A number of states are joining the Nationwide Mortgage License System (NMLS) on January 4, 2010. For all of those states, 20 hours of pre-licensing education and passing an exam with a 75% passing rate is required before you can get approved for a loan originator license.
For some of us, the week before or after Christmas is a slow time in the office. For others of us, January is the time when the phones aren’t ringing so often. During your slow periods, if you are in one of the states that is transitioning to the NMLS in January, 2010, get ahead of the curve and start taking your 20 hours of pre-licensing education. And then sign up for the NMLS tests, both the national component (if you haven’t already taken it for another state) and the state component.
When you sign up for your 20 hours of pre-licensing education, you need to give the course provider your NMLS identification number. If you don’t have one yet, just go to this NMLS web page: https://www.statemortgageregistry.com/Public/Default.aspx and click on “Create an Individual Account.” When you create your account, the NMLS will assign to you a user name, a password, and an NMLS identification number. You will use that same NMLS number for every state in which you will be licensed for as long as the NMLS exists. The password that you receive will be a temporary password and then you can change it to one that you will remember.
Until January 4, 2010, you cannot input the information to create your own MU4 record in the NMLS but if you have the time to get your education hours in and take the test, you will not be scrambling to fulfill those requirements when your pipeline gets full.
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!
Friday, December 18, 2009
Friday, December 11, 2009
A Little Advice About the Pre-Licensing Exams
The SAFE Act, as implemented by each state, requires that all loan originators pass an exam with a 75% passing rate before they can get approved for a loan originator license by each state in which they originate or broker loans. The SAFE test consists of two components – a national test and a state test. Loan originators wishing to get licensed in more than one state must take the state component in each state in which they will be submitting a license application, but must pass the national component only once. The testing requirement must be satisfied by new applicants before they can be approved for a license. If you are currently licensed in a state that is transitioning to the NMLS (nationwide mortgage licensing system), then you transition your license first and the state has set a deadline by which you must pass the two test components.
For those loan originators with testing deadlines, it is important to schedule your test during a slow time at work and not wait until just before the licensing deadline. My clients have found their own state component to be fairly easy to pass but many fail on the first try in states in which they don’t do many loans. I would suggest that for those states, take the required 20 hours of pre-licensing education and then immediately after, take the exam while the material is still fresh in your mind. If you fail the test, you must wait 30 days until you can re-take the exam.
If December is a slow time of the year for you (not so many people are looking for houses during the Christmas season), take your pre-licensing education now and schedule the test for before the New Year starts. Good luck!
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!
For those loan originators with testing deadlines, it is important to schedule your test during a slow time at work and not wait until just before the licensing deadline. My clients have found their own state component to be fairly easy to pass but many fail on the first try in states in which they don’t do many loans. I would suggest that for those states, take the required 20 hours of pre-licensing education and then immediately after, take the exam while the material is still fresh in your mind. If you fail the test, you must wait 30 days until you can re-take the exam.
If December is a slow time of the year for you (not so many people are looking for houses during the Christmas season), take your pre-licensing education now and schedule the test for before the New Year starts. Good luck!
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!
Wednesday, December 2, 2009
New Jersey Transitioning to NMLS Starting January 4, 2010
New Jersey will start its transition to the Nationwide Mortgage Licensing System (NMLS) on January 4, 2010. In the meantime, while they are preparing the transition, the Department of Banking and Insurance (DOBI) is not accepting any new license applications or changes to an existing license.
All current licensees must complete the transition process by April 30, 2010. If you hold an inactive license, you also must transition your license to the NMLS and fulfill all of the requirements under the new law to maintain your license. Mortgage solicitors who are currently registered with DOBI have until May 15, 2010 to transition their registration onto the NMLS and fulfill the new licensing requirements. All existing licenses and registrations expire on July 31, 2010. New Jersey will still require an officer, member, director, partner or owner to maintain an Individual License for each company under the new law.
Companies and mortgage solicitors who have not yet been licensed will start the application process on the NMLS starting January 4, 2010. All licenses that are issued in 2010 will expire on December 31, 2010.
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!
All current licensees must complete the transition process by April 30, 2010. If you hold an inactive license, you also must transition your license to the NMLS and fulfill all of the requirements under the new law to maintain your license. Mortgage solicitors who are currently registered with DOBI have until May 15, 2010 to transition their registration onto the NMLS and fulfill the new licensing requirements. All existing licenses and registrations expire on July 31, 2010. New Jersey will still require an officer, member, director, partner or owner to maintain an Individual License for each company under the new law.
Companies and mortgage solicitors who have not yet been licensed will start the application process on the NMLS starting January 4, 2010. All licenses that are issued in 2010 will expire on December 31, 2010.
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!
Friday, November 20, 2009
Updated Loan Originator Licensing Requirements On One Chart
The Nationwide Mortgage License System (NMLS) has just posted a new chart of each state’s deadline for certain requirements that mortgage loan originators must meet in order to be SAFE compliant. Title V of the Housing and Economic Recovery Act of 2008 (H.E.R.A.), “the SAFE Act”, became effective July 30, 2009 and mandates that state-licensed mortgage loan originators meet certain minimum requirements for licensure. The NMLS does issue a disclaimer that not all requirements are on the chart (for example some states require surety bonds for loan originators). Always check with your state’s regulatory agency in charge of licensing loan originators to find out all of your licensing requirements. Or you can retain an attorney or company that helps loan originators get their licenses.
The NMLS chart does present an updated list of deadlines for the main requirements – pre-licensing education, continuing education, testing for loan originators, credit reports and criminal background checks. It’s very helpful for loan originators who are or want to be licensed in more than one state. Check it out at this URL:
http://mortgage.nationwidelicensingsystem.org/profreq/Documents/SAFE%20Compliant%20Requirements.pdf
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!
The NMLS chart does present an updated list of deadlines for the main requirements – pre-licensing education, continuing education, testing for loan originators, credit reports and criminal background checks. It’s very helpful for loan originators who are or want to be licensed in more than one state. Check it out at this URL:
http://mortgage.nationwidelicensingsystem.org/profreq/Documents/SAFE%20Compliant%20Requirements.pdf
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!
Thursday, November 12, 2009
Changed Pennsylvania Deadlines
Pennsylvania has extended the deadline by which loan originators need to pass the national and state components of the pre-licensing mortgage examination through April 30, 2010. The deadline had previously been December 31, 2009.
Loan originators have 4 opportunities to pass each part of the test components (national and state). If you fail either of the tests , you must wait 30 days to re-take the exam. If you fail 4 times at both tests, you must wait 6 months to take the tests again. And Pennsylvania will suspend your license until you do pass both of the tests.
The deadline for taking the 20 hours of pre-licensing education has not changed and is still December 31, 2009.
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!
Loan originators have 4 opportunities to pass each part of the test components (national and state). If you fail either of the tests , you must wait 30 days to re-take the exam. If you fail 4 times at both tests, you must wait 6 months to take the tests again. And Pennsylvania will suspend your license until you do pass both of the tests.
The deadline for taking the 20 hours of pre-licensing education has not changed and is still December 31, 2009.
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!
Friday, November 6, 2009
NMLS Plusses and Minuses
I've written an article for the November 2009 Residential Edition of Scotsman Guide on "NMLS Plusses and Minuses which can be found at http://www.sg-resdigital.com/resdigital/200911re#pg28
Check it out and let me know what plusses and minuses you have found with the NMLS.
Check it out and let me know what plusses and minuses you have found with the NMLS.
Tuesday, October 20, 2009
Pennsylvania is Not a Brick and Mortar State Anymore
In a move that reverses the current trend of greater regulation, Pennsylvania eliminated its requirement that mortgage bankers, correspondent mortgage lenders, and mortgage brokers be required to maintain at least one office in Pennsylvania. Your company’s books and records can be maintained at your principal place of business or in another office, provided you obtain prior permission from the Banking Department.
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!
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!
Tuesday, October 6, 2009
Don’t Wait for the Last Minute to Take Your Pre-Licensing Education
Each state is passing legislation to implement the federal SAFE Act. The legislation requires 20 hours of pre-licensing education and then passing two tests, one is a national component and the second test is a state component. Each state is setting its own deadline for when you need to complete the 20 hours and pass the exams. Don’t wait until the last minute to take the education and sit for the exams.
I have been in the business of helping mortgage lenders and brokers obtain and renew licenses for more than 10 years. Some of my clients are more on top of their licensing needs and I get the signed paper applications or information that I need to renew through the NMLS a few days after I request the information or send the applications for signature. Since I submit paperwork that I get back from clients within 48 hours of my receiving it, for some clients, this can mean that they get their renewals processed by the state banking department before the reviewers get hit by a deluge of renewals. I also have clients who do not respond as promptly and I cannot submit the renewals until maybe a day or two before the deadline. For these clients, the renewal process is very slow and may create a problem with closing loans because their license has expired. Some states are kind enough to send me a letter that states that the licensee can still close loans while the renewal is in processing. But other states are too busy to send me such a letter and my mortgage broker clients are sitting tight with their borrowers because their lenders will not let them close without a renewal license.
Don’t wait until the last minute. The NMLS system is new and you don’t want to learn what you need to know just before your license expires. Take a few minutes to find out what your deadlines are and get the pre-licensing education and exams done weeks ahead of schedule. You’ll be the one closing loans while the procrastinators are still waiting for their license approval.
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!
I have been in the business of helping mortgage lenders and brokers obtain and renew licenses for more than 10 years. Some of my clients are more on top of their licensing needs and I get the signed paper applications or information that I need to renew through the NMLS a few days after I request the information or send the applications for signature. Since I submit paperwork that I get back from clients within 48 hours of my receiving it, for some clients, this can mean that they get their renewals processed by the state banking department before the reviewers get hit by a deluge of renewals. I also have clients who do not respond as promptly and I cannot submit the renewals until maybe a day or two before the deadline. For these clients, the renewal process is very slow and may create a problem with closing loans because their license has expired. Some states are kind enough to send me a letter that states that the licensee can still close loans while the renewal is in processing. But other states are too busy to send me such a letter and my mortgage broker clients are sitting tight with their borrowers because their lenders will not let them close without a renewal license.
Don’t wait until the last minute. The NMLS system is new and you don’t want to learn what you need to know just before your license expires. Take a few minutes to find out what your deadlines are and get the pre-licensing education and exams done weeks ahead of schedule. You’ll be the one closing loans while the procrastinators are still waiting for their license approval.
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!
Friday, September 25, 2009
Do You Still Need to Take North Carolina Pre-Licensing Education? Maybe Not.
North Carolina has prepared a chart for licensed loan originators to help answer questions they may have about the required pre-licensing education. If you are already a licensed loan originator in North Carolina, you were required to take pre-licensing education before your license application was approved and continuing education each year in order to get your licensed renewed and report that education to the North Carolina Commissioner of Banks. North Carolina is counting those hours towards the required 20 hours of pre-licensing education. Accordingly, if you have been licensed for more than two (2) years, you should have completed the 20 hours already. However, even if you have completed the 20 hours of pre-licensing education, you still need to take eight (8) hours of continuing education before you can renew your license this year (renewals through the Nationwide Mortgage License System (NMLS) start on November 1, 2009). You have until December 31, 2009 to take the pre-licensing education or continuing education.
If you are licensed in another state that has already transitioned onto the NMLS and have completed your twenty (20) hours of pre-licensing education in another state, you will not have to take additional hours of pre-licensing education for North Carolina. But to renew your license, you will need to take your eight (8) hours of continuing education.
The chart is available on the North Carolina Commissioner of Banks’ website here:
http://www.nccob.org/NR/rdonlyres/8D26CEAF-53C4-4104-A688-05A17E9C8651/0/CertificationChart92309.pdf
If you are applying for a new North Carolina loan originator license, you must take twenty-four (24) hours of pre-licensing education before your license application will be approved.
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!
If you are licensed in another state that has already transitioned onto the NMLS and have completed your twenty (20) hours of pre-licensing education in another state, you will not have to take additional hours of pre-licensing education for North Carolina. But to renew your license, you will need to take your eight (8) hours of continuing education.
The chart is available on the North Carolina Commissioner of Banks’ website here:
http://www.nccob.org/NR/rdonlyres/8D26CEAF-53C4-4104-A688-05A17E9C8651/0/CertificationChart92309.pdf
If you are applying for a new North Carolina loan originator license, you must take twenty-four (24) hours of pre-licensing education before your license application will be approved.
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!
Wednesday, September 16, 2009
What is on the Mortgage Loan Originator Tests?
All loan officers who are required to become licensed as mortgage loan originators in every state in which they wish to do business must pass a state exam. You must also pass a national test in order to get your license. If you want to be licensed in two states, you take the national test once, and the state test in the two states in which you intend to be licensed.
The NMLS has posted the course outlines for some of the states on its website:
http://www.stateregulatoryregistry.org/NMLS/AM/Template.cfm?Section=Testing&Template=/CM/HTMLDisplay.cfm&ContentID=24885
As of September 16, 2009, the following states have posted their test course outlines: Georgia, Maryland, Kentucky, District of Columbia, Wyoming, New Jersey, Virginia, Arizona, Idaho, Iowa, Louisiana, New Hampshire, North Carolina, Pennsylvania, Rhode Island, Vermont, and Washington. The National test course outline is also posted on the NMLS website. Massachusetts has posted its course outline but since the test is being revised, the course outline that is posted on the NMLS may be changed as well.
The course outlines are fairly short and just give you the briefest description of what will be tested. For example, the Maryland test has 55 questions, but only 45 questions will be scored. Five per cent (5%) of the test is on the Department of Labor, Licensing and Regulation, Division of Financial Regulation's structure and function. Ten per cent (10%) of the test is on definitions in the various laws that govern the licensing requirements for Maryland loan originators. Twenty five per cent (25%) of the test is about License Law and Regulations and covers who needs to be licensed (both in-state and out-of-state), the qualifications that the loan originator needs, the ground for denying the application, and what needs to be done to maintain the license (such as continuing education and conduct). Half (50%) of the test is about compliance and which types of activities are prohibited, what kind of advertising is not permitted, and what fees and charges are allowed or not allowed. The final ten per cent (10%) of the test covers the discliplinary process if you are not in compliance.
Each state has a slightly different outline so you need to review your state's outline (and the outline for all other states in which you wish to be licensed) to make sure that you know the information that will be tested. You do not need the take the required 20 hours of pre-licensing edcuation before you take the tests.
