Major changes were enacted by the Federal Housing Administration (FHA) in 2009 that applied to the approval, renewal, and loan submission process for FHA-approved mortgagees, starting in 2010. Those changes are still coming as FHA continues to revamp its procedures. The latest changes intersect the requirements that all mortgagees and loan originators have to be licensed under the SAFE Act and maintain a record of their licensing status on the Nationwide Mortgage Licensing System (NMLS).
The latest Mortgagee Letter (Mortgagee Letter 2011-4) requires all FHA-approved mortgagees to provide their Nationwide Mortgage Licensing System (NMLS) number in a number of places during the approval, renewal, and loan origination process. FHA also requires that mortgagees obtain and provide to FHA the NMLS numbers, names and tax identification numbers of the mortgage brokers for whom the mortgagee is acting as a sponsor. This process has been designed to allow FHA to provide performance data on the mortgagees’ third-party originators. If a particular originator is having high rates of default, the mortgagee can choose to no longer underwrite any loan applications from that mortgage broker. The FHA Connection has also been revised to capture the name and NMLS number of the loan officer involved in submitting an FHA loan. The entry of the NMLS number and name of the loan officer involved in a loan origination is optional until April 1, 2011.
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