GREENSBORO, N.C. (7/14/08)--A bill that would require mortgage servicers to be licensed in North Carolina was approved last week and is on its way to the governor’s desk. “The changes will have minimal impact on credit unions,” said Dan Schline, senior vice president, North Carolina Credit Union League association services. “But there were a few items added to the list of prohibited activities for lenders, including credit unions, making mortgage loans in North Carolina.” The provisions of the bill applicable to credit unions will be effective Jan. 1 (Weekly Update
July 11). The bill aims to crack down on abuse by mortgage servicers by providing additional regulatory authority to the state’s banking commissioner. Prohibited activities include:
* Failing to provide notice to the borrower of force placed insurance; * Placing of insurance that exceeds the known value of the property; * Failing to refund fees for unearned premiums to borrowers; * Failing to provide borrow notice and itemized statement 45 before initiating foreclosure proceedings; and * Failing to make payments from escrow accounts in a timely manner.