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In the last Kentucky Legislative session, under the sponsorship of Rep. Tommy Thompson, the Kentucky Association of Mortgage Professionals (KAMP) drafted HB553 which had the purpose of accomplishing the following:
Remove the requirement that loan processors must be licensed
Remove the additional 4 hours of CE annually so that only 8 hours of CE would be required annually
Bring the Kentucky licensing requirements more in line with the requirements of the majority of states
This bill cleared the Kentucky House of Representatives with no objections and was in the Kentucky Senate for a vote. The bill was stopped as a result of objections raised by board members for the Mortgage Bankers Association of Kentucky (MBAKY).
The Mortgage Bankers Association of Kentucky (MBAKY) informed the Senate Banking and Finance Committee Chair they objected to the removal of the processor licensing requirement. That stopped the bill from being brought to the Kentucky Senate floor for a vote. Therefore, the bill died in the last legislative session.
The KAMP and MBAKY have entered into preliminary discussion regarding this bill. KAMP desires to refile the bill for the upcoming legislative session. The MBAKY wants loan processors to be required to have criminal background checks, credit check and continuing education but not be required to complete the exam. They are in favor of changing the continuing education requirement as mentioned above.
Below you will find more information about the drafted bill that the KAMP supports. We are requesting that you please review carefully and then complete the survey. We represent you! Tell us which option you prefer.
The specifics of HB553 include:
Redefines the role of a Loan Originator to be more specific with regard to the duties required of the position.
Redefines "Clerical or support duties" to be specific to include both Loan Processors and Underwriters who work under the direct supervision and instruction of a mortgage loan originator or individual mortgage company/broker. This redefined role would NOT allow these individuals to take a residential loan application, assist a borrower or prospective borrower with the preparation of documents necessary to obtain a mortgage loan, be able to offer or negotiate loan rates or terms, or to provide counseling to consumers about mortgage loan rates and terms.(In other words, it eliminates the possibility that a clerical or support person could act in any way as a loan officer and hide behind the title of a loan processor or underwriter.
Provides clear verbiage that a mortgage loan processor or underwriter cannot act as a mortgage loan originator and shall not represent to the public or to individual consumers that he/she can or is willing to perform any of the activities of a mortgage loan originator. (This prevents individuals from advertising or marketing their services as a loan originator by hiding behind the title of loan processor or underwriter.)
Removes the requirement that loan processors must complete the 20 hour SAFE Pre-licensing course, take the SAFE exam, satisfy the criminal background check and credit check as well as complete annual continuing education hours. It DOES NOT remove the requirement that contract processors and contract underwriters be exempt from the licensing process. (These individuals must still be licensed.)
Changes the continuing education requirement to remove the additional 4 elective hours required each year (of which every other year must be on KRS 286.8 and/or 360.100) beyond the SAFE Core Comprehensive 8 hours. The change would require 1 CE hour each year on KRS 286.8 and/or 360.100 which could be included as the 1 hour elective in the SAFE Core Comprehensive 8 CE hours.(This means that as long as eight hours of continuing education hours is taken annually and one of the required eight hours includes instruction on KRS 286.8 and/or 360.100 then it would satisfy the requirements to renew a license.)