GENERAL QUESTIONS: FORMULATED AND PUBLISHED BY THE TEXAS SAVINGS AND LOAN ASSOCIATION on its website at http://www.tsld.state.tx.us/

What is the Act and what will it do?

The Mortgage Broker License Act was enacted by the 76th Legislature and signed by Governor Bush on July 19, 1999. The Act is to be administered by the Texas Savings and Loan Department ("Department"). It establishes specific qualifications for mortgage brokers and their loan officers to ensure that they are capable of properly addressing mortgage issues for Texas mortgage customers. The Act establishes continuing education requirements and sets certain standards of professional conduct for brokers and loan officers.

When is the Act effective? When Must I be licensed?

The effective date of the statute is September 1, 1999. Mortgage brokers and their loan officers, which are not specifically exempt, must be licensed by January 1, 2000.

When will the application for a license be available?

Applications for Mortgage Brokers / Loan Officers will be available by the last week in August 1999. As soon as the Law goes into effect on September 1, 1999, we will have the application form on the Department's website for downloading. However, there may be some supplements or attachments such as finger print cards, which are not in a downloadable format and you will have to obtain these directly from our office to complete the application.

Will the Texas Savings and Loan Department provide training and education courses?

The Department does not intend to offer classes or training directly; however, it will provide an approved list of training and education courses no later than the effective date of the law (September 1, 1999).

If I already have a 2nd lien license from the Office of Consumer Credit Commissioner, do I still need to get a mortgage broker license?

Yes. If you broker first lien, 1-4 family mortgages and are not specifically exempted by the Act, you will be required to obtain a license to conduct mortgage broker activities after January 1, 2000. The fact that you hold a second lien license from the OCCC does not exempt you from this licensing requirement.

Is there going to be an exam to be a broker?

No. The Act does not require an exam for licensing.

When will the "standard disclosure form" specified in Section 156.004 be available?

The form must be issued in proposed form and published in the Texas Register. This proposed disclosure form will be available upon issuance shortly after September 1, 1999 and will be finalized by January 1, 2000. You will not be required to use this form until it is issued in final form.

How does the statute address Internet business? The Act covers all persons conducting mortgage brokerage in Texas. That would include persons offering brokering loans via the internet. For both internet and out of state brokers, Section 156.212(a) of the Act specifically requires a physical office location in the State which must be set forth in the licensing application.

SPECIFIC QUESTIONS BY SECTIONS OF THE ACT: Section 156.002 - Definitions

Can anyone, like architects, accountants, attorneys, or builders, provide a mortgage application to a prospective client? Anyone can provide a mortgage application to a prospective client without having to obtain a mortgage broker license, as long as they are ONLY performing clerical functions such as delivering a loan application to a mortgage broker or mortgage banker or gathering information related to a mortgage loan application on behalf of the prospective borrower, mortgage broker, or mortgage banker; or performing the functions of a loan processor. If the person's activity goes further than "providing" an application, such as counseling as to which loan program or which lender one should utilize, for example, then a license would be required. For those persons exempt under the statute, this issue is not relevant.

Section 156.202 - Exemptions Certain persons are granted exemptions under the act and are not required to obtain a license to engage in mortgage broker activities. Are these exemptions available to persons that meet the criteria but who live out of state? The exemptions set forth in Section 156.202 are available to all persons who meet the requirements of the exemption regardless of their state of domicile.

Is a person who is an employee of a bank or mortgage banker and therefore exempt under the Act permitted to broker mortgages to entities other than the bank without obtaining a license? The exemptions set forth in Section 156.202 are available only to the extent provided in the statute. Employees of financial institutions or their subsidiaries or affiliates are exempted to the extent they are acting for the benefit of their employer. If they are freelancing or brokering mortgages to entities not affiliated with their employer, they would be required to obtain a license.

Does a "bank" mean any bank? State or National? Under Section 156.202, a bank would include any state or national bank or any other federally insured depository financial institution. It would not include a trust company.

Section 156.204 - Qualifications If the Commissioner obtains a criminal history and a deferred adjudication is on record, what impact will it have on the Commissioner's decision to license? Each circumstance regarding criminal history will be reviewed to determine if it relates to the occupation of a mortgage broker / loan officer according to Section 156. 204(6).

I have a law degree, but have not taken the Bar Exam so I do not have an active attorney license. Does a JD qualify as an area relating to business administration? No. Section 156.204(a)(4)(A) states specifically that a bachelor's degree is required in an area relating to finance, banking, or business administration from an accredited college or university and 18 months of experience in the mortgage or lending field as evidenced by documentary proof of full-time employment as a mortgage broker or loan officer with a mortgage broker or a person exempt under Section 156.202

Section 156.206 - Criminal Background Check Are fingerprints required for a background check? Where will the fingerprinting be conducted? Yes, fingerprints will be required. Official fingerprint cards will be included in the license packets. According to the DPS, all law enforcement offices know what is acceptable for conducting the background check. It is suggested that the applicants notify a convenient law enforcement office and verify their ability to complete the fingerprint process.