Kansas Governor Laura Kelly is expected to approve a bill that allows licensed mortgage officers to operate remotely from their offices.
Due to many people moving to remote work, a temporary regulation was changed during the COVID-19 pandemic. This required that mortgage officers operate from a brick and mortar location. Public outrage over the relaxation of the rule led to legislation (HB 2568) amending the Kansas Mortgage Business Act in order to allow out-of-office mortgage loans.
The legislative passed through the House by 118 votes to 3, and through Senate 38 to 1. With other sector stakeholders, the Office of the State Bank Commissioner helped to create the bill.
Jim Payne (OSBC assistant deputy director for examinations) told the Senate Committee on Financial Institutions and Insurance earlier this month that remote work was essential in providing mortgage services. Payne stated that it would also ensure the safety of clients and mortgage officers. Payne said that the sector’s success during the pandemic was due to remote working, despite the unpredictable lending demands.
Many states such as Kansas collaborated with different mortgage firms during the pandemic to allow remote work as an acceptable model of business. It is important to remember that HB 2568 seeks organize the written rules provided by OSBC to allow remote working with acceptable safety precautions.
Overland Park’s Zillow Home Loans, which is based in Kansas City, testified in support of the bill. Rocket Mortgage and the Mortgage Bankers Association also testified. Zillow Home Loans currently has approximately 55 Kansas licensed loan officers.
Luke Bell, Zillow Group senior manager for government relations and public policy, said that technology and client expectations have changed over time and that the evolution has accelerated due to the pandemic. Bell explained that under the HB 2568 provisions the OSBC has taken steps to simplify and modernize the mortgage business regulations.
Various home mortgage lenders working in Wichita didn’t voice any opposition. Ernest Warren Jnr of Credit Union of America (VP real estate lending), stated that CUA supports the legislation. It is confident in its ability to benefit mortgage lenders.
Sierra Pacific Mortgage’s regional manager for the Midwest, Brian McGinley, said that he will have supported the bill although he refers to himself as a “brick-and-mortar guy.” McGinley stated, however that accountability is crucial to new mortgage lenders entering the market.
OSBC also stated the law would clarify the regulatory framework by eliminating the requirement that lenders require separate branch licenses at all locations. The pandemic has created a need to streamline the regulatory environment and promote a flexible and efficient mortgage industry. Branch licensing regulations remained the same before remote lending and online brokerage changes.
Payne concluded that KMBA required mortgage firm licensees in order to comply with its provisions. A single license would suffice to provide OSBC with the licensing structure it requires.