This week, MHI conducted a conference call with industry lenders on the current implementation of the SAFE ACT. Last summer, as part of the Housing and Economic Recovery Act of 2008, Congress adopted the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act. The Act provides for a nationwide licensing system for mortgage originators, and the federal law provides a definition of what constitutes a mortgage loan originator, specifically anyone who negotiates loan terms or receives compensation from lenders. MHI and its National Communities Council (NCC) worked hard to protect the interests of our industry in a difficult political climate, and successfully worked to have language included in the bill that would greatly minimize the impact on our industry.

To date, 49 states have adopted some version of the SAFE Act, however as this has been playing out in the states, the requirements for lenders to be licensed are going to be extremely burdensome and without any real effect of carrying out the intent and spirit of the law. This week, MHI conducted a conference call with lenders and servicers in the industry to outline several strategies to work towards a better outcome – knowing that while regulation for lenders is necessary to ultimately protect consumers, there is a better path to achieve this while still carrying out the SAFE Act. MHI will be working with HUD, the federal agency which has ultimate oversight for the implementation of the bill, who will be releasing a proposed rule for the SAFE Act before the end of the year. This rule should provide more direction in what exactly triggers licensing. MHI lender and community members will be working over the coming weeks advocating our position.