Important Notice - The deadline has been extended... All Unlicensed Loan Originators Must be Licensed by October 1, 2010 and NOT by January 1, 2010 as previously dictated! Question:Loan Originators currently employed by correspondent lenders and mortgage lenders are currently exempt from licensure; however, the exemption is being repealed. When will these employees need to be licensed as loan originators? Answer: The requirement for new loan originator license for individuals does not become effective until October 1, 2010. However, the Office is strongly recommending that employees of lenders who desire to continue to work uninterrupted seek licensure as a mortgage broker as soon as possible for a number of reasons. First, the law allows applicants already licensed with the Office to file the loan originator application until December 31, 2010 and continue operating while the Office processes and considers the application, even if the final determination on the application does not occur until some time in 2011. Therefore, employees of lenders that obtain a mortgage broker license will have a grace period during which they can continue to work. Second, the Nationwide Mortgage Licensing System (NMLS) will not accept Florida loan originator applications until October 1, 2010, so it will not be possible for individuals to apply for a loan originator license before that date. Under normal circumstances, the processing of these applications can take a number of months during which time the applicant would not be licensed and could not work in any capacity that would require a loan originator license. Third, individuals who delay in applying for a mortgage broker license run the risk of not having their application approved before the deadline. While the Office strives to approve or deny each application as quickly as possible, the current application process can take a number of months to
complete. An application that is still in the pipeline as of October 1, 2010 will expire and a new loan originator application will need to be filed through NMLS. Finally, the Office anticipates a large number of applications after the October 1, 2010 deadline. In addition to non-licensed individuals applying for the first time, all current Chapter 494 licensees will be filing new applications. It will take time to process these applications, which could impact someone’s ability to continue working if they have not been licensed prior to October 1, 2010. In fact, the new law anticipated the additional number of applications that the Office will receive during this transition and extended the deadlines for processing these applications. The Office cannot expedite the processing of applications for unlicensed persons who wait until the new loan originator application becomes available on October 1, 2010, and it could conceivably be well into 2011 before the Office is ready to approve or deny such an application. ACT NOW, DON'T WAIT UNTIL THE LAST MINUTE - MCT Real Estate and Mortgage School is offering 24hrs Mortgage Broker courses to help you fulfill your requirements and give you the tools to continue working. # # # US Treasury sets guidance to simplify 'short sales' Article By Al Yoon NEW YORK, Nov 30 (Reuters) - The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed "short sales" of homes and other loan modification alternatives to stem a rising tide of foreclosures. The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury's website. Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders. The incentives, first announced in May, expand on the government's Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started. See:
http://www.financialstability.gov/latest/tg_11302009b.htm
"While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve" or offer a modification, the Treasury said in its announcement.
Financial incentives for completing short sales or similar deed-in-lieu transactions -- in which the deed is simply transferred to the lender -- include a $1,000 payment to servicers, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders, the Treasury said. Borrowers would receive $1,500 in relocation expenses. Short sales are favored by real estate agents and community groups over foreclosure because they can preserve the borrower's credit rating and leave the property in better condition than when a homeowner is evicted. While primary lenders typically realize steep losses, their recovery is typically far better than under foreclosure. But short sales have been frustrating for borrowers and real estate agents, often hung up by negotiations with multiple lien holders and mortgage insurance companies. Real estate agents have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future. Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt. It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings. In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000. Second lien holders in recent months have begun demanding more money from the first lender, seller, buyer or agent in exchange for releasing their claim, agents have said. Because primary lenders would face larger losses in a foreclosure, some subordinate lenders have felt empowered, the agents said. The largest second-lien holders are Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc. Second lien holders may proceed with a short sale outside of the Treasury program, if they felt the cap was too low, a Treasury official said in October. "If there was a short sale program that didn't recognize the second lien holder position, it could have pretty damaging consequences for the industry," Sanjiv Das, chief executive officer of CitiMortgage, said in an interview last week. # # #
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