If you want to be a mortgage loan originator, what do you need to do to get licensed? What should you expect from the licensing process?
There are several requirements that are common to each state because of the Secure and Fair Enforcement (SAFE) for Mortgage Licensing Act. These requirements are:
1. Registering with the Nationwide Mortgage Licensing System (NMLS) and applying for a license through the NMLS;
2. Taking 20 hours of pre-licensing education;
3. Passing state and national exams;
4. Submitting fingerprints for a federal background check that cannot show a conviction for a dishonesty crime;
5. A satisfactory credit report (“satisfactory” as defined by the state regulatory agency).
Once you have applied for your license, you may need to send in additional documentation to the state regulatory agency that approves loan originator licenses. Some states have extra documents and other states require an additiona set of fingerprints for a state background check.
Then, you complete the balance of the requirements in any order that you wish. The completion of each requirement must be done through the NMLS, as the regulatory agency will be checking the NMLS to see if you complete your requirements. Likewise, you must monitor your record on the NMLS to see if the state regulator has posted a request for clarification of anything you have sent in or a reminder that you still need to do something.
Once you have completed all of your requirements, you must wait for the regulators to review your license application and approve or deny it. The waiting period varies by state and by time of year. If your state has just transitioned its licenses to the NMLS, then your new application will be reviewed after all the transitioning licenses are reviewed. If you apply for a license during renewal season (November and December), then you will likewise have to wait until all the renewals have been processed. If you are applying for a New York license, they are severely backlogged and you could be waiting for a year to get a decision on your license application.
Check with your state regulator to make sure that he/she has received all of the required elements of your application. You may want to periodically check in to see how much longer you will need to wait for your application decision.
Monday, January 17, 2011
Monday, January 10, 2011
FHA Requires Your NMLS Number
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.
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.
Friday, January 7, 2011
Why Don't You Have a Lawyer on Retainer
This is just a quick post directed to mortgage broker/lender company owners. Do you have a lawyer on retainer for your company so that you can shoot questions about licensing, compliance, or general corporate/LLC issues as you think of them? If you do, how often do you call or email your lawyer? If you do not, why not? Please send me your responses or comments at Robin@mortgagelicensesolutions.com. Thank you.
Monday, January 3, 2011
Here’s Some Possible Help if You Missed the December 31st Renewal Period Deadline – The Reinstatement Period
December 31st was the deadline for renewing your company and loan originator licenses. A number of my clients were very busy at the end of December trying to close loans. I was calling them every week to see whether they had renewed their licenses, or to find out whether their cash flow was sufficient for me to renew their licenses and charge the renewal fees to their credit cards. If you didn’t have someone calling you to remind you to start the renewal process by December 31st, are you sure you renewed all of your licenses?
The Nationwide Mortgage Licensing System (NMLS) has been sending out emails to all company administrators informing them of any licenses that were not renewed. If you received one of these emails, you are now aware that you messed up if you had intentions of renewing a particular license (although I’m sure that many of the “failure to renew licenses” were deliberate decisions not to renew a license). Even if you did not receive that email yet, you may now be realizing that you missed a renewal or one of your loan officers may have forgotten to renew his/her license. What can you do now?
Some states allow its licensees to renew late. It is a state by state decision and the time periods for getting in a “late” renewal vary by state. You can have only 15 days up to 2 months, depending on which state’s license you need. In most cases, you will need to pay a late fee but it’s much cheaper than starting a new license application from the beginning. You can see if your state is accepting late renewals by going to http://mortgage.nationwidelicensingsystem.org/SLR/COMMON/RENEWALS/Pages/default.aspx
and clicking on the Renewals Deadline Chart in step 3 for the chart of all states.
What if your state does not accept a reinstatement of your license (since it has technically expired as of December 31, 2010)? Call your state regulatory agency and speak to the reviewers in the licensing division and find out whether you need to submit an entire new application. Make that call immediately if you need to reinstate any of your licenses or those of your loan officers.
