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House approves real-estate licensing changes billed as mortgage-fraud cleanup
Summary
The House approved second substitute House Bill 346 (70–2), which sponsors described as a 'mortgage fraud cleanup' that adds registration for appraisal trainees, gives mortgage licensing bodies flexibility on pre-licensing hours, removes an outdated grandfathering clause and increases penalties for violations.
The Utah House on Feb. 14 approved second substitute House Bill 346, a package of amendments to division-of-real-estate law described on the floor as a mortgage-fraud cleanup. After a motion to replace the bill with a second substitute, the House adopted the substitution and later passed the measure 70–2.
Representative Frower, speaking to the substitute, said the bill removes a UDOT employee licensing exemption left in the original text, and makes three substantive changes: it requires appraisal trainees to register with the Division of Real Estate to permit oversight; it allows the mortgage licensing authority by rule to increase pre-licensing education hours (from the mortgage industry's current 20 toward the real estate requirement of 90, with sponsors expecting something in the 40–50 range); and it removes a now-unnecessary grandfathering provision for principal lending managers. He also said the industry supports the package and that the bill increases penalties for licensing violations.
Frower argued the measure builds on last year’s work addressing mortgage fraud and told members Utah still ranks among the highest states for mortgage fraud, saying that the change is needed to continue addressing the problem. The House adopted the second-substitute and passed the bill; the clerk recorded 70 yes votes and 2 no votes, and the bill will be referred to the Senate for further consideration.
