!#8# The SAFE Act, NMLS and what it means, the mortgage industry

!±8± The SAFE Act, NMLS and what it means, the mortgage industry

After the dramatic expansion in the real estate market in the United States began to default rates on subprime mortgages and adjustable rate mortgages (ARMs) to rise. Tightening of credit and refinancing became more difficult. House prices fell. The foreclosure epidemic has been a crucial factor in the global economic crisis, consumers and devastating forces banks to cut lending, or even close their doors.

The public and Congress, seeking to discover the causes of the crisis and to createSolutions, their attention to the mortgage banking industry. Many analysts believe that the loans were lax copyright or misleading in qualifying buyers for loans. Congress responded in July 2008 and adopted the secure and Fair Mortgage Licensing Act of 2008 (called the SAFE Mortgage Licensing Act of 2008).

The purpose of the law was to establish government oversight over the individual mortgage originator, with the result of an increase in consumptionSecurity. First, the law set more goals for a National Mortgage Licensing System and Registry (NMLSR) for the residential mortgage sector. The law requires that all copyright SAFE residential mortgage loan must have been registered or licensed by the state. A creator mortgage insured by a government bank or financial institution or a company owned and controlled, which is controlled by the federal government used to be registered with the government. All other mortgageLoan originators, without exception, must have been licensed.

All records are kept by the state licensed and federally registered mortgage creator must be the National System of mortgage licenses and stationery the Conference of State Banking Supervisors and the American Association of Residential Mortgage Regulators.

Admission Requirements
The applicant was licensed as a creator loan, some information is added to the NMLSR including fingerprints for acriminal background check and personal history and experience. Minimum standards for licensing are:

Or never had a license revocation of loan originator;
Or never had a criminal conviction by an act of fraud, dishonesty or breach of trust or money laundering (not other types of crime seven years before the application);
The test or financial responsibility;
or complete pre-license training reviewed and approved by NMLSR (aleast 20 hours);
or pass a written test developed and managed by NMLSR (at least 75% of correct answers to at least 100 questions).
States or must provide a minimum equity requirement or condition of the applicant or the applicant has to pay into a state fund.

At the time of the passage of laws, state programs vary widely. The SAFE Act requires states to licensing and registration instead of a July 31, 2009 have (for countries whoseThe legislators meet every year) or July 31, 2010 (for countries where parliaments meet every two years). For each of these periods, provided that the U.S. Department of Housing and Urban Development (HUD) to extend the term if HUD determined that a State shall endeavor in good faith, a state law license, which meets the minimum requirements for establishing The SAFE Act.

From January 2010, 43 states, the District of Columbia and Puerto Rico had adopted NMLS. HUD recognizes that in many states, butPersons authorized to carry home loan right now may not be able to review the training requirements, testing and background for the moment to fulfill the laws and regulations to take effect. In addition, HUD is aware that some states already require approval of the creator loan.

What should the loan originator to do? In the United States, the NMLS have accepted all the characters to create a residential mortgage loan creator (RMLO) has an account in the NMLS and have presented or fileForm MU4 through NMLS by the competent regulatory authority. Closing dates depend on the type of license required.