On
March 25, 2009, I had the opportunity to address the Senate Banking and
Insurance Committee as they prepared to vote on a proposed committee substitute
relating to Senate Bill 2226. This bill is
intended to incorporate the minimum standards of the SAFE Act into F.S. 494,
the Mortgage Brokerage and Lending Law.
While FAMB appreciates the efforts of the committee chairman, Senator
Richter, and its staff for allowing FAMB to actively participate in the process
of this bill, I felt it was necessary to provide the committee with a few of
our concerns with the bill in its
present form. I want to take this
opportunity to share with you the testimony presented that focused primarily on
three key concerns we have regarding the bill...
1. The financial character, fitness and
responsibility requirement for state-licensed loan originators;
Beginning in 2010, an individual
credit report will be required to be obtained as part of the licensing process
for all state-licensed loan originators and control persons. This requirement, due to the SAFE Act,
creates an unlevel playing field between federally-registered loan originators,
who are not subjected to this requirement, and state-licensed loan originators. It is of concern to us that, although each of
these groups is performing the same origination activities, the state-licensed
loan originator is held to a higher standard.
FAMB is committed to continue to work within the legislative process to
create appropriate SAFE Act-compliant credit criteria language that will
satisfy the federal requirements as well as easing the concerns of those
originators who have been impacted from a credit standpoint due to the downturn
in the economy.
2. The elimination of the Mortgage Lender
License with Savings Clause;
Senate Bill 2226 proposes the
elimination of the Mortgage Lender License with Savings Clause effective
October 1, 2010. This license type dates
back to 1991 and, although there are only approximately 195 existing licenses,
including branches under this designation, they are currently servicing
hundreds of millions of dollars of mortgage loans, mostly for private
individuals, some of whom are lending money directly from their individual
retirement accounts, This practice prohibits these investors from handling the
collection of monthly payments on their own mortgage transactions. A $25,000 net worth and audited financials
are currently required under this lender designation. The SAFE Act does not contain language which
would prohibit more than two types of mortgage lender classifications. Ultimately, the elimination of this license category
would create a hardship on the MLS licensee because they would be required to
meet a $250,000 net worth in order to comply with the requirements of the
Mortgage Lender license and still be able to fulfill life of loan servicing
requirements for their clients.
3. Licensing fees for individual loan
originators, mortgage broker and mortgage lender businesses;
The licensing fees presented in the
proposed committee substitute are a decided improvement over the amounts
reflected in the initial bill. FAMB,
however, feels that the fee structure still has room for improvement. For example, under our current licensing
structure, an individual mortgage broker or loan originator renews their
license on a biannual basis and pays a fee in the amount of $150.00. Due to the SAFE Act, all individual loan
originators will be required to renew their license annually. While we are aware that the change is
necessary in order to be SAFE Act-complaint, the annual fee required to renew a
license is the same amount now paid for the biannual renewal. In addition, $20 will be required to be paid
annually towards the mortgage guaranty trust fund along with the fee required
to be paid towards the pulling of a credit report in order to comply with the
financial fitness requirement discussed earlier. FAMB would appreciate the opportunity to work
with the committee as well as the Office of Financial Regulation in order to
restructure the fees for individuals and businesses to a more workable level.
I
want to assure you that FAMB continues to track this legislation as it works
its way through both the Senate and the House.
As
the legislative session winds down, you may be asking yourself, "What can I do
to help myself and my industry?" There
is no more effective tool than grassroots lobbying efforts with your
legislators. If you have an area of
concern regarding yourself or your business, don't hesitate to contact your
elected officials. Phone calls,
hand-written letters and emails to legislators from their constituents aid them
in understanding the issues that concern those living in their districts. FAMB will continue to act diligently and
deliberatively regarding to this pending legislation. However, we can't do it alone...let your voice
be heard and act now! For more
information, please visit our website at www.famb.org and click on
"Legislative" in order to access our Legislative Action System.
Valerie J. Saunders
President
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