What is an NMLS and Mortgage Loan Originator

The Nationwide Mortgage Licensing System and Registry (the NMLS) is a mortgage licensing system developed by a Conference of State Bank Supervisors and American Assocaition of Residential Mortgage Regulators for the licensing and registration of state-licensed loan originators and the registrations of registered loan originators.

Mortgage Loan Originator – a person who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan.

It doesn’t include

a) person engaged solely as a loan processor or underwriter or any individual who performs purely administrative or clerical tasks  on behalf of a person who is licensed as a loan originator.

b) a person or entity that only performs real estate brokerage activities and is licensed or registered with the state, unless the person is compensated by a lender, a mortgage broker or the loan originator.

c) someone or entity involved in extensions of credit relating to time share plans.

Dweling – it’s a residential structure which contains 1-4 units. Its includes a mobile home and trailers if its used as a residence.

Residential real estate – it’s any real estate property located in a state upon which is constructed, or intended to be constructed, a dwelling.

What is a real estate brokerage activity?  It’s an activity that involves offering or providing real estate brokerage services to the public such us:

  • working as a real estate agent or real estate broker for a buyer, seller, lessor or lessee of real property;
  • bringing together parties interested in the sale, purchase, lease, rental or exchange of real property;
  • negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental or exchange of real property (other than in connection with providing financing with respect to such transaction); and
  • engaging in any activity the person who does that is required to be registered or licensed as a real estate agent or real estate broker under any applicable law.

Helping to obtain or apply for a residential mortgage loan which includes:

  1. advising on a loan terms, including rates, fees and other costs.
  2. preparing a loan package or collecting information on behalf of the consumer with regard to a residential mortgage loan.

Loan processor/Underwriter – is a person who performs clerical or support duties at the direction of and subject to the supervision and instruction of a state-licensed loan originator or a registered loan originator. They include the receipt, collection, distribution and analysis of information common for the processing and underwriting of a residential mortgage loan and communicating wit ha consumer to obtain the information necessary for processing and underwriting (without negotiating loan rates and terms or counseling about them).

A processor or underwriter shouldn’t perform any public activities through advertising or other communicating and providing information (brochures, business cards, stationery, signs and other promotional materials) that she or he can or will perform any of the activities of a mortgage loan originator.

All residential mortgage loan-related activities from a taking an application through completion or all required loan closing documents and funding the residential mortgage loan is called origination of a residential mortgage loan. 

RLO – Registered loan originator person who meets the definition and is an employee of a depository institution  (a bank, saving association, or credit union). A subsidiary owned and controlled by a depository institution and regulated by a federal agency or an institution regulated by the Farm Credit Administration and is registered with and maintains a unique identifier through NMLS.

FBA – Federal Banking Agencies includes

  1. Comptroller of the Currency
  2. the Federal Deposit Insurance Corporation.
  3. the Board of Governors of the Federal Reserve System
  4. the National Credit Union Administration; and

A state-licensed loan originator cannot be employee of a depository institution, a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency; or an institution regulated by the Farm Credit Administration; and must be a licensed by a state or by the CFPB if the loan originator is seeking licensing in a state that has failed to establish a licensing system and maintains a unique identifier through the NMLS.

Unique identifier permanently identifies a loan originator and its assigned by protocols established by the NMLS and the federal banking agencies to facilitate (electronic tracking of loan originators & uniform identification of the employment history including public access and any publicly adjudicated disciplinary actions against, a loan originator. )

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