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.

 

Here’s Some Possible Help if You Missed the December 31st Renewal Period Deadline – The Reinstatement Period

December 31st was the deadline for renewing your company and loan originator licenses. A number of my clients were very busy at the end of December trying to close loans. I was calling them every week to see whether they had renewed their licenses, or to find out whether their cash flow was sufficient for me to renew their licenses and charge the renewal fees to their credit cards. If you didn’t have someone calling you to remind you to start the renewal process by December 31st, are you sure you renewed all of your licenses?

The Nationwide Mortgage Licensing System (NMLS) has been sending out emails to all company administrators informing them of any licenses that were not renewed. If you received one of these emails, you are now aware that you messed up if you had intentions of renewing a particular license (although I’m sure that many of the “failure to renew licenses” were deliberate decisions not to renew a license). Even if you did not receive that email yet, you may now be realizing that you missed a renewal or one of your loan officers may have forgotten to renew his/her license. What can you do now?

Some states allow its licensees to renew late. It is a state by state decision and the time periods for getting in a “late” renewal vary by state. You can have only 15 days up to 2 months, depending on which state’s license you need. In most cases, you will need to pay a late fee but it’s much cheaper than starting a new license application from the beginning. You can see if your state is accepting late renewals by going to http://mortgage.nationwidelicensingsystem.org/SLR/COMMON/RENEWALS/Pages/default.aspx
and clicking on the Renewals Deadline Chart in step 3 for the chart of all states.

What if your state does not accept a reinstatement of your license (since it has technically expired as of December 31, 2010)? Call your state regulatory agency and speak to the reviewers in the licensing division and find out whether you need to submit an entire new application. Make that call immediately if you need to reinstate any of your licenses or those of your loan officers.

If you do need to reinstate a license, plan now for the renewals period that starts November, 2011. Set firm deadlines on your calendar to assess which licenses you will want to renew (are you making enough money from every branch office and every loan officer?). If your company NMLS administrator is you and you are usually too busy at the end of the year to handle this job, delegate it to an employee or hire an outside company that will take care of it for you. After all, if you don’t have a valid license, you cannot make any money at all.

How Do You Renew Your Individual Loan Officer License Through the NMLS?

Starting today, all mortgage loan originator licensees (usually called loan officers) must renew the licenses that expire on December 31, 2010. For those of you who are licensed in states that transitioned onto the Nationwide Mortgage Licensing System (NMLS) in 2008 or 2009, this transaction is old hat. For those of you who are renewing for the first time, you may be wondering about what the procedure is like. I have been helping clients with their NMLS renewals since 2008 so I’ve been down this road before.

The renewal process for most states starts with your using the NMLS to indicate which licenses you are renewing. If you have licenses that you are not renewing, you must actively indicate through the NMLS that you are not renewing those licenses. You can change your mind even if you click on “Do Not Renew.” You should also review your record to make sure that all of the information is up-to-date. Did you change your residence, did your company move its offices? All of your record should be accurate. You then attest to your individual record and pay the renewal and NMLS fees. If you took your pre-licensing education in 2008 or 2009, you must have taken 8 hours of continuing education in 2010 in order to get approval for your renewal license application.

Once you have renewed your licenses through the NMLS, you need to review the jurisdictional checklist for each state in which you are licensed. Print out the Renewals Checklist for each state and complete the Checklist. Although many of the states do not require additional documentation, you need to check the uniform checklist at http://mortgage.nationwidelicensingsystem.org/slr/common/renewals/NMLSDocumentLibrary/UniformIndividualRenewalChecklist.pdf
Send in each Checklist together with all additional documentation that is required to each state regulatory agency.

The state may take a few weeks to process your renewal application and additional documentation. If you have not sent in the additional documentation and checklist, the reviewer will post the items still needed on the Task List associated with your MU4 record. You need to keep checking to see if the Task List is changed. You can also view your license status by clicking on the Composite tab and looking at the View license/Registration List or by calling your state regulatory agency and speak to the reviewer.

If you wait until the end of December to renew your licenses, it is likely that your renewal approval will not come through until some time in January. This creates problems for you when your investors will not let you close without a 2011 license. Don’t wait until the last minute to renew.

July 31st was supposed to have been the deadline for completing the licensing requirements in certain states. Some states have decided to extend these deadlines to allow their reviewers additional time to review all of the transition applications. If you are a licensee in New Jersey, Maryland, or South Carolina, you have been granted the right to originate loans until September 30, 2010 (Maryland), October 1, 2010 (New Jersey), or October 31, 2010 (South Carolina Board of Financial Institutions) even if your application is still pending. You should make sure that you have completed all of your licensing requirements as soon as possible to ensure that you are unable to close your loans when this extended deadline passes. The reviewers are finding that many applications are incomplete and rather than denying these companies and loan originators the right to originate, they have given you more time. You should be checking your task lists on the NMLS to see what requirements you still need to comply with. When your application has been approved, the designation on your MU-4 record is usually “approved – conditional.” This is because the required credit check has not been reviewed yet (and won’t be until starting October 1, 2010).

If you missed the July 31, 2010 deadline, you are not covered by an extension. You need to submit a new application (not a transition application) and you cannot originate loans until your application has been approved.

Contact Robin Gronsky at Robin@Mortgagelicensesolutions.com if you want to explore expanding into new states or need help with your licensing applications (company or loan originator). I’ll keep what you tell me confidential but I cannot give you any specific legal advice until you become a client of the firm. This is done by written agreement only.

