Legislation

Subscribe to Legislation

The California legislature ended its legislative session late on Monday, August 31, 2020, by passing two significant bills that will be of interest to the state’s mortgage servicers and other licensees—AB 3088 and AB 1864.

AB 3088 imposes new forbearance-related requirements on mortgage servicers related to the COVID-19 pandemic (in addition to significant protections for tenants in California beyond the scope of this summary). AB 1864 renames, reorganizes, and grants new authority to California’s primary financial services regulator to create a “mini-CFPB”—although many licensees are exempt from the new authority. Governor Newsom has signed AB 3088 into law, which took effect immediately as an urgency measure, and is expected to follow suit with AB 1864 in the near future.

Below we summarize those provisions from the bills that are particularly relevant to California mortgage licensees and federal- and state-chartered depository institutions servicing mortgage loans in California.…
Continue Reading California Enacts Two Bills with Significant Impacts on Mortgage Licensees in the State

On May 15, 2020, the House of Representatives passed the Health and Economic Recovery Omnibus Emergency Solutions Act (H.R. 6800, or the “HEROES Act”). The legislation is a controversial behemoth. It would provide another round of stimulus checks and student loan forgiveness, impose a 12-month eviction moratorium, expand mortgage forbearance relief, provide a…

In a development that industry observers may have overlooked amid more pressing concerns caused by the COVID-19 pandemic, the Idaho legislature enacted a measure that will require mortgage servicers to be licensed by July 1, 2020, unless the date is extended. With last month’s enactment, Idaho joins the majority of states that license mortgage servicing and provides a useful reminder that, when things eventually return to some degree of normalcy, non-pandemic-related compliance obligations will remain. This blog post discusses Idaho’s new mortgage servicer licensing obligation and other pertinent provisions of the legislation.

The New Mortgage Servicer Licensing Obligation

Idaho House Bill 401 (“H401” or the “Bill”) amends the Idaho Residential Mortgage Practices Act (Idaho Code §§ 26-31-101 et seq.) (the “RMPA” or the “Act”) to include mortgage servicing among the activities that trigger licensing under the Act.…
Continue Reading Regulatory Life Goes On—Idaho Legislature Remained in Session During COVID-19 Pandemic to License Mortgage Servicers

How do documents get signed and notarized when the parties signing the documents are faced with stay-at-home orders?  While both the federal Electronic Signatures In Global And National Commerce Act and state-enacted versions of the Uniform Electronic Transactions Act authorize notaries to perform electronic notarizations, electronic notarization is different than remote online notarization (RON).  Without…

On Friday, March 27, 2020, the President signed into law a stimulus bill designed to provide emergency assistance for those affected by the COVID-19 national emergency (the “CARES Act” or “Act”) that includes certain temporary relief for federal student loan borrowers. The Act largely codifies the Department of Education’s previous announcement regarding temporary relief to federal student loan borrowers impacted by the COVID-19 national emergency and extends the timeline for the temporary relief measures.

The Act provides three primary relief measures to federal student loan borrowers whose loans are held by the Department of Education:

…
Continue Reading School’s Out: Proposed Relief for Federal Student Loan Borrowers Impacted by COVID-19

On Thursday, March 26, 2020, from 3:00 p.m. – 3:30 p.m. EDT, Larry Platt will discuss the provisions of recent federal legislation that impact residential mortgage loans.  This call is a part of Mayer Brown’s Global Financial Markets Teleconference Series.

Congress’s response to the COVID-19 pandemic is expansive legislation that provides support to federal agencies,…

The Taxpayer First Act (the “Act” or “TFA”) imposes new limits on the disclosure of US taxpayer tax information obtained on or after December 28, 2019. The Act is designed, among other things, to overhaul and modernize operations at the Internal Revenue Service (“IRS”). One provision of the TFA has a direct impact on a recipient of taxpayer return information obtained directly from the IRS. Although questions remain about the reach of the new rule, it is already finding its way into structured finance and secondary market transactions.

Section 6103 of the Internal Revenue Code (the “Code”) governs the confidentiality and disclosure of tax returns and the information contained in tax returns. The TFA, effective as of December 28, 2019, amends Code Section 6103(c) to require taxpayers to consent to: (i) the particular purposes for which the recipient will use the taxpayer’s tax return information (the recipient may not use the information for any other purpose); and (ii) the sharing of any information from the tax return with other persons. Prior to the TFA amendment, Code Section 6103(c) simply authorized the IRS to release a taxpayer’s tax return information to parties designated by the taxpayer to receive it.…
Continue Reading The Taxpayer First Act and the Impact on Secondary Market Participants  

For many years it was unclear whether mortgage debt was covered under the California Rosenthal Fair Debt Collection Practices Act (the “Rosenthal Act”), which is California’s corollary to the federal Fair Debt Collection Practices Act (“FDCPA”). That issue was resolved on October 7, 2019, when California Governor Gavin Newsom signed into law legislation that expressly includes “mortgage debt” within the Rosenthal Act’s definition of “consumer credit.” Senate Bill 187 (“SB 187”), which is effective January 1, 2020, amends the Rosenthal Act to expressly apply to debt collection activities involving residential mortgage loans.

SB 187 also amends the Rosenthal Act so that it now includes attorneys in the definition of “debt collector.”  Until the amended Rosenthal Act goes into effect, attorneys are excluded from that definition.…
Continue Reading California Legislature Declares that Mortgage Debt Is Regulated under the State’s Debt Collection Law

The U.S. House of Representatives is considering a bill to address the underwriting difficulties and resulting lack of access to mortgage credit for self-employed borrowers and others with nontraditional income sources.

Representatives Bill Foster (D-IL) and Tom Emmer (R-MN) introduced H.R. 2445, a House companion to the Senate bill recently re-introduced by Senators Mike…

On April 29, 2019, New Jersey joined a growing number of states that license mortgage loan servicers when Governor Phil Murphy signed the Mortgage Servicers Licensing Act, to be effective in July 2019. Mayer Brown’s latest Legal Update discusses implications for mortgage servicers, including new licensing requirements, certain exemptions, and the Act’s relationship to federal…