The NMLS has posted the course outlines for some of the states on its website:
http://www.stateregulatoryregistry.org/NMLS/AM/Template.cfm?Section=Testing&Template=/CM/HTMLDisplay.cfm&ContentID=24885
As of September 16, 2009, the following states have posted their test course outlines: Georgia, Maryland, Kentucky, District of Columbia, Wyoming, New Jersey, Virginia, Arizona, Idaho, Iowa, Louisiana, New Hampshire, North Carolina, Pennsylvania, Rhode Island, Vermont, and Washington. The National test course outline is also posted on the NMLS website. Massachusetts has posted its course outline but since the test is being revised, the course outline that is posted on the NMLS may be changed as well.
The course outlines are fairly short and just give you the briefest description of what will be tested. For example, the Maryland test has 55 questions, but only 45 questions will be scored. Five per cent (5%) of the test is on the Department of Labor, Licensing and Regulation, Division of Financial Regulation's structure and function. Ten per cent (10%) of the test is on definitions in the various laws that govern the licensing requirements for Maryland loan originators. Twenty five per cent (25%) of the test is about License Law and Regulations and covers who needs to be licensed (both in-state and out-of-state), the qualifications that the loan originator needs, the ground for denying the application, and what needs to be done to maintain the license (such as continuing education and conduct). Half (50%) of the test is about compliance and which types of activities are prohibited, what kind of advertising is not permitted, and what fees and charges are allowed or not allowed. The final ten per cent (10%) of the test covers the discliplinary process if you are not in compliance.
Each state has a slightly different outline so you need to review your state's outline (and the outline for all other states in which you wish to be licensed) to make sure that you know the information that will be tested. You do not need the take the required 20 hours of pre-licensing edcuation before you take the tests.
Friday, September 4, 2009
NMLS Pre-Licensing Education Approved Providers
The federal SAFE Act, as implemented by each state, requires 20 hours of pre-licensing education. Until recently, the Nationwide Mortgage Licensing System (NMLS) had not approved education providers and therefore the states could not actually require you to fulfill the education requirement in order to approve your being licensed as a loan originator.
NMLS is currently prioritizing approving the pre-licensure education courses for the states of AZ, IA, ID, LA, MA, MD, NH, NC, PA, RI, VA ,VT, and WA. It has also posted a list of approved course providers: http://www.stateregulatoryregistry.org/AM/Template.cfm?Section=Course_Providers&Template=/CM/ContentDisplay.cfm&ContentID=24045
This list is current as of August 31, 2009 and will be updated every Monday. You must take your pre-licensing courses from a provider which is on the NMLS list or the coursework will not fulfill the requirements of your state licensing statute. You do not need to take your 20 hours of pre-licensing education before you take the required test but at some point, you must complete the coursework.
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!
NMLS is currently prioritizing approving the pre-licensure education courses for the states of AZ, IA, ID, LA, MA, MD, NH, NC, PA, RI, VA ,VT, and WA. It has also posted a list of approved course providers: http://www.stateregulatoryregistry.org/AM/Template.cfm?Section=Course_Providers&Template=/CM/ContentDisplay.cfm&ContentID=24045
This list is current as of August 31, 2009 and will be updated every Monday. You must take your pre-licensing courses from a provider which is on the NMLS list or the coursework will not fulfill the requirements of your state licensing statute. You do not need to take your 20 hours of pre-licensing education before you take the required test but at some point, you must complete the coursework.
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!
Friday, August 28, 2009
Do You Need a License?
I periodically get calls and emails, asking me if a certain person needs a license for the activities he is doing. Maybe it’s mortgage loan lead generation, sometimes it’s hard money lending or commercial mortgage brokering. My answer is always to read the statutes in your state (or any state in which you wwant to do business)regarding residential mortgage licensing to see if the activity that you are proposing to do fit within the description of a mortgage broker or mortgage lender. Also read the exemptions from licensing. If your activities fit within the definition of “mortgage broker” or “mortgage lender” and you don’t fit within any of the exemptions, you need a license. If your activity is not residential mortgages, also check the statutes for commercial mortgages to see if any such statute exists, whether your activity falls within the definition of mortgage broker or lender and whether you fall within the exemptions. It’s that simple. If you don't understand the language in the statutes, you need to hire someone like me who can explain the statutes to you.
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!
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!
Thursday, August 20, 2009
Vermont Sole Proprietor License
Vermont has created a separate broker license for sole proprietors. This means that you don’t have any employees working for you. If you do have employees, then you must obtain a Mortgage Broker Company License. The requirements are that you must be licensed in your home state, you must be in good standing with your home state regulators, you must register a resident agent with the Vermont Secretary of State, and you must purchase a $25,000 surety bond.
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!
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!
Monday, August 3, 2009
Oklahoma Joins the Nationwide Mortgage Licensing System
Today is the day that Oklahoma joins the Nationwide Mortgage Licensing System (NMLS). The Oklahoma Department of Consumer Credit will no longer accept paper applications for a mortgage broker license. They must apply through the NMLS. Current licensees must create a company record on the NMLS (called an MU1) by December 1, 2009. If your company already has a record on the NMLS because of licensing in another state, you simply add Oklahoma as an additional jurisdiction to your MU1. There will be a late filing penalty of $100 if your company transitions between December 1, 2009 and December 31, 2009. After December 31, 2009, your license expires and you will not be able to renew it. You will need to submit a new application. If your company has branch offices, each branch must create a record on the NMLS by completing an MU3 form. The person in charge of each office is called the Qualifying Individual on the MU1. The fee for transitioning your broker license is $350, including the NMLS fee. New licenses cost $1,100.
All existing Oklahoma mortgage loan originators as of July 30, 2009 must transition their licenses prior to December 31, 2009 by completing an MU4. All current loan originators will need to take 20 hours of pre-licensing education, pass an exam, submit a surety bond, submit fingerprints for a criminal background check, and pass a financial background check, including a review of your credit report by December 31, 2009. New applicants for a loan originator license must complete the requirements by December 31, 2010. The license costs $210, which includes the NMLS processing fee, if you transition your loan originator license by December 1, 2009. If you do not make the deadline, there is an additional fee of $100. After December 31, 2009, you need to submit a new application. These fees do not include the cost of fingerprinting and credit report fees. You pay the fee through the NMLS and the fee is nonrefundable.
All of the additional requirements with which loan originators need to comply (pre-licensing education, exam, etc.) are not fully available on the NMLS yet so you will need to keep checking back with the NMLS in order to find out whether each requirement has been added to the NMLS. As updated information about the exam and the pre-licensing courses become available, I will post more information on this blog.
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!
All existing Oklahoma mortgage loan originators as of July 30, 2009 must transition their licenses prior to December 31, 2009 by completing an MU4. All current loan originators will need to take 20 hours of pre-licensing education, pass an exam, submit a surety bond, submit fingerprints for a criminal background check, and pass a financial background check, including a review of your credit report by December 31, 2009. New applicants for a loan originator license must complete the requirements by December 31, 2010. The license costs $210, which includes the NMLS processing fee, if you transition your loan originator license by December 1, 2009. If you do not make the deadline, there is an additional fee of $100. After December 31, 2009, you need to submit a new application. These fees do not include the cost of fingerprinting and credit report fees. You pay the fee through the NMLS and the fee is nonrefundable.