If you do need to reinstate a license, plan now for the renewals period that starts November, 2011. Set firm deadlines on your calendar to assess which licenses you will want to renew (are you making enough money from every branch office and every loan officer?). If your company NMLS administrator is you and you are usually too busy at the end of the year to handle this job, delegate it to an employee or hire an outside company that will take care of it for you. After all, if you don't have a license, you cannot make any money at all.
The Nationwide Mortgage Licensing System (NMLS) has been sending out emails to all company administrators informing them of any licenses that were not renewed. If you received one of these emails, you are now aware that you messed up if you had intentions of renewing a particular license (although I’m sure that many of the “failure to renew licenses” were deliberate decisions not to renew a license). Even if you did not receive that email yet, you may now be realizing that you missed a renewal or one of your loan officers may have forgotten to renew his/her license. What can you do now?
Some states allow its licensees to renew late. It is a state by state decision and the time periods for getting in a “late” renewal vary by state. You can have only 15 days up to 2 months, depending on which state’s license you need. In most cases, you will need to pay a late fee but it’s much cheaper than starting a new license application from the beginning. You can see if your state is accepting late renewals by going to http://mortgage.nationwidelicensingsystem.org/SLR/COMMON/RENEWALS/Pages/default.aspx
and clicking on the Renewals Deadline Chart in step 3 for the chart of all states.
What if your state does not accept a reinstatement of your license (since it has technically expired as of December 31, 2010)? Call your state regulatory agency and speak to the reviewers in the licensing division and find out whether you need to submit an entire new application. Make that call immediately if you need to reinstate any of your licenses or those of your loan officers.
If you do need to reinstate a license, plan now for the renewals period that starts November, 2011. Set firm deadlines on your calendar to assess which licenses you will want to renew (are you making enough money from every branch office and every loan officer?). If your company NMLS administrator is you and you are usually too busy at the end of the year to handle this job, delegate it to an employee or hire an outside company that will take care of it for you. After all, if you don't have a license, you cannot make any money at all.
Monday, December 20, 2010
The December 31st Deadline is Quickly Approaching – Does It Affect You?
December 31st is the deadline for quite of number of people in the mortgage business. Many licenses expire and must be renewed. Certain states are completing their transitions to the Nationwide Mortgage Licensing System (NMLS) – Florida, Maryland, and Utah DFI. Hawaii received an extension from HUD through March 31, 2011 to complete its transition to the NMLS. This means that most of you are affected by the December 31st deadline.
Who is not affected? If you renewed your license already, and if you have completed all of your required continuing education, and you have submitted your checklist to your state regulatory agency, then December 31st doesn’t mean much to you. You may wish to contact your state regulatory agency to confirm that they have received everything from you that they need. At this time of the year, the reviewers are checking through thousands of renewal applications, so they may be delayed in approving or denying an application. But, you should check to make sure that you have sent in all required items.
The NMLS and most states are sending out generic reminders of various requirements for renewal. Read through each reminder in its entirety to make sure that it doesn’t apply to you. If it does apply, immediately schedule the work that needs to be done to bring you into compliance. Did you authorize your credit report to be pulled? Did you send in your checklist with all required documentation? Did you take all required continuing education? If you are not sure if the reminder applies to you, call your state regulatory agency and speak to someone in the licensing division. It’s better to be sure than to find out too late that you missed a requirement of your renewal. If you find that you are very busy this time of year, hire a licensing firm that can do most of the work for you and keep you apprised of what you still need to do.
If you are licensed in one of the states that is transitioning to the NMLS, you must decide whether you will transition your license in the next 10 days. I have several clients that are still making that decision and those state regulatory agencies are warning their licensees not to wait until the last minute to transition or they may not be properly licensed at the beginning of January. If you already have an NMLS record, the amount of time you need to spend to add a new state is not onerous (unless you are busy trying to close loans and make some money at this time of the year). If you have never been on the NMLS, you will be shocked at the amount of time it will take you to learn how to use the system. Plus, you must comply with all of the requirements of your license under the new statute.
I urge all mortgage company owners and all loan originators to take a few minutes to ensure that you have complied with all requirements to renew your licenses and/or to transition your licenses to the NMLS. You don’t want to be scrambling in January without a license.
Who is not affected? If you renewed your license already, and if you have completed all of your required continuing education, and you have submitted your checklist to your state regulatory agency, then December 31st doesn’t mean much to you. You may wish to contact your state regulatory agency to confirm that they have received everything from you that they need. At this time of the year, the reviewers are checking through thousands of renewal applications, so they may be delayed in approving or denying an application. But, you should check to make sure that you have sent in all required items.
The NMLS and most states are sending out generic reminders of various requirements for renewal. Read through each reminder in its entirety to make sure that it doesn’t apply to you. If it does apply, immediately schedule the work that needs to be done to bring you into compliance. Did you authorize your credit report to be pulled? Did you send in your checklist with all required documentation? Did you take all required continuing education? If you are not sure if the reminder applies to you, call your state regulatory agency and speak to someone in the licensing division. It’s better to be sure than to find out too late that you missed a requirement of your renewal. If you find that you are very busy this time of year, hire a licensing firm that can do most of the work for you and keep you apprised of what you still need to do.
If you are licensed in one of the states that is transitioning to the NMLS, you must decide whether you will transition your license in the next 10 days. I have several clients that are still making that decision and those state regulatory agencies are warning their licensees not to wait until the last minute to transition or they may not be properly licensed at the beginning of January. If you already have an NMLS record, the amount of time you need to spend to add a new state is not onerous (unless you are busy trying to close loans and make some money at this time of the year). If you have never been on the NMLS, you will be shocked at the amount of time it will take you to learn how to use the system. Plus, you must comply with all of the requirements of your license under the new statute.
I urge all mortgage company owners and all loan originators to take a few minutes to ensure that you have complied with all requirements to renew your licenses and/or to transition your licenses to the NMLS. You don’t want to be scrambling in January without a license.
Monday, December 13, 2010
Can You Make a Living as a Mortgage Broker/Lender in The New Normal?
Real estate contracts are way down, refinances are being challenged by appraisals that come in too low to meet the needed LTV ratios, and too many homeowners are frozen in their current mortgage. This is the new normal.
I just read an article in the Orlando Sentinel in which the Florida Office of Financial Regulation is concerned that many mortgage brokers will not be licensed on January 1st since only about ¼ of them have transitioned to the Nationwide Mortgage Licensing System (NMLS). Florida’s deadline for transition is December 31st.
I have not taken a formal survey but my experience has shown me that in every state that has transitioned to the NMLS, over half of the existing licensees did not make the transition. In some states, it was close to ¾ of the mortgage brokers who lost or surrendered their licenses.
In the current climate of mortgage brokering, a huge group of loan officers are leaving this line of business. There are many reasons. Some of them feel they cannot make the kind of living they used to (during the real estate bubble) so they look for a more lucrative occupation. Others do not want to jump through the many hoops that the new SAFE law requires. Others cannot meet the require4ments of the SAFE Act, either because of a prior felony conviction that did not previously affect their licensing, or because they have a bankruptcy on their credit record, or because their credit score is too low.
I don’t think this new real estate climate can support more loan officers. There is not a lot of business to go around. I met a loan originator who started in this line of work in 2008 and this is the only real estate market he’s ever known. He has heard the stories from other loan officers who talk of phones ringing off the hook, how much easier it was to work with the old Good Faith Estimate, and how quickly loans closed. But all that is gone. It isn’t coming back for years, if ever. Have you learned how to make a living in the new normal? If you haven’t, you’d better re-think your career plans. When the country climbs out of this recession, real estate sales will increase because there are thousands, maybe millions of people who need to move for their jobs. But the flippers, the speculators, the people whose foreclosures will prevent them from buying for a few years – they will all be out of the market until the next normal comes into play. For now, you need to figure out how to grow your business in ways that you didn’t need to bother with 5 years ago. Do you have any ideas for how to grow your business in the new normal?
