On May 4, 2009, Governor Jon Corzine signed the New Jersey Residential Mortgage Lending Act (RMLA) into law effectively bringing his state law into compliance with the federal S.A.F.E. Act.  The new law establishes licensing standards, business practices and oversight for residential mortgage lenders, correspondent mortgage lenders, residential mortgage brokers, qualified individual licesees and mortgage loan originators. 

Pursuant to the changes enacted in the RMLA, all lender licensees with mortgage bankers, correspondent mortgage banker, mortgage broker and/or secondary lender authorities and all mortgage solicitor registrations renewed on July 1, 2009 will expire on July 31, 2010. 

The processing of applications for licensure under the new law is anticipated by the state to begin on or about January 1, 2010.  All licenses issued under the RMLA during 2010 will expire on December 31, 2010 and will be required to be renewed annually in December of each subsequent year.

The requirements under the RMLA for business licensure as a residential mortgage lender, correspondent mortgage lender or mortgage broker are as follows:

• Completed electronic application through the Nationwide Mortgage Licensing System and Registry which will assign a unique identifier
• Criminal background check for all officers, directors, partners and owners of a controlling interest
• General finding of responsibility and fitness for licensure
• Licensure of at least one officer, member, director, partner or owner as a qualified individual in connection with the business entity applicant
• Proof of surety bond coverage in an amount determined by the Commissioner but not less than $25,000
• Demonstration of tangible net worth
• Payment of required fees, including non-refundable application fees set by the Commissioner that may not exceed $2,800; and
• Any other requirements deemed necessary by the Commissioner

The requirements under the RMLA for licensure as either a qualified individual licensee or a mortgage loan originator are as follows:

• Completed electronic application through the Nationwide Mortgage Licensing System and Registry which will assign a unique identifier
• Criminal background check, credit report, and check of governmental information related to administrative, civil or criminal filings
• Character and fitness for licensure
• Employment by one residential mortgage lender or broker business licensee
• Completion of  at least twenty (20) hours of pre-licensing education as approved by the NMLS which may be offered at any location and by any means, including live classroom instruction, prepared group or individual coursework, or the Internet
• Successful passage of a written examination with a score of at least 75%
• Completion of at least twelve (12) hours of continuing education requirements during 2011, prior to renewal in January 2012 and in each year thereafter
• Coverage under employing business licensee’s surety bond
• Payment of required fees including a non-refundable application fee set by the Commissioner that shall not exceed $500; and
• Any other requirements that the Commissioner deems necessary

The Department of Banking and Insurance must promulgate new rules in order to implement the provisions of the RMLA in the coming months.  TrainingPro’s governmental affairs division will continue to monitor the progress of these rules in order to keep our clients informed.