New Servcing Laws Being Introduced in Hawaii. Hawaii recently passed three new laws for Mortgage Servicing and Mortgage Origination that may be the start of setting a direction for other States. I am always skeptical about new laws, many times their purpose is more about creating new revenues than accomplishing what they claim to be established for. I will try to keep an open mind if these new laws make their way to Connecticut, but the smoke and mirrors of the past give me reason for concern.
The first law requires the Office of Consumer Protection to provide classes for consumers regarding fraud scams targeting homeowners facing foreclosure. This sounds good, but who will establish the classes, and who will teach them? Also how will homeowners facing foreclosure be notified about these classes? These classes will come at a cost, so who will be paying for them?
A second law will fine those that violate the Hawaii Mortgage Rescue Fraud Prevention Act with a Class C felony and fine them $10,000. Hitting those who break the law hard in the wallet, and puts them behind bars, has my support as long as it is enforced, and not just another feel good law.
The third law is targeted at Mortgage Servicers, and will require them to register with the Nationwide Mortgage Licensing System. What this will accomplish I am not sure, but it is a revenue source, so I am sure that this one will be enforced.
What is baffling to me about the creation of the new laws, is that they will not apply to all servicers. Those who originate loans for Mortgage Servicers and Nonprofit Organizations, will not be required to register or be licensed, as long as "the employee's actions are part of the employee's duties" for the Mortgage Servicer, and only originates residential mortgage loan modifications.
I truly do not understand the exceptions. It seems to me that if a law is necessary, then it should apply to all. It will be interesting to see how the New Servcing Laws Being Introduced will fair in Hawaii, and if other States try to incorporate them as well.
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