Notice to Interested Parties Request for Comments and Notice of Public Hearing – Relating to the Adjustment of Non-Bank Mortgage Lender Fees to Fund Investigative and Legal Compliance Personnel

December 1, 2009 – (RealEstateRama) — Professional & Financial Regulation – Consumer Credit Regulation

To: Interested Parties

From: Julie Haefele, Examiner-in-Charge, Maine Bureau of Consumer Credit Protection

Date of Published Notice: November 18, 2009

Re: Proposed Adjustment of Mortgage Lender Fees, Rule 285

The Bureau of Consumer Credit Protection is proposing a new rule, titled “Adjustment of Non-Bank Mortgage Lender Fees to Fund Investigative and Legal Compliance Personnel.” A copy of that proposed rule is attached. The Bureau will provide an opportunity for public comment on this proposed rule on Wednesday morning, the 9th of December, 2009, at the Department’s Gardiner Annex, 76 Northern Avenue, Gardiner, Maine 04345, starting at 8:30 AM.

In 2007, when the Legislature enacted strict anti-predatory mortgage lending laws, the laws specifically required the Bureau of Consumer Credit Protection to establish two new positions within the agency; namely, an investigator to review consumers’ complaints against lenders, brokers and servicers; and a staff attorney to assist with taking formal regulatory actions against those companies that violate the laws and to serve as a liaison with other state and federal law enforcement agencies. In passing the law, the Legislature accounted for the fact that revenues to the agency necessary to fund the positions might have to be increased. Therefore, specific statutory authority was included in the law authorizing the Bureau “by rule to adjust the fees paid [by non-bank mortgage lenders] to support the costs of the positions established in subsection 2 [the investigator and counsel positions]”; 9-A MRS, �8-206-F(2). In the time since enactment of the law, the ratio of the agency’s carry-forward fund balance to its budget (the formula utilized in other sections of the Consumer Credit Code as a bellwether to determine when volume fees should be raised or lowered by rule; see 9-A MRS �6-203(3-B)) has fallen from 125%, to less than 15%, due to the precipitous drop in the volume of mortgage lending in this State and across the country. At the same time, the need for the positions has increased, as hundreds of Maine consumers have sought and obtained the legal and regulatory assistance of the agency to address the effects of predatory loans extended in 2005-2008, including foreclosures and threatened foreclosures of their primary residences. This rule permits the agency to utilize the mechanisms of the law in order to generate the revenue necessary for maintenance of the two positions that have proven critical in protecting Maine homeowners.

The purpose of this note is to permit you to make plans to attend the upcoming opportunity for public comment, and/or to prepare written comments based on the questions posed in the Request for Public Comment that is being distributed electronically and has been posted on our website.

The comment period for the proposed rule is now open, and written materials should be mailed, such that they are received on or before December 19, 2009, at 5 PM, to the following address: Julie Haefele, Examiner-in-Charge, Bureau of Consumer Credit Protection, #35 State House Station; Augusta, ME 04333; or the materials can be submitted by e-mail to Julie.F.Haefele (at) maine (dot) gov.

The Bureau

Interested parties will also have an opportunity to present testimony on Wednesday, December 9, 2009, beginning at 8:30 AM, in the Central Conference Room, State of Maine Gardiner Annex, 76 Northern Avenue, Gardiner, Maine 04345. Attendees will then have an additional ten (10) days to submit written information on issues or questions that arise at the public meeting.

The proposed amended rule is available at the following link: http://www.maine.gov/pfr/consumercredit/news/ProposedRule%20285.rtf