least you know if the LO will possibly have an issue if they apply) 3. Some states are just keeping a copy of the credit report in their file, but they are not looking at it. Myhope is that the federal government issues regulations that define what the states needto look at on the credit. Then we will know for sure whether someone meets thosestandards or not. At this time, most states have not issued any details on what they willbe looking at. Application States are required to obtain a license application with certainminimum information. All states have a license fee associated with the application thatranges from $50 to $500. Completion of the application is required to be completedthrough a system called the
Nationwide Mortgage Licensing System (NMLS),
whichnow takes us to the final question. How are the states implementing these newrequirements?
Nationwide Mortgage Licensing System (NMLS) This system is aprivately owned website that was created for the sole purpose of handling all ofthe states new mortgage licensing requirements all in one place.
Most stateshave also decided to handle company and branch license applications throughthis system along with the Mortgage Loan Originator (MLO) License applications.The system is just a website that the states use to receive applications andcomply with this new federal mandate under the SAFE Act.
The NMLS does notreview or approve license applications.
The system allows for submitting a licenseapplication to a state electronically, it has a function to pay for the National andState Tests, a function to pay for the federal fingerprinting, and will soon alsohave a function to pay for the credit report to be sent to each state you want toobtain a license in. It also tracks the status of each MLO License and shows wheneducation, test, and fingerprinting have been completed. And the states use thesystem to post deficiencies for a license when the state needs additionalinformation
. Conclusion Unfortunately, all of this new licensing iscosting companies and mortgage loan originators a lot of money. It iscreating a huge burden on mortgage companies that is then mostlybeing passed down to consumers.
The system has had many difficulties inworking with states existing laws to transition everyone onto the system. Hopefully,going forward, these new requirements will set
accountability in the mortgage