HUD GRANTS HAWAII EXTENSION TO MARCH 31, 2011
Background:
The U.S. Department of Housing and Urban Development (“HUD”) has been carefully monitoring the progress of Hawaii’s implementation of the federal and Hawaii SAFE Acts and has agreed to a reasonable delay – until March 31, 2011 – to allow eligible applicants to fully comply with the licensing provisions of the federal and Hawaii Safe Acts.
Implementation obstacles have caused both Hawaii and national MLO applicants concern, as Hawaii's version of the SAFE Act (Hawaii Revised Statutes (“HRS”), Chapter 454F) requires that MLOs and MLOCs obtain a new SAFE Act compliant license by January 1, 2011 in order to originate loans after that date.
Determining Eligibility:
HRS § 454F-3 includes the following language:
“A mortgage broker or mortgage solicitor who holds a license under chapter 454 that is valid as of December 31, 2010 and who creates a record and obtains a unique identifying number in the Nationwide Mortgage Licensing System by November 30, 2010 shall be determined to be in compliance with the licensing provisions of this chapter until the commissioner makes a final determination on the issuance or denial of the individual's license.”
HRS § 454F-3 also states:
“Effective January 1, 2011, or such later date approved by the United States Department of Housing and Urban Development pursuant to the authority granted under Public Law 110-289, Section 1508(e), 12 United States Code Section 5107(e) ….”
In view of the foregoing, and based on HUD’s recent communications with DFI, applicants for State of Hawaii MLO and/or MLOC licensure
§ who have obtained NMLS unique identifiers by November 30, 2010, AND
§ who hold a license that is valid as of December 31, 2010 under Hawaii’s existing State regulatory program, HRS Chapter 454,
will not violate Hawaii's SAFE Act, or the provisions of the federal SAFE Act and are provided a "safe harbor" until they receive a final license determination by DFI.
List of “Safe Harbor” Eligible Individuals and Companies:
The DFI website will contain a listing (List of "Safe Harbor" Eligible Individuals and Companies) of all mortgage brokers or mortgage solicitors who held a license under HRS Chapter 454 that was valid as of December 31, 2010 and who created a record and obtained a unique identifying number in the Nationwide Mortgage Licensing System on or before November 30, 2010, making them eligible for the HUD "safe harbor" extension until the earlier of a final license determination by DFI or March 31, 2011.
Not Listed?
Companies and individuals licensed under HRS Chapter 454 on or before December 31, 2010, and who created a record and obtained a unique identifying number in NMLS, but whose names do not appear on this listing may appeal to DFI by providing their name(s), NMLS unique identifier, and date obtained, which will be included on subsequent editions of the listing after verification that the NMLS unique identifier was obtained on or before November 30, 2010.
This "safe harbor" period will expire on March 31, 2011.
After that date, any non-exempt individual or company originating residential mortgage loans in Hawaii must have federal and Hawaii SAFE Act compliant licenses.
Wholesale and Secondary Market Activities:
The Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) have confirmed (FNMA ltr 12-20-10, FHLMC ltr 12-20-10) that residential mortgage loans originated by applicants for Hawaii MLO licenses during the period January 1, 2011 to March 31, 2011 will be eligible for purchase provided these applicants hold a license under the existing Mortgage Brokers and Solicitors Act, HRS Chapter 454, that is valid as of December 31, 2010, and created a record and obtained a unique identifying number in the Nationwide Mortgage Licensing System by November 30, 2010, in accordance with Section 454F-3(a) of the Hawaii SAFE Act, namely the Secure and Fair Enforcement for Mortgage Licensing Act, HRS Chapter 454F.
PLEASE NOTE: At this time this extension may have no bearing on how an MLO’s or MLOC’s license status is viewed or interpreted by other state or federal agencies or by agencies (other than the FNMA or FHLMC) and institutions engaged in wholesale and secondary marketing activities.
DFI continues to work with agencies to clarify these issues and will post results on this website if and when they are received.
12-27-10
