The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act) became law on July 30, 2008. It requires the licensing of all non-bank mortgage loan originators (MLOs). It also requires a national registry of all MLOs (both bank and non-bank). The licensing and registration of non-bank MLOs has been unfolding during the past two years. Registration of bank MLOs is still in flux.
What is the status of the requirement for all mortgage loan originators to be registered in a national registry?
In December 2009 a draft of the final SAFE Act regulations was published by the Federal Deposit Insurance Corporation. The other federal financial institution regulatory agencies have not yet published final regulations. The final regulations are under review by the Office of Management and Budget (OMB). Once OMB completes the review the federal bank regulatory agencies will publish the final SAFE Act regulations. Then we all wait on the National Registry.
The National Registry has been accepting registrations from non-bank MLOs for quite some time. The system for bank MLOs is still under development.
FACT OR FICTION
July 1, 2010 Effective Date for bank MLO Registration – According to the rumor mill bank MLOs must be registered by July 1, 2010.
There is no effective date yet. Nothing happens until the agencies publish the final rule. Then nothing happens until the National Registry is open to accept registrations. Once the National Registry is open, MLOs will have six months to complete registration.
Loans sold to Fannie Mae and Freddie Mac on or after July 1, 2010 must include the unique identifier of the MLO – This is true for non-bank MLOs, but the rules from Fannie Mae and Freddie Mac do not require the unique identifier from bank MLOs until the final agency rules are in place. However, there is a new Uniform Residential Mortgage Loan Application that you must begin using. (See blog entry titled New Uniform Residential Mortgage Loan Application.)