The February 2023 DFPI Bulletin focuses on natural disaster guidance, crypto assets, and MLO reports.
Editor’s note — The California Department of Financial Protection and Innovation (DFPI) 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.
Natural disaster guidance
The DFPI issued guidance to financial institutions, mortgage lenders and servicers regarding recent severe storms, flooding and landslides in California. The guidance encourages lenders and servicers to work with consumers affected by these natural disasters to meet their financial needs.
The guidance suggests offering payment accommodations to consumers, including deferrals, extensions and mortgage loan rate or term modifications. The DFPI assures mortgage professionals such actions will not be criticized by examiners.
California’s winter storms prompted a state of emergency declaration at the state and federal level in January 2023. The storms caused flooding, damage to roads, power outages and damage to structures.
Assembly Bill 2013, signed in 2020, helps protect victims of natural disasters from unintended tax consequences. It allows homeowners to rebuild a comparable replacement property on their site within five years of a disaster without triggering a costly reassessment. Click through for qualification details.
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DFPI enters settlement with crypto asset company
The DFPI has joined a $22.5 million settlement agreement against crypto asset platform Nexo Capital, which was accused of failing to adequately disclose risks to consumers and qualify certain accounts as securities.
Disclosing the material facts needed to evaluate an investment is critical — in crypto and in real estate. In fact, real estate transactions with the highest level of fraud risk are investment purchases — specifically multi-family, including two-to-four unit properties.
Real estate scammers grow especially bold during periods of economic distress. Staying on top of recent mortgage fraud schemes can help licensees become their service area’s trusted first line of defense for consumers.
Despite recent high-profile collapses and investigations of crypto platforms, cryptocurrencies continue to creep into real estate services. Consumers and mortgage professionals alike need to exercise extreme caution when evaluating any crypto investment or service. Visit the DFPI’s FAQ page Crypto: What You Should Know Right Now for more information on this still nascent and risky financial product.
Consumers may file a complaint with the DFPI when they suspect a business is flouting financial laws and regulations. The Department relies on complaints to help identify and protect consumers from fraudulent business practices.
In addition, the DFPI has just launched a new Consumer Resources page featuring official events, alerts and education.
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CRMLA and CFL reports
Mortgage professionals have three important annual reports due this March, depending on their license type.
Licensees under the California Residential Mortgage Lending Act (CRMLA) need to file their annual report by March 1, 2023 via the DFPI self-service portal. Note that extensions will not be granted and missing the deadline can result in penalty assessments.
Also, all California Financing Law (CFL) licensees need to submit their annual report by March 15, 2023. This requirement includes licensees who had no business activity in 2022. The submission form and instructions can be found on the DFPI website.
Lastly, state-licensed mortgage lenders who do not report Home Mortgage Disclosure Act (HMDA) data to state or federal regulators need to file their Residential Mortgage Loan Report (also known as the Holden Act Report) by March 31, 2023. Licensees can find the reporting forms and instructions hosted on the DFPI website. The reports need to be scanned and emailed to Holden.Inquiries@dfpi.ca.gov.
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Check out the full February 2023 Bulletin on the DFPI website. To receive the next Bulletin Digest in your inbox, subscribe to Quilix — the official firsttuesday weekly newsletter for California agents and brokers.
