STAND. COM. REP. NO. 2768

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 2850

       S.D. 2

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

 

Sir:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 2850, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO MORTGAGE INDUSTRY REGULATION,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to clarify and enhance the Mortgage Loan Originators Law under chapter 454F, Hawaii Revised Statutes, and the Mortgage Servicers Law under chapter 454M, Hawaii Revised Statutes, which regulate related industries.

 

     Specifically, this measure:

 

     (1)  Adds statutory definitions, updates references to federal regulations, and makes other amendments to increase the clarity of and consistency between the Mortgage Loan Originators Law and the Mortgage Servicers Law; and

 

     (2)  Repeals mortgage servicer provisions in the Mortgage Loan Originators Law, including the mortgage loan servicer loan modification license, in favor of related provisions in the Mortgage Servicers Law, as amended by this measure.

 

     Your Committee received written comments in support of this measure from the Department of Commerce and Consumer Affairs, Division of Financial Institutions.

 

     Your Committee finds that due to a degree of overlap between the mortgage loan origination industry governed by chapter 454F, Hawaii Revised Statutes, and the mortgage servicer industry governed by chapter 454M, Hawaii Revised Statutes, some companies conduct business under the requirements of both statutory chapters.  Currently, a mortgage servicer wishing to offer loan modifications must be licensed as a mortgage servicer under chapter 454M, Hawaii Revised Statutes, and additionally hold a mortgage loan servicer loan modification license under chapter 454F, Hawaii Revised Statutes.  This regulatory arrangement has created confusion among mortgage servicers. 

 

To address this issue, the measure repeals the mortgage servicer provisions in the Mortgage Loan Originators Law, including those related to licensing, the need for which has been eliminated by recent amendments to the Mortgage Servicers Law.  In addition, this measure makes various housekeeping amendments to clarify provisions and ensure consistency between the Mortgage Loan Originators Law, the Mortgage Servicers Law, and applicable federal regulations.  Your Committee believes that the clarity provided by this measure will promote compliance among mortgage industry licensees.

 

     Your Committee has amended this measure by making technical nonsubstantive amendments for the purposes of clarity and consistency.

 

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2850, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 2850, S.D. 2.

 

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

 

 

 

________________________________

JILL N. TOKUDA, Chair