The new SAFE Act: Are You Compliant?

The SAFE act is new federal law designed to assist with the recovery of America’s residential housing market.  It is intended to modernize the Federal Housing Administration, reduce foreclosures, enhance consumer protections, and reduce mortgage fraud by establishing minimum standards for the licensing and registration of state-licensed mortgage loan originators.  If you sell manufactured homes, provisions in this law likely apply to you.    All states must have a licensing and regulation system in place by July 31, 2010 (for states that meet biennially) or July 31, 2009 (for states that meet annually).  For a more complete overview of the SAFE act, visit the HUD website http://www.hud.gov/offices/hsg/ramh/safe/smlicact.cfm
Community owners and retailers that finance home sales, and those that are compensated financially by finance companies for sending them loan customers, will need to acquire a “Mortgage Loan Originator (MLO)” license.  Acquiring this license will require attending a 20 hour class, passing a test, passing a criminal background check, paying a fee, and carrying a MLO $25,000 bond.  Check with your state government for the details on getting the MLO license.  Mobile Insurance at 800-458-4320, can write your MLO bond.
It’s unclear at this time in many states whether communities and retailers who simply help an applicant complete a home loan application and forward it on to a finance company, without being compensated for doing so, will have to carry a MLO license.  You should check with your state’s Manufactured Home Association and or legal counsel for detailed direction.  The penalties for not being compliant can be severe.

Kurt D. Kelley
President
Mobile Insurance
25775 Oak Ridge Drive, Suite 110
The Woodlands, TX 77380
(281) 367-9266, ext. 17
(281) 292-7429 fax
email Kurt@mobileagency.com
www.MobileAgency.com
Member of the American Insurance Alliance

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