE Act?
CSBS's staff has reviewed this measure and believe, as
currently drafted, is in substantial compliance with
the provisions of the SAFE Act. Although HUD has not
yet reviewed the bill (and, in fact, has not
identified anyone to whom states should send
legislation for review), HUD expects to rely very
heavily on CSBS to vet state SAFE Act compliance
legislation. Thus, for all practical purposes, CSBS'
sign-off on a piece of state legislation is equivalent
to HUD sign-off. A drafting map was prepared by
Senate Banking, Finance and Insurance Committee (BF&I)
staff to aid CSBS' and others' review of this bill
for compliance with the SAFE Act. It is appended to
this analysis for reference.
As shown on that drafting map, and indicated by BF&I
staff, the vast majority of the provisions of this
bill pattern the Model Law drafted by CSBS and AARMR,
to help states achieve compliance with the SAFE Act
and avoid intervention by HUD. The two sections in
which this bill deviates from the Model Law are the
"definitions" section and "background check" section
of the Model Law. The definitions sections of this
bill track SAFE Act language, rather than the Model
Law language, because the former is clearer as to
intent and coverage. The CSBS has no concerns with
this deviation.
The background check sections of this bill were
developed through negotiation with CSBS, California's
Department of Justice (DOJ), DRE, DOC, and BF&I
Committee staff when DOJ initially expressed concerns
with the Model Law background check language
originally amended into this measure. The background
check language in the current version of this bill is
now acceptable to all of the parties to the
negotiation, including CSBS.
This bill goes beyond the Model Law in one area, by
including a reporting requirement intended to give the
DRE important information about the
California-specific business activities of its
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mortgage brokering, lending, and servicing licensees.
DRE currently lacks this information, and will
continue to lack such information without an amendment
to augment the Model Law. The list of specific
information to be requested of licensees on an annual
basis was developed, working closely with DRE, to
focus on those aspects of a licensee's business
activities of greatest interest to the Department.
CSBS has no concerns with the inclusion of this
provision.
3.Related or Similar Legislation this Session. SB 94
(Calderon) would prohibit persons from charging advance
fees to borrowers in connection with the modification of
the terms of the borrower's loan, require those who wish
to charge a fee for loan modification services (after
performing them) to provide specified notice to
borrowers, prohibit servicers from imposing any interest
or charge for performing services for borrowers in
connection with loan modifications or other forms of loan
forbearance of forgiveness; and close a loophole in the
California Finance Lenders Law. This measure was
referred to the Senate Banking, Finance and Insurance
Committee and was passed out of that Committee on April
1, 2009 by a vote of 7 to 2. It has been re-referred to
Rules Committee for possible referral to this Committee.
SB 491 (Maldonado) would begin the process of amending
California's mortgage lending and brokering laws in
compliance with the SAFE Act. This measure has been
referred to the Senate Banking, Finance and Insurance
Committee and is to be re-referred to this Committee.
AB 33 (Nava) would abolish the DOC, the DFI, the DRE and
the Office of Real Estate Appraisers and transfer all
powers, duties, purposes, jurisdiction, responsibilities
and functions of these agencies to a newly created
Department of Financial Services (DFS) and designate the
chief officer of the DFS as the Commissioner of Financial
Services. This measure has been referred to the Assembly
Banking & Finance Committee and the Business and
Professions Committee.
AB 34 (Nava) is a spot bill stating the intent of the
Legislature to place California in compliance with the
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SAFE Act. This measure has been referred to the Assembly
Banking & Finance Committee.
AB 260 (Lieu, Bass, and Nava) enacts duties, requirements
and prohibitions relating to higher priced mortgage loans
including the suspension or revocation of a license
granted by DRE, DOC, or DFI for violating any federal
laws related to mortgage loans. This measure was passed
out of the Assembly Banking and Finance Committee by a
vote of 7 to 3, and has been re-referred to the Assembly
Judiciary Committee.
4.Prior Related or Similar Legislation. SB 1053 (Machado,
2008) would have required real estate brokers that make,
arrange, or service residential mortgages on property
containing one to four residential units to notify the
DRE within 30 days of entering the mortgage field and
upon exiting that field, and would require these brokers
to file specified reports with DRE on an annual basis,
documenting their level of compliance with applicable law
and regulation. This measure was held in the Assembly
Banking and Finance Committee.
