The state Division of Banks has issued 43 temporary cease and desist orders against mortgage loan originators who have failed to comply with all the requirements of the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 ("SAFE Act").
Under the act, mortgage loan originators are required to take and pass both national and state-level licensing exams, as well as complete 20 hours of pre-licensure education and submit to a criminal background check. Applicants who applied for a license after July 31, 2009, when the SAFE Act came into effect in Massachusetts, had until July 31, 2010 to comply.
All 43 originators named by the DOB failed to obtain at least one of the four certifications named above, and more than half failed to obtain two or more. Seven originators failed to obtain two of the four certifications; nine failed to obtain three of the four; and eight failed to meet all four requirements, according to a Banker & Tradesman analysis. Specific information on one individual listed on the DOB’s website could not be obtained.
"The mortgage loan originators who received temporary cease-and-desist orders today had ample opportunity to meet the revised licensing requirements. The division made it clear that any mortgage loan originator that failed to meet all requirements for licensure by the stated deadlines would be unable to continue to do business in the Commonwealth," said Commissioner of Banks Steven L. Antonakes.
The division sent notifications to the individuals in an industry letter in September 2009, four separate e-mail notifications and a final notice mailed July 13, according to a statement.
Mortgage loan originators who already had a license under the old system have until Oct. 31 to comply with the new law.
The cease and desist notice requires that licensees immediately stop all work on pending loans and pass them on to their sponsoring entity so that they may be completed by a properly licensed originator.
Licensees must also turn over a detailed record of all loans they have originated to the Commissioner of Banks within five days. They will have 20 days to request a hearing to have the cease and desist order lifted.
