46th legislature - STATE OF NEW MEXICO - first session, 2003

RELATING TO MORTGAGES; REQUIRING LICENSURE AND EDUCATIONAL REQUIREMENTS FOR RESIDENTIAL MORTGAGE LOAN OFFICERS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. A new section of the Mortgage Loan Company and Loan Broker Act is enacted to read:

"[NEW MATERIAL]"residential mortgage loan officer" means an individual who, for compensation or gain, takes or receives a mortgage application, assembles information, and prepares paperwork, and documentation necessary for obtaining a residential mortgage loan, or arranges for a conditional mortgage loan commitment between a borrower and a lender, or arranges for a residential loan commitment from a lender. Residential mortgage loan officer may mean an employee who solicits financial and mortgage information from the public for sale to another residential mortgage broker.

principal mortgage owner" means the owner, or managing general partner, or responsible individual, or any Officer, or stock holder, who holds themselves our to be the party accountable for residential mortgage loan originations or branch mortgage operations, with in the state, and/or the person in direct management of residential mortgage loan origination.

Exempt. Any individuals who do not deal (i.e. negotiate interest rates, loan programs, offer loan locks, loan commitments) directly with borrowers. This includes persons who complete incidental services in arranging or procuring a mortgage loan, including administrative staff wherein their primary function is the verification of data provided by the borrower, assembly of documents and coordination of third party service such as ordering an appraisal, title report or credit reports.

Anyone who deals directly with a consumer and reviews, analyzes, evaluates a proposed borrowers financial statements, income, property characteristics and credit history should obtain a license.

Licensing Requirements

To obtain a state license to become a residential mortgage loan originator, the following concepts should be adopted:

1. A written application for licensure must be required. The application should require an attestation by the applicant as to the applicant's experience and knowledge of the mortgage industry.

2. The applicant should submit to a background investigation of, at a minimum, criminal records, and employment history.

• No individual should be licensed who has had a license, or the equivalent to practice any profession or occupation revoked, suspended or otherwise who has acted beyond legal limits.
• No person should be licensed who has been convicted of acts against society that could be deemed 'moral turpitude'. Such acts where licenses should be denied must include duties owed by licensees to the public including acts contrary to justice and the doctrine of "fair dealing", honesty, principle or good business morals. This includes, but is not limited to theft, extortion, use of the mail to obtain property under false pretenses, tax evasion and the sale of, or the intent to sell controlled substances.
• The licenses should provide evidence that they have managed their business and personal financial affairs with care and diligence.
• convicted felon

3. A first time Residential Mortgage Loan Officer Licensee Applicant shall provide a certificate of satisfactory completion of a course of study, as defined by the state, consisting of the subjects listed below.

4. A Principal Mortgage Lending Entity/Owner/Responsible party Licensee Applicant shall provide a certificate of satisfactory completion of a course of study, as defined by the state, consisting of course work from the subjects listed below.

5. A Licensee Applicant shall pass an examination of the applicant's knowledge after items 1-4 above have been completed.

6. Licenses shall be valid for a two-year period. Upon expiration of the two-year period, the licensee should submit an application for renewal to the appropriate licensing authority. The renewal application should, at a minimum, include evidence of completion of continuing education courses, as described below.⁽¹⁾

7. The licensing authority should have the authority to request additional information from the Licensee Applicant to support statements made on the application or dispute matters discovered through investigation.

8. All initial applicants shall submit for a background check, which shall be forwarded to the local Department of Public Safety and/or FBI for a records check.





9. The licensee Applicant shall pay sufficient fees to pay for Licensing Authorities' costs of processing the license application and investigations. $200.00 bi-annual.

10. Upon receipt of a Residential Mortgage Loan Officers license, the licensee shall immediately deliver the license to his/her employing broker. Upon termination of employment of a Residential Mortgage Loan Officer, the license shall be transferred to anew employing broker and the regulating authority should be notified. If the Residential Mortgage Loan Officer does not have a new employing broker, the license shall be returned to the Licensing Authority with an explanation or the reasons for termination.

Grandfathered Persons

Every Residential Mortgage Loan Officer, currently registered, licensed or otherwise employed in the mortgage industry immediately preceding enactment of this initiative shall be permitted to continue employment as a Residential Mortgage Loan Officer. Each current originator shall be required to meet all of the necessary elements of licensure at the next renewal period specified by state law.

Unless provided for in state law, every Principal Residential Mortgage Lending Entity or Owner, currently licensed immediately preceding enactment of this initiative shall be permitted to maintain their license and position. Each current Principal Residential Mortgage Lending Entity/Owner shall be required to meet all of the necessary elements of licensure at the next renewal period specified in the state law.

Pre-Licensing Education

All persons making an initial application for licensing must:

a) Attend educational courses, determined by the state, when applying for a Residential Loan Officer license;

b) Attend educational courses, determined by the state, when applying for a Principal Mortgage Owner license:

c) Pass a test of core competencies;

d) Receive a certificate of completion from the school or organization that provided courses.

Each state or Licensing Authority should, with the assistance of the local mortgage professionals, established review and approve curriculum sufficient to establish a baseline of knowledge for licenses.

Recommended Course Curriculum Pre-licensor course curriculum may include;

a. Federal Lending Laws;

b. Ethics, Diversify and Sensitivity

c. Practices of Residential Lending

d. Real Estate and Mortgage Mathematics;

e. Escrow Procedures, Title Insurance and Loa Settlement;

f. Appraisals and Land Survey;

g. Loan Processing and Loa Underwriting Process;

h. Secondary Mortgage Market;

i. Loan Default and Foreclosure Law;

j. State Statues and Rules.

Continuing Education Requirements

Every resident mortgage originators, whether a Residential Loan Officer of Principal Mortgage Owner, shall, upon renewal of an existing license, submit proof of satisfactory completion of a course of study.

Subjects may include:

a. Federal and State Lending Law;

b. Local Rules and Regulations;

c. Ethics and Professional Standards;

d. General Real Estate or General Financial Studies;

e. Product Update;

f. Personal Development;

g. Diversify Training.

Continuing education courses may be offered through classroom instruction, electronic transmission, or distance learning. Quaffing hours may be obtained by attendance at a locally chartered real estate or mortgage business school, accredited college, university or community college, or vocational school or other institution approved by the state licensing agency.

The license should receive a completion certificate that such hours have been successfully completed. Licensees shall submit the appropriate certificate(s) with the license renewal form."

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1. Based upon the experience of many mortgage brokers, the educational requirements should be greater than that required of Residential Loan Officers