CSBSAARMR National Mortgage Database

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CSBS/AARMR National Mortgage Database

• National Association of Mortgage Brokers March
  2006

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Conference of State Bank Supervisors

• Established in 1902
• Professional organization
• Advocate of dual banking system
• Represents state banking regulators
• 6,000 state-chartered banks (75 of all charters)
• 33 of all bank assets
• 37 state mortgage regulators

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American Association of Residential Mortgage
Regulators

• Professional organization
• Advocate of regulatory information exchange
• Represents state mortgage regulators

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Topics of Discussion

• Evolution of mortgage industry regulation
• National mortgage licensing system
• System benefits to industry

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Mortgage Regulation

• Mortgage industry changed dramatically in 20
  years
• SL industry replaced by brokers and lenders
• Number of state mortgage regulators
• 1993 18
• 2006 48 (all but AK CO)

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Mortgage Regulator Survey

• State 2006 survey of 50 agencies with over
• 110,000 companies
• 60,000 branches
• 275,000 individuals
• Application processing 43 manual 5 electronic
• Fingerprinting 18 FBI 30 State databases
• Credit reports 25 states
• Credit scores 7 states

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Mortgage Regulator Survey

• Testing/CE 14/23 agencies
• Experience required 21 agencies
• Minimum financial requirements 31 agencies
• Renewals annual, bi-annual 34/11 agencies
• Annual/periodic reports 36 states

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Industry Licensing Process

• No standard licensing software
• Manual, inefficient process
• Applications
• Amendments
• Tracking licenses, regulatory changes CE
• Requires significant resources

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Description - Mortgage licensing system

• Two primary goals
• Provide uniform mortgage application for every
  agency
• Develop comprehensive licensing/supervisory
  repository

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Description - Mortgage licensing system

• System objectives
• Streamline the licensing process
• Reduce the regulatory burden
• Provide increased accountability/consumer
  protection
• Reduce fraud

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Description - Mortgage licensing system

• Initiative does not contemplate
• Reciprocity
• Uniform legislation
• Who should/should not be licensed

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Who is working on Licensing System?

• CSBS
• AARMR
• State agency task force and working group
• Industry Representatives (lenders, brokers)
• NASD (vendor)

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Mortgage Regulatory Taskforce

• Chuck Cross, WA
• Peter Hildreth, NH
• Eric McClure, MO
• Robert Braswell, GA
• Don Saxon, FL
• Jeffrey Vogel, WY
• Gavin Gee, ID

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State Working Group

• California
• Connecticut
• Florida
• Georgia
• Idaho
• Iowa
• Louisiana
• Massachusetts
• Maryland
• Montana

• New Hampshire
• New York
• North Carolina
• Oregon
• Pennsylvania
• South Dakota
• Tennessee
• Texas
• Virginia
• Washington

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National Association of Securities Dealers

• Self regulatory organization (SRO) to securities
  industry
• Developed operates 2 state licensing systems
• Securities - Central Registration Depository
  (CRD)
• Investment Advisors Registration Depository
  (IARD)
• Contract to develop system specifications

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Uniform Mortgage Applications

• Company (mortgage lenders and brokers)
• Branch locations
• Control person
• Individuals (loan officers)
• Plus - state specific requirements (e.g., surety
  bond)

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Centralized functions

• License application processing
• License fee collection
• Document collection (fin. statements, SOS, etc.)
• Call center
• Fingerprinting, criminal checks
• Background checks
• Surety bond and CE reporting

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Licensing System Benefits - Company

• System generated reports
• Standard and custom reports
• Lists of company, branches, LOs, etc.
• Consistent data across participating agencies
• Payment of licensing fees
• ACH
• Prepaid accounts
• Credit card

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Licensing System Benefits - Regulators

• Access to comprehensive repository
• More licensee accountability
• License information
• Criminal and administrative sanctions
• Improved timeliness
• Online application
• Centralized processing
• Applications are complete when received
• Approvals

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Licensing System Costs

• Development cost born by state agencies
  (4.3million)
• Operating cost
• License processing fee
• Application (company, branch individual)
• Annual renewal
• Cost/benefit

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Ongoing Next Steps

• Information gathering
• Beta testing of uniform application forms
• Identify possible regulatory or legislative
  changes
• FBI fingerprinting through system
• System design
• System development

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Timeline by Quarter
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Conference of State Bank Supervisors

• CSBS
• 1155 Connecticut Avenue NW
• Suite 500
• Washington, DC 20036
• 202-728-5711
• www.csbs.org