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MBA Convinces Florida to Drop Certain Mortgage Underwriter Requirements

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In the first part of 2010, the Florida Office of Financial Regulation (OFR) passed a mandate that mortgage processors and underwriters must become licensed as loan originators. According to an email sent today from the Mortgage Bankers Association (MBA), the trade group successfully convinced the OFR to reverse this requirement. "[Mortgage] processors and underwriters support the origination function and have limited contact with borrowers, and, moreover, many companies have erected firewalls between the origination and underwriting functions to preserve the integrity of the loan process and in response to the Home Valuation Code of Conduct," said the email from the MBA, explaining its argument to the state of Florida for rule reversal. Additionally, underwriters who work for one employer also will not be subject to the existing requirements that loan processors file certain mortgage brokers or mortgage lenders declarations with the state of Florida. In issuing its opinion, the assistant general counsel for the OFR, Jenny Kim, said that the state of Florida considers a "loan originator" as anyone who "processes a mortgage loan application." Underwriters did not clearly fit this description, Kim writes, as they instead provide support work under the supervision of an originator, according to Section 1503(4) of the S.A.F.E. Act. "Please keep in mind that in-house underwriters that work for a licensed lender must be supervised by a licensed loan originator in order to comply with the S.A.F.E. Act and Florida statutes," Kim concludes. Write to Jacob Gaffney.

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