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Catalyst Mortgage Solutions - Law Library
Law Library
Housing and Economic Recovery Act of 2008
National Act
PL 110-289 Div. A

Eff: 8/1/2009
Division A - Housing Finance Reform
PL 110-289 Div. A, Title V

Eff: 8/1/2009
Title V - S.A.F.E. Mortgage Licensing Act
PL 110-289 Div. A, Title V, Sec. 1501

Eff: 8/1/2009
Section 1501 - Short Title
PL 110-289 Div. A, Title V, Sec. 1502

Eff: 8/1/2009
Section 1502 - Purposes and Methods for Establishing a Mortgage Licensing System and Registry
PL 110-289 Div. A, Title V, Sec. 1503

Eff: 8/1/2009
Section 1503 - Definitions
PL 110-289 Div. A, Title V, Sec. 1504

Eff: 8/1/2009
Section 1504 - License or Registration Required
PL 110-289 Div. A, Title V, Sec. 1505

Eff: 8/1/2009
Section 1505 - State License and Registration Application and Issuance
  1. PL 110-289 Div. A, Title V, Sec. 1505(a)
    BACKGROUND CHECKS.—In connection with an application to any State for licensing and registration as a State-licensed loan originator, the applicant shall, at a minimum, furnish to the Nationwide Mortgage Licensing System and Registry information concerning the applicant’s identity, including—
  2. PL 110-289 Div. A, Title V, Sec. 1505(b)
    ISSUANCE OF LICENSE.—The minimum standards for licensing and registration as a State licensed loan originator shall include the following:
  3. PL 110-289 Div. A, Title V, Sec. 1505(c)
    PRE-LICENSING EDUCATION OF LOAN ORIGINATORS.—
  4. PL 110-289 Div. A, Title V, Sec. 1505(d)
    TESTING OF LOAN ORIGINATORS.—
    1. PL 110-289 Div. A, Title V, Sec. 1505(d)(1)
      IN GENERAL.—In order to meet the written test requirement referred to in subsection (b)(5), an individual shall pass, in accordance with the standards established under this subsection, a qualified written test developed by the Nationwide Mortgage Licensing System and Registry and administered by an approved test provider.
    2. PL 110-289 Div. A, Title V, Sec. 1505(d)(2)
      QUALIFIED TEST.—A written test shall not be treated as a qualified written test for purposes of paragraph (1) unless the test adequately measures the applicant’s knowledge and comprehension in appropriate subject areas, including—
    3. PL 110-289 Div. A, Title V, Sec. 1505(d)(3)
      MINIMUM COMPETENCE.—
  5. PL 110-289 Div. A, Title V, Sec. 1505(e)
    MORTGAGE CALL REPORTS. —Each mortgage licensee shall submit to the Nationwide Mortgage Licensing System and Registry reports of condition, which shall be in such form and shall contain such information as the Nationwide Mortgage Licensing System and Registry may require.
PL 110-289 Div. A, Title V, Sec. 1506

Eff: 8/1/2009
Section 1506 - Standards for State License Renewal
  1. PL 110-289 Div. A, Title V, Sec. 1506(a)
    IN GENERAL.—The minimum standards for license renewal for State-licensed loan originators shall include the following:
  2. PL 110-289 Div. A, Title V, Sec. 1506(b)
    CONTINUING EDUCATION FOR STATE-LICENSED LOAN ORIGINATORS.—
    1. PL 110-289 Div. A, Title V, Sec. 1506(b)(1)
      IN GENERAL.—In order to meet the annual continuing education requirements referred to in subsection (a)(2), a Statelicensed loan originator shall complete at least 8 hours of education approved in accordance with paragraph (2), which shall include at least—
    2. PL 110-289 Div. A, Title V, Sec. 1506(b)(2)
      APPROVED EDUCATIONAL COURSES.—For purposes of paragraph (1), continuing education courses shall be reviewed, and approved by the Nationwide Mortgage Licensing System and Registry.
    3. PL 110-289 Div. A, Title V, Sec. 1506(b)(3)
      CALCULATION OF CONTINUING EDUCATION CREDITS.—A State-licensed loan originator—
    4. PL 110-289 Div. A, Title V, Sec. 1506(b)(4)
      INSTRUCTOR CREDIT.—A State-licensed loan originator who is approved as an instructor of an approved continuing education course may receive credit for the originator’s own annual continuing education requirement at the rate of 2 hours credit for every 1 hour taught.
    5. PL 110-289 Div. A, Title V, Sec. 1506(b)(5)
      LIMITATION AND STANDARDS.—
PL 110-289 Div. A, Title V, Sec. 1507

