Thursday, July 8, 2010

Mortgage Call Reports – Coming Soon!


On March 15, 2010, on behalf of the state regulatory agencies participating in the Nationwide Mortgage Licensing System and Registry (NMLSR), the State Regulatory Registry invited public comments on the proposed implementation of a NMLS Mortgage Call Report (Report), which is intended to replace and standardize annual reports required by state regulators, provide necessary information to supervise state mortgage licensees, and fulfill the requirements of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act).

The comment period closed on Friday, May 14, 2010. Notwithstanding that deadline, the NMLSR was accepting comments in response to the proposal as late as May 28, 2010.

Since June 2009, a working group of state regulators have been developing the Report and accompanying policies. When implemented, the Report will institute significant obligations for large and small mortgage company licensees, requiring them to report a far more extensive set of mortgage loan activity and financial information, in a more detailed manner, and more frequently, than any state has ever required such mortgage activity and financial information to be reported by a licensee.

The legal authority is claimed under the SAFE Act itself. State regulators use the SAFE Act for their authority to impose on licensees the information gathering requirements of a Mortgage Call Report. That is, the SAFE Act is intended to provide for the (1) registration of the loan originator employees of institutions regulated by the federal banking agencies, and (2) licensing of loan originators who are employees of state-licensed mortgage companies.

Section 1505 of the SAFE Act (12 U.S.C. 5104) sets forth the requirements that must be met for an individual to be a state-licensed loan originator. Subsection (e) of Section 1505 of the SAFE Act (12 U.S.C. 5104(e)) states:

"MORTGAGE CALL REPORTS -- Each mortgage licensee shall submit to the National Mortgage Licensing System and Registry reports of condition, which shall be in such form and shall contain such information as the Nationwide Mortgage Licensing System and Registry may require."

This provision is worded broadly. The SAFE Act does not otherwise address the Mortgage Call Reports. State regulators have concluded that because the term mortgage licensee,as used only in this section of the SAFE Act, is undefined, and appears to be distinct from the term loan originator (which is actually defined in12 USCA 5102), and because the phrase "reports of condition" is a phrase drawn from banking supervision of federally insured depository institutions, the Mortgage Call Report must be a statement of condition on the company that employs licensed mortgage loan originators and its operations (including financial statements and production activity volumes reported per state).

Many industry representatives believe that since the Mortgage Call Report provision requires each mortgage licensee to submit reports of condition to the NMLSR, and as the NMLSR is limited licensing or registering loan originators, the reference to a "mortgage licensee" in the Mortgage Call Report provision is intended to mean only licensed loan originators.

In other words, there is no statutory basis under the SAFE Act to extend the Mortgage Call Report provision to requiring each mortgage company to submit a quarterly financial statement and a quarterly report to each state on its mortgage activity in the state. A state regulator may already have or seek authority under its state law to require licensees to submit quarterly financial statements and loan activity reports, but the authority itself does not exist under the SAFE Act.

The upshot, from the industry's perspective, is that a Mortgage Call Report will impose significant operational and financial obstacles.
For instance the National Association of Mortgage Brokers (NAMB) believes there are "several legal flaws" in the proposal; and, it is also concerned about the burden of such reporting on small business mortgage companies, and places an "unacceptable financial burden" on small businesses.

If you have any questions about this NMLS requirement or would like assistance with mortgage compliance, please contact Jonathan Foxx, Managing Director or call 516-442-3456 x 100.



  • Quarterly report of condition
  • Submitted through NMLS by an entity with at least one licensed mortgage loan originator
  • Consists of two parts:

1. Part I: Residential Mortgage Loan Activity Report, by state.

2. Part II: Financial Condition Report for the entity


  • Executed by the company holding more than one license type in a jurisdiction is only required to submit one NMLS Mortgage Call.
  • Report for that jurisdiction. A company licensed in multiple states will complete a separate Residential Mortgage Loan Activity Report for each state in which they are licensed.
  • Companies not licensed in a state but employing state-licensed mortgage loan originators are afforded the opportunity by the state regulator to create a record in NMLS and submit the record to the state through NMLS.
  • Companies with one or more licenses in any "Approved" status will be required to file the NMLS Mortgage Call Report on a quarterly basis.
  • Failure to submit the report within 45 days of the end of the quarter will result in a "deficiency" placed on licenses or registrations held by the company and may result in a state regulatory action. Such deficiencies will prevent license or registration renewal.
  • Mortgage Call Report financial information must be reflective of the licensee's mortgage activities. Consolidated financial information will not be acceptable. Financial information should be reported on a Year-To-Date (YTD) basis.
  • Companies that, under state laws or regulations, are required to submit a self-prepared financial statement on an annual basis as part of maintaining a license or registration may use the Mortgage Call Report to meet this requirement.
  • Companies that are required to submit a Compiled, Reviewed or Audited financial statement must complete and submit such financial statements through NMLS in addition to the Mortgage Call Report.
  • Companies must submit quarterly residential mortgage loan activity data that reflects the company's operations within a state for each state in which they are licensed or registered through NMLS. All mortgage origination activity of their licensed mortgage loan originators must be included on the Mortgage Call Report. Activity is to be reported on a Year-To-Date (YTD) basis.
  • All company filings are confidential and will not be made public by NMLS, but will be available to state mortgage regulators under the system's information sharing architecture.
  • State, regional and national aggregated data is considered public information and may be made available by NMLS or state regulators.
  • The Mortgage Call Report is a "uniform form" that will be used by all companies, regardless of a company's organizational structure and activities. Companies will only be required to complete sections and questions that are relevant to the company's activities and/or authorities

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NMLS Mortgage Call Report - Request for Public Comments
March 15, 2010