All of the additional requirements with which loan originators need to comply (pre-licensing education, exam, etc.) are not fully available on the NMLS yet so you will need to keep checking back with the NMLS in order to find out whether each requirement has been added to the NMLS. As updated information about the exam and the pre-licensing courses become available, I will post more information on this blog.
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!
Tuesday, July 28, 2009
Virginia transitioning to NMLS for Mortgage Loan Originators
Virginia will start using the Nationwide Mortgage Licensing System (NMLS) on August 3, 2009 to start implementing its version of the SAFE Act. It will not be using the NMLS for licensing mortgage bankers or brokers yet. What do you need to know if you are a mortgage loan originator whose employer originates or brokers Virginia loans?
By July 1, 2010, all loan originators will need to be licensed. In order to start the ball rolling, loan officers can start submitting applications through the Nationwide Mortgage Licensing System (NMLS) on August 3, 2009.
If you have never registered on the NMLS, you need to create your own record by completing an MU4 form which serves as the application. Then, you submit the Virginia checklist and accompanying documentation.
If you are already on the NMLS because you are licensed in another state, you do not need to submit a new application. You merely add a jurisdiction (Virginia) to your record (the MU4) and then submit the Virginia checklist with required accompanying documentation.
All applicants for a Virginia mortgage loan originator license need to take 20 hours of pre-licensing education, pass an exam, submit a surety bond, submit fingerprints for a criminal background check, and pass a financial background check, including a review of your credit report.
The fee for the license is $180, which includes a Virginia application fee of $150 and NMLS processing fee of $30. (This fee does not include the cost of fingerprinting and credit report fees that will be required.) All fees are collected through the NMLS and are NONREFUNDABLE.
As of July 22, 2009, the NMLS has not approved any course providers to teach the 20 hours of pre-licensing education. The licensing statute does not require the pre-licensing courses to be taken before the exam. As updated information about the exam and the pre-licensing courses become available, I will post more information on this blog.
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!
By July 1, 2010, all loan originators will need to be licensed. In order to start the ball rolling, loan officers can start submitting applications through the Nationwide Mortgage Licensing System (NMLS) on August 3, 2009.
If you have never registered on the NMLS, you need to create your own record by completing an MU4 form which serves as the application. Then, you submit the Virginia checklist and accompanying documentation.
If you are already on the NMLS because you are licensed in another state, you do not need to submit a new application. You merely add a jurisdiction (Virginia) to your record (the MU4) and then submit the Virginia checklist with required accompanying documentation.
All applicants for a Virginia mortgage loan originator license need to take 20 hours of pre-licensing education, pass an exam, submit a surety bond, submit fingerprints for a criminal background check, and pass a financial background check, including a review of your credit report.
The fee for the license is $180, which includes a Virginia application fee of $150 and NMLS processing fee of $30. (This fee does not include the cost of fingerprinting and credit report fees that will be required.) All fees are collected through the NMLS and are NONREFUNDABLE.
As of July 22, 2009, the NMLS has not approved any course providers to teach the 20 hours of pre-licensing education. The licensing statute does not require the pre-licensing courses to be taken before the exam. As updated information about the exam and the pre-licensing courses become available, I will post more information on this blog.
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!
Monday, July 20, 2009
Washington D.C. Licenses – New Law That You Need to Follow!
Washington D.C. will start using the Nationwide Mortgage Licensing System (NMLS) on August 1, 2009. What do you need to know if you have a Washington D.C. Mortgage Broker/Lender/Dual Authority License? What are the requirements if you want to get a new Washington D.C. license?
If you currently have a Washington D.C. license that expires between July 1, 2009 and December 31, 2009, you will be renewing your license the same way you have always renewed it – a lengthy paper renewal application with a great deal of supporting documentation. Payments of your renewal fee must be by check and sent to the post office lockbox. Your new license will expire on December 31, 2010, when it will need to be renewed. Your renewal fees will be prorated; the assessment fee will not.
Between August 1, 2009 and October 31, 2009, you must create your company record on the NMLS (and pay the NMLS registration fee which is separate and apart from any fees that you pay for your renewal license to the DC Department of Insurance, Securities and Banking). If you have never applied for a license through the NMLS, you must access the NMLS website at www.stateregulatoryregistry.org/NMLS and complete a Company Account Request Form and identify a Primary Account Administrator and a Secondary Account Administrator. Within a few days, the NMLS sends you via email your log-in information. If you already have an NMLS account, you simply go into your company account and add Washington D.C. as an additional jurisdiction.
The Department of Insurance, Securities, and Banking is not accepting new license applications through July 31, 2009. Starting August 1, 2009, if you wish to apply for a new Washington D.C. license, you will apply for it through the NMLS.
The Department of Securities, Insurance and Banking is still creating regulations for the new licensing procedures and the licensing of loan originators. As I hear of them, I will pass them on in this blog.
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!
If you currently have a Washington D.C. license that expires between July 1, 2009 and December 31, 2009, you will be renewing your license the same way you have always renewed it – a lengthy paper renewal application with a great deal of supporting documentation. Payments of your renewal fee must be by check and sent to the post office lockbox. Your new license will expire on December 31, 2010, when it will need to be renewed. Your renewal fees will be prorated; the assessment fee will not.
Between August 1, 2009 and October 31, 2009, you must create your company record on the NMLS (and pay the NMLS registration fee which is separate and apart from any fees that you pay for your renewal license to the DC Department of Insurance, Securities and Banking). If you have never applied for a license through the NMLS, you must access the NMLS website at www.stateregulatoryregistry.org/NMLS and complete a Company Account Request Form and identify a Primary Account Administrator and a Secondary Account Administrator. Within a few days, the NMLS sends you via email your log-in information. If you already have an NMLS account, you simply go into your company account and add Washington D.C. as an additional jurisdiction.
The Department of Insurance, Securities, and Banking is not accepting new license applications through July 31, 2009. Starting August 1, 2009, if you wish to apply for a new Washington D.C. license, you will apply for it through the NMLS.
The Department of Securities, Insurance and Banking is still creating regulations for the new licensing procedures and the licensing of loan originators. As I hear of them, I will pass them on in this blog.
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!
Friday, July 10, 2009
Can You Lose Your Ability to Earn a Living If You Have a Criminal Conviction?
When I started doing mortgage broker/lender licensing over 10 years ago, very few states licensed their loan officers. Now, as a result of the federal SAFE Act, every state will be licensing loan officers by July 31, 2010. Some of the states which licensed their loan officers asked about arrests and criminal convictions when you applied for a license, others did not. Even in those states that asked about criminal convictions, there was a lot of leeway for license application reviewers to use their discretion about granting the license depending upon what kind of crime was involved or how long ago your conviction took place. Now every state will ask about your criminal background and require you to submit fingerprint cards to verify that you do not have a criminal conviction.
After the subprime mortgage mess revealed many instances of mortgage fraud, it came to light that there were thousands of loan originators who had criminal records. Some of the criminal convictions were for fraud, embezzlement, writing bad checks and identity theft. The SAFE Act attempts to address this issue by prohibiting anyone who has had a felony conviction within the last seven (7) years or who was convicted of a felony involving fraud, dishonesty, breach or trust or money laundering. Some of the states, in writing their own laws to implement the SAFE Act, have been more stringent in their desire to weed out possible bad apples. Those states have simply prohibited any person from getting approved for a loan originator license if that person has a felony conviction of any type, no matter how far in the past that conviction was.
