West Virginia Re-enacts Mortgage Licensing, Lending and Servicing Acts
by: Louis Danastorg
West Virginia SAFE Mortgage Licensing Act and West Virginia Mortgage Lender, Broker
and Servicer Act – Senate Bill 383
Earlier this month West Virginia passed an act to amend and reenact definitions within the West Virginia SAFE Mortgage Licensing Act and the West Virginia Mortgage Lender, Broker and Servicer Act (WV Codes §31-17A-2 and §31-17-1) that relate to certain limited exemptions from licensing requirements for self-financed home financing if the owner acts outside their regular course of business; establishing reporting requirements; and authorizing civil penalties for failure to timely report.
WV SAFE Act:
g) Anyone that performs clerical or support duties as an employee subject to the direction or supervision of a person licensed or exempt from licensing under Article 17 shall be considered a loan processor or underwriter.
h) A mortgage loan originator (MLO) is any individual that takes, offers, or negotiates a residential mortgage loan application, or the terms therein, for compensation and is sponsored by a mortgage lender, broker, or regulated consumer lender.
- MLO does not include any individual engaged solely as a loan processor or underwriter.
- People or entities not currently holding a residential MLO license in WV or any other state that have originated no more than three residential mortgage loans in any calendar year are not considered MLOs. However, the person or entity must report any such loans to the Division of Financial Institutions within thirty days unless be subject to a $250 civil penalty.
- Properly licensed and registered individuals that only perform real estate brokerage activities, so long as that person is not compensated by a lender, mortgage broker, or another MLO.
- Persons wholly involved in extensions of credit relating to timeshares.
- Employees at manufactured or modular home retailers that serve purely administrative or clerical functions and only receive a customary salary or commission based on the sales transaction.
i) Real estate brokerage activity means any activity that involves offering or providing brokerage services to the public. This includes:
- Acting as a real estate salesperson or real estate broker.
- Bringing together interested parties to a real estate transaction.Negotiating any portion of a contract relating to the transfer of real estate other than the financing of such transaction.
- Engaging in an activity which requires registration or licensure as a real estate agent or broker.
- Offering to engage in any of the above activities.
k) Any mortgage product containing a non-fixed rate is a nontraditional loan product.
m) A registered MLO is any individual that meets the definition of MLO and employed by a depository institution, a subsidiary of a depository that is regulated by a federal banking agency, or an institution regulated by the Farm Credit Administration. The institution and MLO must be registered with and maintain a unique identifier through the NMLS registry.
WV Residential Mortgage Lender, Broker and Servicer Act:
a) Additional charges are every type of charge arising out of the making or acceptance of a primary or subordinate mortgage loan that are not financing charges.
b) Persons under the same ownership or management control are affiliated.
c) To the extent that payment is deferred, the amount financed includes:
- The cash price less the amount of any down payment.
- Amounts paid by the seller pursuant an agreement with the buyer to discharge a security interest or lien on the property.
- Any applicable taxes, title or license fees if not already included in the cash price.
- Every lender and broker licensee shall maintain at his or her place of business in this state, if any, such books, accounts and records, as determined by the Commissioner, relating to all transactions within this article. All books, accounts and records shall be preserved, presented to the Commissioner, and kept readily available for a reasonable period of time. The Commissioner has authority to determine the minimum information the books, accounts and records must contain.
- Each licensee shall file a report with the NMLS registry under oath or affirmation concerning his or her business and operations arising out of WV. The Commissioner may direct reports to be filed directly with the Division of Financial Institutions. Any reports or information filed pursuant this subsection are not public records and not subject to public inspection.
- The Commissioner has the discretion to order an examination of the books of every lender or broker licensee pertaining to primary and subordinate mortgage loans made in WV in order to determine whether each licensee is in compliance with these provisions and to verify licensees’ annual reports.
- The Commissioner shall publish an annual list of licenses issued and direct consumers to public information available through the NMLS registry.
- The Commissioner may enter into cooperative and information-sharing agreements with regulators in other states or federal authorities.
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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