Mississippi Regulatory Update

Mississippi Regulatory Update

The Mississippi Department of Banking and Consumer Finance (the “Department”) recently amended its Regulations for the Mississippi SAFE Mortgage Act, effective August 30, 2013.

 

MISSISSIPPI SAFE MORTGAGE ACT REGULATIONS TITLE 5, PART 2

 

Loan Originators

 

Loan originators must be W-2 employees of the licensed mortgage broker or mortgage lender (previously loan originators included 1099 employees).

 

 

The provisions addressing sponsorship removal, the movement of a loan originator from one licensed mortgager broker or lender to another licensed mortgage broker, examples of activities that may be considered as taking an application or offering or negotiating by an individual that will cause him or her to be licensed as a loan originator have been deleted, and the interpretation of the federal SAFE Act with regard to an individual who “takes a residential mortgage loan application” applying to the Mississippi SAFE Act have been deleted.

 

 

Licensing Criteria

 

The term “qualifying individual” has replaced the term “principal officer.”  “Qualifying individual” means an employee of the mortgage broker or lender who submits documentation of a minimum 2 years experience directly related to mortgage activities (previously the 2 years experience had to occur within the previous 4 years of the date of application directly in mortgage lending).  The qualifying individual will be the person primarily responsible for the operations of the licensee.

 

 

The provisions addressing the mortgage lending experience, licensing, continuing education, and residency requirements for principal officers have been deleted.

 

 

Change in Location, Name, Principal Officer, Loan Originator

 

The provisions addressing notifying the Department of the licensee’s change in location, name, principal officer, and loan originators have been deleted.

 

 

Surety Bond Requirements

 

The following chart will be the surety bond requirement for the renewal for all licensed mortgage brokers based on the volume of Mississippi residential mortgage loans originated by the licensed mortgage broker from the previous licensing/calendar year.  This only includes loans that were closed by a lender or exempt company.  The amounts shown will be the minimum amount required of surety bond coverage.  If the company chooses, it may renew its initial bond amounts (mortgage broker $25,000) and forward an original Continuation Certificate for renewal to the Department.

 

 

Volume Amount Surety Bond Coverage
$1 million or less $15,000
More than $1 million but less than                   $5 million $20,000
More than $5 million $25,000

 

 

The following chart will be the surety bond requirement for the renewal for all licensed mortgage lenders based on the volume of Mississippi residential mortgage loans originated, brokered, funded, serviced, or owned by the licensed mortgage lender from the previous licensing/calendar year.  This only includes loans that were closed by a lender or exempt company.  The amounts shown will be the minimum amount required of surety bond coverage.  If the company chooses, it may renew its initial bond amounts (mortgage lender $150,000) and forward an original Continuation Certificate for renewal to the Department.

 

 

Volume Amount Surety Bond Coverage
$10 million or less $75,000
More than $10 million but less than                   $25 million $100,000
More than $25 million $150,000

 

Branch Offices

 

 

Origination or modification of a Mississippi residential mortgage loan may not occur at a wholesale lending office.

 

 

The provision requiring the branch officer to display the original branch issued license in a place visible to the public has been deleted.

 

 

Requirements for In-State Offices

 

 

The provisions requiring documentation to be provided to the Department where the office is located and what the location’s security must consist of have been deleted.

 

Required Contents of Individual Borrower Files

 

 

The individual borrower files of a mortgage broker and mortgage lender must now contain:

  • Initial Truth in Lending Disclosure (previously Preliminary Truth in Lending).
  • Affiliated Business Agreement (previously Controlled Business Agreement).
  • Notice of Action Taken (within 3 business days of receiving notice the loan is denied or within 30 calendar days of receiving an application denied by lender) (previously Copy of Notice of Cancellation from Broker/Lender).
  • Verification that the applicant received the “Settlement Cost Booklet”.

 

The records must be kept in a secure onsite or offsite location.  An onsite secure location would include the licensed main office location of the company.  If the branch location becomes unlicensed, then the mortgage records must be maintained where the main office records are maintained according to the Nationwide Mortgage Licensing System and Registry system.

 

 

Journal of Mortgage Transactions

 

The provisions requiring licensees to maintain a journal or mortgage transactions have been deleted.