ALLIANCE BUSINESS SCHOOLS

FAQ

Mortgage Loan Originator License

License FAQs

  1. When is a community association manager license required?

    A CAM license is required when managing an association of more than 10 unitsand/or has an annual budget in excess of $100,000.

     

  2. What types of properties hire community association managers?

    Community association managers are generally hired at mobile home parks,planned unit developments, homeowners associations, cooperatives, timeshares,condominiums, or other residential units which which are authorized to impose afee that may become a lien on the parcel.

     

  3. What are some typical responsibilities of a community association manager?

    Responsibilities include: 1) controlling or disbursing association funds; 2)determining how or when to prepare budgets or other financial documents for anassociation; 3) determining how or when to provide notice of meetings or toconduct association meetings; 4) maintaining and/or having authorization tospend association petty cash; 5) coordinating maintenance for the residentialdevelopment; and 6) performing other day-to-day services involved with theoperation of a community association.

     


  4. I want to be a property manager. Is a CAM License required?

    No.A community association manager (CAM) license is not applicable to themanagement of apartment buildings, commercial property or single-familydwellings. There is no state license for a property manager. However, if youwill be receiving compensation in the form of commissions for securing tenantsyou will be required to have a Florida Real Estate License

  5. How often do I need to renew my license?

    All CAM licenses expire September 30 of every even-numbered year.

     


  6. My license expired two or more years ago, and is now null and void. How do I become a licensed community association manager again?

    You may petition for reinstatement of a null and void license if you failedto renew your license due to unusual hardship or illness. If the council deniesreinstatement, you will be required to reapply for licensure as a newapplicant, including pre-licensure education. You are not, however, required totake the state examination again.

     


  7. I am not using my community association manager license. Can I place my license in an inactive status?

    Yes, you may place your license in an inactive status. You may do this atrenewal time for an inactive renewal fee of $100 or you may submit a request atany time other than the renewal period, along with your original license and achange of status fee of $15.

     

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Mortgage Loan Originator License

  1. Are the changes in Chapter 494, F.S., applicable only to residential mortgage loans?

    Answer: No, see the definition ofmortgage loans in Section 494.001(20), F.S.

     


  2. If a real estate licensee, who has been asked by a client to list a house for sale, enters into dialogue with the client‚??s lender to see if a short sale would be acceptable, would the licensee need to comply with the loan modification provisions under S

    Answer: The conversations betweenthe real estate licensee and the lender appear to be ancillary to the servicesbeing provided by the real estate licensee in the sale of his client’sproperty. As long as the only remuneration sought is the standard commissionfor the area on the sale of the property and no other fees are collected forthe dialogue with the lender, the activity mentioned above does not appear tofall under the provisions of Section 494.00296, F.S.

     

  3. Is there a prescribed format for the ‚??notice of cancellation‚?? referenced in 494.00296(2)(b)?

    Answer: Yes, per Section494.00296(2)(c), F.S.

     


  4. If a real estate licensee, who has been asked by a client to list a house for sale, enters into dialogue with the client‚??s lender to see if a short sale would be acceptable, would the licensee need to comply with the loan modification provisions under S

    Answer: The conversations betweenthe real estate licensee and the lender appear to be ancillary to the servicesbeing provided by the real estate licensee in the sale of his client’sproperty. As long as the only remuneration sought is the standard commissionfor the area on the sale of the property and no other fees are collected forthe dialogue with the lender, the activity mentioned above does not appear tofall under the provisions of Section 494.00296, F.S.

     


  5. Is a ‚??bounced check‚?? considered a form of moral turpitude?

    Answer: Criminal events areevaluated individually based upon the disposition of all charges. It isdifficult to characterize a crime as moral turpitude without court documentsoutlining the facts.

     

  6. Individual Mortgage Broker Licenses ‚?? since licenses were renewed August 31, 2009 and are valid until December 31, 2010; will the fees be prorated?

    Answer: Licensing and renewal feesare set by Chapter 494, F. S., and there is no provision for prorated fees.