Eff: 8/1/2009
Section 1507 - System of Registration Administration by Federal Agencies
  1. PL 110-289 Div. A, Title V, Sec. 1507(a)
    DEVELOPMENT.—
    1. PL 110-289 Div. A, Title V, Sec. 1507(a)(1)
      IN GENERAL.—The Federal banking agencies shall jointly, through the Federal Financial Institutions Examination Council, and together with the Farm Credit Administration, develop and maintain a system for registering employees of a depository institution, employees of a subsidiary that is owned and controlled by a depository institution and regulated by a Federal banking agency, or employees of an institution regulated by the Farm Credit Administration, as registered loan originators with the Nationwide Mortgage Licensing System and Registry. The system shall be implemented before the end of the 1-year period beginning on the date of enactment of this title.
    2. PL 110-289 Div. A, Title V, Sec. 1507(a)(2)
      REGISTRATION REQUIREMENTS.—In connection with the registration of any loan originator under this subsection, the appropriate Federal banking agency and the Farm Credit Administration shall, at a minimum, furnish or cause to be furnished to the Nationwide Mortgage Licensing System and Registry information concerning the employees’s identity, including—
  2. PL 110-289 Div. A, Title V, Sec. 1507(b)
    COORDINATION.—
  3. PL 110-289 Div. A, Title V, Sec. 1507(c)
    CONSIDERATION OF FACTORS AND PROCEDURES.—In establishing the registration procedures under subsection (a) and the protocols for assigning a unique identifier to a registered loan originator, the Federal banking agencies shall make such de minimis exceptions as may be appropriate to paragraphs (1)(A) and (2) of section 1504(a), shall make reasonable efforts to utilize existing information to minimize the burden of registering loan originators, and shall consider methods for automating the process to the greatest extent practicable consistent with the purposes of this title.
PL 110-289 Div. A, Title V, Sec. 1508

