Thinking about selling that motor home you have parked out back?
Better either do it before July 21 or prepare to devote the time and money to become certified as a mortgage loan originator.
Unless the U.S. Department of Housing and Urban Development tells him otherwise, Mississippi Banking Commissioner John Allison is using a broad definition of “primary residence” as specified in the federal Secure and Fair Enforcement Mortgage Licensing Act, or SAFE, enacted in 2008. The law is set to go into effect July 21.
The transaction apparently does not need to involve a mortgage to fall under the SAFE Act, according to Allison.
“What is a home? If it’s a primary residence and you sell an RV that could fall under the SAFE Act,” he said. “It may not need a deed of trust. Just a sales contract.”
To meet terms of the SAFE Act and to ensure Mississippi could have its own law instead of defaulting to the federal version, Allison persuaded legislators in the past session to adopt requirements for mortgage loan origination certification. That measure classifies motor homes, houseboats, mobile homes and manufactured homes as primary residences.
But until he gets clarification from HUD on what constitutes a primary residence and thus falls under the SAFE Act, Allison is not enforcing the state law.
“What I’m really waiting on, is HUD going to talk about exemptions? And if so, what will they be?
“I am not licensing anybody until HUD lets us know what it wants in the way of owner financing and also on manufactured housing.”
Previously, HUD has said that if you do owner financing of real estate properties you must have a license under the SAFE Act, Allison noted.
HUD concedes it must clarify the reach of the SAFE Act. “There are certain contexts in which HUD will need to issue clear direction in its final rule regarding the scope of coverage of individuals who must be licensed under the SAFE Act,” spokesman Lemar C. Wooley said.
He said HUD will give Mississippi and the other states a “reasonable” amount of time to adjust their licensing systems to meet the final rule’s requirements. But it intends to closely monitor the states to ensure compliance, Wooley added.
As specified by the SAFE Act, mortgage loan originators, mortgage brokers and anyone else involved in mortgage processing would have to undergo a set amount of instruction and pass a pair of exams — one state and one federal.
The names and backgrounds of those are certified would be stored in a database that each state can access, Allison said.
“All this does is give a one-stop shop for filling out your application. It doesn’t waive the state’s right to say what you have to do to qualify for a license.”
For instance, the federal law prohibits anyone with a felony conviction from qualifying for a mortgage originator’s license under the SAFE Act. In Mississippi, a misdemeanor disqualifies you, said Allison, who noted Mississippi settle don’t he more stringent provision after case reviews showed many of those convicted had plea bargained to a misdemeanor from a felony.
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