MBA Offers Support for TRID Improvement, Mortgage Licensing Bill

The Mortgage Bankers Association sent a letter to House leaders yesterday expressing strong support for legislation that would make key adjustments to the TILA/RESPAIntegrated Disclosure rule and support flexibility for mortgage loan originators.

The House is expected to consider H.R. 3978, the TRID Improvement Act, this week. Introduced by Reps. Steve Stivers, R-Ohio, Joyce Beatty, D-Ohio, Bruce Poliquin, R-Maine and Kyrsten Sinema, D-Ariz., the bill ( amends the Real Estate Settlement Procedures of 1974 to modify disclosure requirements applicable to mortgage loan transactions. Specifically, the disclosed charges for any title insurance premium shall be equal to the amount charged for each individual title insurance policy, subject to any discounts as required by either state regulation or the title company rate filings.

The bill also accommodates H.R. 2948 (, which amends the S.A.F.E. Mortgage Licensing Act of 2008 to temporarily allow loan originators that meet specified requirements to continue to originate loans after moving: (1) from one state to another, or (2) from a depository institution to a non-depository institution.

MBA Senior Vice President of Legislative and Political Affairs Bill Killmer offered MBA’s support for the bill. On the latter, Killmer said the bill would eliminate two parallel but asymmetrical regimes for mortgage loan originators that have resulted in uneven consumer protections and an un-level playing field for mortgage originators: the SAFE Act requires MLOs employed by non-bank lenders to be licensed, which includes pre-licensing and annual continuing education requirements, passage of a comprehensive test, and criminal and financial background reviews conducted by state regulators. These MLOs are also registered in the Nationwide Mortgage Licensing System and Registry. By contrast, MLOs employed by federally insured depositories or their affiliates must only be registered in the NMLS, and do not have to pass a test or meet specific education requirements.

“The result is a two-tiered system that inhibits job mobility for loan officers and makes it difficult for non-bank lenders to compete for talented employees,” Killmer wrote. “Rather than leaving a job on a Friday and starting a new job on a Monday, an MLO who moves from a bank to a non-bank lender must sit idle for weeks, and sometimes months, unable to engage in loan origination activities while they complete the SAFE Act’s licensing and testing requirements–despite the fact they have already been registered in the NMLS and originating loans.

The legislation “promotes a fair and competitive labor market by eliminating barriers to the ability of non-bank lenders (especially small lenders) to compete for talented staff, and allowing MLOs to more easily move to the employer that offers them the best chance to succeed,” Killmer said.

Killmer noted in the last Congress, the bill was unanimously reported from the House Financial Services Committee, and shortly thereafter passed the full House under suspension of the rules. Again, late last year, the bill was reported from the Financial Services committee by a unanimous 60-0 vote.

H.R. 3978, repackaged after being introduced as a free-standing bill by Reps. French Hill, R-Ark., and Ruben Kihuen, D-Nev., would amend RESPA to require the Consumer Financial Protection Bureau to allow accurate disclosure of title insurance premiums and any potential available discounts to homebuyers.

Killmer said under current regulations, the CFPB does not permit title insurance companies to disclose available discounts for lender’s title insurance on the government-mandated disclosure forms.

“This creates inconsistencies in mortgage documents and causes confusion for consumers,” Killmer said. “This section would minimize that confusion by allowing title insurance companies to disclose available discounts and accurate title insurance premiums to consumers across the country.”

In conjunction with the letter, the MBA grassroots advocacy arm, the Mortgage Action Alliance issued a Call to Action, asking its members to contact their Representatives in the House in support of H.R. 3978 (