Archive for the 'NMLS' Category

It’s License Renewal Time – Have You Fulfilled the Necessary Requirements?

It’s license renewal season until December 31, 2012.  Have you completed the requirements before you have tried to renew your license through the NMLS?

What requirements?  The biggest one for mortgage license originators is completion of your continuing education requirements.  If you are licensed in only one state, you only need to complete that state’s continuing education hours.  If you are licensed in more than one state, you need to fulfill each state’s requirements.  This may mean taking more continuing education classes, usually in state-specific law for each state that requires state-specific law classes.

You also need to check your MU-4 record to make sure that it is up-to-date.  If you have changed employers, moved to a new house, or need to update the answers to the disclosure questions, you must make the necessary changes to your MU-4 record before renewing your license.

If you are a company, all of your Mortgage Call Reports must have been already filed before you renew your license.  You must also have an updated MU-1 record.  Some states require certain forms to be filed with their mortgage broker/banker regulatory department prior to allowing you to renew your license.  Additionally, if you owe any fees to your regulatory agency, those fees must be paid before you can renew your company licenses.

Do not wait until the end of December to renew your licenses.  The later in December that you wait, the longer the approval process will take and you may not have your license renewed by December 31, 2012.  This could spell trouble with your lenders when January 2012 comes and you cannot  close their loans because you do not have a valid 2012 license.


You Need Continuing Education Hours, Don’t You?

Most mortgage loan originators will need to take eight (8) hours of continuing education before the end of the year. Actually, you should take your continuing education courses before November 1, 2011, when the ability to renew your license opens up on the NMLS. Some states have specific dates by when you must take your continuing education and other states simply will not let you submit your renewal license application unless your continuing education provider has uploaded the courses you have taken to the NMLS.

Each state has its own requirements as to whether you need to take continuing education this year and whether you need to take state-specific courses. For example, in Connecticut, unless you took your twenty (20) hours of pre-licensing education in 2011 and were approved for your license in 2011, you need to take continuing education in 2011. Exactly what is required? The SAFE Act requires the following education courses: 3 hours of Federal law and regulations, 2 hours of ethics that include instruction on fraud, consumer protection, and fair lending issues, 2 hours of training related to lending standards for the nontraditional mortgage product market, and 1 hour of undefined instruction on mortgage origination. Some states require specific courses on their state’s laws. For example, Georgia requires 1 hour of Georgia law that would count as your 1 hour of undefined instruction on mortgage origination. Georgia also has a deadline of October 31, 2011 for completing continuing education.

The NMLS has a state-by-state breakdown chart that details whether you need to take continuing education in 2011, what kind of courses you need to take, and when your deadline is:

If you are licensed in multiple states, the requirement that you take courses in state-specific law may mean that you are taking more than eight (8) hours of continuing education.

Also be aware that if you took continuing education in 2010, you may not take the same courses again in 2011.

Even if your state does not have a deadline before December 31, 2011, please remember that if you wait until the last minute to do your continuing education and license renewal, there is a good chance that your renewal will not be completed until sometime in January, 2012. Late renewals lead to major hassles with investors who want confirmation that you have a 2012 license to originate mortgages.

Do You Need Continuing Education?

The SAFE Act created a requirement that all mortgage loan originators take at least  8 hours of continuing education each year in order to get approval of your license renewal. If you were licensed in 2009 or 2010, you must comply with the continuing education requirement. If you took your pre-licensing education in 2011 and were licensed in 2011, you do not need to take any continuing education this year. If you took your pre-licensing education in 2009 or 2010 and your licensed was approved in 2011 or is still pending, you need to check with your state regulatory agency to find out if it is requiring loan originators to take continuing education.

If you are licensed in one (1) state, the requirement is that you take 3 hours of federal law and regulations, 2 hours of ethics, 2 hours of training related to lending standards for the nontraditional mortgage product market, and 1 hour of unspecified mortgage training (it’s your choice of topic). If you took continuing education last year, you need to take different classes this year. Some states require a certain number of hours of state-specific education instead of the 1 hour of unspecified mortgage training. Therefore, if you are licensed is more than one (1) state, you may need to take more than eight (8) hours of continuing education.

