NMLS Continuing Education

It's that time of year again for you to complete your Continuing Education. We recommend having it completed by 11/1 each year to avoid delays in renewing your Loan Originator License.

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 here for the discount: http://www.integritymortgagelicensing.com/discounted-nmls-mortgage-education/

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

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. 

New Hawaii Mortgage Company and LO Licensing Requirements

Hawaii has changed the SAFE Act Compliance Legislation and extended the Deadline for Mortgage Loan Originator Licensing. On May 7, the Hawaiian Governor, Linda Lingle, signed into law legislation (S.B. 2603) to amend Hawaii's Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) compliance law, which was passed last year.


This amendment delays the deadline for licensure of mortgage loan originators via the Nationwide Mortgage Licensing System (NMLS) until January 1, 2011. Also, mortgage loan originators who are licensed with Hawaii by December 31, 2010 have until November 30, 2011 to be licensed via NMLS. Additionally, The law requires certain independent contractors (including mortgage loan originators, processors and underwriters) to be licensed as "mortgage loan originators." Finally, the law replaces an existing surety bond requirement with the Mortgage Loan Recovery Fund, which assesses a fee to licensees based on the number of registered offices and mortgage loan originators. For a copy of the bill, please see http://www.capitol.hawaii.gov/session2010/bills/SB2603_CD1_.pdf.

California DRE requires Mortgage Loan Originator Endorsement through NMLS

By January 31, 2010, or within 30 days of commencing the activity whichever is later, all licensees must report to the Department of Real Estate if they make, arrange or service loans secured by real property. This requirement applies to both residential and commercial businesses. The report must be completed online using Form RE 866- Mortgage Loan Activity Notification. Future business activity reporting will also be required.

Penalty fees can apply for failure to submit this required notification. Penalties are fifty dollars ($50) per day for the first 30 days the report is not filed and one hundred dollars ($100) per day for every day thereafter not to exceed a maximum of $10,000.

The following steps must be completed in order to comply with SB 36 and the SAFE Act by January 1, 2011:

1. Register on the Nationwide Mortgage Licensing System and Registry (NMLS&R)
   
   The NMLS&R will contain a single license record for each mortgage loan lender, broker, branch and mortgage loan originator (MLO). A fee is not required to create this initial NMLS&R base record, however, this first registration step is needed to initiate the necessary examination process.
2. Satisfy the federal requirements for MLO licensure. Requirements include new qualification assessments, federal and state examinations, and background checks. There are no exceptions to or exemptions from these requirements for existing licensees.
3. By January 1, 2011, be issued an MLO endorsement on your real estate license. Endorsement applications for qualified MLO registrants must be submitted electronically to the NMLS&R by September 15, 2010 to be issued by January 1, 2011. Review the qualification and examination requirements before you initiate the electronic application process.
   
   The initial MLO license endorsements will expire on December 31, 2011. MLO endorsements are issued annually and expire December 31st each year. The endorsement will carry a nationwide identification number known as a “unique identifier” which will be assigned by the NMLS&R. The term and license identification number of the “base” real estate license will not change. Real estate licensees will continue to be responsible for filing the necessary renewal and record update requirements to maintain their four year real estate license separate from the MLO endorsement.
   
   Penalty fees can apply for failure to obtain a license endorsement. Penalties are fifty dollars ($50) per day for the first 30 days the report is not filed and one hundred dollars ($100) per day for every day thereafter not to exceed a maximum of $10,000.

Illinois Requires Licensing of Mortgage Loan Originators

Illinois passed a bill requiring the licensing of loan originators. Under the bill, mortgage loan originators and loan processors of underwriters acting as independent contractors must obtain a license under the Residential Mortgage License Act of 1987, unless exempt. The bill also establishes loan originator requirements with respect to education, exemptions, fees, renewals, bonds and notifications. In addition, the bill requires all application forms, solicitations and advertisements to contain the NMLS unique identifier of the person originating the mortgage loan. The bill became effective on July 31, 2009; however, mortgage loan originators and loan processors of underwriters acting as independent contractors have until July 31, 2010 to obtain a license.

