[0:00] Should we get going then? >> Yes, please go ahead. And let me just

[0:04] say and I I'll mention it once we start recording. Uh director Veette is not

[0:10] available uh and able to meet make our meeting today. So she apologizes but uh

[0:16] we have uh Michael Jenko will be handling the technical aspects of the

[0:22] meeting and uh we'll go ahead. So Jeff, if you want to uh begin, I think we're

[0:28] ready. >> Okay.

[0:30] Thank you. Uh welcome to everybody and and we'll call the meeting to order. Um

[0:35] beginning with consideration and approval of the minutes from last

[0:39] meeting, April 8th. Uh can I get uh someone to approve those for us?

[0:49] » And I'll second. >> Okay. Minutes have been approved.

[0:54] » Do we have anyone from Go ahead, Jeff. All in favor? Sorry. Yeah. Thank you.

[0:57] All in favor? I

[1:02] » Okay, thank you. Um, anyone here from the

[1:06] public that would like to make comment at this point?

[1:16] Okay. Um, so we'll move on to our division section for reports and uh,

[1:22] acting director Justin Barney will will allow you to go ahead and start with our

[1:26] director's report. Yes, thank you.

[1:31] Again, as I mentioned, uh, Director Veette is is unavailable. She apologizes

[1:37] for not being able to attend the meeting and has asked me to serve as acting

[1:41] director for the meeting today. Uh, she had one item to u remind the

[1:49] commissioners and that was the OPMA training. she sent out a a an email

[1:57] about that and just reminded um us that that training is available and and we

[2:04] should go ahead and participate in that. If you have any questions, maybe send

[2:09] drop her an email or check with me and we can we can help you with that.

[2:15] And um I have a a very brief update, but I'll save that for the uh section for

[2:24] for me when uh I get to speak a little bit later. So other than that, I I think

[2:30] it may be a quicker meeting uh today and turn the time back over to you, Jeff.

[2:37] » Thank you. Uh we'll turn the time over to Laurel for for our licensing and

[2:42] education uh portion of our meeting here.

[2:46] » Hi. Thanks. Uh good morning everyone. I'm earlier than normal, so I'm like

[2:52] ready to go. Uh we just have a few things for you. We have our um our

[2:58] pre-licicensing transition update. So we moved from 15 hours to 5 hours. I

[3:02] reported on that last time we met, but we were kind of in the middle of that.

[3:06] But it is uh up and running and we had a few people that were already taking the

[3:11] 15 hours. So we just made an exception for them. They reported it to us

[3:17] and then we reported it to the NMLS like normal. But other than that, other than

[3:21] those few people, this has like been super smooth. Thanks to Mike Page,

[3:26] thanks to the NMLS, um we have the credit reporting going

[3:31] right through the NMLS. So, we've taken us out of the loop and it is Mike Page

[3:37] reported this morning. It's going like gang busters. So, we have uh we have

[3:41] some good traction with that. And on our stats uh from December 25, we kind of

[3:51] peaked and then because that's when you were new. Um

[3:57] sorry, my screens are kind of goofed up. Uh then it kind of recovered and then

[4:03] from January to June, mortgage lending is looking good for lensure. They're

[4:09] just like rebounding up up. So we're at a high a 12-month high for MLOS's. Our

[4:17] PLMs are fairly flat, but that I think is stable. So looks good. Is there more

[4:23] mortgage business out there? That's what I'm wondering.

[4:26] » Not a ton. the commission [laughter] >> looking good in the mortgage robe. I was

[4:31] like, >> "Yeah,

[4:33] » well,

[4:39] » you kind of can't hear you, Laurel. >> Uh oh.

[4:42] » If you're talking, it's not muted, but it was like kind of

[4:46] » Try again." >> Uh, let's see.

[4:48] » Yeah, I can We can >> We can hear you now.

[4:51] » Yeah, >> that was weird.

[4:54] » I do have a fan running. Maybe that's upsetting the system, but uh so I'm

[5:01] sorry that it's not going gang buster for you.

[5:06] People are licensing, so it's hopeful. We're always hopeful at the division

[5:09] that things will pick up and everyone can make their uh ends meet at the

[5:14] minimum and then exceed at the rest. And unless you have questions for me, that's

[5:18] all I have for you. >> Hey Laurel, good job on the uh

[5:22] enforcements, the complaints, and the cases. You guys are doing great on that.

[5:28] » That's Bren Bren's going to talk about that. That's herment, right?

[5:31] » I'm just doing licensing. I'll take credit for it if you want, but

[5:35] » Well, it's not really my thing. >> Whoever did the spreadsheet, good job.

[5:39] We're excited about it. >> Yay. Yay.

[5:44] » Uh well, any other questions for Laurel?

[5:50] » Okay. Well, if not, then uh >> you're back on, Justin.

[5:53] » Okay. Thank you. Uh as the commission will recall, we have uh a amended the

[6:01] administrative rule uh that has to do with the mortgage loan originator

[6:07] licensure. So the uh we used to have the highest I believe

[6:13] it was the highest pre-licicensing education required in the in the country

[6:19] and we've reduced that from 15 hours to five hours. We do think that there are

[6:24] some specific items that that should be uh covered uh prior to licensing and we

[6:30] still have that course, but it's a five-hour course that was announced last

[6:34] time. Just a reminder that that is uh in place now. I might ask Laurel or uh Mike

[6:42] Paige, are we getting any feedback on that? any any uh response from licences

[6:48] about the lower time requirement to do the

[6:53] pre-licicensing education? >> Um the only thing that I've been

[6:58] receiving um as far as I've I've not had any negative uh feedback in regards

[7:05] people seem to be a lot more receptive to the now the new 5 hour. That is what

[7:09] I've been running into is a lot of times um applicants will

[7:15] uh have outstanding license requests that have been been there for se several

[7:20] months but haven't received any education from them. And so with the

[7:25] implementation of the new 5-h hour um we're still accepting the 15-hour course

[7:30] requirement if they still if they've taken it prior to the May 1st deadline.

