Source: https://www.franzen-salzano.com/new-georgia-rules-regarding-temporary-authority-to-operate-effective-january-9-2020-except-for-disclosure-requirement/
Timestamp: 2020-07-02 10:16:07
Document Index: 780918237

Matched Legal Cases: ['§ 5117', '§ 80', '§ 80', '§ 80', '§ 80', '§ 80', '§ 80', '§ 80']

New Georgia Rules Regarding Temporary Authority To Operate Effective January 9, 2020 (except for Disclosure Requirement) | Franzén and Salzano, P.C.
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New Georgia Rules Regarding Temporary Authority To Operate Effective January 9, 2020 (except for Disclosure Requirement)
On December 20th, the Georgia Department of Banking and Finance finalized its proposed rules on temporary authority for loan originators to operate without a license. Loretta Salzano was the sole non-DBF attendee at the hearing and was pleased to work with the DBF to craft and adopt changes to the proposed rules in response to industry concerns. Click here for the DBF’s publication of the final rule which is effective January 9,2020 with the exception of the new disclosure requirement which is effective April 1, 2020. Our firm’s summary follows. If you have questions, please contact Loretta at lsalzano@franzensalzano.com or 770-248-2881.
1. Disclosure Requirement – Effective April 1, 2020. Mortgage lenders or mortgage brokers sponsoring a loan originator operating under temporary authority must disclose in writing to each applicant, no later than the date the consumer signs the application or any disclosure, whichever occurs first, that the loan originator has temporary authority to operate. The disclosure must be signed by the applicant and maintained by the mortgage lender or mortgage broker. The disclosure shall include the following language in at least ten-point bold-faced type: “The Georgia Department of Banking and Finance requires that we inform you that our company is licensed but the mortgage loan originator responsible for your loan is not currently licensed by the Georgia Department of Banking and Finance. The mortgage loan originator has applied for a mortgage loan originator license with the Georgia Department of Banking and Finance. Federal law (12 U.S.C. § 5117) authorizes certain mortgage loan originators to operate on a temporary basis in the state of Georgia while their application is pending.
“The Georgia Department of Banking and Finance may grant or deny the license. Further, the Georgia Department of Banking and Finance may take administrative action against the mortgage loan originator that may prevent such individual from acting as a mortgage loan originator before your loan closes. In such case, our company could still act as your broker or lender.” Ga. Comp. R. & Regs. r. § 80-11-1-.01(11).
A mortgage loan originator is jointly responsible for ensuring this disclosure requirement is satisfied. Ga. Comp. R. & Regs. r. § 80-11-5-.09.
2. Advertising Requirement. An advertisement by a mortgage lender or mortgage broker that mentions the ability of a loan originator operating under temporary authority to act as a loan originator in Georgia must indicate the individual has temporary authority to operate. The advertisement must also indicate the individual is unlicensed, has submitted a license application, and that the Department may grant or deny the license application. Ga. Comp. R. & Regs. r. § 80-11-1-.02.
3. Mortgage Loan Transaction Journal. A mortgage loan transaction journal maintained by a mortgage lender or mortgage broker must indicate if the loan originator used temporary authority at any point in the application process and, if so, the final status of the loan originator’s application as one of the following: approved, withdrawn, or denied. Ga. Comp. R. & Regs. r. § 80-111-.03. A mortgage loan transaction journal maintained by a loan originator must identify if the loan originator used temporary authority to operate at any point in the application or loan process. Ga. Comp. R. & Regs. r. § 80-11-5-.02.
4. Signature Line Requirement. A loan originator operating under temporary authority must indicate “TAO,” “temporary authority to operate,” or similar language next to the signature line on any document, application, or disclosure signed by the loan originator in connection with a loan application. Ga. Comp. R. & Regs. r. § 80-11-15.09.
5. Proof of Enrollment. Unless the loan originator has already satisfied the following requirements, a loan originator operating under temporary authority must submit proof to the Department of enrollment in a class to satisfy the education requirement as well as registering for the required test within thirty (30) days of submitting a loan originator application to the Department. Id.
Lastly, not only the loan originator, but also the sponsoring mortgage broker or mortgage lender could be liable if it is determined that the loan originator was not entitled to temporary authority. Ga. Comp. R. & Regs. r. § 80-11-3-.01.
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