Hawaii Adopts Amendments Regarding MLO and Mortgage Servicing Licensing
The State of Hawaii has enacted Senate Bill 2850 which amends its mortgage loan originators law and mortgage servicers law. The purpose of the bill is to bring consistency to the terminology of the chapters, to bring clarity to the scope of each chapter and to update references to federal law in the chapters. The amendments are effective July 1, 2016.
HRS § 454M has been amended to provide a new section regarding confidentiality.
454M – Confidentiality
- (a) Provides that the privacy or confidentiality of any information or material provided to NMLS, and any privilege arising under federal or state law, including the rules of any federal or state court, with respect to the information or material shall continue to apply to the information or material after the information or material has been disclosed to NMLS.
- (b) Provides that the commissioner may enter into agreements or sharing arrangements with other governmental agencies.
- (c) Information or material that is subject to a privilege or confidentiality under subsection (a) is not subject to:
- 1. Disclosure under any federal or state law governing the disclosure to the public of information held by an officer or an agency of the federal government or a state; or
- 2. Subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by NMLS applicable to the information or material; provided that the person to whom the information or material pertains waives, in whole or in part, in the discretion of such person, that privilege.
454M and 454F – Definitions
454F-1 and 454M-1 have been amended to add and to make consistent the definitions used in each chapter. The following is a sampling of definitions that have been amended to be made consistent between the two chapters. Minor variances between the definitions are identified in brackets. For a full list of the new and amended definitions please see the full text of the act at https://legiscan.com/HI/text/SB2850/2016
- “Borrower” means the obligor, maker, cosigner or guarantor under a {residential mortgage loan agreement [454F-1]} {mortgage loan agreement [454M-1]}
- “Residential mortgage loan” or “mortgage loan” means any loan primarily for personal, family or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling or residential real estate {upon which is constructed or intended to be constructed a dwelling,[454F-1]} and includes refinancing, reverse mortgages, home equity lines of credit, and other first and additional lien loans that meet the qualifications listed in this definition
- “Residential loan modification” or “loan modification” means a temporary or permanent change to the terms of a borrower’s existing residential mortgage loan agreement, mutually agreed to between a borrower and a lender.
The full text of the act may be found at https://legiscan.com/HI/text/SB2850/2016
Adam Faria, JD, is a regulatory compliance consultant with CLA. He is a graduate of Northeastern University and earned his juris doctor at Suffolk University Law School. He is admitted to the bar in Massachusetts and New Hampshire.
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