[7:36] Um I'm not sure how long we want to continue to accept that as as time goes

[7:40] on. You know, say sometime later in the year if we want to draw a deadline in

[7:45] terms of that and said no, it's it's been enough time. The new 5 hours been

[7:50] implemented that needs to be the course of action now. But um I'm only getting a

[7:57] few, you know, far in between folks that uh

[8:02] they signed up for the course, but they never took or they never completed the

[8:06] course until after May 1st. And so that's where it's kind of throwing a

[8:09] wrench into things. And so I have to kind of go one by one and make a list of

[8:15] people to send to the animal list for him for them to manually bank the those

[8:20] hours for them. But it's uh it's kind of it's dying off a little bit. There's,

[8:26] you know, ones and twos every once in a while, but I haven't had any um

[8:32] issues regarding that uh with people or the NMLS. The NLS has been really uh

[8:37] helpful, especially Jennifer Eskina, who's a the education and licensing uh

[8:43] person with NLS that she's been fantastic. She uploads the the education

[8:48] within a day or two and uh when I'm able to process lo the applications, it's

[8:54] been pretty straightforward. >> And I can add a little bit to that. Uh

[8:59] we just finished out our caravan yesterday in Spanish Fork and every time

[9:03] I announce, you know, that this is in play, I get hands up in the air, hooray,

[9:07] from mortgage people. So, they reacted kind of like uh the commission did when

[9:12] I first kind of brainchilded this. And uh everyone loves this change. And we

[9:18] honestly didn't have enough content for 15 hours. So uh putting that down into

[9:23] the five hours makes it dense and um easier and just more accommodating for

[9:29] anyone that wants to come uh do the mortgage thing in Utah. So

[9:34] we're grateful for your support initially because that was the first

[9:37] feel and then yeah caravan it's like cheers silent cheers with hands up in

[9:42] the air. So, >> I'm sure with the uh NMLS conference

[9:46] next year, um I'll probably get a lot of high fives and everything like that from

[9:51] folks. So, um I can report back on when when that happens, but I I suspect that

[9:57] um it it'll continue to grow and uh more people will be uh coming to our state

[10:05] for that. So, >> good. And Mike, as I understand it, the

[10:10] the one of the real advantages is now that you don't have to manually input

[10:16] those hours. They can be uh banked automatically through the NMLS. Is that

[10:20] right? >> Right. Yeah. We're we're finally uh

[10:23] catching up with the rest of the country. Um, so it, yeah, I it's saving

[10:28] me time uh to have to reach out and and ask for these certificates that obvious

[10:35] that we should have not had to be doing years ago. But um, so yeah, it I it's

[10:42] cutting my processing time by about half.

[10:46] » That's good news. >> That's great.

[10:51] Well, that is uh the extent of my report to the commission and I'm happy to

[10:56] answer any questions if you have them.

[11:02] » Okay, thank you [clears throat] for your time.

[11:05] » Thank you Justin. Thank you Laurel and also Mike. Appreciate you guys. Um

[11:10] enforcement Brenn with us. >> Yes, thank you so much.

[11:14] » Thank you. Our our case management uh has remained highly stable and efficient

[11:18] over the last quarter. We maintain a 100% clearance rate perfectly balancing

[11:24] the incoming case load of 19 complaints by um also closing 19 complaints over

[11:30] that period. Uh which is fantastic. Um currently the division is managing a

[11:35] healthy inventory of 20 open complaints with only two requiring escalation to

[11:42] pending legal action. Is there any uh stats questions before

[11:47] moving on? >> Hey Bren, great job.

[11:51] » Hey, thank you. >> Yes, we're

[11:54] » on those legal actions. Are these stipulations or are they coming up for

[11:58] hearings or is just not determined yet? >> So, those are technically pending. Um,

[12:04] we haven't had >> that mapped out quite yet.

[12:09] » Okay. Okay. We do have one uh stipulation to present

[12:15] to you today if there's no more enforcement questions.

[12:19] » Okay. Fantastic. I'd like to turn the time over to Justin uh to present that

[12:23] stipulation. Thank you. >> Good morning, commissioners. I would

[12:28] like to present a proposed stipulation in order regarding White Glass Lending

[12:33] LLC. This is docket number RE-2026-048.

[12:41] Division case number is 142309 for your consideration.

[12:47] This investigation originated from a consumer complaint filed with the

[12:50] division in March 2023. The complaint alleged that the their

[12:56] property was encumbered by a 865.

[13:02] » Go ahead.

[13:06] I think that was just some feedback. >> Yeah, we just had that go.

[13:09] » Sorry. So, uh, it was encumbered by an $865,723

[13:14] loan issued by White Glass Lending, which was secured using documents forged

[13:19] by a third-party title agent. The consumer reported that White Glass

[13:23] Lending refused to remove the allegedly void trust deed from the property's

[13:29] title in a timely manner, which prevented the homeowners from selling

[13:34] the property. The division's investigation uncovered the respondent's

[13:38] licensing status had expired January 1, 2022. However, the company continued to

[13:45] engage in residential mortgage loan activities for approximately 23 months

[13:50] while their license was expired. The respondent obtained a valid license

[13:55] again on December 8th, 2023. During the interview, the respondent

[13:59] cited that the gap in lensure was due to an administrative oversight rather than

[14:04] a willful attempt to circumvent the law. The unlicensed activity is a violation

[14:10] of Utah code 61-2C-201

[14:15] which requires lensure to transact the business of residential mortgage loans.