I just read an article in the Orlando Sentinel in which the Florida Office of Financial Regulation is concerned that many mortgage brokers will not be licensed on January 1st since only about ¼ of them have transitioned to the Nationwide Mortgage Licensing System (NMLS). Florida’s deadline for transition is December 31st.
I have not taken a formal survey but my experience has shown me that in every state that has transitioned to the NMLS, over half of the existing licensees did not make the transition. In some states, it was close to ¾ of the mortgage brokers who lost or surrendered their licenses.
In the current climate of mortgage brokering, a huge group of loan officers are leaving this line of business. There are many reasons. Some of them feel they cannot make the kind of living they used to (during the real estate bubble) so they look for a more lucrative occupation. Others do not want to jump through the many hoops that the new SAFE law requires. Others cannot meet the require4ments of the SAFE Act, either because of a prior felony conviction that did not previously affect their licensing, or because they have a bankruptcy on their credit record, or because their credit score is too low.
I don’t think this new real estate climate can support more loan officers. There is not a lot of business to go around. I met a loan originator who started in this line of work in 2008 and this is the only real estate market he’s ever known. He has heard the stories from other loan officers who talk of phones ringing off the hook, how much easier it was to work with the old Good Faith Estimate, and how quickly loans closed. But all that is gone. It isn’t coming back for years, if ever. Have you learned how to make a living in the new normal? If you haven’t, you’d better re-think your career plans. When the country climbs out of this recession, real estate sales will increase because there are thousands, maybe millions of people who need to move for their jobs. But the flippers, the speculators, the people whose foreclosures will prevent them from buying for a few years – they will all be out of the market until the next normal comes into play. For now, you need to figure out how to grow your business in ways that you didn’t need to bother with 5 years ago. Do you have any ideas for how to grow your business in the new normal?
Monday, December 6, 2010
Don’t Forget to Renew Your Branch Licenses
Once of my clients has several branches, some of which are doing great and others that are not doing so well. I’ve already been on the Nationwide Mortgage Licensing System (NMLS) to renew the company license and I’ve asked the owners whether they want to renew all of the branches or just some of the branches. At this point, I still don’t have an answer and there are only about 3 weeks left in the renewal season.
The NMLS provides for a system where you can renew all of your licenses in one fell swoop or you can renew at different times, depending on your circumstances. Maybe your cash flow doesn’t allow a big hit at the beginning of November for the renewal fees or your credit card limit is being exceeded by all of the fees. It’s not uncommon for companies to renew the license for the company first and to deal with the branch offices and loan originators later.
But with a looming expiration of December 31st on all licenses, you must take the necessary steps to renew whichever branch licenses you intend to keep. Some states have treat branch offices the same as the company in terms of licensing requirements (branch office manager industry experience, surety bond requirements) so you must ensure that all necessary documentation is submitted to the licensing agency as soon as possible.
And don’t forget that some states are not processing company and branch license renewals through the NMLS. You may need to check the website of any state that has not transitioned to the NMLS for their branch office renewal requirements.
The NMLS provides for a system where you can renew all of your licenses in one fell swoop or you can renew at different times, depending on your circumstances. Maybe your cash flow doesn’t allow a big hit at the beginning of November for the renewal fees or your credit card limit is being exceeded by all of the fees. It’s not uncommon for companies to renew the license for the company first and to deal with the branch offices and loan originators later.
But with a looming expiration of December 31st on all licenses, you must take the necessary steps to renew whichever branch licenses you intend to keep. Some states have treat branch offices the same as the company in terms of licensing requirements (branch office manager industry experience, surety bond requirements) so you must ensure that all necessary documentation is submitted to the licensing agency as soon as possible.
And don’t forget that some states are not processing company and branch license renewals through the NMLS. You may need to check the website of any state that has not transitioned to the NMLS for their branch office renewal requirements.
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