Eff: 8/1/2009
Section 1508 - Secretary of Housing and Urban Development Backup Authority to Establish a Loan Originator License System
  1. PL 110-289 Div. A, Title V, Sec. 1508(a)
    BACKUP LICENSING SYSTEM —If, by the end of the 1-year period, or the 2-year period in the case of a State whose legislature meets only biennially, beginning on the date of the enactment of this title or at any time thereafter, the Secretary determines that a State does not have in place by law or regulation a system for licensing and registering loan originators that meets the requirements of sections 1505 and 1506 and subsection (d) of this section, or does not participate in the Nationwide Mortgage Licensing System and Registry, the Secretary shall provide for the establishment and maintenance of a system for the licensing and registration by the Secretary of loan originators operating in such State as State-licensed loan originators.
  2. PL 110-289 Div. A, Title V, Sec. 1508(b)
    LICENSING AND REGISTRATION REQUIREMENTS.—The system established by the Secretary under subsection (a) for any State shall meet the requirements of sections 1505 and 1506 for Statelicensed loan originators.
  3. PL 110-289 Div. A, Title V, Sec. 1508(c)
    UNIQUE IDENTIFIER.—The Secretary shall coordinate with the Nationwide Mortgage Licensing System and Registry to establish protocols for assigning a unique identifier to each loan originator licensed by the Secretary as a State licensed loan originator that will facilitate electronic tracking and uniform identification of, and public access to, the employment history of and the publicly adjudicated disciplinary and enforcement actions against loan originators.
  4. PL 110-289 Div. A, Title V, Sec. 1508(d)
    STATE LICENSING LAW REQUIREMENTS.—For purposes of this section, the law in effect in a State meets the requirements of this subsection if the Secretary determines the law satisfies the following minimum requirements:
    1. PL 110-289 Div. A, Title V, Sec. 1508(d)(1)
      A State loan originator supervisory authority is maintained to provide effective supervision and enforcement of such law, including the suspension, termination, or nonrenewal of a license for a violation of State or Federal law.
    2. PL 110-289 Div. A, Title V, Sec. 1508(d)(2)
      The State loan originator supervisory authority ensures that all State-licensed loan originators operating in the State are registered with Nationwide Mortgage Licensing System and Registry.
    3. PL 110-289 Div. A, Title V, Sec. 1508(d)(3)
      The State loan originator supervisory authority is required to regularly report violations of such law, as well as enforcement actions and other relevant information, to the Nationwide Mortgage Licensing System and Registry.
    4. PL 110-289 Div. A, Title V, Sec. 1508(d)(4)
      The State loan originator supervisory authority has a process in place for challenging information contained in the Nationwide Mortgage Licensing System and Registry.
    5. PL 110-289 Div. A, Title V, Sec. 1508(d)(5)
      The State loan originator supervisory authority has established a mechanism to assess civil money penalties for individuals acting as mortgage originators in their State without a valid license or registration.
    6. PL 110-289 Div. A, Title V, Sec. 1508(d)(6)
      The State loan originator supervisory authority has established minimum net worth or surety bonding requirements that reflect the dollar amount of loans originated by a residential mortgage loan originator, or has established a recovery fund paid into by the loan originators.
  5. PL 110-289 Div. A, Title V, Sec. 1508(e)
    TEMPORARY EXTENSION OF PERIOD.—The Secretary may extend, by not more than 24 months, the 1-year or 2-year period, as the case may be, referred to in subsection (a) for the licensing of loan originators in any State under a State licensing law that meets the requirements of sections 1505 and 1506 and subsection (d) if the Secretary determines that such State is making a good faith effort to establish a State licensing law that meets such requirements, license mortgage originators under such law, and register such originators with the Nationwide Mortgage Licensing System and Registry.
PL 110-289 Div. A, Title V, Sec. 1509

Eff: 8/1/2009
Section 1509 - Backup Authority to Establish a Nationwide Mortgage Licensing and Registry System
PL 110-289 Div. A, Title V, Sec. 1510

Eff: 8/1/2009
Section 1510 - Fees
PL 110-289 Div. A, Title V, Sec. 1511

Eff: 8/1/2009
Section 1511 - Background Checks of Loan Originators
PL 110-289 Div. A, Title V, Sec. 1512

Eff: 8/1/2009
Section 1512 - Confidentiality of Information
  1. PL 110-289 Div. A, Title V, Sec. 1512(a)
    SYSTEM CONFIDENTIALITY. Except as otherwise provided in this section, any requirement under Federal or State law regarding the privacy or confidentiality of any information or material provided to the Nationwide Mortgage Licensing System and Registry or a system established by the Secretary under section 1509, and any privilege arising under Federal or State law (including the rules of any Federal or State court) with respect to such information or material, shall continue to apply to such information or material after the information or material has been disclosed to the system. Such information and material may be shared with all State and Federal regulatory officials with mortgage industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by Federal and State laws.
  2. PL 110-289 Div. A, Title V, Sec. 1512(b)
    NONAPPLICABILITY OF CERTAIN REQUIREMENTS. Information or material that is subject to a privilege or confidentiality under subsection (a) shall not be subject to—
  3. PL 110-289 Div. A, Title V, Sec. 1512(c)
    COORDINATION WITH OTHER LAW.—Any State law, including any State open record law, relating to the disclosure of confidential supervisory information or any information or material described in subsection (a) that is inconsistent with subsection (a) shall be superseded by the requirements of such provision to the extent State law provides less confidentiality or a weaker privilege.
  4. PL 110-289 Div. A, Title V, Sec. 1512(d)
    PUBLIC ACCESS TO INFORMATION.—This section shall not apply with respect to the information or material relating to the employment history of, and publicly adjudicated disciplinary and enforcement actions against, loan originators that is included in Nationwide Mortgage Licensing System and Registry for access by the public.
PL 110-289 Div. A, Title V, Sec. 1513