[14:21] To resolve the matter, the respondent alongside their legal counsel has agreed

[14:26] to a $5,000 civil penalty and the respondent acknowledges that this action

[14:32] will be published in the division's quarterly newsletter and shared with

[14:36] other agencies. Does the commission have any questions?

[14:43] » Did they I mean, did they ever end up removing the lean like they were

[14:46] supposed to? Just out of curiosity. >> The lean was removed. Yes.

[14:52] And that came from a title company or was it from the

[14:56] borrower? >> So the borrower owned the title company

[15:00] from uh what we've seen in the news. So he used that title agency to submit

[15:06] documentation.

[15:12] » Okay. >> Dustin did there was um criminal action

[15:18] taken in that case. Is that right? >> I believe from this

[15:22] » that doesn't affect this particular matter. But so that that was why White

[15:27] Glass got drawn into that there was a a criminal conduct and a criminal case

[15:33] that that went forward. But uh we're just addressing the issues of the lency

[15:38] at this in this stipulation. >> Is there any status on their license

[15:44] itself? I mean, was it ever it was not we're not looking at putting it

[15:49] suspending it or or anything other than that, right?

[15:54] » All of the individual loan officers were still licensed. It was just a company

[15:58] license that had lapsed. >> Okay.

[16:07] » Okay. And that $5,000 penalty, is that what statutory allowed statute allows or

[16:14] what? How did we determine that? >> That would have been the maximum uh that

[16:18] they allowed. >> Okay.

[16:32] I don't I don't have any other questions.

[16:34] » I don't have any questions on it. >> None here either.

[16:38] Okay. >> Thank you, Justin. Thank you, Bren.

[16:44] » Um, in this matter, we'll we'll need to, uh, go into executive session. And so,

[16:52] uh, if we could make arrangements for that.

[16:55] » So, sorry, this is Jennifer. I'm with um, I think that the meeting started

[17:00] early. We joined at 8 o'clock, but it looks like we missed the public comment

[17:04] portion already. Did that already occur? >> You were here when they asked for it,

[17:10] but you must have missed it. Is this Yeah, we started right at 9.

[17:17] » Yeah. Um I joined right at 9:00. I don't I guess I missed it. I mean, is it

[17:23] possible for us to address some public comments about the PLM issues that have

[17:28] been circulating? >> I think that's further in the agenda,

[17:32] isn't it, Jeff? >> I don't see it in the agenda. That's

[17:35] what I was about. >> It was for public comment. Uh, Chair

[17:39] Flynn, if you want to since uh she was here and and wants to address that, if

[17:44] you want to reopen public comment for this matter, I think you can do that.

[17:48] That's up to you. >> Okay. Yeah. Let's go ahead and open

[17:51] reopen public comment uh for Jennifer and and for for Tula Law uh to discuss

[17:57] your matter. >> Thank you. Um hopefully I think that the

[18:03] uh memo was circulated, our final memo and this is based on our October

[18:07] meeting. So I wanted to thank you guys for you know that thoughtful discussion

[18:10] back in October. Uh we took your concerns seriously. We revised our

[18:15] proposal um to specifically address some of the

[18:19] issues that were raised. Um hopefully you guys had a chance to

[18:23] review it and um you know just to reiterate we're not here asking the

[18:28] commission to reduce standards for the PLM uh licensing requirements. Um we're

[18:34] just asking for a way to recognize the equivalent experience portion.

[18:39] So our revised proposal did include you know a business purpose only maybe

[18:44] designation or alternative documentation requirements for business purpose

[18:49] lenders perhaps a certification or some addistation under penalty of perjury

[18:55] prohibiting consumer lending um I mean generally the issue isn't that

[19:00] these applicants don't have the experience you know they have it's it's

[19:04] the issue is of you know the current verification mechanism it doesn't recogn

[19:09] recognize the experience that these lenders, these business purpose

[19:12] commercial lenders do have, right? So, we're not, you know, we're not asking

[19:17] you guys to reduce any experience experience requirements. We're asking

[19:22] you guys to recognize perhaps an equivalent experience using some sort of

[19:25] documentation um that's appropriate for business

[19:28] purpose lending. Um I I think that gen generally there's a regulatory mismatch,

[19:35] you know, between what the current experience verification method um is and

[19:40] the reality of business purpose lending. So, you know, the Utah code does um

[19:46] allow for uh the the commission to exercise discretion.

[19:51] Um, and so we're hoping to maybe work with you guys to identify acceptable

[19:55] forms of documentary evidence, you know, um, and we're happy to work with, you

[20:02] know, whatever document standards you guys believe is appropriate. Maybe loan

[20:06] tapes, loan files, you know, recorded deeds of trust.

[20:10] Um, anything, you know, if you guys have

[20:14] suggestions, we're happy to, you know, work through that. Um, did you guys have

[20:19] any questions or comments based on our memo?

[20:25] » And if maybe you can address this for me because I was reading through it, but I

[20:29] didn't get through the whole thing. The question I think the concern that I've

[20:33] always had is you're bringing in more investors into Utah that then start

[20:38] taking the single family homes or doing these things for investment purposes and

[20:43] we already have a shortage of homes and things like that for regular people. So

[20:49] what like what types of property are they trying to

[20:54] do loans on here? What is their goal? it would be to um you know like rehab um

[21:01] one to fours right because that's the the rule the statutes in Utah require

[21:06] licensing for one to fours um but these would be investment properties um

[21:10] vacation rentals things like that um not owneroccupied

[21:15] these wouldn't be the borrowers would not be you know the ones that are using

[21:19] these to um renovate their own kitchen or something like that it's it's for

[21:25] investment purposes business purposes Okay.

[21:32] » Well, the focus on fix and flip the SCR investment property sounds like one to

[21:38] four consumer. >> Yeah.

[21:43] » Um, now Mike is is Mike still on. Mike Page.

[21:48] » Yeah, I'm here. >> Is this something that could even Can

[21:51] they can you regulate that? I mean, how do you know or determine,

[21:56] you know, if uh the Well, I guess it's the experience. You still open it up and

[22:00] they'd still become a PLM. They'd still receive they could do anything. How

[22:04] could you how can you regulate a business purpose versus somebody that's

[22:08] not doing it? So, if I'm doing business, I'm also doing investments, DSCR loans.

[22:14] I'm doing fix and flips and I I've I've complied to everything. But then you got

[22:19] somebody else that comes in that's kind of we've loosened up or had some other

[22:22] way to regulate their experience and what they're doing. They're doing the

[22:26] exact same thing other than they're not doing the residential side of things.

[22:31] How do you is that even possible to regulate something like that?

[22:36] Uh it's very >> it's very difficult um for me to ve to

[22:43] be able to uh verify something uh like Miss Young is is talking about um where

[22:52] um it's almost this this if you want to call it a a niche

[22:59] type of market that came about when COVID happened where um people were shut

[23:05] up and you know not able to conduct business on a regular basis. And so this

[23:11] thing of um business purpose lending or or what have you meaning uh became a par

[23:19] became a new a new thing where people would would start to invest in

[23:23] residential properties to for fix and flips for renovation for uh commercial

[23:30] lending for that type of a thing. And so what I review and what I what I coming

[23:37] from my back background in in licensing here um we've never experienced anything

[23:43] like this before. It's a new it's it's almost like a new market that that came

[23:49] about somebody's idea to you know make money quick and easy type of a thing and

[23:56] to I don't want to say circumvent the rule or to get around normal mortgage

[24:02] origination where um it's they they use the they go under the

[24:08] name of business purpose type of thing and so a lot of these business purpose

[24:12] loans that I try to that that I need to verify are not recorded

[24:17] or or submitted through the NMLS and the HUD reports. And so it's impossible for

[24:23] me to review anything like that. And so would be basically

[24:28] deny these deny it because it's it's there's nothing I can review or verify

[24:33] because it's a because it's a commercial. A lot of these are

[24:36] commercial in in in in um

[24:42] » what I want to say

[24:46] in in view in view of point it's the DR doesn't regulate commercial the

[24:52] commercial side of that we we regulate first lane residential owner occupied

[24:57] one to four family unit closed end first uh closed end loans a lot of the I wrote

[25:03] a uh a newsletter article a few months back regarding just such of

[25:08] just such a things because we've been we were getting inundated with new lending

[25:13] manager applicants that only did this type of of lending. Well, they didn't

[25:18] have they they in terms of the lending pipeline that they are supposed to

[25:23] provide me so that I can verify these none of these were available for me to

[25:27] look at. So they have to be able to provide me evidence, physical evidence

[25:33] of the actual loan application to prove that they are the loan originator on

[25:38] from start to finish uh and they are the final signer on the 103 document. And so

[25:46] that's where the the difficulty is and for me to kind of kind of verify this

[25:51] and um where it's

[25:56] that's the only way I can ver that's the only way I can see anything happening is

[26:01] because if it's a business purpose loan, if it is only on the 1 to4 family unit

[26:06] and it is a closed end loan but it's a non-owner occupied,

[26:11] those don't get reported to the NMLS. us. So that's where the problem is.

[26:16] » That's exactly right. So we're trying to, you know, hopefully work with you

[26:20] guys to figure out an alternative way to show that experience because it's not

[26:25] that they don't these applicants don't have the experience. You know, it's just

[26:28] that the current verification mechanism doesn't recognize the experience that

[26:32] they already have. And so our proposal was to, you know, maybe come up with a

[26:38] special designation or require separate types of documentation or specific list

[26:43] of documents. What, you know, we're open to working with you guys to see what

[26:48] you're comfortable with in accepting the equivalent experience. Um, and that's

[26:52] kind of the >> Well, the only the only thing that I

[26:56] will accept. um we don't there's not really an an equivalency that we can

[27:01] that I can accept other than I need the actual document. So I've had other

[27:06] people for example that they work for a financial institution like a bank or

[27:11] credit union. Those those do not report to the NLS. Those don't report to HUD or

[27:16] anything like that. So I need to actually either I need the physical loan

[27:20] application. So I need 45 loan applications

[27:24] basically. >> Okay.

[27:26] um is the only way that I have is the only way I can do it or in lie of that I

[27:30] can accept uh deeds of trust uh is the only other uh option that I will accept

[27:38] regarding verif regarding proof of origination

[27:43] » um and then what happens if these um deeds of trust and applications don't

[27:49] have an individual but has a company lender list

[27:52] » they will not qualify based on our rule And they have to bas it has to be

[27:57] according to our will they have to be if it's a company that that's done as or if

[28:01] they're part of a team or if they're part of a me if they supervise something

[28:06] or part of a team or or something like that that doesn't fall under our rule of

[28:11] a general um origination application that has to be those that's the thing

[28:17] that I don't know I don't I don't uh see a way a way around of that

[28:24] because we've We've already have three options available already. Um, each of

[28:29] them require personal loan origination anywhere from 15 to 45. Um, and as far

[28:36] as I made an exception in talking with my supervisors, my director regarding

[28:41] okay, I can't verify they don't have the that's not listing in the NMLS. What

[28:46] else can I do? And so by providing the actual documents and it has to be that

[28:52] individual that signed the 103. The company can't do it. It has to be that

[28:56] individual because they're it's the individual that's applying for the

[29:00] license, not the company. >> Hey Jennifer, um what what stops your I

[29:05] mean I know everybody wants to not have middlemen or whatever, but what stops

[29:09] your people with teaming up with a lender in Utah in order to accomplish

[29:15] these things? like why do they have their own PLM when it's as hard as it is

[29:19] to change that specific rule? >> Yeah, because for the company to get

[29:25] licensed, the PLM has to be um a unique um uniquely sponsored by the company.

