HUD NEWS
U.S. Department of Housing and Urban Development - Shaun Donovan, Secretary
Office of Public Affairs, Washington, DC 20410
HUD No. 09- 231
Lemar Wooley
(202) 708 - 0980
http://www.hud.gov/news/index.cfm
WASHINGTON - The U.S. Department of Housing and Urban Development today announced publication of a proposed rule setting the minimum standards that states must meet to comply with the
Secure and Fair Enforcement Mortgage Licensing Act of 2008 (SAFE Act) in licensing loan originators. The proposed rule is posted in today's Federal Register and on HUD's website.
"By introducing nationwide standards of uniform licensing for loan originators, the SAFE Act is taking an important step in returning integrity and accountability to the residential mortgage loan market," said FHA Commissioner David Stevens. "Implementation of this Act is a critical addition to our system of regulatory protections that will benefit both consumers and financial institutions."
The SAFE Act was enacted into law on July 30, 2008, as part of the Housing and Economic Recovery Act of 2008. It is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators. SAFE also mandates the creation of a Nationwide Mortgage Licensing System and Registry (NMLSR), and encourages all states to provide for a licensing and regulatory regime for all residential mortgage loan originators.
While states are charged with enacting licensing standards that meet the requirements of the SAFE Act, overall responsibility for interpretation, implementation, and compliance rests with HUD. If HUD determines that a state's licensing standards do not meet the minimum requirements of the Act, it is required to implement and administer a licensing system for that state.
To comply with the Act, states must put in place a Loan Originator Licensing program that requires originators to take an education course, pass a test, and undergo civil, criminal and financial background checks. States have until July 31, 2010, to have their loan originators licensed under the SAFE Act criteria, unless they already have them licensed under a different system. If already using a different licensing system, they have until December 31, 2010, to bring them in line with the Act's requirements.
The proposed rule:
HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov.