STATE OF UTAH

Is a license required?

Yes.  Loan modification services must be licensed as if they were loan originators.  61-2c(Attached as Schedule A)-201-1 states that “Unless exempt from this chapter under Section 61-2c-105'>61-2c-105, a person may not transact the business of residential mortgage loans without obtaining a license under this chapter.”

The statute does not exactly define what a loan originator is, only what it is not.  The law does not really seem applicable to loan modification, but state regulators have stated that the license is required and that this is the applicable law.

State specific loan modification law?

None

Advantages of becoming a licensed Mortgage Broker?

Required.  There is no alternative.

Penalties for operating in the state without a license:

61-2c-405 states that “(1) In addition to being subject to a disciplinary action by the commission, a person required to be licensed or certified under this chapter who violates this chapter:(a) is guilty of a class A misdemeanor upon conviction of a first violation of this chapter; and (b) is guilty of a third degree felony upon conviction of a second or subsequent violation of this chapter.”

Is an advanced fee permitted?

Yes, but with some restrictions.  61-2c-301-a states that a person may not “(a) give or receive compensation or anything of value in exchange for a referral of residential mortgage loan business; (b) charge a fee in connection with a residential  mortgage loan transaction: (i) that is excessive; or (ii) if the person does not comply with Section 70D-2-305;”

70D-2-305 states that “A lender or broker may not accept a fee or deposit from an applicant for a mortgage loan unless at the time the lender or broker accepts the fee or deposit there is a written statement: (1) signed by the applicant; (2) stating whether or not the fee or deposit is refundable; and (3) describing the conditions, if any, under which all or a portion of the fee or deposit will be refunded to the applicant.”

Is a written agreement required?

Yes.  See above.

Other noteworthy information?

Utah regulators are requiring a license and pointing to a law which really does not have anything to do with loan modification.  I would recommend that the Utah Division of Real Estate be contacted before trying to do business in the state.  They can be contacted here:  Ctrl + Click Here

Utah Statutes

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Utah code 61-2c:                                              Ctrl + Click Here

License application:                                         Ctrl + Click Here