[29:32] So, they can't just use another PLM. >> Um but if they I guess they'd have to be

[29:37] employed by the companies out here. Okay. I'm just trying to think of

[29:41] [snorts] >> well I know there's a uh we've been

[29:44] doing with another company [clears throat] if you're familiar with

[29:47] who Lending Tree is. So Lending Tree they are pretty much

[29:53] » they are they are licensed with our state. I'm dealing with an issue with

[29:58] them right now with the same type of a thing where they can't get a lending

[30:01] manager because our rule requires this type of a thing. But Lending Tree is

[30:06] different in that they are a lead generation type of company where they

[30:09] will basically uh take applications and or they'll

[30:14] receive they'll receive notifications or however they do it and they basically

[30:19] farm out these loans to licensed companies to complete the origination

[30:24] and then that person that takes the referral or whatever get a a kickback or

[30:30] a fee or a or something like that as far as payment that in that regard. But um

[30:36] I'm not sure [sighs]

[30:39] like like Allison was saying um I'm not sure

[30:46] how how Fortra can then can't just implement something in that regard if

[30:53] they want to get if they want to do loans with the state if they or or uh

[30:59] hire somebody off of the street or from another company to become the PLM.

[31:03] that already has a license or can obtain that license outside of your company,

[31:09] » right? But the problem still is the same, right? The people that they're

[31:13] looking for who are, you know, well-versed in business purpose lending

[31:17] don't have the requirements needed to to satisfy the the licensed experience that

[31:25] Utah currently needs. So, I mean, we've tried all avenues and this is just we're

[31:31] we're stuck, right? And so that's why we're asking for you guys to help us um

[31:36] figure out a solution, maybe, you know, come up with some sort of equivalent

[31:42] experience that you would approve of. Mike, weren't you just kind of

[31:45] suggesting like that they work with somebody in Utah that has the ability to

[31:50] get their PLM >> because I I don't know if the rules in

[31:55] Utah that if they have to have a physical location here. I think that's

[31:58] no >> no requirement to be, you know,

[32:01] physically in Utah. The requirement is to show the licensed experience and

[32:06] that's just >> a lot of loan officers in Utah that

[32:09] could show that that you might be able to partner with,

[32:12] » right? but they don't have the business purpose experience, right? Because if

[32:16] they are able to meet the the the lending manager experience requirements,

[32:20] it means that they're licensed as an MLO doing consumer lending because on the

[32:24] business purpose side, you don't need that. And consumer lending is very very

[32:27] different from business purpose lending. >> Okay. [snorts] So, I guess that's where

[32:32] I'm confused because it's like I can do a business purpose loan.

[32:36] I guess it's not I do have options for doing it in a business name rather than

[32:40] an individual, but most people that when they're buying an investment property,

[32:44] it's an individual, then they move it to the LLC or whatever. The obstacle that

[32:49] you're running up against is that it's it's going to be a company and not

[32:54] an individual that wants to do these loans. Is that is that the problem?

[32:59] » Um, it's a company that's trying to get the license, right? But the difference

[33:03] between the type of lending activity that business purpose lending companies

[33:07] do versus consumer purpose lending companies is that the borrowers that

[33:12] they interact with um for business purpose it is not they're not using the

[33:17] loan proceeds for their personal home, household or family purposes. It's for

[33:21] investment purposes, right? And so consumer lending is you're dealing with

[33:24] borrowers who are using these loan proceeds specifically for personal

[33:28] family or household purposes. So the the nature of the loan itself is different

[33:34] and business purpose across the board in other states don't require MLO licensing

[33:41] and that is where we're hung up because Utah's PLM license does require you know

[33:47] the individual to show MLO experience uh MLO being listed on the HUD or MCRS

[33:54] being reported which is not required for business purpose lending. It's kind of

[33:57] like catch 22 and we don't know how to show that. And so we're asking if you

[34:02] know the commission does have you know the code allows the commission to

[34:07] you know have a you know discretion to approve equivalent experience. And so

[34:13] our proposal is to, you know, we gave a couple of options and we're hoping to

[34:19] work with you guys to come up with something at your discretion, what is

[34:22] acceptable for you guys to show the equivalent experience needed in order

[34:27] for these individuals to get their PLM license. And Mike, the big issue that

[34:31] you're running up against is that there's no real record of these loans

[34:35] besides like a a deed trust or an application to show that they have that

[34:41] experience, >> right? Because it's the company that's

[34:44] signing off on the loan, not an individual.

[34:46] » Yeah. >> I mean, we can go further and dig into

[34:49] that, right? I mean, if if the the docs show the company, um perhaps there's,

[34:54] you know, I'm sure that companies can show who the originator is on these

[34:58] loans. Um maybe some sort of internal I I don't know, records or something like

[35:03] that. I mean, I don't have the answer, but I'm hoping to, you know, work with

[35:07] you guys and just kind of brainstorm and figure out something.

[35:11] » But but Mike, does um does a PLM have to have the business purpose experience? I

[35:17] mean because if if I've done a lot, you know, Allison or whoever, Jeff,

[35:20] whatever. If we've done a lot of investment properties out there, done

[35:23] things and they become and they're no longer associated with any other

[35:27] company. They're part of your company now with Forra or well or the name of

[35:31] the whatever the uh company name will be. Could they not still be the PLM here

[35:37] in Utah and be working for your company at that time?

[35:42] So, the lending company would need an individual to get their PLM license. And

[35:48] the problem is that to get the PLM license, you have to show specific

[35:52] experience that is verified on either the HUD or on MCRS or something. And

[35:56] Mike's not able to verify that because they do business purpose loans and

[35:59] that's not on HUD, right? that that would be on maybe a loan dock set where

[36:06] they have attestations from the borrowers that this is this is purpose

[36:09] loans. Um I know that >> I think what Jeff's trying to get at is

[36:14] like if you just have a regular loan officer in Utah that has the experience

[36:19] to become a PLM, they can work with your folks. Like once they have that PLM,

[36:24] there's nothing stopping them from going and doing an investment property loan.

[36:28] So, like in some ways that's the simple solution where you have somebody in Utah

[36:34] that has their PLM and then you do these loans. So, I I guess I'm I'm still

[36:38] confused as to why it's a like why you guys can't do business here. Yes, you

[36:42] can't as a company get a PLM without showing that, but you can still do

[36:46] business that way >> with without showing the experience,

[36:51] » right? Well, because they've already had the experience on a as a as a one to

[36:55] four unit lender for the PLM, but but now they're just stepping in working for

[37:01] your company as a PLM. They don't have they've already had, I would think,

[37:05] equivalent to any of these. >> They have equivalent experience, but not

[37:10] the type of documentation that Mike needs to approve

[37:15] them being a PLM. Is it correct to say, let's just say me,

[37:21] okay, I have I have experience. I do have my PLM, but like let's just say I'm

[37:25] somebody who doesn't. And Jennifer comes to me and says, "Hey, we'd like to team

[37:30] up, whatever. Can you go get your PLM?" I go, "Sure, I'll go get my PLM. Then I

[37:36] can go do investment property loans." then you can be the PLM for you know my

[37:41] lending company and then we'd be good to go and my company can apply and get the

[37:45] mortgage entity license then we'd be set but in reality

[37:49] » in reality that's impossible I mean for maybe four years now I've been advising

[37:55] my clients go out and find somebody who can show that they have the license

[37:58] experience and these companies have been trying for years and they're still not

[38:03] able to find people who can show the experience that Mike needs because

[38:07] they're not you know they're not listed on HUDs. They're not listed. They don't

[38:11] have to do MCRS, right? Because they do business purpose loans. So, their 30

[38:15] years of experience is not um it's it's it's just not verifiable to Mike in what

[38:21] he needs. And so, what I'm asking is for us to figure out a different equivalent

[38:27] method of showing that equivalent experience. Mike, am I I'm missing

[38:32] something here because like what what would stop them from teaming up with

[38:36] somebody in Utah that has their PLM or is willing to get their PLM and do what

[38:40] they want to do? >> Absolutely nothing, right? But they

[38:44] can't get their PLM because they don't have the equivalent experience to show.

[38:46] » Well, any old loan officer here in Utah that has 15 under their belt or whatever

[38:51] the thing is can go get their PLM. >> I think what the is Could I just add

[38:57] this? >> Yeah, tell me. I'm I just want to

[38:59] understand because I'm trying to help you find something

[39:01] » and Mike can correct me if [laughter] I if I misstate this but I think what's

[39:05] what's uh I'm hearing from you Jennifer is that the pool of candidates that your

[39:12] client is willing to consider to be the PLM is a is a small group that is not

[39:20] involved in other types of lending. So in other words, the the uh pool of

[39:27] potential PLM is only the people that are currently

[39:32] affiliated with your company. What Allison is saying is that if you expand

[39:37] your pool, there are uh hundreds of potential PLMs that are either already

[39:45] licensed or uh have the required experience and and

[39:51] affiliating with one of those people would allow you to meet the requirement.

[39:56] I think that's what what she's saying. >> Yes. And I hear that my so we're a law

[40:02] firm and we represent private lenders across the US. Um for you know at least

[40:08] four years now my clients who want to operate in Utah and want to get that

[40:13] Utah mortgage entity license have been looking for originators who can qualify

[40:19] for a the PLM license. But this just not possible because their originators are

[40:25] business purpose originators. And when you do business purpose loans, you are

[40:29] not going to have your, you know, license on the HUD or you don't have to

[40:34] report on MCRS. >> Please, please listen to me. So I I

[40:38] understand that part. >> The issue isn't that the originators who

[40:44] are working for Fortra or one of your other clients can show that experience.

[40:49] The issue is there are hundreds of other people who can do that. And instead of

[40:55] looking at the small pool that you already are affiliated with,

[41:00] expand that and find somebody who can can meet those requirements and step

[41:06] into the company as the PLM because they already have the experience or they're

[41:10] willing to get it through another means. I think that's Allison, is that what you

[41:14] were saying? >> Yeah, I'm just saying like I don't

[41:18] » I mean, >> but it's a separate pool.

[41:20] » It it doesn't matter. This is what I'm saying is there is nothing stopping me

[41:24] as a PLM from going out and doing an investment property loan. Period. The

[41:29] end. >> Yeah.

[41:30] » So, I don't I don't know why the company does like feels that they can't team up

[41:37] with somebody that's already in Utah or that is willing to go get their PLM so

[41:41] that you have that licensing so you can do the lending. That's where I can't

[41:44] figure out. >> Absolutely. They are trying to they

[41:50] » are they only looking for business purpose people only

[41:54] » but that's the company right that's the company you're that you're representing

[41:58] they they're looking for business purpose PLM right

[42:02] » all of our all of our lenders are business purpose lenders only right they

[42:06] don't do consumer lending and so the originators that they're hire they're

[42:10] trying to hire would you know a consumer lending originator doesn't fit what

[42:17] they're looking for because first of all, some of them just want to stay in

[42:20] the consumer lending world, right? >> 50 ways to skin a cat and they can do

[42:26] business in Utah if they just team up with a PLM in Utah.

