Missed the Deadline for Renewing Your License Through the NMLS?

The license renewal period on the Nationwide Mortgage Licensing System (NMLS) ran from November 1, 2009 through December 31, 2009. What if you didn’t get around to renewing your license through the NMLS?

Different states have allowed a late renewal or reinstatement (for an extra fee, of course). Here’s the link for more information: http://mortgage.nationwidelicensingsystem.org/slr/common/renewals/Pages/RenewalStates.aspx

Hurry up! Your state may allow a renewal request only through January 15, 2010. In other states, if you didn’t request a renewal of your license, it has expired and you need to apply for a new license.

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Renewals on the NMLS

You should have received an email from the Nationwide Mortgage License System (NMLS) notifying you that the renewal season is about to start. If you live in a state that has transitioned onto the NMLS, you need to renew your license. For states whose license period was not the calendar year, this may seem strange. When you moved your licensing record onto the NMLS, you were advised that all licenses would, in the future, expire on December 31st. Renewal fees for some states were prorated to accommodate the change in renewal dates.

In order to renew all of the licenses that you have on the NMLS, you need to review your records to make sure that all of the information is accurate. You can start doing that as of October 13th. Even if there are no changes, you must attest that your records are accurate. Regardless of whether there are any changes, each state may require that you send in additional paperwork, such as financial statements, continuation certificates for surety bonds, or proof that continuing education requirements have been met. Those additional documents must be submitted to the licensing agency within 5 days of your renewing your license. To find out what additional documentation is required, you need to check the NMLS website here:

http://www.stateregulatoryregistry.org/AM/Template.cfm?Section=Renewals&Template=/CM/ContentDisplay.cfm&ContentID=17970

Don’t forget that, in those states that license individual loan officers, each loan officer must update his/her record and renew his/her license. After that is done, the company must finish up the loan officer renewal process. Renewal for the company cannot be completed until after loan officer licensing is finished.

Remember that all license renewals must be reviewed by the state banking departments so get your renewals done by December 1, 2008. If you wait, your license may expire before your renewal license is issued.

Should You Renew All of Your Licenses?

The mortgage business is still very quiet and predicted to stay that way for at least another year. Those mortgage companies that hold licenses in multiple states may be wondering whether it is economically feasible to maintain all of the licenses it holds.

I recommend that every license should undergo an analysis of whether the costs of keeping the license are justified by the fees and commissions earned in each state. How much do you earn in each state? Then you must calculate how much the renewal fee for each license is, add in the fees to file the company annual report with the Secretary of State, the premiums for surety bonds, whether you must maintain a certain minimum net worth that is greater than you would normally retain in your business account, and the cost of any brick and mortar offices and employees in each state. Don’t forget to subtract any taxes you must pay on the income that you earn from each state. The resulting number should determine whether you want to renew that state’s license.

If the income you earn from any state is outweighed by the costs of sustaining the license, you must determine whether there are other factors that could tip the scales in favor of renewing the license. Do you have a great referral source for that state that you do not want to lose? Do your customers have second homes in that state and use you for the mortgages on both homes?

Maybe there is no good reason to keep the license. In that case, you may want to inquire as to whether the license can be made inactive. Some of the states that permit inactive status are Arizona, Florida, Montana, New Jersey, New York, Oklahoma, Texas, and Washington. When a license is inactive, you cannot broker or originate mortgages in that state. However, you do not have to go through the licensing process again when the market turns and you want to go back into business in that state. All that you must typically do is apply for re-activation and pay a re-activation fee. It is quicker and much less difficult than re-applying for a new license even if you had perfect examinations in years past.

If your marketing plan has drastically changed for the next few years and the state in which you don’t want to be licensed does not have inactive status, then it makes sense to surrender the license.