Montana Amends Provisions Regarding Mortgage Act and Reporting Requirements for Escrow Businesses
The state of Montana amended its provisions relating to its Mortgage Act that include, but are not limited to, adding capital requirements for mortgage servicers; adding net worth requirements for mortgage lenders; revising designated manager and branch office requirements; and revising surety bond requirements. These provisions are effective on October 1, 2019.
The amendment under Section 1 adds capital requirement for mortgage servicers and provides that a mortgage servicer that is wholly owned and controlled by one or more depository institutions regulated by a state or federal banking agency may apply to the
Department of Administration (Department) to waive or adjust one or more of the capital requirements in subsections (2) and (3) of Section 1.
Section 4 of the amendment provides that the Department may not issue or renew any mortgage broker, mortgage lender, mortgage servicer, or mortgage loan originator license if the applicant has failed to meet the mortgage servicer capital requirements provided in Section 1 or has failed to meet the minimum mortgage lender net worth requirements provided in Section 2.
Section 5 of the amendment revises designated manager and branch office license requirements and provides that a designated manager may be responsible for more than one location and that the designated manager is responsible for the mortgage origination activity conducted at each office to which the designated manager is assigned in the NMLS (National Mortgage Licensing System.)
Section 6 amends the surety bond requirements and provides that “the amount of required surety bond for a mortgage servicer must be calculated on the mortgage servicer’s total unpaid principal balance of residential mortgage loans as of December 31.” The amendment also provides the amount of the surety bond that must be provided, which is: (a) $75,000 for an unpaid principal balance that does not exceed $25 million a year; (b) $150,000 for an unpaid principal balance of more than $25 million but not exceeding $100 million a year; (c) $250,000 for an unpaid principal balance of more than $100 million but not exceeding $500 million a year; or (d) $350,000 for an unpaid principal balance of more than $500 million a year.
Section 7 allows service by common courier with tracking capability for legal service of process. The amendment under Section 8 and 11 provides for rule making authority regarding false, deceptive, and misleading advertising, internet and electronic advertising, and allows the Department to adopt rules regarding the mortgage servicer capital requirements provided in Section 1 and to define supervisory requirements for designated managers.
Section 9 of the amendment provides for penalties and restitution from service providers who have violated any of the provisions of the Act or who have failed to comply with the rules, instructions, or orders promulgated by the department. The amendment also authorizes investigations of service providers under Section 10 and allows the Department to disclose information about service providers to licensees under Section 12.
Montana Amends Provisions Regarding Reporting Requirements for Escrow Businesses
The state of Montana amended its provisions relating to reporting requirements for escrow businesses. These provisions are effective on October 1, 2019.
The amendment allows annual reports of escrow businesses to be reviewed by an independent public accountant every odd-numbered year and considers that the department of administration has complied with the legal service of process by common courier with tracking capability.
Rhona Kyeyune, LLM, is a regulatory compliance consultant with CLA. She is a graduate of Makerere University and earned her master of laws at Boston University School of Law.
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