Passing the Licensing Exams

Every loan officer must pass the national component of the NMLS exam if they want to originate mortgages. They must also pass at least one state component (or more than one, if they are licensed in more than one state). Yet, not every loan officer is passing the required exams. At least 25% of loan officers are not passing the national exam on their first try. Are you one of the 25%?

If you are or if you haven’t taken the test yet, here is a piece of advice. Study for the exam. Don’t just wing it. The information that I am getting from my clients is that some of the questions on the exam are about information that you may rarely use as you originate loans. Ideally, the pre-licensing education that you took covered everything that you will be tested on. The reality is that the instructors who are teaching the pre-licensing education may be good or they may be bad and you may be not be taught everything that you need to know. Or you may be taking online education and just breezing through it to get the required hours in. You may think that you already know all of this because you’ve been doing it for 3 or 5 years. Or you are using the certification process to avoid taking the pre-licensing education.

Most of the material tested should be information that you do know off the top of your head and you should get really close to the passing grade without doing much homework. But, if you get too many of those random obscure questions wrong, you will fail the test.

Many employers are taking a hard line about getting your licensing requirements completed. After all, what good are you to them if you cannot originate loans? What good are you to your family if you cannot earn your livelihood? Take the licensing requirements seriously. Do the work that will get you past the hurdle of passing the state and national exams. Study the information that you didn’t know before. Review any books or notes that you took during your pre-licensing education. If you didn’t take pre-licensing education, find a cram course that is specifically geared towards passing these exams. Your job may depend on it.

Contact Robin Gronsky at Rgronsky@Gronskylaw.com if you want to explore expanding into new states or need help with your licensing applications (company or loan originator). I’ll keep what you tell me confidential but I cannot give you any specific legal advice until you become a client of the firm. This is done by written agreement only.

Have You Transitioned Yet? – Calling all Licensees in California (DOC), Montana, Oregon, Utah (DRE), and Texas (SML)

If you are a licensee in California (under the Department of Corporations), Montana, Oregon, Utah (under the Department of Real Estate) or Texas, (under the Department of Savings and Mortgage Lending), your deadline to transition your license to the Nationwide Mortgage Licensing System (NMLS) is coming up at the end of May, 2010 (depending on your state, it’s May 28th (California) or May 31st).

What does it mean if you haven’t transitioned your licenses before the deadline? It could mean that you can’t originate any loans after July 31, 2010. Most companies and loan originators are uncertain as to whether they are affected by the new laws. Many companies and loan originators never were subject to licensing requirements under their own state statutes. But all states have changed their laws to conform to the requirements of the federal SAFE Act. So, in all 50 states and Washington D.C., loan officers who work for mortgage lenders, correspondent mortgage lenders, and mortgage brokers, will need to be licensed.

So, catch up with your licensing requirements. Create an MU4 record through the NMLS. Take the necessary tests immediately (each loan originator must pass a state test and a national test). If your loan originator fails either test, he must wait 30 days before he can re-take the test. And passing the test is not a given – a significant portion of the test-takers are failing the tests. Schedule your FBI criminal background check through the NMLS. Don’t wait until the last minute. If you have questions, call your state regulatory agency. There are licensing companies that help mortgage companies and loan officers to transition their licenses. If your company or your loan officers are already licensed in other states and you are on the NMLS, don’t forget to go back into your MU1, MU3, and MU4 records and transition your CA, MT, OR, UT, and TX licenses (and update your registered agent information, jurisdiction information, and pay the transition fees).

Please feel free to forward this blog post to your colleagues, listserv members or favorite bloggers. Or if you would like to run it (in whole or in part) in any publication or quote from it, simply include my name and URL: http://www.mortgagelicensesolutions.com. No prior permission needed. To inquire about joining my list to receive my blog posts or my availability to speak to your group or write an article for your publication, please email me at Robin@Mortgagelicensesolutions.com. Thank you!

Certification Process for Loan Officers

Many states had testing or education requirements, even before the SAFE Act required them. These states are allowing loan officers to “certify” completion of these requirements rather than making them take a test again or sit through more hours of education.

The certification process just opened up on the Nationwide Mortgage Licensing System (NMLS) on May 1, 2010 and many states that are participating only allow a loan officer to certify through June 30, 2010 (but your state may be starting or ending on a later date). Currently, thirty-five (35) states are allowing certification of testing and/or education. Certification of testing pertains to the state component only; all loan officers need to pass the national component exam. You need to check this list to see if your state is permitting certification:

Click to access Certification%20State%20List.pdf

Your state regulatory agency will decide if you are eligible to participate in the certification process. In order to use your eligibility to certify, you must have an MU4 record on the NMLS and either transitioned an existing license or applied for a new license. The NMLS will send you an email (using the email address that you have on your MU4 record), letting you know that your state has permitted you to certify and that a certification payment invoice has been posted to your MU4 record. The email will give you step-by-step instructions for paying the invoice. If you are eligible for certification for testing, the fee is $5 per test. If you are eligible for certification for education, the fee is $15. If you don’t pay the fees, you are not “certified” and must actually pass the state test and/or sit through the education hours.

There is a lot of confusion about the loan originator requirements, especially for those loan originators who are licensed in multiple states. Your state regulatory agencies have the answers. If you are my client, I will get you the answers to your questions.

Please feel free to forward this blog post to your colleagues, listserv members or favorite bloggers. Or if you would like to run it (in whole or in part) in any publication or quote from it, simply include my name and URL: http://www.mortgagelicensesolutions.com. No prior permission needed. To inquire about joining my list to receive my blog posts or my availability to speak to your group or write an article for your publication, please email me at Robin@Mortgagelicensesolutions.com. Thank you!