This legislation was designed to assist with the recovery and revitalization of the housing market.
On July 30, 2008 the Housing and Economic Recovery Act (HERA) was signed into law and established the S.A.F.E. Act. HERA was designed to foster the recovery and revitalization of America's residential housing market which includes foreclosure prevention and consumer protection initiatives. To provide uniform licensing standards nationwide, the S.A.F.E. Act of 2008 mandates all states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators by August 1, 2009. This also mandates the implementation and maintenance of a mortgage licensing and registration system for the residential mortgage industry. If a state fails to comply with these two conditions, the Department of Housing and Urban Development will implement a state licensed mortgage loan originator.
In June of 2009, a joint proposal by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, Office of Thrift Supervision, Farm Credit Administration, and National Credit Union Administration recommended rule adaptations of the S.A.F.E. Act. In this proposal, mortgage loan originators employed by agency-regulated institutions must register with the Nationwide Mortgage Licensing System and Registry and obtain a unique identifier. A unique identifier serves the purpose of allowing consumers to access the originators' employment and background information. The recent proposal reflects a continuation of the S.A.F.E. Act's aim to increase transparency and accountability of loan originators, protect consumers from fraud, and to ensure that the originator is acting in the best interests of the consumer.
Enforcement of Financial Consumer Protection Laws
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
The Community Reinvestment Act and the Recent Mortgage Crisis
At the Confronting Concentrated Poverty Policy Forum, Board of Governors of the Federal Reserve System, Washington, D.C.
Administered through the U.S. Department of Housing and Urban Development, or HUD, the Neighborhood Stabilization Program will provide grants to every state and certain communities to purchase foreclosed or abandoned homes and to rehabilitate, resell or redevelop these homes to stabilize neighborhoods and stem the decline of values of neighboring homes.
The program will refinance mortgages for borrowers – owner-occupants only – who are having difficulty making their payments, but can afford a new loan insured by HUD's Federal Housing Administration. The program offers 30-year fixed rate mortgages and government insurance to lenders who voluntarily reduce mortgages for at-risk homeowners to at least 90 percent of the property's current value. The HOPE for Homeowners program ends on September 30, 2011.
This act modernizes the regulation of the housing government-sponsored enterprises – Fannie Mae and Freddie Mac – and the Federal Home Loan Banks and expands the housing mission of these GSEs. The new, independent regulator for the enterprises and the FHLBs is the Federal Housing Finance Board, or FHFB, an independent federal body created as the successor regulatory agency resulting from the statutory merger of the Federal Housing Finance Board, or FHFB, and the Office of Federal Housing Enterprise Oversight, known as OFHEO.
The Secure & Fair Enforcement Mortgage Licensing Act, or S.A.F.E. Act, was established through the Housing and Economic Recovery Act, or HERA, of 2008 which was signed into law on July 30, 2008. HERA was designed to foster the recovery and revitalization of America's residential housing market. The S.A.F.E Act aims to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators and to establish and maintain a nationwide mortgage licensing system and registry for the residential mortgage industry. The registration process requires information and fingerprints for background checks. The key objectives of the S.A.F.E. Act are to provide increased accountability of loan originators, protect consumers from fraud and ensure the originator is acting in the best interest of the consumer.