SB 1240 (Machado, 2008) would have required real estate
licensees engaged in mortgage brokering, lending, and/or
servicing activities to notify DRE about those
activities, submit an annual business activities report,
and contract for a compliance review by an independent
public accountant on an annual or biennial basis,
depending on loan volume. This measure was originally SB
1053 which was passed out of the Senate and then held in
Assembly Banking and Finance. This measure was a gut and
amend in the Assembly. However, it was vetoed by the
Governor, with a veto message requesting the Legislature
to send him a SAFE Act implementation bill to sign.
5.Arguments in Support. The California Association of
Realtors (CAR) is in support and believes that this
measure takes the appropriate approach toward SAFE Act
implementation by using an additional endorsement on the
real estate license and applying similar licensing
requirements to other types of loan originators regulated
outside of DRE. CAR believes that this approach will
result in the least disruption of existing licensing
requirements and minimize compliance costs to both the
state and individual licensees. CAR also speaks to the
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electronic exchange issue discussed immediately above by
stating, "we hope that in your role as Chair (Author)
that you can intervene with the federal entities involved
to ensure that state costs are minimized by allowing
electronic exchanges of databases and discipline
records."
The California Mortgage Association (CMA) and the Los
Angeles District Attorney's Office support this measure,
because they believe that the state must act to implement
the SAFE Act. CMA is concerned that failing to enact the
SAFE Act will risk intervention in the state's regulatory
affairs by HUD. The Los Angeles District Attorney's
Office believes that complying with the SAFE Act will
provide important consumer protections.
6.Support if Amended. The California Association of
Mortgage Brokers (CAMB) is in support of this measure
with amendments. CAMB is a strong supporter of the
intent of the SAFE Act, the implementation of reasonable
standards for the licensing of all mortgage loan
originators to the betterment of the industry and its
service to consumers. However, CAMB would like to see
the following changes: (1) for revocation or denial of
licenses based on new parameters in determining the
applicants financial responsibility, character, honesty,
etc., allow an appeal process; (2) try to consolidate
into one report both the reporting requirements for NMLS
Registry and the DRE "Business Activity Report"; and,
allow for the DRE Commissioner to consider certain
application requirements for a mortgage loan originator
license endorsement as already having been met through
the pre-existing licensing process in obtaining a real
estate broker's license.
Consumers Union (CU), the California Reinvestment Coalition
(CRC) and several other members of CRC's coalition are
supportive of this measure if it is amended to go beyond
SAFE Act compliance, to additionally enhance consumer
protections, and reduce fraud in a way that they believe
will be meaningful for Californians. These organizations
are requesting four amendments, as follows: (1) include
sections on prohibited acts for real estate brokers and
residential mortgage lenders; (2) strengthen the list of
prohibited acts by including prohibitions against
steering, recommending default on an existing mortgage,
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originating loans without regard to a borrower's ability
to repay, charging yield spread premiums, charging
prepayment penalties, and engaging in bait-and-switch
tactics during one-on-one communications with a borrower;
(3) increase net worth or bonding requirements and
licensing fees for real estate brokers to the value of
the loans that a broker originated during the prior year;
and (4) extend the data reporting requirements in the
bill to include borrower race, ethnicity, and income, and
the quality of loans originated, and make the data
publicly available.
Center for Responsible Lending (CRL) indicates that it
would be in support of this measure if it were amended to
include additional and stronger reforms and argues
similar to CRC that it should include a bonding
requirement for mortgage brokers with a real estate
license and recommends a sliding scale bonding
requirement, depending on the broker's previous volume of
mortgage originations, with the amounts capped at
$500,000. CRL also recommends that this measure should
codify a fiduciary duty between mortgage brokers and
borrowers and should prohibit brokers from steering
borrowers to more costly loans, and provide borrowers
with a right of action for violations of these important
protections. CRL additionally recommends that there be
stronger underwriting and other lending standards as
specified.