CA Passes NMLS Loan Originator Licensing Requirements

California recently adopted several mortgage related bills.
CA Senate Bill 36 became effective October 11, 2009 and includes the following revisions and adoptions:

• Adopts new sections covering: 
• licensing requirements for loan processors and underwriters; 
• application requirements including fingerprinting, personal history, and independent credit reports; 
• minimum standards that must be met by mortgage loan originator licensing applicants; 
• pre-licensing and continuing education requirements and testing requirements; 
• license renewal requirements for mortgage loan originators; 
• requirement for mortgage loan originators to include their unique identifier on application forms, advertisements, and other required documents; 
• prohibited acts and practices for mortgage loan originators and potential penalties for violations;
• requirements for submission of reports of condition;
• notification requirements and licensing requirements for mortgage loan originators and real estate brokers; 
• minimum standards that must be met by mortgage loan originator licensing applicants and the minimum standards for renewal of an endorsement as a mortgage loan originator; 
• requirements for real estate brokers to submit annually a business activities report and detailing what must be contained in the report; 
• record retention requirements; and 
• requirement that mortgage loan originators to obtain and maintain a license and a unique identifier and prohibiting residential mortgage lenders or servicers from employing a mortgage loan originator whose license or license endorsement has lapsed.
• Revises current statutes to add or amend: 
• requirement that a licensee's unique identifier be included on advertisements and certain disclosures; 
• requirement that applications for endorsement to act as a mortgage loan originator must be made electronically or in writing as directed by the Commissioner; 
• minimum net worth requirements for licensees employing one or more mortgage loan originators; 
• requirement for mortgage loan originators to obtain and maintain a license and a unique identifier and prohibiting finance lenders or brokers from employing a mortgage loan originator whose license or license endorsement has lapsed;
• that it is a violation for a person to knowingly make a false statement to the NMLSR;
• that mortgage loan originator licenses must be renewed annually after the payment of an annual assessment;
• notification requirements; and
• bond requirements.
• Repeals CA BUS & PROF § 10131.8 and CA FIN § 50705. 
• Section 87 of CA Senate Bill 36 states the deadline for mortgage loan originators to obtain a license.

CA Assembly Bill 329 becomes effective on January 1, 2010. This bill revises the required notice that must be provided to a reverse mortgage loan application prior to the applicant receiving counseling. It also adds a requirement that a lender provide the borrower with a written checklist prior to the borrower's meeting with a counselor, details what must be included in the checklist, and states other checklist requirements.

CA Senate Bill 94 became effective on October 11, 2009. This bill adopts a new section stating what fees and compensation may not be received for loan modifications or other forms of loan forbearance. Senate Bill 94 also adopts a new section stating what acts are prohibited in relation to loan modifications or other forms of loan forbearance and stating what acts are permitted if the person who offers the loan modification or forbearance is offering it for a loan that is owned or serviced by that person. This bill also amends sections to add an exemption for certain counseling organizations approved by HUD that provide loan modification counseling services for no cost to the borrower and to add a prohibition regarding making materially false or misleading statements or representations to a borrower about the terms or conditions of that borrower's loan, when making or brokering the loan.

CA Assembly Bill 260 becomes effective on January 1, 2010. This bill adds that the commissioner may suspend, revoke, or deny issuance of a license for violations of RESPA, TILA, HOEPA, regulations promulgated under RESPA, TILA, or HOEPA, and for violating or failing to comply with Chapter 2 of Title 14 of Part 4 of Division 3 of the California Civil Code. Assembly Bill 260 also adopts new sections stating that any violations of RESPA, TILA, HOEPA, or related regulations will be violations of the California Finance Lenders Law and the California Residential Mortgage Lending Act. This bill also adopts a new section stating that mortgage brokers providing mortgage brokerage services to a borrower have a fiduciary duty to the borrower, stating what is included in the fiduciary duty, and providing definitions for licensed person, mortgage broker, mortgage brokerage services, and residential mortgage loan. In addition, this bill adopts new sections regarding higher-priced mortgage loans stating what the maximum amount is for prepayment penalties, prohibited acts, permissible fees, document requirements, and potential penalties for violations.