     


  7. When I receive a ‚??bonus‚?? fee for preparing a file for the lender to process, is a disclosure required before closing?

    Yes, the current law, Section494.0038(1)(b)(2), F.S. and effective 10/1/2010, Section 494.0038(2)(a), F.S.states “the exact amount of any payment of any kind by the lender to themortgage broker must be disclosed in writing to the borrower within 3 businessdays after the mortgage broker is made aware of the exact amount of the paymentfrom the lender but not less than 3 business days before the execution of theclosing or settlement agreement.” 

     

  8. Is taking an application from the potential borrower to engage in loan modification services prohibited by 494.00296(1)(a)?

    Answer: Pursuant to Section494.00296(1)(a), F.S., a written agreement is required prior to taking anapplication.

     


  9. Mortgage Brokerage Business Licenses are to be renewed as of August 31, 2010 however due to the law change will this renewal be for a Mortgage Broker License?

    Answer: The new law will extend theexpiration date of active mortgage brokerage business licenses until December31, 2010. Effective October 1, 2010, changes to Chapter 494, F.S, will resultin redefined and reclassified license types. Consequently, mortgage brokeragebusiness licenses cannot be renewed. Mortgage brokerage business licensees willhave to apply for the new mortgage broker license (company license) betweenOctober 1, 2010 and December 31, 2010. If the company applies for the new mortgagebroker license within the aforementioned dates then the existing mortgagebrokerage business license will be valid until the Office renders a decision onthe new mortgage broker license application.

     


  10. Will the Principal Representative need to register with the NMLS?

    Answer: Effective October 1, 2010the principal representative designation will be reclassified along with theprincipal broker designation to principal loan originator. Principal loanoriginators will be required to be licensed as a loan originator and have atleast one year of experience. Also beginning October 1, 2010 all Floridalicense applications will be required to be filed through the NMLS.

     

  11. Can a licensee take an upfront fee to perform a loan modification?

    Answer: No. Section 494.00296(1)(c),F.S., states, “When offering or providing loan modification services, amortgage broker, mortgage brokerage business, mortgage lender, or correspondentmortgage lender licensed, or required to be licensed, under ss.494.001-494.0077 may not solicit, charge, receive, or attempt to collect orsecure payment, directly or indirectly, for loan modification services beforecompleting or performing all services included in the agreement for loanmodification services.”

     


  12. I understand that there were significant changes to the exemptions from Chapter 494, F.S., in the last legislative session. What entities and individuals are going to be exempt under the new law?

    (1) The following are exempt fromregulation under parts I, II, and III of this chapter:

    (a) Any person operating exclusively as a registered loanoriginator in accordance with the S.A.F.E. Mortgage Licensing Act of 2008.

    (b) A depository institution; subsidiaries that are owned and controlled by adepository institution and regulated by the Board of Governors of the FederalReserve System, the Comptroller of the Currency, the Director of the Office ofThrift Supervision, the National Credit Union Administration, or the FederalDeposit Insurance Corporation; or institutions regulated by the Farm CreditAdministration.

    (c) The Federal National Mortgage Association; the Federal Home Loan MortgageCorporation; any agency of the Federal Government; any state, county, ormunicipal government; or any quasi-governmental agency that acts in suchcapacity under the specific authority of the laws of any state or the UnitedStates.

    (d) An attorney licensed in this state who negotiates the terms of a mortgageloan on behalf of a client as an ancillary matter to the attorney'srepresentation of the client.

    (e) A person involved solely in the extension of credit relating to thepurchase of a timeshare plan, as that term is defined in 11 U.S.C. s. 101(53D)

    (2) The following persons are exemptfrom regulation under part III of this chapter:

    (a) A person acting in a fiduciary capacity conferred by theauthority of a court.

    (b) A person who, as a seller of his or her own real property, receives one ormore mortgages in a purchase money transaction.

    (c) A person who acts solely under contract and as an agent for federal, state,or municipal agencies for the purpose of servicing mortgage loans.

