April 3, 2008
LANSING - Governor Jennifer M. Granholm today signed a 13-bill package that will help protect Michigan consumers from mortgage fraud and unfair lending practices by requiring the state's estimated 20,000 mortgage loan officers to register with the state's Office of Financial Services (OFIS).
"This legislation will help us to protect consumers against unfair lending practices, mortgage fraud, and unlicensed mortgage activity," Granholm said. "Effective regulation of loan officers is critical in our effort to protect citizens from abusive lending practices by unethical individuals."
The legislation creates the state's first list of loan officers and strengthens the state's oversight of the loan industry's practices by mandating background checks and educational training for loan officers. It also establishes a mortgage industry advisory board that will make recommendations to OFIS on educational requirements and loan officer applications.
The legislative package also includes bills that will:
- extend the licensing fee to include loan officer registration;
- require loan officers to be registered in order to receive compensation for originating a loan;
- require agents to register to originate loans within 90 days of employment; and
- authorize the OFIS commissioner to deny an application for a registration, bring an action against a loan officer registrant, suspend or revoke a loan officer registration, and censure a loan officer registrant.
These new laws are just the latest action in the Granholm administration's ongoing efforts to help Michigan families stay in their homes and protect them from possible mortgage foreclosure. This week, Governor Granholm signed into law programs that will assist Michigan homeowners facing mortgage foreclosure by offering new refinancing options to protect their home ownership.
The programs will be administered by the Michigan State Housing Development Authority (MSHDA) in conjunction with its Save the Dream public awareness campaign to help citizens avoid foreclosure.
In January, Granholm met with representatives from a number of the nation's leading mortgage servicers to discuss what they could do to help Michigan consumers avoid foreclosure. The servicers concurred in the goals set forth in the Michigan Protocol to Assist Homeowners Facing Potential Foreclosure, which includes providing Michigan homeowners with alternatives to foreclosure and reaching out proactively to borrowers many months before their loans reset to work out alternatives to foreclosure.
Granholm has also asked state lawmakers to approve a supplemental appropriation of $1.4 million funded by regulatory fees to add 34 mortgage industry regulators overseeing the industry, including 19 examiners and additional enforcement staff, to ensure that consumers are being protected in the mortgage lending process.
The loan officers must be registered by January 1, 2009.
The bills signed into law today include, Senate Bills 826 and 827 sponsored by Randy Richardville (R-Monroe), Senate Bill 828 sponsored by Hansen Clarke (D-Detroit), Senate Bill 829 sponsored by Tony Stamas (R-Midland), Senate Bill 830 sponsored by Tupac Hunter (D-Detroit), Senate Bill 831 sponsored by Dennis Olshove (D-Warren), Senate Bill 832 sponsored by Nancy Cassis (R-Novi), Senate Bill 833 sponsored by Alan Sanborn (R-Richmond Township), House Bill 5287 sponsored by Shanelle Jackson (D-Detroit), House Bill 5288 sponsored by Andy Coulouris (D-Saginaw, House Bill 5289 sponsored by Ed Clemente (D-Lincoln Park), House Bill 5290 sponsored by David Robertson (R-Grand Blanc), House Bill 5291 sponsored by Darwin Booher (R-Evart).
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