Ohio and Rhode Island Regulatory Update

Ohio and Rhode Island Regulatory Update

The Ohio Division of Financial Institutions recently promulgated rules effective June 7, 2013, under the Second Mortgage Loan Act and under the laws governing mortgage brokers with regard to temporary mortgage loan originator licenses.  The Rhode Island Department of Business Regulation (the “Department”) recently amended its foreclosure regulations, effective August 9, 2013.

OHIO RULES 1301:8-3-25 AND 1301:8-7-30



The application for a temporary mortgage loan originator license must be accompanied by a nonrefundable application fee of $150 and all other required fees, including any fees required by the Nationwide Mortgage Licensing System and Registry.



A temporary mortgage loan originator license will be valid for 90 days from the date of issuance.  The Superintendent of Financial Institutions may extend the expiration of the temporary license an additional 30 days upon receiving a written request from the temporary mortgage loan originator at least 5 business days prior to the expiration date on the license.



The term of a temporary mortgage loan originator license begins on the issuance date and ends on the expiration date as printed on the temporary license.




The Department has promulgated forms to comply with the foreclosure notice requirements of House Bill 5335/Senate Bill 416 referenced in our August 8, 2013 Compliance Memorandum.  The forms for the Notice of Default and Mortgagee’s Right to Foreclose and Notice of Availability of Mortgage Counseling Services, Notice of Mediation Conference, and Certificate Authorizing Foreclosure are available at:




“Days” means calendar days.



“Mediation coordinator” means a person designated by a Rhode Island based HUD-approved counseling agency to serve as the unbiased, impartial, and independent coordinator and facilitator of the mediation conference, with no authority to impose a solution or otherwise act as a consumer advocate, provided that the person possesses the required experience and qualifications.  Until the time that a hearing is held to establish qualification and experience requirements of mediation coordinators and until the applicable provisions are amended or clarified, Rhode Island Housing is qualified to perform mediation coordination functions in Rhode Island.



The Notice of Mediation Conference must be provided to all borrowers and owners of residential real estate by certified and first class mail to the address of the residential real estate when a mortgage is not more than 90 days delinquent and, if different, at the address designated by the borrower by written notice to the lender as the borrower’s address for receipt of notices.



The lender must designate an agent to participate in the mediation conference and respond to all requests from the mediation coordinator, borrower, or counselor assisting the borrower within a reasonable period of time not to exceed 14 days.



If the lender declines to accept the borrower’s work-out proposal, if any, the lender must provide a detailed statement documenting the reasons for rejecting the proposal within 14 days.



A lender subject to regulation and supervision by the Division of Banks (the “Division”) must maintain a duplicate of the Notice of Mediation Conference including information regarding delivery in the borrower’s file consistent with the Division’s record-keeping requirements.



If the lender decides to send a “substantially similar” document, there must be no changes to the wording, font, or information required in the Notice of Mediation Conference.



All lenders must comply with the requirements regarding the Notice of Mediation Conference by September 14, 2013.



The mediation coordinator must have a minimum of 3 years of experience in residential mortgage lending and loss mitigation guidelines with a working knowledge of prime and sub-prime loan products, modifications, forbearance agreements, bankruptcy laws, tax sales, excellent written and verbal communication skills, strong analytical, problem-solving and organizational skills, and experience with tracking systems.  The mediation coordinator will also have the knowledge, ability, and contacts to access local and national offices of lenders and foreclosure attorneys.


The Department will provide a list of approved mediation coordinators on its website by September 13, 2013.



The Certificate Authorizing Foreclosure will be issued by the mediation coordinator and/or its designee upon confirmation that all criteria have been met and the Notice of Mediation Conference was properly served upon the borrower and owner of the residential real estate.



All written correspondence and documents related to the mediation conference process received by or submitted to the mortgage coordinator must be provided to the lender and maintained by the lender consistent with the Department’s record-keeping requirements.



The references to mediation above expire on July 1, 2018.