Alert December 15, 2009

HUD Issues Proposed Rule on SAFE Act Minimum Standards

HUD issued a proposed rule setting forth the minimum standards the Secure and Fair Enforcement for Mortgage Licensing Act provides states to meet in licensing mortgage loan originators. The proposal seeks to interpret and clarify undefined or ambiguous terms contained in the Act, such as "engage in the business of a loan originator," "take an application," and "offering or negotiating." HUD also proposes procedures for determining state compliance with the SAFE Act licensing and registration system requirements and addresses how it will respond if it finds that a state has failed to comply. The proposal is subject to a 60-day comment period following publication in the Federal Register. Click here for the proposal.