04 Jun Kansas and Mississippi Legislative and Oklahoma Regulatory Update
The Kansas legislature recently amended its laws governing the maximum interest rate. The Mississippi legislature recently amended the Mississippi S.A.F.E. Mortgage Act (the “Act”). The Oklahoma Department of Consumer Credit issued changes in dollar amounts based upon changes in Consumer Price Index Indicators effective from July 1, 2013 to June 30, 2014. All the changes discussed in this memorandum are effective July 1, 2013.
KANSAS SENATE BILL 129
The following provision has been deleted from Kansas Statutes Annotated § 16-207:
The maximum interest rate per year for first lien mortgage loans will be in an amount equal to 1.5 percentage points above the yield of 30-year fixed-rate conventional home mortgages committed for delivery within 61 to 90 days accepted under Freddie Mac’s daily offerings for sale on the last day on which commitments for such mortgages were received in the preceding month. Such interest rate will also apply to second lien mortgage loans if the borrower and the lender expressly agree to make the loan subject to Kansas Statutes Annotated § 16-207.
MISSISSIPPI SENATE BILL 2696
“Qualifying individual” means an owner or employee of a mortgage broker or mortgage lender who submits documentation of 2 years’ experience directly related to mortgage activities and who is primarily responsible for the operations of the licensed mortgage broker or mortgage lender (previously who is licensed as a loan originator and who resides within 125 miles of the licensed principal place of business of the company).
The location of a principal place of business, branch office, or any other location where business activity is conducted under the Act must be within the United States or a territory of the United States, including Puerto Rico and the U.S. Virgin Islands.
Only one qualifying individual may be named for Mississippi and this person must be the qualifying individual for only one licensee under the Act.
Employment history as evidence of experience no longer must be in the form of written letters.
Evidence of experience no longer includes a listing of wholesale lenders with whom the applicant has done business within the past 2 years either directly as a mortgage broker or loan originator.
At least one employee must be licensed as a loan originator at a licensed location.
Upon receipt of an application for licensure, the Department of Banking and Consumer Finance (the “Department”) or designated third party may conduct an investigation as it finds necessary to determine that:
- The applicant and its officers, directors, and principals are of good character and ethical reputation;
- The applicant demonstrates reasonable financial responsibility; and
- The applicant has reasonable policies and procedures to receive and process customer grievances and inquiries promptly and fairly.
The Commissioner of the Department (the “Commissioner”) will not license an applicant unless he or she is satisfied that the applicant will operate its mortgage activities in compliance with the laws, rules, and regulations of Mississippi and the United States.
If an applicant satisfies the requirements for a mortgage broker or mortgage lender license, the Commissioner will issue the license unless the Commissioner finds any of the following:
- The applicant has had a mortgage lender, mortgage broker or mortgage servicer license revoked in any governmental jurisdiction, except that a subsequent formal vacation of the revocation will not be considered a revocation; or
- The applicant or its controlling persons has been convicted of, or pled guilty or no contest to:
- A felony in a domestic, foreign or military court during the 7-year period preceding the date of application for licensing;
- A crime at any time preceding the date of application involving an act of fraud, dishonesty, a breach of trust, or money laundering; or
- A misdemeanor of fraud, theft, forgery, bribery, embezzlement or making a fraudulent or false statement in any jurisdiction. However, any pardon or expungement of a conviction is not considered a conviction under the Act.
Applicants for a mortgage loan originator license must apply through the Nationwide Mortgage Licensing System and Registry (“NMLS”). An initial mortgage loan originator license must be accompanied by a fee of $200 (previously $100). The annual renewal fee is $100 (previously $50).
The Commissioner will not issue a mortgage loan originator license unless the Commissioner makes, at a minimum and among other findings, a finding that the applicant has not been convicted of, or pled guilty or no contest to, a crime at any time preceding the date of application involving an act of fraud, dishonesty, a breach of trust or money laundering.
A mortgage broker and mortgage lender license fee is $1,500 (previously $750). The renewal fee for such license is $1,000 (previously $475).
A licensed mortgage loan originator may not take the same approved course in the same or successive years to meet the annual requirements for continuing education (previously except for the course regarding the Act).
A branch office application fee is now $300 (previously $100). The branch office renewal application fee is $100 (previously $25).
The Commissioner may charge an examination fee in an amount not less than $300 or more than $600 per day, with a maximum examination fee of $2,400 for each office or location in Mississippi, and an examination fee in an amount not less than $300 or more than $800 per day for each office or location outside of Mississippi.
Changes in the disclosure questions regarding certain events that may impact the activities of the company may now be submitted through the NMLS or filed in a written report.
Licensees who are involved in civil actions must notify the NMLS within 60 days of the occurrence. An explanation and supporting documentation for each civil action concerning the company must be submitted through the NMLS. The Department may require additional information as necessary.
Each licensee must maintain a journal of mortgage transactions at the principal place of business as stated on its license for all Mississippi residential loans that the licensee originated and/or funded. This journal must be separate from non-Mississippi loans.
Each licensee must maintain a journal of serviced loans at the principal place of business as stated on its license for all Mississippi residential loans that the licensee owns and/or services. This journal must be kept separate from non-Mississippi loans. The journal must include at least the following information:
- The number of mortgage loans the licensee is servicing;
- The type and characteristics of the loans;
- The number of serviced loans in default, along with a breakdown of 30-, 60- and 90-day delinquencies;
- Information on loss mitigation activities, including details on workout arrangements undertaken; and
- Information on foreclosures begun.
The following provisions have been deleted from the Act:
The required mortgage lending experience must have been within the previous 4 years from the date of application. The qualifying individual must also be licensed as a loan originator with the Department, must be employed at the main office address of the applicant and must reside within 125 miles of the main office address of the applicant.
The loan originator must display the current, original license issued by the Department in the licensed office in which he or she is assigned.
OKLAHOMA DOLLAR CHANGES
The delinquency charge for consumer loans was increased from $23.50 to $24. The alternative computation of the finance charge with the loan amounts upon which the loan finance charge is calculated changed as follows: $1,410 increased to $1,440; $1,410 – $4,700 increased to $1,440 – $4,800, and $4,700 increased to $4,800 as the remaining balance of the loan upon which the finance charge is calculated.
The minimum loan amount in which a security interest in real estate may be taken increased from $4,700 to $4,800; loans of that same amount or less may not allow attorneys fees.