WE’RE HEARING about significant changes to the Idaho Residential Mortgage Practices Act which took place as of July 1. In case you have not noticed I plan to eventually write about each and every one of the 50 states in this blog. Today we are in Idaho, Arkansas, New York and back in Michigan. What happens in one state is important because it may make its way over to your neck of the woods at any time.
The Idaho amendments are 22 some odd pages long. There are definitional changes and changes that effect brokers, lenders and MLOs. One of the changes I noticed that would be of concern to anyone trying to get into the business is the need to study hard for the licensing exam. The passing score is 75%. Sure if you flunk you can take it again but only twice making it like baseball. You know three strikes and you are out. You used to get a fourth strike but no more.
For brokers and lenders it is now a requirement that quarterly mortgage call reports are filed and also an annual financial statement. Your NMLS ID number must now be displayed everywhere you can think of—although you no longer have to display your license certificate at your office. For MLOs they have clarified the requirements about obtaining, retaining or activating an inactive license.
Speaking of an inactive license, I recently reviewed a net branch agreement for someone who had multiple licenses in one state. My first thought for them was to make their existing licenses inactive so in case things did not go as planned they could go back to square one. The client was pretty sure they could not inactivate their license. Before I researched that issue it became a moot point because of the terms of the proposed net branch agreement.
This agreement I reviewed came from an Ohio company and I really did not think it had been prepared by an attorney. Maybe parts of it but mostly it read as if it had been cobbled together from a bunch of other agreements. It was very one-sided, vague as to the exact amount of medical benefits and the deal breaker was the noncompetition language. They could fire you for no reason and then you were supposed to not compete for two years. Go figure.
Over to Arkansas where it turns out that they have two ways to foreclose on a mortgage gone bad. The statutory (nonjudicial) method was recently challenged by someone because the lender was a national association and not regulated by the state. You have to hand it to the folks who come up with these defenses. Well it turns out that the Eighth Circuit Court of Appeals says the national association (Chase) can use the Arkansas statutory nonjudicial foreclosure method and that is good enough for me.
We are also hearing again from New York and this time sadly it relates to Hurricane Sandy. It is like the storm just keeps coming back. Well plenty of folks have not gotten back to normal yet and now it turns out that flood insurance premiums are skyrocketing (tripling in some cases). Talk about adding insult to injury.
Right now I am staring at Lake Michigan or more properly Little Traverse Bay in Petoskey, Mich. My wife and I just purchased a small old vacation home. Since the lake’s water levels have been going down I do not think it will flood. Apparently it will freeze though as I have learned that I have to leave the water running slightly in the basement during the winter. Thanks go to my closing agent Jayme Levin who gave me Internet access today to help complete my column.
Based in Chelsea, Mich., John McDermott is a real estate and elder care attorney who represents both consumers and businesses. He can be emailed at email@example.com.