FOR IMMEDIATE RELEASE
Ohio Manufactured Homes Association
Phone: (614) 799-2340
OHIO STATEHOUSE, COLUMBUS, OH – June 2, 2021
OMHA’s advocacy of legislation to remove retail salespeople who do not originate loans from the Ohio SAFE Act was included as an amendment to HB 133 signed into law by the Governor on June 2, 2021. The new law is effective immediately.
The Ohio law mirrors federal law exempting retailers from loan originator requirements enacted as part of Dodd/Frank, TILA signed into law by former President Trump in 2018.
The Ohio SAFE ACT legislation highlights:
Any person engaged in the retail sale of manufactured homes, mobile homes, or industrialized units shall not offer or negotiate the residential mortgage loan rates or terms; however, if, in connection with obtaining financing by others for those retail sales, the person only assists the borrower by providing or transmitting the loan application as follows:
(1). Retailers of manufactured homes and manufactured home park operators may provide any counseling with borrowers about residential mortgage loan rates or terms, to have general discussions with customers about interest rates and fees, typical financing options, and hypothetical loan terms, such as the following:
—-Retailers of manufactured homes and manufactured home park operators may assist with the preparation of residential mortgage loan packages, which means compiling loan application materials and supporting documentation.
—-Retailers of manufactured homes and manufactured home park operators may provide general instructions to help consumers complete a loan application.
—-Retailers of manufactured homes and manufactured home park operators may gather information on the consumer’s behalf, which includes collecting and sharing’s supporting documentation from third parties, so the consumer can submit a completed application to the loan originator or creditor.
—-Retailers and community owners can provide customers with a list of lenders available to discuss financing options and/or refer a customer to a lender or recommend a lender if they do not offer or negotiate loan terms on behalf of the lender or customer and if they do not receive any additional compensation or gain for referring the borrower to the lender, including any payment, kickback, referral fee, or anything else of value for the referral. However, they must disclose to the customer in writing any corporate affiliation with any creditor, and if the retailer does have a corporate affiliation and offers a recommendation, provide referral information for at least one unaffiliated creditor. Retailers/community owners can also discuss share with customers their relationships with specific lenders.
However, keep in mind, current Ohio and federal SAFE Act requirements are still in place for any activity providing loans or extending credit. A community owner can sell a manufactured home and then “hold paper” only if holding the appropriate lending license, as required by state law, and employs licensed Mortgage Loan Originators. SAFE Act Licensing will still be required of community owners or community operators who offer manufactured home leases with an option to purchase, as credit is still considered “financing”.
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