[42:31] » And honestly, you could probably say, "Hey, PLM, we're going to hire you for

[42:35] we're going to hire Allison for $100,000 a year and she's going to only focus on

[42:41] business purpose lending." But she may not even be originating. She may just be

[42:44] saying, "Hey, I'm here as a PLM company, come and start doing business under I'm

[42:49] I'm your PLM. I'm going to be able to uh represent and re uh the requirements for

[42:55] Utah as a PLM and now I'll be your PLM. I'll be hired by your client's company

[43:02] and now she's she can she doesn't have to do the business purpose lending, but

[43:07] she also has that experience because she's done hundreds of investment

[43:11] properties already. So it seems like they could they could use someone like

[43:15] her to already step and they wouldn't have to have that business purpose

[43:18] experience >> and it sounds like a company wants to do

[43:22] that but or wants to do just the business purpose thing and get an

[43:25] exception so that they can have a PLM but I don't really

[43:30] » Yeah, I guess I don't see like why it has to be that way and why we need to

[43:34] change a rule when they just need to >> Yeah. I mean, my clients are having a

[43:40] hard time finding people who can actually who meet those requirements. I

[43:45] understand that you you know, there are probably a lot of originators out there

[43:49] who meet their experience requirement and can show it to get that license

[43:53] approved, but my clients cannot find them and it's, you know, they're they're

[43:58] trying. It's not for a lack of trying. And now we're, you know, years and years

[44:02] and years in and their business in Utah has just stalled because they cannot get

[44:06] that license. they cannot find the person, they cannot, you know, I mean,

[44:10] we represent so many clients who want to go into Utah and maybe five of them have

[44:16] found somebody who was able to meet their experience requirements. And so

[44:21] now, >> yeah,

[44:23] » where we are is trying to propose maybe some sort of alternative

[44:29] equivalent experience to show you guys so that they can sit for that PLM

[44:34] license. I mean they have the experience you know you guys can audit um the the

[44:40] activity I don't know but it's not that they don't have the experience they can

[44:43] sit they sit there and they they can pass the exam they're knowledgeable it's

[44:47] just this experience requirement that they get stuck with because the method

[44:52] that you guys are requiring it does not fit the business purpose lending

[44:56] » and you're representing multiple lenders that want to do the same thing right so

[45:00] like each one of these like >> commission like each One of these would

[45:05] h I mean would have to find a way to team up with

[45:09] APLM or more. >> Yeah. No, I'm seeing I'm seeing the

[45:14] thing. I just I'm >> Yeah,

[45:17] » I guess I'm not just put point out that this has uh come up for a discussion

[45:24] just from the public comment period. We the commission is not able to take any

[45:29] action today and maybe the the process is um look at the uh the letter that you

[45:37] received and uh if if there's interest in in doing something or putting that on

[45:43] an agenda in the future. It's not on the agenda now so no action can be taken but

[45:47] it has been I think helpful to get the information. We appreciate

[45:52] Jennifer Young coming in and and making the case for clients. So

[45:58] » yeah, >> I think it's probably I mean it's up to

[46:01] you chair, but I'm not sure how much longer you want to spend on this public

[46:05] comment matter. >> I agree with you Justin. I go ahead

[46:09] Jeeoff. Do you have more? Hey, I just just one thing, Jennifer, I think you

[46:12] just take away. Um maybe just go back to your clients and say why, you know,

[46:15] could would you be willing to open it up to other PLMs without specifically and

[46:20] strictly business experience? >> Oh, I've done that.

[46:23] » Yeah. No, I've done that. I'm like, please just go find someone. I don't

[46:26] know who who

[46:31] » I even have I even have a list of every PLM licensed with the state of Utah. I

[46:37] can even email that direct list to you directly if you would like. But

[46:41] » um >> but those PLMs can only work for one

[46:44] company, right? Because that sponsorship from the company is unique. So they

[46:47] can't be a PLM for both companies. >> That is true.

[46:50] » And so once they're PLM for a company, they can't

[46:54] » it's not even just the uh PLMs that are already licensed. There are thousands of

[47:00] MLOs's that have the required experience and all they would need is to so it

[47:06] expands the pool. It's a huge pool. There seems like there should be a

[47:12] handful that would be willing to expand their business

[47:16] » uh into business purpose loans. It's just a matter of going through that list

[47:21] and contacting them and finding who might be willing to do that.

[47:26] » Yes. And that's my, you know, first piece of advice when I have a company

[47:31] wanting to get licensed in Utah, right? I say,

[47:35] » have they used that list? Apparently not at this point. Uh, why don't you get the

[47:39] list from Mike and uh and and see if one of the thousands that are on there might

[47:46] be willing to to branch out their business and become business purpose uh

[47:52] originators. So, would this be poaching originators?

[47:57] I don't want my clients to be poaching other originators.

[48:00] » That happens all the time. >> That happens all the time.

[48:03] [laughter] >> I've been here almost 12 years and I've

[48:08] given this list out dozens of times. So, it's not

[48:11] » there's not a day that doesn't go by where we are recruited by someone else.

[48:14] » Recruiting is like >> completely normal. I mean, if

[48:20] » everybody wants more money, so [laughter]

[48:25] it's just a matter of finding the right person. But I know I understand your

[48:28] frustration, Jennifer, and I appreciate and understand, you know, where you're

[48:32] coming from on this. So, um, just like I say, my from what we do, what I try and

[48:38] do, I try and be as open as possible to all my applicants that come in. That's

[48:43] why I offer have offered to um if they don't have loans that I can verify on

[48:50] the NMLS, you know, send me the files or send me the applications with that. But

[48:55] again, the the the the originator has to be the person that did the loan. It

[49:01] can't be signed off on by a company, unfortunately.

