Mississippi Reenacts and Updates SAFE Mortgage Act
Effective on July 1, 2016 Mississippi reenacted the SAFE Mortgage Act and updated license requirements, document retention procedures, self-reporting, and set new limitations.
Continuing Education
Mississippi enacted amendments that delineate the requirements of continuing education for a licensed mortgage loan originator. Each mortgage loan originator must complete a total of eight hours of continuing education annually; within those eight hours specific material must be covered: (1) three hours of federal law and regulations; (2) two hours of ethics; and (3) two hours of standards in the nontraditional mortgage product marketplace.
Document Retention
Mississippi enacted amendments that set standards for document retention and compliance. In relation to consumer mortgage files, all such files must be maintained separate and apart from the same consumer’s personal loan files. Compliance for operation files was also amended.
In order for operation files to be in compliance the licensee, individual or person subject to this chapter must be able to produce books and records to the commissioner upon request. In addition, these must be produced within 60 days from the day of request or it may result in a violation of this chapter, resulting in a civil penalty.
Several other documents were also changed in how they are to be retained and the substance they need to include now. Namely, the final signed Uniform Residential Loan Application and journal of mortgage transactions. For further details please follow link provided below to the complete legislation and refer to sections 20 and 21 respectively.
NMLS Information Submission
Under the amendments enacted several scenarios were explicitly stated as triggering events where the company at fault must self-report to the NMLS; failure to do so may result in civil penalties. The new triggering events are as follows: (1) expiration, termination or default of lines of credit or warehouse credit agreement; (2) suspension or termination of the licensee’s status as an approved seller/servicer; (3) exercise of recourse rights by investors or subsequent assignees of mortgage loans if they aggregately exceed the licensee’s net worth; or (4) the existence of negative balances exceeding one hundred dollars.
Loan Payoff
Under the amendments enacted pay off request procedures were clarified and expanded. These changes have led to several new limitations to take note of.
Firstly, an individual covered under this chapter must provide upon the request of a borrower or third party a loan payoff. This must be completed within 3 days of the request. The payoff must also be provided free of charge and must be both understandable and accurate. A lender may, however, charge a reasonable fee for any payoff statement exceeding the 5 non-charge payoff statements allowed to the borrower. Secondly, an individual may not sign a consumer’s name to an application or other mortgage loan documents on behalf of the consumer. Lastly, knowingly falsify income or asset information and lastly, discourage a consumer from attaining independent legal counsel.
The changes noted were the most notable changes to occur. For the complete reading of the amendments please refer to the following link: http://billstatus.ls.state.ms.us/documents/2016/pdf/SB/2500-2599/SB2504SG.pdf
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