Ohio prepayment penalty adjustment for 2016

Don’t forget to update your Ohio Homebuyers’ Protection Act Informational Document with the 2016 prepayment penalty adjustment. Beginning January 1, 2016, no mortgage broker, loan officer or nonbank mortgage lender may charge a penalty for the prepayment or refinancing of a residential mortgage obligation secured by a first lien if the loan amount is less than $87,410. See Ohio Revised Code 1343.011(C)(2).

The Ohio Homebuyers’ Protection Act Informational Document is required by Ohio Revised Code 1345.05(G). An acknowledgement of the consumer’s receipt must be retained by the lender, mortgage broker and loan officer, as applicable. The Ohio Attorney General and the Department of Commerce may examine your records to ensure that you are providing the most current version of this document to consumers with the 2016 adjusted amount. The updated form can be found here. The rule regarding distribution and receipt of the Informational Document can be found here.

We hope you have a happy, healthy and prosperous New Year.

Ohio Division of Financial Institutions, State Regulatory

Are you ready? Here come the new Ohio Mortgage Broker Act rules

Lenders of all sizes should take notice: Ohio’s rules are about to change. The Ohio Division of Financial Institutions (DFI) filed the final version of the Ohio Mortgage Broker Act (OMBA) rules on July 20, 2015. The new rules will become effective on January 4, 2016.

This should give mortgage brokers, mortgage bankers, credit union service organizations, loan originators and third-party processors and underwriters adequate time to make the operational changes necessary for compliance. Many of the changes were made in order to meet the minimum standards set by the Secure and Fair Enforcement for Mortgage Licensing Act of 2008. Here are just a few of the highlights:

  • Third-party processing and underwriting companies and nonprofit organizations will be able to apply for a letter of exemption beginning around November 1.
  • Mortgage bankers will be able to originate USDA loans and Federal Home Loan Bank of Cincinnati loans under the authority of their letters of exemption.
  • Registrants and licensees will be allowed to place their NMLS numbers on advertisements in lieu of their Ohio numbers.
  • There will be no separate test to become an operations manager.
  • DFI will be able to accept some federal forms in lieu of similar state forms.
  • No fines or make-up courses will be required for continuing education violations that occurred before 2010.
  • New objective and specific criteria will be used to evaluate an individual’s financial responsibility to be a loan originator.

Deputy Superintendent Bob Niemi and members of DFI will entertain questions about the new rules during a panel discussion at the Midwest Financial Services Regulatory and Compliance Conference on August 20, 2015, in Columbus, Ohio. A booklet containing the new OMBA rules will be available at the conference. This event will feature many engaging speakers on a variety of hot topics, including Richard Cordray, director of the Consumer Financial Protection Bureau. For more information or to register, click here.

For more information, please contact Jackie Mallett at 614.227.4816.

Depository Institutions, Ohio Division of Financial Institutions, State Regulatory