Eff: 8/1/2009
Section 1513 - Liability Provisions
PL 110-289 Div. A, Title V, Sec. 1514

Eff: 8/1/2009
Section 1514 - Enforcement Under HUD Backup Licensing System
  1. PL 110-289 Div. A, Title V, Sec. 1514(a)
    SUMMONS AUTHORITY.—The Secretary may—
  2. PL 110-289 Div. A, Title V, Sec. 1514(b)
    EXAMINATION AUTHORITY.—
    1. PL 110-289 Div. A, Title V, Sec. 1514(b)(1)
      IN GENERAL.—If the Secretary establishes a licensing system under section 1508 for any State, the Secretary shall appoint examiners for the purposes of administering such section.
    2. PL 110-289 Div. A, Title V, Sec. 1514(b)(2)
      POWER TO EXAMINE.—Any examiner appointed under paragraph (1) shall have power, on behalf of the Secretary, to make any examination of any loan originator operating in any State which is subject to a licensing system established by the Secretary under section 1508 whenever the Secretary determines an examination of any loan originator is necessary to determine the compliance by the originator with this title.
    3. PL 110-289 Div. A, Title V, Sec. 1514(b)(3)
      REPORT OF EXAMINATION. Each examiner appointed under paragraph (1) shall make a full and detailed report of examination of any loan originator examined to the Secretary.
    4. PL 110-289 Div. A, Title V, Sec. 1514(b)(4)
      ADMINISTRATION OF OATHS AND AFFIRMATIONS; EVIDENCE.— In connection with examinations of loan originators operating in any State which is subject to a licensing system established by the Secretary under section 1508, or with other types of investigations to determine compliance with applicable law and regulations, the Secretary and examiners appointed by the Secretary may administer oaths and affirmations and examine and take and preserve testimony under oath as to any matter in respect to the affairs of any such loan originator.
    5. PL 110-289 Div. A, Title V, Sec. 1514(b)(5)
      ASSESSMENTS.—The cost of conducting any examination of any loan originator operating in any State which is subject to a licensing system established by the Secretary under section 1508 shall be assessed by the Secretary against the loan originator to meet the Secretary’s expenses in carrying out such examination.
  3. PL 110-289 Div. A, Title V, Sec. 1514(c)
    CEASE AND DESIST PROCEEDING.—
    1. PL 110-289 Div. A, Title V, Sec. 1514(c)(1)
      AUTHORITY OF SECRETARY. —If the Secretary finds, after notice and opportunity for hearing, that any person is violating, has violated, or is about to violate any provision of this title, or any regulation thereunder, with respect to a State which is subject to a licensing system established by the Secretary under section 1508, the Secretary may publish such findings and enter an order requiring such person, and any other person that is, was, or would be a cause of the violation, due to an act or omission the person knew or should have known would contribute to such violation, to cease and desist from committing or causing such violation and any future violation of the same provision, rule, or regulation. Such order may, in addition to requiring a person to cease and desist from committing or causing a violation, require such person to comply, or to take steps to effect compliance, with such provision or regulation, upon such terms and conditions and within such time as the Secretary may specify in such order. Any such order may, as the Secretary deems appropriate, require future compliance or steps to effect future compliance, either permanently or for such period of time as the Secretary may specify, with such provision or regulation with respect to any loan originator.
    2. PL 110-289 Div. A, Title V, Sec. 1514(c)(2)
      HEARING.—The notice instituting proceedings pursuant to paragraph (1) shall fix a hearing date not earlier than 30 days nor later than 60 days after service of the notice unless an earlier or a later date is set by the Secretary with the consent of any respondent so served.
    3. PL 110-289 Div. A, Title V, Sec. 1514(c)(3)