So, if you were a loan officer in a state that did not inquire about criminal convictions or your felony conviction was for drunk driving or possession of some pot when you were 20 years old, you may have been closing mortgages for 5 or 10 years with no problem. Now, once your state implements the SAFE Act, depending on how strict they want to be, you may not get past the application that needs to be submitted through the Nationwide Mortgage License System. If you indicate that you have been convicted of a felony, the application process might stop right there. And you are now out of a profession. There is no room for leniency or discretion by the state regulators.
So, if you are an employer, be aware that you may be losing some of your loan officers once the SAFE Act comes to your state. If you are a loan officer, I am sorry to say that a felony conviction is one mistake in your life that you may not be able to correct.
Please feel free to forward this blog post to friends, family, 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!
After the subprime mortgage mess revealed many instances of mortgage fraud, it came to light that there were thousands of loan originators who had criminal records. Some of the criminal convictions were for fraud, embezzlement, writing bad checks and identity theft. The SAFE Act attempts to address this issue by prohibiting anyone who has had a felony conviction within the last seven (7) years or who was convicted of a felony involving fraud, dishonesty, breach or trust or money laundering. Some of the states, in writing their own laws to implement the SAFE Act, have been more stringent in their desire to weed out possible bad apples. Those states have simply prohibited any person from getting approved for a loan originator license if that person has a felony conviction of any type, no matter how far in the past that conviction was.
So, if you were a loan officer in a state that did not inquire about criminal convictions or your felony conviction was for drunk driving or possession of some pot when you were 20 years old, you may have been closing mortgages for 5 or 10 years with no problem. Now, once your state implements the SAFE Act, depending on how strict they want to be, you may not get past the application that needs to be submitted through the Nationwide Mortgage License System. If you indicate that you have been convicted of a felony, the application process might stop right there. And you are now out of a profession. There is no room for leniency or discretion by the state regulators.
So, if you are an employer, be aware that you may be losing some of your loan officers once the SAFE Act comes to your state. If you are a loan officer, I am sorry to say that a felony conviction is one mistake in your life that you may not be able to correct.
Please feel free to forward this blog post to friends, family, 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!
Thursday, July 2, 2009
Why You Absolutely Need to Have a Broker Fee Agreement?
What is a broker fee agreement? It is the legal document in which you and the borrowers agree on your fee. By signing a fee agreement, you and the borrowers are memorializing the agreement on the amount of the fee, the circumstances under which it is earned, and other details about the transaction that may be required by state law. Most states not only require a broker fee agreement, but they actually have recommended forms for you to use. If your state does not have a recommended form, review your state’s requirements and have your attorney draft an agreement that complies with that law.
If your state requires a written fee agreement, that is signed by the borrowers, failure to have one in each applicant’s file can expose you to penalties and fines when your files are examined, or if a borrower complains to your banking department about any aspect of the transaction. Even if the complaint has nothing to do with your fee, the banking department will ask you to submit copies a certain documents in the file, always asking for the broker fee agreement.
But even if your state does not require a written broker fee agreement, why should you have the applicant sign one anyway? Because a written agreement protects you. You do a lot of work to find the best loan for your borrowers, you have to keep up-to-date with all of your lenders’ programs, and when you do work, you want to be paid for it. When a borrower signs a broker fee agreement, you now have the basis for enforcing the agreement that you entered into. A court will give great weight to the terms of a written agreement and it is much easier to win a lawsuit or defend yourself against a complaint from a borrower if you have a writing that the borrower has agreed to.
If you are using Calyx or other software to generate your documents, you must review their form and ensure that it complies with your state’s requirements and does not contain any blanks that must be filled in. If there are blanks that must be completed, you must make sure that your loan officers complete the forms properly and keep an original in the file.
It will be very costly for you to not have each loan applicant sign a broker fee agreement. Without a signed agreement, you are not entitled to collect the fee you ask for. Make sure every file has one to protect your interests.
Please feel free to forward this blog post to friends, family, 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!
If your state requires a written fee agreement, that is signed by the borrowers, failure to have one in each applicant’s file can expose you to penalties and fines when your files are examined, or if a borrower complains to your banking department about any aspect of the transaction. Even if the complaint has nothing to do with your fee, the banking department will ask you to submit copies a certain documents in the file, always asking for the broker fee agreement.
But even if your state does not require a written broker fee agreement, why should you have the applicant sign one anyway? Because a written agreement protects you. You do a lot of work to find the best loan for your borrowers, you have to keep up-to-date with all of your lenders’ programs, and when you do work, you want to be paid for it. When a borrower signs a broker fee agreement, you now have the basis for enforcing the agreement that you entered into. A court will give great weight to the terms of a written agreement and it is much easier to win a lawsuit or defend yourself against a complaint from a borrower if you have a writing that the borrower has agreed to.
If you are using Calyx or other software to generate your documents, you must review their form and ensure that it complies with your state’s requirements and does not contain any blanks that must be filled in. If there are blanks that must be completed, you must make sure that your loan officers complete the forms properly and keep an original in the file.
It will be very costly for you to not have each loan applicant sign a broker fee agreement. Without a signed agreement, you are not entitled to collect the fee you ask for. Make sure every file has one to protect your interests.
Please feel free to forward this blog post to friends, family, 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!
Thursday, June 25, 2009
Loan Originator Testing Starting Soon
The federal SAFE Act, which requires loan originator pre-licensing education and then passing a test, has been implemented in part by many states. The law requires that the Nationwide Mortgage License System (NMLS) create that test. The test consists of questions on relevant national laws (National Component) and questions which test your knowledge of the state law for the state license for which you are applying (State Component). The earliest states to implement their version of the SAFE Act have now announced that they will start testing loan originators on July 30, 2009. Arizona, Idaho, Iowa, Louisiana, Massachusetts, Michigan, New Hampshire, North Carolina, Pennsylvania, Rhode Island, Vermont, Washington State are the first states to offer their State Component of the required testing. The National Component will become available on July 30, 2009, as well. You must pass the National Component and State Component once. If you wish to become licensed in more than one state, once you have passed the National Component, you only need to sign up and pass the test for the State Component in each state in which you have applied for a license. Certain states may permit you to be exempt from their State Component if you have already passed their state exam.
In order to schedule tests with Pearson Vue, the test delivery vendor, you must register and pay for that test through the NMLS. Starting June 29, 2009, you can enroll for the National Component and the State Component for the 12 states listed above. Testing centers are located throughout the country and you can register for the one closest to you, no matter which State Component you have signed up for. All State Components exams are given at all testing sites. This eliminates the travel requirement to each state that multi-state licensed loan officers had under the current system.
You are not required to take any prep courses before you take the exam. Nor are you required to take the 20 hours of pre-licensing education that the SAFE Act requires before you take the exam. However, even if you pass the both the National and State Component of the exam, you will need to complete the 20 hours of pre-licensing education.
Please feel free to forward this blog post to friends, family, 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!
