There has been talk about the new Nationwide Mortgage Licensing System (NMLS) for a couple years now, and now it is finally here. There has been a lot of speculation on how this will affect the mortgage licensing process. With 42 states now agreeing to take part, 7 states agreeing to use the system starting 1/2/08 and 8 more states agreeing to join by the end of 2008, what exactly will the Nationwide Mortgage Licensing System do?
That is the question everyone is asking. What will the system do? Here is a brief overview of the Nationwide Mortgage Licensing System, what it will do now, and what the plans are for the future.
The Nationwide Mortgage Licensing System has been developed as a central repository for pertinent information on mortgage companies licensed by the states. Each company will only have one record in the system, which will include information on the Company, its owners, officers, and directors, its branch locations, and its Loan Originators. This is the main purpose of the Nationwide Mortgage Licensing System. Instead of providing the same information to each state on their own state-specific form, you will just provide your information once to the Nationwide Mortgage Licensing System and then make sure to maintain it and update it as needed. Of course, this only works for the states that are using the system.
The initial states that will be using the system as of 1/2/08 are:
• Rhode Island
• New York
Any companies that are licensed in these states should have already requested an account administrator login and will be receiving information on how to log in and use the system in the last week of December. If you are currently licensed in any of these states, after 1/2/08 you will need to create one company record and provide information on the Company, its owners, officers, and directors, its branch locations, and its Loan Originators.
New Mortgage License Applications
Anyone that is not currently licensed in any of these states but is interested in obtaining licenses in these states after the new year, will need to first submit their company information into the Nationwide Mortgage Licensing System. The biggest question for most mortgage companies is whether this will simplify the mortgage licensing process. The answer is slightly. Even though you will only need to submit your company information once, you still will need to submit everything to the state that is not part of the Nationwide Mortgage Licensing System. This can include, fingerprints, company financials, personal financials, surety bonds, additional forms, secretary of state filings, trade name certificates, etc. The list can go on for a while depending on the state. So yes, you will only need to provide your company’s basic information once, which is a great relief, but you will still need to work with each state’s regulatory agency in order to process the remaineder of the conditions.
States Joining in 2008
The following states will be joining the Nationwide Mortgage Licensing System some time in 2008.
• New Hampshire
• North Carolina
In the future, the Nationwide Mortgage Licensing System will also maintain information on continuing education for the loan officers and responsible officers. The plan is for the system to link to the certified continuing education providers so that they can update the states immediately when someone has completed education.
For the most part, the Nationwide Mortgage Licensing System will make it easier for mortgage companies to maintain their mortgage licenses, but it will still be very burdensome to apply for licenses in each state. For the most part, the Nationwide Mortgage Licensing System (NMLS) will be more of a tool for regulators to work across state borders in finding companies that are not complying with the laws of the state or possibly committing fraud. The regulatory agencies will now be interlinked by this one system so any mortgage companies that are not in compliance in one state may be more likely to receive audits in another state. Now is the time to focus on compliance if your mortgage company has been avoiding it in the past.