Delaware Loan Originator Licensing Requirements

Delaware has sent out a letter to its licensees informing them of how it will comply with the federal SAFE law in connection with mortgage loan originators.

The first step you would have noticed is that, unlike in prior years, when you renewed your Delaware company license, the application asked for the names and addresses of the loan originators that you employ. In the future, on a quarterly basis, you will be required to report any newly hired mortgage loan originators.

If a loan originator is currently employed by a licensed Delaware lender or broker, the loan originator will be required to submit a license application through the Nationwide Mortgage License System (NMLS) by March 31, 2009. The loan originator will be allowed to keep originating while the license application is pending, once the application is timely submitted.

If you hire a loan originator after January 1, 2009, that originator must first submit a license application through the NMLS immediately upon beginning employment (he/she can’t wait until March 31, 2009). Once the application is submitted, the loan originator may start to originate loans until a decision on his/her license application is made.

If your loan originator is already on the NMLS because of licensing in another state, he/she doesn’t need to create a new record. A simple amendment to the MU4, adding Delaware as a new state, is all that is required. Delaware is not yet requiring fingerprinting, credit reports, education hours or a national test yet. But if your loan officer answers ”yes” to any of the disclosure questions, he/she must send in additional information, giving all of the details about the problem that caused the “yes” answer.

There will be a $280.00 application fee which must be paid through the NMLS with a credit card or through electronic debit from a checking account. Once the loan originator license is approved, another $250.00 license fee will be required. There will also be annual assessment fees and annual NMLS processing fees.

Delaware has not announced when it will transition company licensing to the NMLS. The above information is for the licensing of individual loan officers only.

New HUD-1 and GFE forms

This is not a licensing issue but I thought I’d give out some information on the compliance front. HUD has announced that it is requiring new Good Faith Estimate (GFE) and HUD-1 and HUD-1A forms. The new HUD-1 forms have references back to the GFE so savvy consumers can compare the two documents. Although the new forms won’t be required until January, 2010, you should take a look at them:

http://www.hud.gov/content/releases/goodfaithestimate.pdf
http://www.hud.gov/content/releases/hud-1.pdf