    (d) A person who makes only nonresidential mortgage loans and sells loans onlyto institutional investors.

    (e) An individual making or acquiring a mortgage loan using his or her ownfunds for his or her own investment, and who does not hold himself or herselfout to the public as being in the mortgage lending business.

    (f) An individual selling a mortgage that was made or purchased with thatindividual's funds for his or her own investment, and who does not hold himselfor herself out to the public as being in the mortgage lending business.

    (3) It is not necessary to negateany of the exemptions provided in this section in any complaint, information,indictment, or other writ or proceeding brought under ss. 494.001-494.0077. Theburden of establishing the right to an exemption is on the party claiming thebenefit of the exemption.

     


  13. Loan Originators currently employed by correspondent lenders and mortgage lenders are currently exempt from licensure; however, the exemption is being repealed. When will these employees need to be licensed as loan originators?

    Answer: The requirement for new loanoriginator license for individuals does not become effective until October 1,2010. However, the Office is strongly recommending that employees of lenderswho desire to continue to work uninterrupted seek licensure as a mortgagebroker as soon as possible for a number of reasons. First, the law allowsapplicants already licensed with the Office to file the loan originatorapplication until December 31, 2010 and continue operating while the Officeprocesses and considers the application, even if the final determination on theapplication does not occur until some time in 2011. Therefore, employees oflenders that obtain a mortgage broker license will have a grace period duringwhich they can continue to work.

     

    Second, the Nationwide MortgageLicensing System (NMLS) will not accept Florida loan originator applicationsuntil October 1, 2010, so it will not be possible for individuals to apply fora loan originator license before that date. Under normal circumstances, theprocessing of these applications can take a number of months during which timethe applicant would not be licensed and could not work in any capacity thatwould require a loan originator license.

     

    Third, individuals who delay inapplying for a mortgage broker license run the risk of not having theirapplication approved before the deadline. While the Office strives to approveor deny each application as quickly as possible, the current applicationprocess can take a number of months to

    complete. An application that is still in the pipeline as of October 1, 2010will expire and a new loan originator application will need to be filed throughNMLS.

     

    Finally, the Office anticipates alarge number of applications after the October 1, 2010 deadline. In addition tonon-licensed individuals applying for the first time, all current Chapter 494licensees will be filing new applications. It will take time to process theseapplications, which could impact someone’s ability to continue working if theyhave not been licensed prior to October 1, 2010. In fact, the new lawanticipated the additional number of applications that the Office will receiveduring this transition and extended the deadlines for processing theseapplications. The Office cannot expedite the processing of applications forunlicensed persons who wait until the new loan originator application becomesavailable on October 1, 2010, and it could conceivably be well into 2011 beforethe Office is ready to approve or deny such an application.

     

  14. Do I have to be licensed to perform a loan modification?

    Answer: Yes, effective January 1,2010.

     


  15. Can a borrower waive the disclosure of the exact amount of payment of any kind from the lender to the licensee that is supposed to be done at least 3 days prior to closing?

    No, Section 494.0038, F.S., providesno waiver by the borrower of this disclosure. 

     


  16. If disclosure of the maximum amount of payment of any kind from the lender was disclosed on the initial mortgage brokerage contact and the licensee collects that exact amount do they have to do a second mortgage brokerage contract pursuant to §494.0038(1

    No, effective 10/1/2010, Section494.0038(2)(a), F.S., states “Notification is waived if the exact amount of thepayment is accurately disclosed in the written mortgage broker agreement.”

     

  17. Q: Can you confirm that a licensed loan originator located in the same physical location of an underwriter will satisfy the ‚??supervision‚?? requirement for excluded underwriters, even if the loan originator is not the underwriter‚??s manager?

    A: No.  Simply having alicensed loan originator physically present is not sufficient to constitutesupervision.  Effective October 1, 2010, Sections 494.0035 and 494.00665,Florida Statutes, will require that each licensed mortgage broker (business)and mortgage lender designate a qualified and licensed principal loanoriginator.  Each company’s principal loan originator shall have fullcharge, control, and supervision of the company.  Additionally, eachbranch office must also designate a qualified and licensed branch manager whoshall also have full charge, control, and supervision of the branch office.