[49:06] » Well, I mean, obviously, a company is not going to be the one that's

[49:09] originating, right? They probably they have to have an actual individual doing

[49:12] the origination and the company's just listed. Is there something is there like

[49:16] an additional step that we can add to show you documentation wise that there

[49:21] was an individual that was associated with all of these loans? I mean I'm you

[49:26] know >> are you servicing your Jennifer? Are you

[49:29] servicing these loans? How how do you what process do you guys go through once

[49:32] the loan is completed? Where does it go? Is it being serviced by your own

[49:36] individual companies or >> I think some of them do service their

[49:41] own loans. Others use, you know, third party loan serer like an FCI or

[49:45] something. >> So nothing like a consumer company,

[49:51] Wells Fargo, any of those like places. Okay.

[49:55] » Yeah. >> Okay.

[49:57] » Okay. No. >> And Mike, the

[50:02] » the PLM does not have to continue to originate. They could just act as a PLM.

[50:06] They don't have to >> It's like a It's like a processing

[50:10] company. If they want to be a proc open a processing company with the state and

[50:14] have in-house processors that are paid via W2, they still need a lending

[50:19] manager, but that lending manager just acts as a supervisor. But again, they

[50:24] have to have a lending manager that has prerequis.

[50:30] » Okay, that's good. >> Hey, Jennifer, thanks for coming. We

[50:34] appreciate it. >> Yeah, thank you.

[50:36] » Um, thank you guys. So, I mean, we we would love to keep on working with you

[50:40] guys to maybe figure out whatever documentation or safeguards you guys

[50:43] believe are appropriate. Um, thank you for your time. And will you send me that

[50:47] list, Mike, of originators potentially? Um, and then would it be possible if we

[50:53] send you documentation and then kind of work through, you know, because I do

[50:58] have quite a number of applicants that are looking to get licensed in Utah and

[51:04] I want to figure out a way for them. >> Uh, yeah. Um, I would need to get with

[51:11] my people first to see, you know, what it is that we're we want to see on that,

[51:15] but I can certainly get that list to you uh today.

[51:19] » Yeah. Thank you. I'm happy to chat through, you know, whatever it is that

[51:22] you guys think you might need and we can, you know, go from there.

[51:26] » Okay. >> Do you have her email address, Mike?

[51:29] » I might, but if you want to, uh, you might have my email address. I'm not

[51:34] sure if you do or not. Do you >> just Mike pageutah?

[51:39] So, >> okay. If you want to just send me a

[51:42] short email and I'll respond back to that.

[51:44] » Okay. And then so just for my um my understanding, are we is this matter

[51:50] considered closed or are we still are you guys still open to kind of maybe

[51:55] working together in finding some sort of verification meth meth method that

[52:00] works?

[52:05] » I'm I'm not sure if we got that. >> We have discussed that

[52:10] » that I'm not sure. That's up to the commission.

[52:14] » Yeah. And also, Director Vead's not here today. Uh, so we can do that. Jennifer,

[52:20] please stay in touch still and and let's uh maybe this uh

[52:27] list and and searching out a potential PLM might might solve your problems. If

[52:33] not, let's uh re uh look at this down the road.

[52:41] » That sounds good. Thank you. And I will tell you that it's not been working, but

[52:45] I mean that's why we're here. But I appreciate it.

[52:48] » Appreciate your time. >> All right.

[52:50] » Thank you guys. >> Thank you.

[52:54] » Okay, let's uh move into our uh executive closed session for the matter

[52:59] of white glass lending if we could. Hey, so you'll need a a uh motion to

[53:09] uh enter an an executive session and and vote on that and then I have something

[53:14] that I can read as a prerequisite to entering that close session.

[53:20] » Uh if we could get a motion to uh move into a closed session in discussion of

[53:26] the matter of white class lending. >> Make a motion to do that.

[53:32] I'll second. Second. >> Thank you.

[53:36] » I can read it in. >> All in favor?

[53:39] » I I >> Thanks, Jeff. [laughter]

[53:45] » After you, Jeff. >> Uh, let the record show the following

[53:48] commission members have voted to close this meeting for the sole purpose of

[53:52] discussing the character, professional competence, or [snorts] physical and

[53:55] mental health of an individual. Chair Flinton, Commission members Olsen,

[53:59] England, and Vale.

[54:04] And the breakout room just started

[1:04:55] Okay, everyone back.

[1:05:02] Okay. Regarding Yeah. Regarding the uh stipulation,

[1:05:07] uh do I have a motion to accept the stipulation as written?

[1:05:12] » I may make that motion. >> And a second.

[1:05:17] » I'll second it. >> Does the commission concur?

[1:05:24] » So, uh Jeff, what you want to do is ask for a vote on the motion. Oh, could I

[1:05:28] get a vote on the motion? >> Do I just

[1:05:33] » I'm in favor. >> In favor?

[1:05:35] » Yes. I'm in favor. >> Okay.

[1:05:39] » Does the commission concur? >> Yes, the uh the division concurs with

[1:05:43] the action. Thank you.

[1:05:50] » Okay.

[1:05:53] » Well, that will uh that will conclude our our meeting today. Um, appreciate

[1:05:58] everyone coming and and participating and we'll adjourn to looks like October

[1:06:03] 7th would be our next one. And if I'm not mistaken, Justin, is that one in

[1:06:07] person? >> I apologize, I did not check that. There

[1:06:12] is one per year that we do in person. Uh, I'll check with Lee and we'll make

[1:06:16] sure you know that. That could be the October meeting because it's been a

[1:06:20] while since we were in person. >> So, no shorts and t-shirt is what you're

[1:06:24] recommending then. We won't tell you how to cry.

[1:06:31] » Okay. Well, thank you. We appreciate you.

[1:06:34] » All right. Thank you for your time. >> Have a great day. Thank you.

[1:06:37] » Bye, everyone. >> Thank you.

[1:06:39] » Bye now.

Mortgage Commission Meeting - 7/8/26

Transcript