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HUD Issues Rules to Implement the S.A.F.E. Act

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the "S.A.F.E. Act") was passed by Congress and implemented in Oregon by the 2009 Legislature. It requires licensing of persons who do residential mortgage loan origination and work for nonbank mortgage lenders.

Under the Act, the U.S. Department of Housing and Urban Development (HUD) was charged with adopting rules to implement the Act and ensuring that states meet minimum standards for compliance. When the bill passed, there were questions and concerns about whether and how the S.A.F.E. Act applied to individual employees of local government housing agencies and non-profit housing organizations.

From our initial review of the new HUD rules, it appears that most employees of local governments and bona fide non-profit organizations will be exempt from the mortgage loan originator licensing requirements.

HUD rules do authorize state regulators to further implement these rules regarding the "commercial content" of loan originator activities and the determination of how an organization qualifies as an exempt "non-profit." Over the next several months, the Division of Finance and Corporate Securities will develop rules implementing the exemptions as permitted by these final rules, involving a variety of stakeholders.

For more information, please contact Richard Y. Blackwell, Senior Policy Analyst at 503-947-7056 or richard.y.blackwell@state.or.us.

Memo regarding S.A.F.E. Act rules

CSBS - S.A.F.E. HUD rule summary