New York Now Requires Mortgage Loan Originator Registration

New York now requires all loan officers, which they call mortgage loan originators (MLOs), to be registered. This state is one of the first to become part of the Nationwide Mortgage Licensing System (NMLS). In addition to the detailed online application through the NMLS, loan officers are required to submit supplementary documents directly to the New York Banking Department, including fingerprints, credit history, and documentation related to financial and criminal disclosures. Loan officers who work for banks, thrifts and credit unions do not have to register. Loan processors would need to register if they discuss loan products or terms with customers.

Sole proprietors and company officers, directors, members and shareholders who also engage in soliciting customers for New York loans must register as MLOs.

Each loan officer will need to set up his/her own account on the NMLS, creating a personal user name and password. He/she will need to complete the MU4 form and pay a registration fee.

Each loan officer will be required to get his/her fingerprints taken, getting the fingerprint cards either through the Banking Department or through the employer. Even company officers, directors, members and shareholders who were previously fingerprinted for the company license must be fingerprinted again if they are required to register as an MLO.

Additionally, a recent (within 30 days of registration on the NMLS) credit report for each registered MLO must be submitted with the fingerprint cards. If the MLO answered “yes” to any of the questions regarding criminal charges and convictions, bankruptcy filings, civil litigation, regulatory problems with any state or federal agency, and whether he/she was ever fired from a previous job, back-up documentation must be submitted along with the fingerprint cards and credit report. All MLO applications must be approved by the Banking Department or that loan officer cannot solicit any business in New York.

The registrations are good only for one calendar year and expire on December 31st. MLOs can work for only one company. If the MLO switches companies, the Banking Department must be notified of the change.

If your company was licensed in New York before January 1, 2008, your existing MLOs must submit applications through the NMLS for registration before July 1, 2008. If your company is licensed after January 1, 2008, the MLOs should immediately submit their applications as they have only until April 1, 2008 to receive notification from the Banking Department that their application has been received to be allowed to solicit New York business.