Hawaii Amends Provisions Regarding Mortgage Requirement
by: Lee Greenberg
The state of Hawaii recently amended several provisions of the Secure and Fair Enforcement for Mortgage Licensing Act in Senate Bill No. 2817. The new legislation became effective on July 1, 2014.
The legislation added the following five definitions to the Act:
- “Elder” means an individual who is sixty-two years of age or older;
- “Offers or negotiates terms of a residential mortgage loan” means presents for consideration by a borrower or prospective borrower particular residential mortgage loan terms, communicates directly or indirectly with a borrower or prospective borrower for the purpose of reaching a mutual understanding about prospective residential mortgage loan terms, or takes or gathers information from a borrower or prospective borrower for the purpose of recommending, referring or steering that borrower or prospective borrower directly or indirectly to a particular lender or set of residential mortgage loan terms, in accordance with a duty to or incentive from any person other than the borrower or prospective borrower;
- “Principal office” means the office location where the company’s core executive and administrative functions are primarily carried out;
- “Regular business hours” means Monday through Friday, between the hours of 8:00AM and 4:30PM, excluding state holidays; and
- “Sole proprietorship” means a mortgage loan originator business that is solely and personally owned or operated by an individual mortgage loan originator, and where there is no legal distinction between the individual business owner and the business.
The new law clarifies that a branch manager may not oversee more than one branch office or principal place of business. In addition, the law requires the principal place of business and each branch office of the mortgage loan originator company to be identified in the NMLS to consumers as a location at which the licensee holds itself out as a mortgage loan originator company. Each location is required to be open for business to the public during posted business hours which must be during regular business hours. If a location is in a commercial building, then the business hours must be conspicuously posted on or adjacent to the main office door of the location, and visible to the public from outside the location. If a location is not in a commercial building, then the business hours must be conspicuously posted on the home page of the mortgage loan originator company’s website, along with the address and phone number of the location.
Further, the new law allows the commissioner or the commissioner’s authorized representatives to conduct an examination or investigation of a mortgage loan originator company during regular business hours. If the commissioner or the commissioner’s authorized representatives are denied access to any office, record or file for any reason, such denial may be considered a violation of the law.
Lastly, the new law repealed the licensing exemption requirements for individuals facilitating mortgage loans for family members and the requirement that sole proprietorships be reimbursed by the division for fees paid for the state mortgage loan originator’s initial application and annual license renewal fees.
Lee Greenberg, J.D. is Vice President and Regulatory Compliance Director at Bankers Advisory. Lee is a graduate of the University of Colorado at Boulder and earned his J.D. at the New England School of Law. He is admitted to the bar in Massachusetts. He can be reached at lee@bankersadvisory.com
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
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