Senate panel backs SAFE changes for CPAs

Certified public accountants want to make it clear that they are not “mortgage originators” when they advise their clients on the tax consequences of taking on different kinds of mortgages, and it looks like they are getting their wish.On Wednesday, the full Senate votes on Senate Bill 189, which takes out language that the CPAs contend, swept them up in the federal SAFE (Secure and Fair Enforcement for Mortgage Licensing Act) designed to safeguard consumers from those who sell mortgages without any real regulation.The SAFE act was designed to protect consumers from unsavory mortgage originators who assure subprime borrowers that they can afford a loan with an introductory interest rate, without disclosing how those monthly payments could balloon out of control a few years into the loan. By that time the originator would have passed off the loan to some unsuspecting investors.However, in order to make sure that “advisers” weren’t acting as originators without regulation, the federal definition contains some broad language to consider as advisers those “who assist a consumer in obtaining or apply to obtain a mortgage loan, by among other things, advising on loan terms (including rates, fees and other costs), preparing loan packages or collecting information on behalf of the consumer with regard to a mortgage loan.”That’s the kind of advice CPAs frequently give to homebuyers or businesses.The state – for the most part – adopted the federal language. And Mary Jurta, director of the Consumer Credit Division of the state Banking Department, at first worried about changing it. She was concerned that the federal government might step in and start regulating originators themselves, instead of leaving it up to the Banking Department. But she relented after realizing that other states have made similar changes without the feds stepping in.Last week, the Senate Commerce Committee asked lobbyists Bruce Berke, representing the New Hampshire Society of CPAs and Jim Demers, representing the Mortgage Bankers and Brokers Association of New Hampshire, to hammer out the final language, which they did in time for this week’s Senate calendar.The Commerce Committee voted that the bill ought to pass by a vote of 4-0. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW