The August 2021 DFPI Bulletin focuses on the 2020 Report on the California Residential Loan Mortgage Act and the first Debt Collector Advisory Committee meeting, among other topics.

Editor’s note — The California Department of Financial Protection and Innovation (DFPI, formerly the Department of Business Oversight), supervises, licenses and regulates a variety of financial institutions, including some real estate mortgage loan originators (MLOs) holding a Nationwide Multistate (or Mortgage) Licensing System and Registry (NMLS) license. Alongside the California Department of Real Estate (DRE), the DFPI shares the responsibility for overseeing MLOs depending on their license use.

Licensees, stay in the know on August 2021’s MLO news and events below.

California Residential Mortgage Loan Act 2020 Report

The DFPI has published the 2020 Annual Report of activity under the California Residential Mortgage Lending Act (CRMLA). The report is compiled from data submitted to the DFPI by residential mortgage lenders and mortgage loan servicers licensed under the CRMLA.

The report includes detailed information on California’s residential mortgages, rates, consumer complaints, foreclosures, and other data elements for the 2020 calendar year. In a press release about the report, the DFPI boasts a 68% drop in foreclosures and a doubling of mortgage loan originations over the previous year.

Related article:

How foreclosures will impact the housing market in the wake of the 2020 recession 

Model State Regulations for Nonbank Mortgage Servicers

On July 26, 2021, the Conference of State Bank Supervisors (CSBS) released model state regulatory prudential standards for nonbank mortgage servicers. The prudential standards are one of eight priorities set for 2021 by state regulators to advance Networked Supervision, a strategy to streamline nonbank licensing and supervision and generate new data for risk analysis through expanded use of technology platforms.

The prudential standards were created to meet the regulatory demands of the fast-growing nonbank mortgage servicer market, which has grown from 6% to 60% of the government agency mortgage market in the past 10 years and at least 45% of the servicing market overall. Nonbank mortgage servicers currently administer roughly 75% of the servicing for loans in Ginnie Mae mortgage backed-securities, which are low-to-moderate income borrowers, loans to veterans and first-time homebuyers.

The adoption of these standards allows states to provide a consistent framework that ensures covered nonbank servicers maintain the financial capacity to serve consumers and investors with heightened transparency, accountability, and risk management standards.

Escrow Reports due

For escrow agent licensees whose fiscal year ended on April 30, 2021, annual reports are due August 13, 2021. Independent certified public accountants and independent public accountants may email reports to using a secured encrypted delivery system or a secured dropbox. Reports may also be mailed to:

Sultanna Wan, Senior Financial Institutions Examiner, Escrow Law
Department of Financial Protection and Innovation
320 West Fourth Street, Suite 750, Los Angeles, CA 90013

For questions about the annual reports, call Sultanna Wan at (213) 576-7647.

The penalties for failure to file the annual report by the due date or to include required information are $100 per day for the first five days a report is late and $500 per day thereafter. Failure to file a report or to include any required information may also result in the suspension or revocation of an escrow agent’s license and/or prompt an immediate examination.

Debt Collector Advisory Committee

On July 28, 2021, the first meeting of the Debt Collector Advisory committee was convened by Acting Commissioner Christopher S. Shultz and Senior Deputy Commissioner Suzanne Martindale. Per the Debt Collection Licensing Act (DCLA), committee members were appointed for two-year terms. Meetings are open to the public and notices for future meetings will be sent via GovDelivery.

An application for registration must be submitted by all debt collectors on or before Friday, Dec. 31, 2021, to continue operating in 2022, pending approval or denial of the application. Failure to apply by the Dec. deadline would prohibit a debt collector from operating until the issuance of a license. The application is expected to be available on the NMLS beginning September 1, 2021.

While the DCLA sets licensing, regulation and oversight for debt collectors, persons licensed under the California Financing Law, Residential Mortgage Lending Act (RMLA), or Real Estate Law are exempt from the DCLA’s licensing requirements.

That’s a wrap on August’s DFPI Bulletin. Find out more about the topics mentioned here by reading the full bulletin on the DFPI website.