     


  18. Q: Our processors have assistants who handle clerical-type tasks. They do not speak with the borrowers. Would these assistants require licenses? Additionally, will a closer (defined by us as a W2 employee who facilitates the administrative and clerical as

    A: The last sentence of theFlorida definition of “loan originator” states:  “The term [loanoriginator] does not include an employee of a mortgage broker or mortgagelender who performs only administrative or clerical tasks, including quotingavailable interest rates, physically handling a completed application form, ortransmitting a completed form to a lender on behalf of a prospectiveborrower.”  Section 494.001(14), Fla. Stat.

     

    Job titles or the fact that anindividual does not communicate with borrowers as part of his or her jobdescription does not, by itself, determine whether he or she is excluded fromloan originator licensure.  The Florida definition of “loan originator”lists compensation or gain as one factor, in addition to licensable activitiessuch as soliciting, accepting, negotiating, and processing of mortgage loanapplications, as well the offer to perform these activities.

     

  19. Does a company that facilitates short sale transactions for borrowers need to be licensed?

    ANSWER: In general, yes. Effective January 1, 2010, the definition of “acting as a mortgage broker” willinclude negotiating the terms or conditions of an existing mortgage loan onbehalf of a borrower. See Section 494.001(3), F.S. Since a company that facilitatesshort sale transactions for borrowers will be asking the lender to accept lessthan the amount owed, it will be affecting the terms or conditions of anexisting mortgage loan. Accordingly, a company that facilitates short saletransactions needs to be licensed under Chapter 494, F.S. 

     

    However, under certaincircumstances, companies, which are otherwise engaged to perform real estatebrokerage services and title insurance services, can perform the ancillaryservice of contacting the lender to see if a short sale is acceptable withouthaving to obtain loan originator and mortgage broker licenses.  Suchcompanies could receive no additional consideration for the ancillary servicesover and above the fee customarily charged for the primary service.  Formore information on this, see the response to Frequently Asked Questionsentitled “Loan Modifications:  Short Sale Dialogue Between RE Licensee& Lender” and “Loan Modifications:  Short Sale Dialogue Between TitleInsurance Agent & Lender”.

     

  20. : Are underwriters required to obtain a Florida loan originator license?

    A: S.A.F.E. states thatunderwriters who are independent contractors must be licensed as loanoriginators, while “supervised” underwriters (generally meaning W-2 employees)are not required to obtain loan originator licenses if they are supervised by alicensed loan originator. 

     


  21. 2009 Legislative Session

    During the 2009 legislative session,the Florida Legislature passed a bill that substantially changed the provisionsof Chapter 494, Florida Statutes. These changes occurred, in part, to complywith the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008(known as the “S.A.F.E Act”).

     

    As a result of these changes, the Office has received and continues to receivea number of questions regarding the impact of these changes. In order toprovide guidance on the new law, the Office will be publishing answers toadditional

    questions on its website. These answers constitute informal opinions only andbased only on the questions posed and are subject to change. They do notconstitute legal advice or rules of the Office.

     

    Anyone who would like an answer to aspecific answer to a question should contact the Office. As a preliminary guideto understanding the changes that occurred, all individuals and businessesoperating as loan originators, mortgage brokers,

    mortgage broker businesses, mortgage lenders, and correspondent lenders, shouldbe aware of the following:

    Mortgage broker, mortgage broker business, mortgage lender, and correspondent mortgage lender licenses issued prior to October 1, 2010 will expire on December 31, 2010. Entities holding an active license on October 1, 2010 that desire to continue to operate in these capacities need to reapply for licensure starting October 1, 2010 with the Nationwide Mortgage Licensing System and Registry (NMLS).


  22. I am a loan officer at a lending subsidiary which is owned and controlled by a depository institution regulated by the Federal Reserve. I am also a registered loan originator on NMLS. Do I also need to become licensed as a Florida loan originator under

    A: No.  Section494.00115(1)(a) exempts “any person operating exclusively as a registered loanoriginator in accordance with the S.A.F.E. Mortgage Licensing Act of2008.” 

    A registered mortgage loan originator is a loan originator who is employed by adepository institution, by a subsidiary that is owned and controlled by adepository institution and regulated by a federal banking agency, or by aninstitution regulated by the Farm Credit Administration, and who is registeredwith and maintains a unique identifier through the registry.  Section494.001(28), Fla. Stat. and S.A.F.E. §1503(7). 

     

  23. If a loan originator is licensed by 10/1, will they be able to process loans for their broker or lender? I‚??m trying to think ahead in case we have a shortage of available licensed processors once the deadline hits.

    A: Yes.  The Florida definition of “loan originator” explicitly includes “processes a mortgage loanapplication.” 

     

  24. Can a licensee take any upfront fees, including third party fees, to perform a loan modification?

    No, the licensee cannot accept anupfront fee for any purpose by whatever name called.  Section494.00296(1)(c), F.S. states, “When offering or providing loan modificationservices, a mortgage broker, mortgage brokerage business, mortgage lender, orcorrespondent mortgage lender licensed, or required to be licensed, under ss.494.001-494.0077 may not solicit, charge, receive, or attempt to collect orsecure payment, directly or indirectly, for loan modification services beforecompleting or performing all services included in the agreement for loanmodification services.”

     

  25. The licensee provides the borrower with a written agreement for loan modification services which complies with §494.00296(2)(a) and the modification provides a material benefit to the borrower. Is the fee earned if the borrower elects not to consummate

    Answer:  Section494.00296(1)(c), Florida Statutes (2009) provides in part:  ". . . Afee may be charged only if the loan modification results in a material benefitto the borrower. . ."

    Since the borrower elected not toconsummate the transaction, the modification did not provide a material benefitto the borrower.  Accordingly, no fee is earned.

     


  26. Are loan processors required to obtain a Florida loan originator license?

    A: Yes.  The Floridadefinition of “loan originator” explicitly includes “processes a mortgage loanapplication.”  Thus, regardless of his or her status as an employee or anindependent contractor, a loan processor is required to obtain a loanoriginator license with the Office.

     

  27. Does ‚??Mailed to Client‚?? or ‚??Mailed to Borrower‚?? written on the mortgage brokerage agreement absent any other documentation sufficient to document the mailing of the mortgage brokerage contract within 3 days of application?

    No, Section 494.0038(1)(b),F.S.states “the licensee bears the burden of proving that the borrower received andapproved the agreement.”

     

  28. Does the ‚??principal loan originator‚?? have to sign the mortgage brokerage contract within 3 business days of application if it has been signed by the originating loan originator?

    Effective 10/1/2010, the principalloan originator or branch manager must sign the agreement per Section494.0038(1), F.S., which states “A loan origination fee may not be paid exceptpursuant to a written mortgage broker agreement between the mortgage broker andthe borrower which is signed and dated by the principal loan originator orbranch manager, and the borrower.”

     


  29. What constitutes a mortgage loan application?

    Effective 10/1/2010, Section494.001(21), F.S. defines a mortgage loan application as the submission of aborrower's financial information in anticipation of a credit decision, whichincludes the borrower's name, the borrower's monthly income, the borrower'ssocial security number to obtain a credit report, the property address, anestimate of the value of the property, the mortgage loan amount sought, and anyother information deemed necessary by the loan originator. An application maybe in writing or electronically submitted, including a written record of an oral application.