The SAFE Act requirement is that you must take your continuing education hours by December 31, 2011. However, certain states require that you take continuing education before you can renew your license. Other states let you submit your renewal license applications, starting November 1, 2011, but they will not approve your renewals before you submit your continuing education hours through the NMLS. You need to check the rules for each state in which you are licensed to ensure that you are taking the correct number and types of continuing education courses so your licenses will be renewed.

Compare Your Company to Other Licensed Companies

The Nationwide Mortgage Licensing System & Registry (NMLS) has compiled information regarding licensees nationwide who are licensed in the first quarter of 2011. It can be accessed at

It shows how many licensees are licensed in more than one state, how many loan originators are sponsored by licensees, how many licensees have branch offices, etc.

You can use the information for marketing purposes or for strategic planning purposes.

The Mortgage Call Report – It’s Back

Were you one of those mortgage company owners who were filing their Mortgage Call Reports late on Sunday, May 15, 2011?  I had clients who sent me their information on 5:00 that afternoon and I was inputting information that evening.  Don’t leave yourself in that position again.  The Mortgage Call Reports for the 2nd quarter of 2011 are due on August 15, 2011.  Don’t wait until the last minute to get your information together.  As we get closer to the deadline, the NMLS computers work more slowly and it’s more difficult to get the information in.  If you are having a fantastically busy summer, then hire outside help to get your Mortgage Call Report done.  It’s money well spend because it lets you do what you do best – closing loans.

Are You Keeping Your State Regulators Notified About Changes in Your Company?

Have you moved your offices?  Has a loan originator been terminated or left your company?  Do you have a new branch manager?  Has a state or federal agency instituted a cease and desist order or have you entered into a consent agreement?

When any piece of information changes from what is listed in your company MU1, or a branch office MU3 or your loan originators’ MU4 records, you must notify your state banking department.  Each state has slightly different requirements about the notification – some states require 30 days’ prior notice, others require 15 days prior notice, other states will allow notice after a situation changes. 

Each state has different requirements about the timing but the SAFE Act requires that you update your NMLS records to reflect all changes in your company that pertain to the information that is maintained in the NMLS database.  Remember, when you attest to your record (whenever that is required), you are attesting to the fact that all of the information in your company record is still current.  Therefore, if you have sponsored a loan originator, and he is no longer working for you, you must change your NMLS record to terminate the sponsorship.  If you have moved your office, you must change your MU1.  In some cases, you will need to surrender a paper license to get a new one with your new address.  Make sure your loan originators update their MU4 records when any information of theirs changes – if they change their residence address or  employment address.

It is a good practice to check your NMLS records (all of the company, branch office and loan originator records) on a regular basis so that you remember to make the necessary changes and notify your state regulator.  Add this to the list of proactive steps to take so you are always in compliance.


The Mortgage Call Report – Are You Ready to File Your First One?

The Nationwide Mortgage Licensing System has just opened up the Mortgage Call Report for the first filing.  I just finished filing New Jersey Annual Reports on Friday so I know my clients are not going to be happy to be putting together the information needed for this new requirement.  What is a Mortgage Call Report and what does it require?

All mortgage broker and mortgage lender/banker licensees must file quarterly reports regarding their loan applications and their closed loans.  I have clients that are licensed in multiple states and both originate and broker loans.  For this type of licensee, there are about 38 questions to answer, for each state report.  That’s a lot of information to compile and submit.  You even have to file a report if you had no loan activity.

If you cannot submit your Mortgage Call Report because you are too busy closing loans, I will be happy to help you file your Report.  Don’t forget, this is a quarterly obligation.

Maryland Loan Officers – You Need Company Sponsorship

By now, most of you loan officers have the licensing requirements down pat – 20 hours of pre-licensing education, pass the state and national tests, do the criminal background check, get the credit check done – and you’re licensed.  There’s always a stray requirement hanging out there that you forget about and Maryland’s newest requirement highlights that fact.

The SAFE Act requires that all loan officers work for only one mortgage company at a time.  The company that you work for must “sponsor” you.  That means that your employer must show on the NMLS that you work for them.  Most states, when they transitioned onto the NMLS, required the company sponsorship as part of the initial licensing application.  You couldn’t get your loan originator license until your company sponsored you.

