H. 171 Enhances Help, Consumer Protections for Vermont Mortgage Holders


Montpelier, VT – May 22, 2009 – (RealEstateRama) — Today Governor James Douglas signed into law H.171, a bill that enhances consumer protections for Vermonters with home mortgages. These measures as advocated by Paulette Thabault, Commissioner of Banking, Insurance Securities and Health Care Administration (BISHCA), and supported by the financial services industry, have several main thrusts. They enhance the state’s Mortgage Assistance Program, they permit Vermont to benefit from recently enacted federal consumer protections within the mortgage industry, and they strengthen Vermont’s oversight of licensing and educational requirements for lenders. Taken together, these measures will bolster our already solid system of consumer protections,

streamline licensing and promote responsible lending.


Said Governor Douglas, “In Vermont, our financial institution oversight and sounder industry lending practices have played a part in lessening the impact of the country’s mortgage woes on our state. But we have not been immune to national economic forces. We must do all we can to help keep Vermonters in their homes, and to continue making the

lending marketplace safer for borrowers.”


BISHCA Commissioner Paulette Thabault said, “H.171 gives us a new collection of important and interworking safeguards and licensing tools, some of which stem from the bill’s implementation of the National Mortgage Licensing System. H.171 also gives an administrative boost to a program begun in the Banking Division last year to help troubled borrowers facing foreclosure action.”




H.171 provides an enhancement to Vermont’s Mortgage Assistance


A little over a year ago, as the compounding effects of sub-prime lending, ballooning interest rates, and a plunging national economy and were taking a toll nationally, Vermont ranked as one of the states least effected by sub-prime lending practices. But in response to signs of an upward trend, in March 2008, Governor Douglas asked the Banking Division to implement a Vermont Mortgage Assistance Program (MAP), as part of his Economic Growth Initiative. MAP is designed to help Vermonters who are at risk of defaulting on a home mortgage.


The program steers borrowers toward relief, refinancing options, credit counseling or other options that may be available to them. MAP has also worked with troubled borrowers and lenders to facilitate repayment plans that have kept Vermonters in their homes. The program has received over 650 calls since April 2008. H.171 amends the foreclosure statute to provide BISHCA with some basic information about foreclosures at the time the foreclosure action is filed. For many Vermonters using the program, help cannot come too soon, and this measure jump starts the process.


H. 171 implements the national “SAFE” Act. Last year the Vermont legislature authorized the BISHCA to join the Nationwide Mortgage Licensing System (“NMLS”) for licensing mortgage brokers and licensed lenders. BISHCA joined the system on July 1, 2008. Shortly thereafter, on July 30, 2008, the President signed into law the federal Secure and Fair Enforcement for Mortgage Licensing Act, also referred to as the SAFE Act, requiring that all individual mortgage loan originators be either licensed or registered through the Nationwide Mortgage Licensing System, which BISHCA joined last year.


H. 171 increases uniformi

ty among the states, reduces regulatory

burden, enhances consumer protection, reduces fraud, and helps aggregate and improve the flow of information to and among regulators, through

these measures:


— Sets minimum competency levels for all mortgage loan

originators, promotes a higher level of professionalism, and encourages best practices and responsible behavior among all mortgage loan originators.

— Requires that all mortgage loan originators complete at least 20

hours of pre-license education and pass a standardized test before being licensed as a mortgage loan originator. Additionally, mortgage loan originators must annually complete 8 hours of continuing education.

— Requires additional screening for mortgage loan originator

applicants and requires that licenses be denied to those that have committed any felony within the last seven years, have ever committed certain financially related felonies, have ever had a similar license revoked, or do not demonstrate the financial responsibility, character, or general fitness to operate as a mortgage loan originator.

— Helps state regulators share information among the states so

that a mortgage loan originator that has abused consumers in one state cannot move to another state and take advantage of consumers in a new state.

— Enhances the consumer protection and anti-fraud measures to help

provide that, to the greatest extent possible, mortgage loan originators act in the best interests of the consumer, and includes a list of prohibited practices including such things as: defrauding or misleading borrowers; collecting or attempting to collect fees that are prohibited; advertising financial terms that are not available; and making payments, threats, or promises to influence the independent judgment of an appraiser.


Contact Information for the Vermont Mortgage Assistance Program:


Toll free line: 1-888-568-4547; Local: 802-828-3307 On the Web: www.vermontbanking.info, and under “Consumer Assistance Information, click on Banking Division Mortgage Assistance Program U.S. Mail: Banking Division, BISHCA, 89 Main St., Montpelier, VT



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