Aloha Servicers ... Licensing Now Required in Hawaii – NMP Skip to main content

Aloha Servicers ... Licensing Now Required in Hawaii

Jul 03, 2013

Hawaii has become the first state requiring all mortgage servicers be licensed in order to continue operation. Hawaii Gov. Neil Abercrombie signed Act 92, legislation that effectively forces all mortgage servicers operating in Hawaii who receive scheduled, periodic payments pertaining to any residential mortgage loan, as well as servicers who employ loan modification or borrower personnel. The new law, however; prevents those who service five loans or less per calendar year to be licensed. According to Act 92: “No person licensed as a mortgage servicer shall provide mortgage loan modifications or any other services that would require licensing pursuant to chapter 454F without first complying with the licensure requirements under Chapter 454F.” Chapter 454F essentially states that any personnel involved in the origination of a loan must register with the Nationwide Mortgage Licensing System, which is not an uncommon thing in the mortgage industry. There are some in the mortgage industry who are concerned that the recent ruling in Hawaii could be enacted in other states, however; former Government Affairs Committee Chair with NAMB—The Association of Mortgage Professionals John H. P. Hudson, commented, “On one hand, any person who quotes terms, conditions, or originates a loan file should have knowledge of mortgage lending and be licensed. However, the NMLS still exempts originators or employees from depository institutions to be registered, i.e., no testing required … If parity is what the goal is, then every originator or employee that quotes terms or conditions of a loan should be licensed and tested … not just those working for non-depository companies.“ Modification licenses are not required by individuals who work for a firm. “The requirement of servicer employees to be licensed will without a doubt increase costs will be passed on to consumers,” said Hudson. “However, a forensic ‘fingerprint’ on every file will help prevent future problems given the reported abuses made by mortgage servicers in the past” The full text of Act 92 can be found here.
About the author
Published
Jul 03, 2013
California Approves $25B Homebuyer Loan Program, Targeting New Construction

Proposition 37 could open new purchase lending opportunities, but financing costs and borrower qualification will determine its reach

When AI Takes Action: New Federal Framework Raises Questions

New federal banking guidance examines the risks of autonomous AI, from borrower communications to servicing transactions, with a focus on human oversight and accountability

States Tighten Mortgage Rules For Home Equity Investments

Massachusetts, Maine, and Illinois are expanding oversight of home equity financing

West Capital LO Challenges Contractor Status, Required Fees

A former originator alleges unpaid overtime, recurring tech charges, and company restrictions that he says undermine his independent-contractor status

CFPB Closes 40% Of Investigations, Keeps Mortgage Enforcement In Focus

The federal watchdog closed thousands of supervisory and investigative matters as it narrowed oversight

Midterms Loom With Mortgage Policy Changes Already In Motion

As voters head to the polls Tuesday, Washington is weighing changes to refinancing costs, loan pricing, and lending regulations