7.Remaining Issues to be Resolved. According to BF&I
Committee staff and the Author, there appear to be three
outstanding issues involving the SAFE Act implementation.
Two have been brought forward by industry, and one by
DRE. Amendments to address the two industry issues are
being negotiated, and are expected to be resolved
shortly. These issues generally involve questions of
whether employees of manufactured home dealers must be
licensed as mortgage loan originators and whether
individuals who help facilitate mortgage loan
modifications must be licensed as mortgage loan
originators.
The one outstanding issue on which amendments are not
currently pending involves the operative date of the Real
Estate Law sections of the bill. As currently drafted,
this bill provides that the operative date of the Real
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Estate Law sections of the bill is the date that the
Commissioner of Real Estate issues a finding that the
NMLS Registry is capable of two-way electronic
communication with the enterprise information system
(EIS) maintained by DRE. The bill is drafted in this
way, to draw attention to a costly problem facing DRE and
its licensees, and to encourage CSBS and AARMR to reverse
their current position on two-way electronic
communications between the NMLS Registry and California's
DRE.
According to CSBS, the NMLS Registry is not designed to
allow states to electronically upload information about
its licensees to the nationwide registry. Instead, state
regulators will be expected to manually enter data
regarding license applicants. Manual uploads may not be
a significant problem for a small state that did not
previously license the individuals required to obtain
mortgage loan originator licenses under the SAFE Act.
However, California's size, together with the fact that
DRE already maintains considerable information about most
of the individuals who will be applying to the Department
for license endorsements, are creating an enormously
costly problem for the Department and its licensees.
Although the specific details of the programming that will
be required to accomplish two-way communication are
complicated, the issue can be described simply - without
a change in CSBS' position regarding electronic uploads
by states, DRE employees will be required to manually
enter specific information into the NMLS Registry for an
estimated 50,000 to 75,000 mortgage loan originator
licensees, on an annual basis. (This estimate is
approximate and is based on an estimated 10,000 to 15,000
real estate brokers acting as mortgage loan originators,
each of whom will supervise an average of four real
estate salespersons acting as loan originators; all of
these individuals will need mortgage loan originator
license endorsements under the provisions of the SAFE
Act).
The process of manually uploading data to NMLS Registry
will be time-consuming, labor-intensive, and costly, not
only because of the number of people expected to apply
for license endorsements from DRE, but also because of
CSBS' requirement that all licenses be renewed as of
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December 31st of each year. Because rolling renewals
will not be allowed, California will be unable to spread
out the workload associated with license renewals across
twelve months; instead, the bulk of the work will fall
toward the end of the year, when license endorsements
expire.
An estimate of the costs associated with these manual
uploads is currently being developed by DRE. Those costs
will be of particular interest to DRE licensees, because
they will be passed on to applicants for mortgage loan
originator license endorsements. Obtaining a streamlined
ability to electronically upload licensee information to
the NMLS Registry could potentially save applicants for
mortgage loan originator license endorsements a
considerable sum of money.
California may have some leverage on this issue, in part
because CSBS and AARMR are expecting DRE to pay $500,000
toward development of the NMLS Registry, and in part
because the SAFE Act was authored by Senator Diane
Feinstein, who, one would imagine, might be receptive to
ameliorating unintended negative consequences of her bill
on her home state.
8.Suggested Technical Amendments: Suggest the following
technical amendments be made to this measure:
a. On page 6, line 10, strike "(d)" and insert "(c)"
b. On page 7, line 20, after the word "endorsement"
insert "pursuant to this article"
c. On page 7, line 37, strike "subdivision (b)" and
insert "paragraph (2) of subdivision (b)"
SUPPORT AND OPPOSITION:
Support:
California Association of Realtors
California Mortgage Association
Los Angeles County District Attorney's Office
Support if Amended:
California Association of Mortgage Brokers
California Coalition of Rural Housing
California Reinvestment Coalition
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Center for Responsible Lending
Consumer Action
Consumers Union
East Bay Asian Local Development Corporation
East LA Community Corporation
EPACT Education Fund
Fair Housing Council of San Diego
Fair Housing Law Project
Law Foundation of Silicon Valley
Opposition: None Received.
Consultant:Bill Gage