In finalizing its rule on the licensing and registration of loan officers, the Department of Housing and Urban Development reversed course and is now suggesting that employees working on loan modifications for mortgage servicers should be licensed by the states, says Kris D. Kully, a lawyer at K&L Gates LLP.

HUD removed a provision from the final rule that would have delayed licensing for employees of mortgage servicers who perform loan modifications.

Kelly said the final rule leaves the issue to the Consumer Financial Protection Bureau, which assumes responsibility on July 21 for administering the Secure and Fair Enforcement for Mortgage Licensing Act of 2008.