In order to schedule tests with Pearson Vue, the test delivery vendor, you must register and pay for that test through the NMLS. Starting June 29, 2009, you can enroll for the National Component and the State Component for the 12 states listed above. Testing centers are located throughout the country and you can register for the one closest to you, no matter which State Component you have signed up for. All State Components exams are given at all testing sites. This eliminates the travel requirement to each state that multi-state licensed loan officers had under the current system.
You are not required to take any prep courses before you take the exam. Nor are you required to take the 20 hours of pre-licensing education that the SAFE Act requires before you take the exam. However, even if you pass the both the National and State Component of the exam, you will need to complete the 20 hours of pre-licensing education.
Please feel free to forward this blog post to friends, family, 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!
Friday, June 19, 2009
Out-of-Date Information
I have been helping mortgage lenders and brokers get their licenses for over 10 years. I’ve been blogging about licensing and compliance for about 2 years. Much of the information that I needed to know when I first starting working with mortgage companies is useless. Even some of the information that I published in my blog back in 2007 is now wrong.
The laws in the mortgage licensing area keep changing to keep up with events that are happening in our country to the financial industry. When I first started working in this area of law, there were a handful of states that did not require licensing at all. I’ve watched as all of the states passed laws to require the licensing of mortgage companies and then loan originators. Although there are some states now that do not require the licensing of loan originators, that will be a memory in about a year, when the federal SAFE Act becomes fully implemented.
If you are going to try to get yourself licensed without any help, you need to know that the information that you are relying upon is the most up-to-date out there. As I become aware of new legislation, new regulations and new compliance requirements, I write a blog entry about the changes so you can stay current. There are companies that you can subscribe to that will send updates to you when there are changes to the law in any state that yo uare interested in. Unfortunately, most of my clients don’t have time to read those updates or don’t understand them. Another way to get information is to read what is on the website of the regulatory agency that is in charge of mortgage lender, broker or loan originator licensing. The agencies go by different names in different states – they may be the Banking Department or the Department of Financial Institutions or the Commissioner of Banks. In California, it is the Department of Corporations (who would have guessed?). And sometimes, even after reading what’s on the website, I still call the agency and ask to speak to the reviewers in the licensing department. They can’t give legal advice (not that I’m asking for any advice) but they can tell me if the information on their website is current and answer questions about what is on their website or about an announcement about a change in their laws that I’ve received in the mail. You should do the same.
Always make sure that the information that you are working with is as up-to-date as it can be. If you are following a law that has been changed, you are not following the correct law and you could be subject to penalties and fines.
The laws in the mortgage licensing area keep changing to keep up with events that are happening in our country to the financial industry. When I first started working in this area of law, there were a handful of states that did not require licensing at all. I’ve watched as all of the states passed laws to require the licensing of mortgage companies and then loan originators. Although there are some states now that do not require the licensing of loan originators, that will be a memory in about a year, when the federal SAFE Act becomes fully implemented.
If you are going to try to get yourself licensed without any help, you need to know that the information that you are relying upon is the most up-to-date out there. As I become aware of new legislation, new regulations and new compliance requirements, I write a blog entry about the changes so you can stay current. There are companies that you can subscribe to that will send updates to you when there are changes to the law in any state that yo uare interested in. Unfortunately, most of my clients don’t have time to read those updates or don’t understand them. Another way to get information is to read what is on the website of the regulatory agency that is in charge of mortgage lender, broker or loan originator licensing. The agencies go by different names in different states – they may be the Banking Department or the Department of Financial Institutions or the Commissioner of Banks. In California, it is the Department of Corporations (who would have guessed?). And sometimes, even after reading what’s on the website, I still call the agency and ask to speak to the reviewers in the licensing department. They can’t give legal advice (not that I’m asking for any advice) but they can tell me if the information on their website is current and answer questions about what is on their website or about an announcement about a change in their laws that I’ve received in the mail. You should do the same.
Always make sure that the information that you are working with is as up-to-date as it can be. If you are following a law that has been changed, you are not following the correct law and you could be subject to penalties and fines.
Monday, June 1, 2009
Arizona Transitions to the NMLS
You have until June 30, 2009 to transition your company or sole proprietor mortgage broker license to the NMLS if you are currently licensed in Arizona. Mortgage bankers needed to transition to the NMLS by March 31, 2009.
Remember that transitioning your licenses does not mean amending your license information. If there are any changes to your information (e.g., you’ve moved your office or changed branch managers), you can submit the changes only after your current filings are approved.
The most basic filing is an MU1 for the company and the MU2 for each control person and the Responsible Individual. If you have branch licenses already approved, then you need to complete an MU3 for each branch and the branch managers must complete their own MU2 filings.
New applications for a company or branch license must be submitted through the NMLS. There are no more paper applications.
All loan originators must be licensed by December 31, 2009. The Arizona Department of Financial Institutions (the “DFI”) is still working on the conditions it will require for licensing loan originators since they are still deciding how to fully comply with the federal SAFE Act. However, loan originators can currently input an MU4 on the NMLS to get licensed under the existing Arizona licensing law. Loan originators must wait to input their MU4s until their employer has completed their NMLS filings. The DFI is intending to propose legislation that would postpone the deadline for licensing loan originators until July 1, 2010. But, such legislation has not become law yet so the deadline stays at December 31, 2009.
Remember that transitioning your licenses does not mean amending your license information. If there are any changes to your information (e.g., you’ve moved your office or changed branch managers), you can submit the changes only after your current filings are approved.
The most basic filing is an MU1 for the company and the MU2 for each control person and the Responsible Individual. If you have branch licenses already approved, then you need to complete an MU3 for each branch and the branch managers must complete their own MU2 filings.
New applications for a company or branch license must be submitted through the NMLS. There are no more paper applications.
All loan originators must be licensed by December 31, 2009. The Arizona Department of Financial Institutions (the “DFI”) is still working on the conditions it will require for licensing loan originators since they are still deciding how to fully comply with the federal SAFE Act. However, loan originators can currently input an MU4 on the NMLS to get licensed under the existing Arizona licensing law. Loan originators must wait to input their MU4s until their employer has completed their NMLS filings. The DFI is intending to propose legislation that would postpone the deadline for licensing loan originators until July 1, 2010. But, such legislation has not become law yet so the deadline stays at December 31, 2009.
Monday, May 18, 2009
Illinois
Illinois has started a new newsletter that is available on its website: http://www.obre.state.il.us/RESFIN/NewsLetters/MBNewsLetter042009.pdf. The newsletter details the new licensing fees that have gone effect, which are lower than they used to be. There’s a good article on enforcement actions which itemizes the most common mistakes that get mortgage companies into regulatory hot water. If you’ve ever had your books and files examined by a state banking department, you know how easy it is to find missing documents from files, advertising that is not compliant, or issues with unlicensed branches or loan originators. Such mistakes are costly to you as the banking department assesses penalties. The newsletter also reminds loan originators that it is time to renew their licenses.
Even if you are not licensed in Illinois, you may want to take a look at the newsletter or see if your state has online newsletters. Much of the information in these newsletters can be used by almost any mortgage company in any state since the licensing statutes are similar in most states and getting more uniform as more states join the NMLS.
Even if you are not licensed in Illinois, you may want to take a look at the newsletter or see if your state has online newsletters. Much of the information in these newsletters can be used by almost any mortgage company in any state since the licensing statutes are similar in most states and getting more uniform as more states join the NMLS.
Tuesday, May 5, 2009
Maryland Revises its Licensing Law
Maryland has revised its licensing statute to conform to the federal SAFE Act. The new law requires new license applicants to use the NMLS to apply, starting in early May, 2009. Existing licensees who need to renew their licenses until July 1, 2009 will use the Maryland online system to renew. Existing licensees who do not need to renew their licenses until after July 1, 2009 will be required to transition to the NMLS starting in July, 2009 and will have up to 18 months to transition. If you need to renew your license during the transition period, you will renew on the NMLS. New licenses will be for up to a 1-year period and will expire on December 31st, like all other licenses obtained through the NMLS.
The new law also requires mortgage loan originators to be individually licensed, which requires the applicant to take 20 hours of pre-licensing education, to pass an exam in order to get licensed, pass a criminal background check and a regulatory background check. A mortgage loan originator will not be approved for a license if he has had a license from another state revoked or if during the prior 7-year period pleaded guilty, nolo contendere or been convicted of a felony. If the felony was for an act involving fraud, dishonesty, breach of trust, or money laundering, the application will be denied no matter how far in the past the conviction or nolo contendere plea was. After licensing is approved, the mortgage loan originator will be required to complete 8 hours of continuing education annually.
Mortgage loan originators who are not employed by a licensee can place their license in a “nonactive” status until re-employed by a different licensee.
The new law also requires mortgage loan originators to be individually licensed, which requires the applicant to take 20 hours of pre-licensing education, to pass an exam in order to get licensed, pass a criminal background check and a regulatory background check. A mortgage loan originator will not be approved for a license if he has had a license from another state revoked or if during the prior 7-year period pleaded guilty, nolo contendere or been convicted of a felony. If the felony was for an act involving fraud, dishonesty, breach of trust, or money laundering, the application will be denied no matter how far in the past the conviction or nolo contendere plea was. After licensing is approved, the mortgage loan originator will be required to complete 8 hours of continuing education annually.
Mortgage loan originators who are not employed by a licensee can place their license in a “nonactive” status until re-employed by a different licensee.
Tuesday, April 7, 2009
Did you Miss the Michigan Requirement to Register Loan Officers?
Michigan requires mortgage companies to register loan originators and the deadline was April 1, 2009. If you did not submit registration applications for your loan officers to the NMLS, they cannot originate loans for you now.
The first thing you need to do is notify the Michigan Office of Financial and Insurance Regulation that you are employing a loan officer who is not registered in Michigan. Then the company must register the loan officer through the NMLS. The loan officer must give the employer access to the NMLS record, then the company must request attestation from the loan officer before the company can submit the MU4. Once the loan officer completes the attestation, then the company can submit the MU4.
Loan officers must get fingerprinted to get registered. The company must get an Agency ID number from the Michigan State Police to be used for all loan officers that it employs. If your company is located in Michigan, your loan officers will schedule an appointment for a LiveScan Fingerprint. If you are out-of-state, you need to use FBI fingerprint cards.
In addition to the fingerprinting, Michigan requires 24 hours of pre-licensing education taken through an approved provider. If you have been employed as a loan officer in 4-1/2 out of the last 5 years, you are exempt from the pre-licensing education. Then you have to pass a test with a score of at least 75%.
If your loans officers did not get registered before the April 1, 2009 deadline, your loan officers can originate loans for the next 90 days only if they are not compensated for their originations and if they meet the “notification” requirement (which means that the loan officer had their fingerprints taken, the fingerprints were submitted to the Michigan State Police and the FBI for criminal background checks, there are no disqualifying results from the background check, and the employer notified the Office of Financial and Insurance Regulation of the loan officer’s employment).
The Office of Financial and Insurance Regulation promises to conduct investigations to ensure that loan officers are properly registered. Failure to register your loan officers will lead to penalties and fines.
The first thing you need to do is notify the Michigan Office of Financial and Insurance Regulation that you are employing a loan officer who is not registered in Michigan. Then the company must register the loan officer through the NMLS. The loan officer must give the employer access to the NMLS record, then the company must request attestation from the loan officer before the company can submit the MU4. Once the loan officer completes the attestation, then the company can submit the MU4.
Loan officers must get fingerprinted to get registered. The company must get an Agency ID number from the Michigan State Police to be used for all loan officers that it employs. If your company is located in Michigan, your loan officers will schedule an appointment for a LiveScan Fingerprint. If you are out-of-state, you need to use FBI fingerprint cards.
In addition to the fingerprinting, Michigan requires 24 hours of pre-licensing education taken through an approved provider. If you have been employed as a loan officer in 4-1/2 out of the last 5 years, you are exempt from the pre-licensing education. Then you have to pass a test with a score of at least 75%.
If your loans officers did not get registered before the April 1, 2009 deadline, your loan officers can originate loans for the next 90 days only if they are not compensated for their originations and if they meet the “notification” requirement (which means that the loan officer had their fingerprints taken, the fingerprints were submitted to the Michigan State Police and the FBI for criminal background checks, there are no disqualifying results from the background check, and the employer notified the Office of Financial and Insurance Regulation of the loan officer’s employment).
The Office of Financial and Insurance Regulation promises to conduct investigations to ensure that loan officers are properly registered. Failure to register your loan officers will lead to penalties and fines.
Tuesday, March 24, 2009
Audited Financial Statements and the NMLS
I find the NMLS to be an exasperating system to use at times. However, one function they have instituted has been very helpful to me and others who maintain compliance for mortgage lenders and brokers who operate in more than one state.
Many states have a requirement that you send them a copy of an audited financial statement every year. This involves keeping track of which states have this requirement and when the statements are due. Then you have the manual task of sending the same statement to each of those states.
Those states on the NMLS have revised their deadlines to all coincide on March 31st. Your audited financial statement must be in PDF form in order to be uploaded through the NMLS. And you are required to input the assets, liabilities, and shareholder/member capital even though those figures are in the financial statement. However, you upload one financial statement and it is distributed to all the states on the NMLS who require you to submit financials. That is one less task that your compliance department (which may be the owner of the company) must do more than once.
Many states have a requirement that you send them a copy of an audited financial statement every year. This involves keeping track of which states have this requirement and when the statements are due. Then you have the manual task of sending the same statement to each of those states.
Those states on the NMLS have revised their deadlines to all coincide on March 31st. Your audited financial statement must be in PDF form in order to be uploaded through the NMLS. And you are required to input the assets, liabilities, and shareholder/member capital even though those figures are in the financial statement. However, you upload one financial statement and it is distributed to all the states on the NMLS who require you to submit financials. That is one less task that your compliance department (which may be the owner of the company) must do more than once.
Wednesday, February 25, 2009
Is Your Competition Out of Business? Market To Their Referral Sources
I am probably not the only licensing lawyer who has had some of her clients go out of business. In probably every state, the number of licensed mortgage brokers and lenders is down. Many of them have gone out of business or placed their license in “inactive” status until the market turns around.
This is your opportunity to find those referral sources – realtors, builders, buyers, and sellers who no longer have a mortgage professional to whom they will automatically turn if they know of someone who needs a mortgage. This is your chance to contact everyone who you heard was referring business to your competitors and try to get a relationship started.
And of course, stay in contact with everyone who already is a referral source to you. They need to know you are still in business, ready to serve their needs. Don’t forget the borrowers you already have done business with. Although there is little loyalty between mortgage brokers and their customers, you can increase your retention rate if you keep your name in front of people that you have already helped and liked you.
There are business opportunities even in a recession. I hope you take advantage of them and keep yourself in business.
This is your opportunity to find those referral sources – realtors, builders, buyers, and sellers who no longer have a mortgage professional to whom they will automatically turn if they know of someone who needs a mortgage. This is your chance to contact everyone who you heard was referring business to your competitors and try to get a relationship started.
And of course, stay in contact with everyone who already is a referral source to you. They need to know you are still in business, ready to serve their needs. Don’t forget the borrowers you already have done business with. Although there is little loyalty between mortgage brokers and their customers, you can increase your retention rate if you keep your name in front of people that you have already helped and liked you.
There are business opportunities even in a recession. I hope you take advantage of them and keep yourself in business.
Wednesday, February 18, 2009
New Pennsylvania Regulations
Pennsylvania has some new regulations that are about to come into effect.
The first regulation requires that you submit to the PA Banking Department a copy of your internal procedure regarding how you will perform an analysis of how the borrower will repay the mortgage loan at the fully-indexed rate. The procedure must state, at the minimum, that you will verify and document the borrowers' income and fixed expenses, that you will not rely on the sale or refinance of the house to repay the loan, and that you will not ignore facts or circumstances that raise a red flag that the borrowers may not be able to repay the loan. Your procedure can also use other factors to determine whether the borrowers can repay the loan. If the loan is FHA or VA, there is a presumption that the borrowers can repay. All records, worksheets and supporting documentation used in the ability to repay analysis must be kept in the borrowers' loan file. A copy of your internal procedure must be emailed to the PA Banking Department by March 20, 2009.
Also taking effect on March 20, 2009, is a regulation that requires that, within 3 days after you take an application, you need to send the borrowers a new disclosure. The disclosure must state:
1. whether the lender will be escrowing for taxes and homeowners' insurance;
2. that you cannot lock-in the interest rate;
3. whether the loan contains an adjustable rate, negative am, prepayment penalty, or a balloon payment.
If the terms of the loan change so that the initial disclosure is incorrect, you must re-disclose as soon as you know of the change. If the lender is providing the borrower with this disclosure, then you do not need to provide it. The borrower is supposed to sign it within 10 days after you send the disclosure. You must keep a copy in the borrowers' file.
The first regulation requires that you submit to the PA Banking Department a copy of your internal procedure regarding how you will perform an analysis of how the borrower will repay the mortgage loan at the fully-indexed rate. The procedure must state, at the minimum, that you will verify and document the borrowers' income and fixed expenses, that you will not rely on the sale or refinance of the house to repay the loan, and that you will not ignore facts or circumstances that raise a red flag that the borrowers may not be able to repay the loan. Your procedure can also use other factors to determine whether the borrowers can repay the loan. If the loan is FHA or VA, there is a presumption that the borrowers can repay. All records, worksheets and supporting documentation used in the ability to repay analysis must be kept in the borrowers' loan file. A copy of your internal procedure must be emailed to the PA Banking Department by March 20, 2009.
Also taking effect on March 20, 2009, is a regulation that requires that, within 3 days after you take an application, you need to send the borrowers a new disclosure. The disclosure must state:
1. whether the lender will be escrowing for taxes and homeowners' insurance;
2. that you cannot lock-in the interest rate;
3. whether the loan contains an adjustable rate, negative am, prepayment penalty, or a balloon payment.
If the terms of the loan change so that the initial disclosure is incorrect, you must re-disclose as soon as you know of the change. If the lender is providing the borrower with this disclosure, then you do not need to provide it. The borrower is supposed to sign it within 10 days after you send the disclosure. You must keep a copy in the borrowers' file.
Wednesday, January 21, 2009
Massachusetts Surety Bonds
If you haven’t obtained one yet, you are now overdue in complying with Massachusetts’ requirement that all mortgage lenders and brokers have a surety bond (you should have had it by December 31, 2008). If you are applying for a new license, the surety bond is part of your application.
The amount of the bond is different for lenders and brokers but for lenders, it is based on your volume of business in Massachusetts. If you are a lender, and the volume of the loans you have closed is reported on your Annual Report for the previous year as between $0-$49,999,999, then you must have the minimum bond of $100,000. If your closed loan volume is between $50,000,000 and $249,999,999, then your bond must be in the amount of $250,000. If you closed loans with a dollar volume of $250,000,000 or more, then you need a $500,000 surety bond.
For mortgage brokers, the amount of the bond is $75,000, regardless of how many Massachusetts loans you brokered in the previous year.
Those licensees who hold both a lender and a broker license need two bonds, a lender bond in the amount that corresponds to its closed loan volume and a $75,000 broker bond.
Both lenders and brokers will be required to submit Continuation Certificates each year to confirm that the surety bond is in effect and that it is in the proper amount.
The amount of the bond is different for lenders and brokers but for lenders, it is based on your volume of business in Massachusetts. If you are a lender, and the volume of the loans you have closed is reported on your Annual Report for the previous year as between $0-$49,999,999, then you must have the minimum bond of $100,000. If your closed loan volume is between $50,000,000 and $249,999,999, then your bond must be in the amount of $250,000. If you closed loans with a dollar volume of $250,000,000 or more, then you need a $500,000 surety bond.
For mortgage brokers, the amount of the bond is $75,000, regardless of how many Massachusetts loans you brokered in the previous year.
Those licensees who hold both a lender and a broker license need two bonds, a lender bond in the amount that corresponds to its closed loan volume and a $75,000 broker bond.
Both lenders and brokers will be required to submit Continuation Certificates each year to confirm that the surety bond is in effect and that it is in the proper amount.
Thursday, January 8, 2009
It's Annual Reports Season Again
I’ve already received my first annual report form and I know from my calendar system that other states have early annual reporting requirements. Most states require an annual report to be filed, some states require semi-annual reports. The vast majority of the annual reports require information about loans that you closed in the previous year. There are also reporting requirements in some states requesting information about the loan officers that you hired and fired in the last quarter or last year.
If this is your first year filing an annual report in a particular state, it may take you awhile to gather the information that the report asks for. So don’t wait until the last minute to review the report to see what information you need to find. If you have filed a report in prior years, you should have your computers and files stored in such a way that you can access the needed data in minutes (if you don’t, maybe you want to update your technology).
Some of the annual reports require financial information in their format, not your accountants’ format, which means that you are spending a lot of time manipulating the numbers to conform to the categories that your state has on its form. If this is not your area of expertise, hire an outside specialist to handle it for you. Your time is better spent closing loans than puzzling how to complete a form.
If this is your first year filing an annual report in a particular state, it may take you awhile to gather the information that the report asks for. So don’t wait until the last minute to review the report to see what information you need to find. If you have filed a report in prior years, you should have your computers and files stored in such a way that you can access the needed data in minutes (if you don’t, maybe you want to update your technology).
Some of the annual reports require financial information in their format, not your accountants’ format, which means that you are spending a lot of time manipulating the numbers to conform to the categories that your state has on its form. If this is not your area of expertise, hire an outside specialist to handle it for you. Your time is better spent closing loans than puzzling how to complete a form.
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