Montana Regulatory Update

Montana Regulatory Update

The Montana Department of Administration (“Department”) recently amended its rules governing mortgage broker and loan originator licensing, effective December 16, 2013 and March 1, 2014.

MONTANA RULES 2.59.1701 to 2.59.1751 and .1753 (effective December 16, 2013)

 

 

“Origination of a mortgage loan” does not include credit underwriting activities as long as the credit underwriter does not communicate directly with the borrower about specific credit terms.  Credit underwriting activities include the analysis done by a mortgage underwriter to determine whether:

  • Credit should be extended to a borrower;
  • A loan meets the requirements for funding; or
  • A loan meets the criteria to be sold on the secondary market.

 

A bona fide not-for-profit entity must certify that it meets an exemption by using the Montana Bona Fide Not-For-Profit Certification (“Certification”) dated August 13, 2013, to make its certification both initially and annually.  A copy of the Certification is available at the Montana Division of Banking and Financial Institutions, 301 S. Park Ave., Suite 301, Helena, Montana, during regular business hours or on the Department’s website atwww.banking.mt.gov.

 

 

An application is abandoned if the applicant fails to provide the information requested by the Department within 60 days of notification of the deficiencies to applicant by the Department or December 31, whichever comes first.

 

 

“Material change” no longer includes:

  • A change in the physical location of the principal location and/or branch office;
  • A change in the phone number;
  • A change in the nature of the business; and
  • A change in the share ownership of the company of 10% or more.

 

In addition to the current requirements, satisfactory proof of 3 years of experience as a designated manager now includes verification of active licensure as a mortgage loan originator in another state through the Nationwide Mortgage Licensing System (“NMLS”).  Paystub copies are no longer considered satisfactory proof of such experience.

 

 

The Mortgage Loan Originator (MLO) Testing Handbook dated April 7, 2013 may be found at

http://mortgage.nationwidelicensingsystem.org/profreq/testing/Documents/MLO%20Handbook.pdf.

 

 

An expired license that is not reinstated is referred to as “Termination-Expired” (previously “Terminated Failed to Renew”).

 

 

At the servicer’s election, the servicer may submit either the expanded mortgage call report (“MCR”) through the NMLS or the Quarterly Statement for Mortgage Servicing Activity (“Quarterly Statement”) dated December 23, 2011.  Each servicer must submit either an expanded MCR through the NMLS or the Quarterly Statement for each and every quarter during which it held a license.

 

 

The written exemption forms for requesting a licensing exemption have been removed.

 

 

The following provisions have been deleted from the rules:

 

 

“Another person involved in the transaction” means a licensee, the borrower’s employer, the lender, the real estate agent, or other persons or entities allowed by the lender guidelines.

 

 

The mortgage servicer report must contain the following information:

o       The number of Montana mortgage loans the servicer is servicing;

o       The type of loans, such as Federal Housing Administration guaranteed or private label, and characteristics of the loans in Montana, such as fixed, variable, home equity lines of credit, reverse mortgages, high-cost loans, higher-priced loans, option-adjustable-rate mortgages, and negative-amortization loans;

o       The number of mortgage loans the servicer is servicing that are in payment default and a breakdown of these mortgage loans by length of payment delinquency, including 30-day, 60-day, 90-day, and longer delinquencies;

o       The unique identifier of the mortgage loan originator and the broker who originated the loan;

o       Information on loss-mitigation activities, including, but not limited to, the following:

§         The number of workout arrangements entered into by the servicer in connection with mortgage loans;

§         A description of the types of workout arrangements, including mortgage loan modifications, and the percentage of each type of workout arrangement entered into;

§         The ratio of loan modifications requested by the borrower to the actual number granted by the mortgage servicer; and

§         The proactive steps taken by the mortgage servicer to identify borrowers at a heightened risk of default, such as those with impending interest rate resets, including, but not limited to, contacts with borrowers to assess their ability to repay their mortgage loan obligations; and

o       The number of foreclosure actions commenced in Montana in connection with mortgage loans the mortgage servicer is servicing and where the loan is in the foreclosure process.

 

Any person claiming to be exempt from the licensing requirements of the Montana Mortgage Act must receive an exemption from the Department before engaging in activities claimed to be exempt.  A claim form may be found online at www.banking.mt.gov.

 

Any fee for an exempt registration is set by NMLS and is payable as directed by NMLS.

 

A candidate for mortgage loan originator licensure must request and pay for a separate test enrollment through the NMLS at http://www.nationwidelicensingsystem.org each time the candidate takes a national or state examination component.

Retakes of the mortgage loan originator licensing examination following failed attempts and the applicable waiting periods are governed by the following table:

TEST ATTEMPT TEST RESULT RETAKE WAITING PERIOD
Initial Fail 30 days
2nd Fail 30 days
3rd Fail 180 days
Initial Fail 30 days
(Retake cycle repeats)

The waiting period between exam attempts applies independently to each examination component, national and state.  Failing one component does not impose a waiting period for another component.

A candidate may request and pay for a new test enrollment window through NMLSimmediately following the failure of an examination.  The window will not allow the candidate to reschedule the examination for a date before expiration of the applicable waiting period.

If an individual fails to continuously maintain a valid current Montana mortgage loan originator license or registration or combination thereof for a 5-year period, but has maintained a mortgage loan originator license in another state or a mortgage loan originator registration or combination during that period, the individual must reapply for a license, requalify, pay the applicable fee, and must retake and pass only the state component examination as a prerequisite to being relicensed in Montana.  A suspended license is not considered a “valid current” Montana license during the period of suspension.

MONTANA RULES 2.59.1752 (effective March 1, 2014)

An individual seeking a mortgage loan originator license must complete 2 hours of prelicensing education specific to Montana residential mortgage statutes and rules.