CA Senate Bill 237 becomes effective on January 1, 2010. This bill adds six prohibited acts related to improperly influencing or attempting to improperly influence an appraisal.

CA Senate Bill 239 becomes effective on January 1, 2010. This bill repeals CA PENAL § 532f and then adopts CA PENAL § 532f stating what acts are considered mortgage fraud, the related voluntary and mandatory disclosure requirements, and that this offense is punishable by a maximum of 1 year in the state prison or county jail. 

Wyoming Enacts Mortgage Loan Originator Licensing and Registration

On March 12, 2009, Wyoming Governor Dave Freudenthal signed HB 169, a bill that modifies the Wyoming Residential Mortgage Practices Act and Uniform Consumer Credit Code to provide for mortgage loan originator licensing and registration. Among other things, the bill details (i) the initial application process, (ii) pre-licensing education, (iii) testing requirements, (iv) the renewal process, and (v) continuing education requirements. While the bill goes into effect July 1, 2009, loan originators have until July 1, 2010 to register or obtain licensure.

HUD Reviews S.A.F.E. Mortgage Licensing Act Model Legislation

The U.S. Department of Housing and Urban Development recently reviewed model legislation developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators regarding the Secure and Fair Enforcement Mortgage Licensing Act (Act). The Act primarily addresses the licensing and registration standards for "loan originators," as defined by the Act. The model legislation would require loan originators both to obtain a state license and to register under the Nationwide Mortgage Licensing System and Registry. Among other things, the model legislation addresses (i) license and registration requirements, (ii) application procedures, (iii) pre-licensing, renewal, and continuing education requirements, and (iv) enforcement, violation, and penalties. For a copy of the Federal Register notice, please see http://edocket.access.gpo.gov/2009/pdf/E8-31389.pdf. For a copy of the model legislation, please see http://www.hud.gov/offices/hsg/sfh/mps/modellaw.pdf.

Michigan Extends Mortgage Loan Officer Registration Deadline

On December 18, the Governor of Michigan signed into law statutes amending the Mortgage Brokers, Lenders, and Servicers Licensing Act (MBLSLA). The law: (i) amends the effective date of mortgage loan officer registration requirements from January 1, 2009 to April 1, 2009; (ii) extends the deadline from December 3, 2008 to April 1, 2009 for an individual to obtain fingerprints and have an FBI and Michigan State Police criminal history check completed, pass the required Michigan mortgage loan officer examination, and submit the required Nationwide Mortgage Licensing System (NMLS) loan officer registration application and the Michigan specific loan officer application; (iii) extends the deadline from December 31, 2008 to March 31, 2009 for a residential mortgage originator and a loan officer to receive compensation for the origination of a mortgage loan; (iv) amends the MBLSLA and SMLA specifying that beginning January 1, 2009, the Michigan State Police and FBI may complete a mortgage loan officer criminal history check; (v) amends the SMLA to require fingerprints, a Michigan State Police and FBI criminal history check, pre-registration and continuing education, testing, and a secondary mortgage loan officer application if the loan officer is not registered as a loan officer under the MBLSLA and will originate for a mortgage broker, lender, or servicer that only brokers, makes, or services secondary mortgage loans.

Delaware Adopts Mortgage Loan Originator Regulations

Recently, the Delaware Office of the State Bank Commissioner issued regulations implementing a law requiring mortgage loan originators to be licensed. Among other things, the regulations provide that those mortgage loan originators employed by a licensed lender or mortgage loan broker prior to January 1, 2009 have until March 31, 2009 to submit a license application. Additionally, those individuals beginning employment as mortgage loan originators after January 1, 2009 may not conduct business as mortgage loan originators until they have submitted a license application. Once a license application has been submitted, an individual is free to operate as a mortgage loan originator on a provisional basis until the regulator has rendered a decision on the application. The regulations also set forth duties of originating entities that employ mortgage loan originators, as well as record keeping and notification requirements. Mortgage loan originators will be licensed through the Nationwide Mortgage Licensing System. The regulations became effective December 11, 2008.