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Hawaii Pushes New Laws for Originators, Servicers

The Aloha State recently passed three new bills related to mortgage servicing and mortgage origination. All three went into effect at the beginning of this month.

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The ""first"":http://www.capitol.hawaii.gov/session2012/bills/HB2375_SD2_.pdf requires the Office of Consumer Protection to educate consumers regarding fraud schemes aimed at homeowners facing foreclosure.

The bill also establishes that violators of Hawaii's Mortgage Rescue Fraud Prevention Act will be charged with a Class C felony and fined $10,000 in addition to other possible penalties.

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""The Hawaii Secure and Fair Enforcement for Mortgage Licensing Act"":http://www.capitol.hawaii.gov/session2012/bills/SB2763_CD1_.pdf requires adjustments to loan originator registration fees and amends Hawaii's Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) to comply with recent changes to federal laws.

Those who originate loans on behalf of a mortgage servicer are not required to register or obtain licensing so long as ""[t]he employee's actions are part of the employee's duties as an employee of the mortgage servicer company"" and the employee only originates residential mortgage loan modifications.

Similar exemptions are made for those who originate loans for nonprofit organizations if the nonprofit registers with the Nationwide Mortgage Licensing System and Registry.

Registered mortgage loan originators acting as subsidiaries of federally-regulated insured depository institutions are now subject to provisions of the SAFE Act.

Hawaii also passed a ""law"":http://www.capitol.hawaii.gov/session2012/bills/HB2502_CD1_.pdf affecting mortgage servicers. According to the new law, the Commissioner of Financial Institutions may require servicers to register with the Nationwide Mortgage Licensing System.

Additionally, the bill states servicers must comply with all licensing requirements of the SAFE Act before offering loan modifications.

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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