Maryland was different.  You transitioned your license onto the NMLS but your company sponsored you on the Department of Labor, Licensing, and Regulation website.  Now, Maryland is requiring that all employers create a sponsorship relationship with each of their loan officers on the NMLS.  This must be completed by May 15, 2011 or there will be a payment involved.

All Maryland loan officers must first give access to their employer to their MU4 record.  This is done by the loan officer getting onto their MU4 record on the NMLS and creating an “active relationship” with their employer.  Once that has been completed, your employer must create the sponsorship. 

You must keep checking your NMLS record to ensure that your employer has completed his part of the sponsorship request.  After May 15, 2011, any loan officer who has not had a sponsorship request submitted via the NMLS will be placed in an “approved-inactive” status. That means that you will not have the authority to originate loans.

What To Do When You Don’t Want To Originate In a State Anymore

Are you one of the many mortgage brokers or lenders who applied for numerous state licenses during the housing boom and now you wonder why you are still paying for the licenses and the additional costs associates with those licenses? I’ve counseled all of my clients that at least once a year, they should compare how much they earn from each state against how much each state’s license costs them. Included in the calculations are the costs of the licenses, the filing fee for the annual report to the state’s Secretary of State Corporations Division, the cost of the surety bond, and the payment to the company who acts as your registered agent. If there hasn’t been much origination activity lately, you may decide that it’s not worth the expense of the license and the hassle of keeping the license. What do you do when you decide you want to give up a license?

You can decide to do nothing until renewal season. At that point, you can simply not renew your license. If you choose this course of action, you must comply with all license requirements, even if you do not originate any loans for the entire year.

If you don’t want to wait until the license expires on December 31st, you need to find out the requirements for each state where you want to surrender your license. Some states require prior notice of your surrender of a license. Other states require notice within a certain number of days after you decide to surrender the license. What is the notice that is required? You go to your MU1 record on the NMLS and indicate that you wish to surrender your license in a particular state.

After you change your MU1 record, you may need to take additional action. Some states require a final Annual Report to be filed within a specified number of days after surrender. Other states may have additional forms that you need to submit. If you have branch offices licensed in the state whose license you are surrendering, you must surrender the branch license as well as the company license.

After the state has accepted the surrender of your license, then you can cancel your surety bond and registered agent. Don’t forget to file a Certificate of Withdrawal of your Certificate of Authority to Transact Business as a Foreign Corporation/LLC. Some states charge annual fees if you haven’t withdrawn, regardless of whether you are conducting business in that state or not.

Is There a Specific Order For Completing the Licensing Requirements for a Loan Originator?

I’ve been receiving phone calls and emails from people who want to get licensed as mortgage loan originators (usually known as loan officers).  One of their questions is whether there is a required order in which to complete the various requirements that must be satisfied in order to get your loan officer license.  There is no required order but certain requirements should be completed before other requirements.  You should familiarize yourself with all of the requirements before you even start of the process of licensing.

The licensing laws of each state contain certain disqualifiers to licensing.  If you have one of the disqualifiers, you should not even start the licensing process.  If you have a dishonesty criminal conviction in your past, no matter how good a citizen you have been since you have been convicted, you will not be approved for a license.  A dishonesty crime is theft, embezzlement, fraud, perjury, passing bad checks, among others.  These types of crimes are total disqualifiers.  If you have a criminal conviction within the past seven (7) years, you are disqualified from licensing.  A very bad credit report is not an automatic disqualifier, depending upon the reasons for the bad credit.  Were you unemployed for several months and had no income to pay your bills?  Or did you declare bankruptcy because you had so much consumer debt due to purchases of lots of “stuff” that you were overwhelmed with bills?   Depending upon the circumstances of your bad credit items, you may still get approved for your license.

Assuming you have no automatic disqualifiers, you need to create an MU4 record in the Nationwide Mortgage Licensing System (NMLS) database.  The creation of your record gives you an NMLS number that you will keep throughout your life.  In the mortgage broker/lender world, your NMLS number is your identifier the same way your social security number is your identifier elsewhere.

After you get your NMLS number, you start to complete the licensing requirements:  taking pre-licensing education, passing the state and national tests, sending your authorization so that your state regulators can pull your credit report, and getting your background check done.  There is no required sequence in which to complete these requirements.  The stumbling block for many applicants is passing the tests so make sure you prepare for them.


Get every new post delivered to your Inbox.