Not So Fast: HUD Rescinds MI Premium Cut

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As you may have heard in various media reports, HUD issued Mortgagee Letter 2017-07 on Friday, January 20, rescinding the annual Mortgage Insurance Premium (MIP) cuts announced in Mortgagee Letter 2017-01. While there has been much news and opinion analysis on this story, the only effect on your daily business is the annual MIP will not change effective with closings on or after January 27.

The actual impact on the mortgage market is likely very minimal, with the most likely outcome being that some loans on which disclosures were sent to borrowers between January 10th and 20th – showing the reduced premium – will have to be re-disclosed. Before re-disclosing, I suggest doing a quick double-check to ensure that the change has been applied throughout the loan file, including the APR on the Loan Estimate. It remains to be seen whether the new administration will decide to move forward with any premium cuts in the months to come.

Peter

NMLS Rolls Out Uniform State Test

The Nationwide Mortgage Licensing System and Registry (NMLS) has announced that the Uniform State Test (UST) will be available for enrollment beginning 4/1/2013.  As I mentioned in a previous blog post, the goal of the UST is to eliminate the need for Mortgage Loan Originators to take two tests to obtain a license under any state regulatory agency that adopts the UST program.  Although we’ve known for a year now that the NMLS was planning this initiative to streamline the licensing process (and save states the time and money involved in maintaining their own individual tests), the details have just recently become available.  Here are the critical ones you need to know:

WHICH STATE AGENCIES ARE PARTICIPATING IN THE UNIFORM STATE TEST PROGRAM?

As of this writing, the following state regulatory agencies have signed on to the UST program effective on the following dates.

State agencies allowing test enrollments beginning 4/1/2013:

Delaware New Hampshire
Georgia North Carolina
Idaho North Dakota
Indiana Department of Financial Institutions* Pennsylvania
Iowa Rhode Island
Kentucky South Dakota
Louisiana Utah Department of Financial Institutions*
Maryland Virginia
Massachusetts Washington
Michigan Wisconsin

*NOTE: Indiana Secretary of State and Utah Department of Real Estate have not elected to participate in the UST program at this time.  Licensees applying to these agencies will still be required to pass a State Component Test in order to become licensed.

Agencies allowing test enrollments beginning 7/1/2013:

Alaska
Kansas
Nebraska
Vermont

The NMLS will add agencies to this list as they sign on to the UST program.  An up-to-date list can be found by going to the NMLS Resource Center and following the links on the right-hand side of the page.

WHAT IF MY STATE AGENCY WAS NOT LISTED?

If you wish to become licensed by a state agency that has not adopted the UST, you must continue to take their State Specific Component Test. If you will be taking the National Compnent Test on or after 4/1/2013, your National Component Test will include the UST.  However, the required State Specific Component Test (for a state agency that has not adopted the UST) will need to be taken separately in order to become licensed by that state agency.

HOW DO I ENROLL FOR THE UNIFORM STATE TEST, AND WHAT IS THE FORMAT?

There is no way to enroll for the Uniform State Test until 4/1/2013.  Once that date has arrived, you will open a testing window by enrolling through the NMLS system as you would any other test.  To my surprise, the NMLS did elect to offer the UST as a stand-alone test for those who have already passed the National Test Component.  Enrollment for the stand-alone UST will only be available for the one-year period running 4/1/2013 – 3/31/2014.  After that time, any individual who has not passed some version of the UST (either the stand-alone or the National Test Component with UST) will have to enroll for (and pass) the National Test Component with UST if they want to obtain a license from any state regulatory agency that has adopted the UST.

The cost to take just the UST (which will consist of 25 questions, all of which are scored) will be $33.00.  The questions will NOT be state-specific, but rather will relate to topics that are fairly uniform across all states; many will be based off of the SAFE Act model state law created in 2008.  The full text of that law in PDF format can be found here.  If you’d like to look at the UST content outline from the NMLS, click this link.

WHAT IF I’VE ALREADY PASSED A STATE TEST IN ONE OF THE STATES LISTED?

You will continue to be able to do business as usual.  You will not need to take the UST, unless you wish to obtain a license from one of the state agencies that have adopted the UST program after the exam becomes available.

WHAT IF I’M CURRENTLY SCHEDULED TO TAKE A TEST OR HAVE AN OPEN ENROLLMENT WINDOW?

If you’re currently scheduled to take a test, or have an open enrollment window to schedule a test, you will need to take the test as-scheduled and before the end of your enrollment window or you will lose the funds you have paid to open that enrollment window.  Failure to show for a scheduled exam will also close the enrollment window.  There is no way to switch an enrollment window from a State Specific Component Test to the UST once that enrollment window has been opened and during the time it remains open.

WHAT IF I NEED TO TAKE THE NATIONAL TEST COMPONENT?

After 4/1/2013, all NEW enrollments for the National Test Component will include the UST.   The National Test Component with UST will consist of 125 questions, 115 of which will be scored. There will not be an option to take the National Test Component without the UST.  The price for all National Test Component enrollment windows opened on or after 4/1/2013 will increase to $110.

All enrollment windows for the National Test Component opened prior to 4/1/2013 will be for the existing National exam and will not include the UST.  The cost for this will remain at $92.

Until 4/1/2013, there will be no way to open an enrollment window for the National Test Component with UST.  After 4/1/2013, there will be no way to open an enrollment window for the National Test Component without the UST.  The existing National Test Component will be administered until the last enrollment window closes.

WHERE DO I FIND MORE INFORMATION?

All pertinent information relating to the UST can be found at the  NMLS Resource Center under the TESTING tab.  You can locate the UST Implementation Information page from there.

Real Estate Institute offers UST exam prep programs. Free practice tests are also available.

Happy originating!

URGENT – Do You Have An Unpaid NMLS Education Certification Invoice?

As of today, nearly 1,600 ILLINOIS ORIGINATORS who certified their pre-license education (PE) requirement have failed to pay the $15.00 NMLS invoice and ARE NOT COMPLIANT WITH THEIR PE REQUIREMENT.  If you certified your pre-license education, exempting you from the 20-hour course, you MUST pay the NMLS $15.00 in order to have the certification added to your record.  This fee is in addition to the fee you paid to have your name included in the certification upload. 

So Close, Yet So Far
All individuals who certified their education and who have not paid their invoice by the end of the year will NOT be compliant with the education requirements and will be forced to take the 20 hour class in order to renew/reactivate their license.  You can check your invoice status by logging into the NMLS system and clicking the “Invoice” link at the top of your home page.  Unpaid certification invoices will be deleted from the NMLS system on January 1, 2011 and there will be no way to pay them after that date, so the full 20 hours of pre-license education will be required.

Don’t Close the Door on Your Career Opportunities
If you are not planning on renewing your license, but certified your pre-license education requirement, it only makes sense to pay the $15.00 fee.  Once this is paid, you will be compliant with the PE requirement and that certification will remain on your record for 5 years.  If you do not pay the $15.00 invoice, and decide you would like to re-enter the business, you will have to pay over $300 for a 20 hour pre-license course. 

Additionally, you should know that, if you exit the business in 2010 and re-enter the business in a subsequent year, you will still be responsible for completing your continuing education requirement for 2010!  That will have to be done through a special course which will likely cost more than the regular course.  If you are even thinking of getting back in the mortgage business in the future, save yourself time and hassle and take your CE before the end of the year.

Remember, if you take a 20-hour PE course in 2010, you do not need to take continuing education in 2010.  However, if you have fully completed the pre-license certification process by paying your NMLS invoice, you do need to complete an 8-hour continuing education course in 2010.