     


  30. Can licensees provide the borrower with the CHARM booklet in an electronic format?

    Yes, provided the licensee can provethe disclosures were provided to the borrower.  Effective 10/1/2010,Section 494.0038(4), F.S. states, “The disclosures required by this subsectionmust be furnished in writing at the time an adjustable rate mortgage loan isoffered to the borrower and whenever the terms of the adjustable rate mortgageloan offered materially change prior to closing. The mortgage broker shallfurnish the disclosures relating to adjustable rate mortgages in a formatprescribed by ss. 226.18 and 226.19 of Regulation Z of the Board of Governorsof the Federal Reserve System, as amended; its commentary, as amended; and thefederal Truth in Lending Act, 15 U.S.C. ss. 1601 et seq., as amended; togetherwith the Consumer Handbook on Adjustable Rate Mortgages, as amended; publishedby the Federal Reserve Board and the Federal Home Loan Bank Board. The licenseebears the burden of proving such disclosures were provided to the borrower.”

     


  31. If a written agreement for loan modification services is constructed whereby as milestones are reached in the loan modification process the borrower agrees to compensate the licensee is that a violation of Chapter 494, Florida Statutes? Alternatively, c

     

    Question:  If a writtenagreement for loan modification services is constructed whereby as milestonesare reached in the loan modification process the borrower agrees to compensatethe  licensee is that a violation of Chapter 494, Florida Statutes? Alternatively, can a licensed entity have the borrower enter into separate loanmodification agreements that conform to Section 494.00296(2)(c), FloridaStatutes?  In other words, in lieu of having a single loan modificationagreement whereby the licensee is receiving payment throughout the modificationprocess as benchmarks are obtained; can a licensee enter into separateagreements for various services thereby being compensated as each contract isfulfilled?

     

    Answer:  A written agreementfor loan modification services, in which a borrower agrees to compensate thelicensee as milestones are reached in the loan modification process, would be aviolation of Chapter 494, Florida Statutes.  Section 494.00296(1)(c),Florida Statutes (2009) provides:

     

    (1)  PROHIBITED ACTS.-whenoffering or providing loan modification services, a mortgage broker, mortgagebrokerage business, mortgage lender, or correspondent mortgage lender licensed,or required to be licensed, under ss. 494.001-494.0077 may not:

    *         *          *

    (c)  Solicit, charge, receive, or attempt to collect or secure payment,directly or indirectly, for loan modification services before completing orperforming all services included in the agreement for loan modificationservices.  . . .  (Emphasis supplied)

     

    Since the agreement described above contemplates a sequence of services, thefee would be earned after all services are performed.  Similarly, if alicensed entity entered several contracts with a borrower to obtain payment asmilestones are being reached towards modifying a loan, this would be aviolation of Chapter 494, Florida Statutes.  This is because the term“loan modification services”, underlined above, contemplates modifying anexisting loan as opposed to a partial service towards modifying an existingloan.

     


     


  32. A licensed title insurance agent has been hired by the seller to clear the title requirements of the underwriter, to follow the requirements of lenders (buyers and sellers), to follow the real estate contract to facilitate the closing of a real property t

    ANSWER: Unless the title insuranceagent is being compensated (directly or indirectly) by a mortgage loan originatoror its agent, the conversations and the provision of documents that occurbetween the licensed title insurance agent and the lender appear to beancillary to the services being provided by the licensed title insurance agentin the sale of the property. As long as the only remuneration sought is thestandard compensation for the area on the sale of the property and no otherfees are collected for the dialogue with the lender, the activity mentionedabove does not appear to fall under the provisions of Section 494.00296,F.S.  If the title agent is being directly or indirectly compensated forhis services involved in negotiating a short sale or loan modification with alender, he must be licensed as a mortgage broker.

     

  33. What does the Office consider to be a material change in the terms of a mortgage loan previously offered to the borrower?

    Effective 10/1/2010, Section494.001(17), F.S. defines a material change as a change that would be importantto a reasonable borrower in making a borrowing decision, and includes a changein the interest rate previously offered a borrower, a change in the type ofloan offered to a borrower, or a change in fees to be charged to a borrowerresulting in total fees greater than $100. 

     

  34. If the Mortgage Brokerage Agreement is mailed and never returned, does this eliminate the need for a signed Mortgage Brokerage Agreement in the file?

    No, Section 494.0038(1)(b),F.S.states “the licensee bears the burden of proving that the borrower received andapproved the agreement.”

     


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