      TEMPORARY ORDER. Whenever the Secretary determines that the alleged violation or threatened violation specified in the notice instituting proceedings pursuant to paragraph (1), or the continuation thereof, is likely to result in significant dissipation or conversion of assets, significant harm to consumers, or substantial harm to the public interest prior to the completion of the proceedings, the Secretary may enter a temporary order requiring the respondent to cease and desist from the violation or threatened violation and to take such action to prevent the violation or threatened violation and to prevent dissipation or conversion of assets, significant harm to consumers, or substantial harm to the public interest as the Secretary deems appropriate pending completion of such proceedings. Such an order shall be entered only after notice and opportunity for a hearing, unless the Secretary determines that notice and hearing prior to entry would be impracticable or contrary to the public interest. A temporary order shall become effective upon service upon the respondent and, unless set aside, limited, or suspended by the Secretary or a court of competent jurisdiction, shall remain effective and enforceable pending the completion of the proceedings.
    4. PL 110-289 Div. A, Title V, Sec. 1514(c)(4)
      REVIEW OF TEMPORARY ORDERS.—
      1. PL 110-289 Div. A, Title V, Sec. 1514(c)(4)(A)
        REVIEW BY SECRETARY.—At any time after the respondent has been served with a temporary cease and desist order pursuant to paragraph (3), the respondent may apply to the Secretary to have the order set aside, limited, or suspended. If the respondent has been served with a temporary cease and desist order entered without a prior hearing before the Secretary, the respondent may, within 10 days after the date on which the order was served, request a hearing on such application and the Secretary shall hold a hearing and render a decision on such application at the earliest possible time.
      2. PL 110-289 Div. A, Title V, Sec. 1514(c)(4)(B)
        JUDICIAL REVIEW.—Within—
      3. PL 110-289 Div. A, Title V, Sec. 1514(c)(4)(B)
        the respondent may apply to the United States district court for the district in which the respondent resides or has its principal place of business, or for the District of Columbia, for an order setting aside, limiting, or suspending the effectiveness or enforcement of the order, and the court shall have jurisdiction to enter such an order. A respondent served with a temporary cease and desist order entered without a prior hearing before the Secretary may not apply to the court except after hearing and decision by the Secretary on the respondent’s application under subparagraph (A).
      4. PL 110-289 Div. A, Title V, Sec. 1514(c)(4)(C)
        NO AUTOMATIC STAY OF TEMPORARY ORDER.—The commencement of proceedings under subparagraph (B) shall not, unless specifically ordered by the court, operate as a stay of the Secretary’s order.
    5. PL 110-289 Div. A, Title V, Sec. 1514(c)(5)
      AUTHORITY OF THE SECRETARY TO PROHIBIT PERSONS FROM SERVING AS LOAN ORIGINATORS.—In any cease and desist proceeding under paragraph (1), the Secretary may issue an order to prohibit, conditionally or unconditionally, and permanently or for such period of time as the Secretary shall determine, any person who has violated this title or regulations thereunder, from acting as a loan originator if the conduct of that person demonstrates unfitness to serve as a loan originator.
  4. PL 110-289 Div. A, Title V, Sec. 1514(d)
    AUTHORITY OF THE SECRETARY TO ASSESS MONEY PENALTIES.—
PL 110-289 Div. A, Title V, Sec. 1515

Eff: 8/1/2009
Section 1515 - State Examination Authority
PL 110-289 Div. A, Title V, Sec. 1516

Eff: 8/1/2009
Section 1516 - Reports and Recommendations to Congress
PL 110-289 Div. A, Title V, Sec. 1517

Eff: 8/1/2009
Section 1517 - Study and Reports on Defaults and Foreclosures
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