Florida Enacts Provisions Regarding Mortgage Brokering Exemptions
The state of Florida recently passed House Bill 193, which exempts certain individuals from the state’s mortgage loan originator and broker regulations, under certain circumstances. This bill will become effective on July 1, 2018.
The new provisions exempt a securities dealer, investment advisor, or associated person registered under ch. 517, F.S. from regulation as a mortgage broker or loan originator under ch. 494, F.S. In order to be exempted, he or she must meet the following requirements.
First, he or she may be exempted if in the normal course of conducting securities business with a corporate or individual client, he or she solicits a mortgage loan from a securities client or refers a securities client to any of the following: a depository institution; certain regulated subsidiaries that are owned and controlled by a depository institution; institutions regulated by the Farm Credit Administration; a licensed mortgage broker; a licensed mortgage lender; or a registered loan originator.
In addition, he or she must not accept (or offer to accept) an application for a mortgage loan, and he or she must also not negotiate (or offer to negotiate) the terms or conditions of a new or existing mortgage loan on behalf of a borrower or lender. Lastly, he or she must not negotiate or offer to negotiate the sale of an existing mortgage loan to a noninstitutional investor for compensation or gain.
The bill adds that any solicitation or referral made pursuant to the exemption must comply with the federal Real Estate Settlement Procedures Act, ch. 517, F.S. and any applicable federal law or general law of the state of Florida. The Office of Financial Regulation believes that any loss of licensure revenues will be insignificant.
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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