Six financial regulators today issued final rules requiring mortgage loan originators employed by agency-regulated institutions to register under compliance with the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act of 2008.
The SAFE Act requires originators to register with the National Mortgage Licensing System and Registry. Originators include a variety of information, including fingerprints for background checks.
The Federal Reserve, Federal Deposit Insurance Corp. (FDIC), Office of Thrift Supervision (OTS) and Office of the Comptroller of the Currency (OCC) were among the six agencies to issue final rules today to apply SAFE Act requirements to employees of agency-regulated institutions.
The final rules establish the registration requirements for residential mortgage loan originators employed by agency-regulated institutions. They also establish the requirements for the institutions to adopt policies and procedures to ensure SAFE Act compliance. Mortgage originators will also be required to obtain a unique identifier through the registry.
The final rules take effect Oct. 1, 2010. The agencies said in a joint statement that the registry could begin accepting federal registrations as early as Jan. 28, 2011, but warned that affected originators must wait for agency instruction to register.
According to a note emailed by lawfirm K&L Gates, the final rule does not deviate from the definition of "loan originator" in the SAFE Act.
"Further, the federal banking agencies exclude individuals engaged in modifications and assumptions from the registration requirement, determining that since those transactions do not result in the extinguishment of an existing loan and the replacement with a new loan," the note clarifies, "the individuals engaging in that activity would not be taking a residential mortgage loan application, and thus are not mortgage loan originators."
Write to Diana Golobay.
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