House Bill 401 — Mortgage licensing

House Bill 401 — Mortgage licensing

by
Lindsay Atkinson
February 12, 2020
Lindsay Atkinson
February 12, 2020

Bill description: HB 401 removes the licensure requirement for a qualified person in charge of a mortgage broker or lending company and allows new Idahoans who want to be mortgage loan originators to apply for temporary authorization.

Rating: +3

Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market? 

HB401 adds a new provision to state law that allows new hires at a mortgage broker or lending company to apply for temporary authorization to act as a mortgage loan originator if they are licensed in another state. Though this temporary authorization comes with certain requirements, such as having not committed certain felony and misdemeanor offenses, it allows new Idahoans in this field to get to work quicker.

(+1)

The bill also effectively removes the licensure requirement for “qualified persons in charge,” who essentially act as managers at mortgage broker and lending companies. This removes an unnecessary layer of licensure in the mortgage system, and thus gets rid of associated requirements. For instance, it removes the requirement that qualified persons in charge have three years of experience in mortgage lending. The change also means that mortgage broker and lending companies would not be vulnerable to having their license revoked if they do not designate a new person in charge soon enough after their old person in charge has left (it currently has to be within 30 days).

(+1)

Additionally, the bill specifies that individuals who regularly mortgage to build or rehabilitate dwellings are exempt from the definition of “borrowers.” In addition, individuals who offer less than five mortgage loans a year, using their own money, are exempt from licensing requirements.

(+1)

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