NMLS MLO Authorized to Conduct Business with New Employer

How soon can a Loan Originator start taking applications for a new employer once the LO has changed their sponsoring employer in the NMLS?  I am seeing a lot of companies that will request a sponsorship in the NMLS of a new employee and allow the new employee to start taking loan applications that day.  The problem is that requesting a sponsorship in the NMLS doesn’t mean the loan originator is actively sponsored under the new employer yet.  The LO needs to wait until their sponsorship is approved by the state in the NMLS before they can start taking applications for their new employer.  Depending on the state, this can take anywhere from a few hours to a few weeks, but usually takes a day or so in most states.  However, sometimes the sponsorship is not accepted by the state for various reasons.  For example, the LOs residence is too far from the company’s closest location, or the LO is a CA DRE Salesperson and also needs to have the company appointed as their employing broker in CA DRE’s eLicensing System, or the state requires additional documentation to be mailed to them before they can approve the sponsorship request, or the LO needs to update their employer on their NMLS MU4 filing.    These issues can permanently delay a sponsorship request from being approved by the state.  And in these situations you can have an unlicensed LO taking applications for your company for quite a while before you realize the problem. Companies will start seeing this come up in audit findings and be fined by the states, if they aren’t doing this right.  Or they could even have loans that they can’t close if they are a broker, or even worse, they can have loans that they can’t sell if they are a banker.  I just spoke two different companies with this exact problem last week.

NMLS Approved Pre-License Education and Continuing Education

Integrity Mortgage Licensing has partnered with Mortgage Educators & Compliance (MEC) to offer our customers a 15% discount for all NMLS Approved Pre-License Education and Continuing Education that are now required for loan originator licensing due to the SAFE Act. Go to: Discounted NMLS Education

Texas Mortgage Servicer License/Registration now required

On June 17, Texas Governor Rick Perry signed into law S.B. 17, the Residential Mortgage Loan Servicer Registration Act, which requires all residential mortgage loan servicers in Texas to register with the Commissioner of the Texas Department of Savings and Mortgage Lending (Commissioner). The Mortgage Servicer Registration is required for companies acting purely in a servicing capacity, such as sub-servicers, as well as mortgage bankers acting as residential mortgage loan servicers, i.e. servicing their own portfolios. As of the date of this article, the application for the Mortgage Servicer Registration has not been released by Texas yet. For a copy of S.B. 17, please see http://www.legis.state.tx.us/tlodocs/82R/billtext/pdf/SB00017F.pdf#navpanes=0.

Florida In-House Processors no longer need LO Licensing as of July 1, 2011

Florida law previously required persons acting solely as loan processors to secure a loan originator license.  On May 31, the Governor of Florida signed into law a bill to relieve in-house loan processors from individual licensing in Florida. Specifically, the bill excludes in-house loan processors from individual licensure, so long as the individual (i) is an exclusive employee of a single mortgage broker or a mortgage lender, (ii) under direct supervision and instruction of a licensed Florida loan originator, and (iii) engages in loan processing only (i.e., receiving, collecting, distributing, and analyzing information for processing a mortgage loan or communicating with consumers to obtain information necessary to process a mortgage loan [not including offering or negotiating or counseling consumers about mortgage loan rates or terms]). Independent Contract loan processors remain subject to loan originator licensing requirements in certain circumstances.  This amendment brings Florida's law more in line with the federal Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E.) and other state jurisdictions with respect to treatment of mortgage loan processors. 


The bill additionally requires mortgage lenders to submit reports of their financial condition to the NMLS registry and to authorize the NMLS registry to obtain a credit report for each of the mortgage lender's control persons in order to renew a mortgage lender license. The bill becomes effective July 1, 2011. 

Montana Mortgage Servicer Licensing required effective October 1, 2011

On May 5, 2011, Montana adopted House Bill No. 90, which made numerous revisions to the Montana Mortgage Broker, Mortgage Lender, and Mortgage Loan Originator Licensing Act (Act) and changed its title to the Montana Mortgage Act. The revisions included requirements for the licensing and regulation of mortgage servicers. The effective date of the changes is October 1, 2011. And as of the writing of this article, Montana has not yet released an application to apply for the new Mortgage Servicer License.

The revisions also updated application and licensing requirements for brokers, lenders and originators, made a reduction in the number of hours required for continuing education, made changes to recordkeeping, reporting, bonding and disclosure requirements, and made prohibitions against certain acts by mortgage lenders and mortgage servicers. In addition, the Act was revised to conform to federal law and expand the Department of Administration's rulemaking authority.