Loan Originator Compensation: New Rules

On January 24, 2013, as the last of the Final Rules of the Consumer Financial Protection Bureau (CFPB) rolled out, I offered an outline of all of them, entitled "CFPB's Gang of Seven (Final Rules)".*

I listed them in order of issuance, as follows:

1. Ability-to-Repay (ATR)
2. High-Cost Mortgage (HCM)
3. Escrow
4. Servicing
5. Appraisals for High-Risk Mortgages
6. Copies of Appraisals
7. Mortgage Loan Originator Compensation

Having come through the last two months responding to numerous questions about these Final Rules, I have been able to cobble together some of the most salient questions, regulatory features, and concerns that our clients have expressed about them. And when I have spoken to the media types, it seems that they also have a set of questions and interests that are not being fully addressed in the current dialogue. Of abiding interest is the change relating to loan originator compensation.

With that in mind, I want to provide a brief outline of some loan originator compensation issues, offering additional details garnered from two months in the trenches working through these regulatory issues on behalf of our clients. From time to time, I will have more to discuss about many regulatory changes anticipated in 2013 and 2014. I am going to conduct this review topic by topic, rather than just as specific regulations subject to a final rulemaking.

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IN THIS ARTICLE

Terms and Conditions
Retirement Plans
Factors and Proxies
Dual Compensation
Non-loan Originations Services
Points and Fees
Loan Originator Qualifications
Mandatory Arbitration Clause
Single Premium Insurance
Record Retention Requirements

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Terms and Conditions

By now, there is nary a residential mortgage lender or originator that does not know that, under Regulation Z, loan originator compensation is prohibited from being based upon the terms and conditions of a mortgage loan transaction.

The CFPB has provided new nomenclature for the terminology "transaction terms and conditions," without much changing the prohibition and certain exceptions to the standing rule. The new terminology is "term of a transaction," but now with the clarified meaning that term of a transaction means to include "any right or obligation of the parties to a credit transaction."

The usual cast of regulatory prohibitions continue in force. For instance, loan originator compensation is still prohibited from being based on such things as the interest rate of a loan, or upon the inclusion of additional fees or charges for products or services provided by other parties to the transaction.

And the usual cast of regulatory identifiers of a term of a transaction continue in force. Thus, fees or charges are a term of the transaction if they must be disclosed in the Good Faith Estimate (GFE) or HUD-1 or HUD-1A Settlement Statement (HUD-1). That obviously means to include loan originator or creditor fees or charges for the credit transaction or for a product or service provided by the loan originator or creditor that is related to the extension of credit; and it also means those fees or charges of other parties for any product or service required by the lender as a condition of the extension of credit. Keep in mind, however, that just because a fee or charge is stated on the HUD-1 does not in itself make the fee or charge a term of the transaction.

One rather controversial area involves the off-setting of compensation due to increased costs. The standing rule has provided that loan originator compensation is prohibited from being reduced in response to a change in the transaction terms. This has caused lenders all manner of frustration, not to mention loss of revenues and diminished profits. Yet, the new rule would allow compensation to be reduced in order to offset unexpected increases to estimated settlement costs, otherwise known as "unforeseen circumstances." What is a circumstance that is unforeseen? The imagination reels! But since the CFPB has offered no formal guidance to delineate very specifically what may or may not be an unexpected event, the lender must be extremely careful not to enter these dark waters too briskly.

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CFPB's Gang of Seven (Final Rules)

This has been a busy month for the Consumer Financial Protection Bureau (CFPB). Since the advent of the New Year, the CFPB has issued seven Final Rules that impact residential mortgage loan originations.

The finale was on Sunday, January 20, 2013, when the CFPB issued the seventh Final Rule, one day prior to the deadline set forth in the Dodd-Frank Act (Dodd-Frank), in § 1400(c), for automatic implementation of its Title XIV provisions.

By my count, these are the Final Rules, in order of their issuance:

1. Ability-to-Repay (ATR)
2. High-Cost Mortgage (HCM)
3. Escrow
4. Servicing
5. Appraisals for High-Risk Mortgages
6. Copies of Appraisals
7. Mortgage Loan Originator Compensation 

I recently discussed the Final Rule regarding the Ability-to-Repay. I will soon provide an outline of the CFPB's important Final Rule for Mortgage Loan Originator Compensation.

With regards to the latter, we will be updating the FAQs Outline - Loan Originator Compensation for the rule changes affecting loan origination compensation. For your consideration, I plan to provide soon a useful and practical understanding of the compensation revisions. In the near future, I will notify you of and provide access to the forthcoming article I am publishing on these regulatory guidelines.

In this article, I want to briefly outline this Gang of Seven (Final Rules). Please keep in mind that I am providing a broad sketch of the Final Rules. As is the case with many applications of legal and regulatory compliance, there are numerous statutory requirements and implementation guidelines that bring about consideration of some recourse to a competent risk management professional.

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IN THIS ARTICLE

Chart: Final Rules Compliance Dates
Gang Member # 1: Ability-to-Repay (ATR)
Gang Member # 2: High-Cost Mortgage (HCM)
Gang Member # 3: Escrow
Gang Member # 4: Servicing
Gang Member # 5: Appraisals for High-Risk Mortgages
Gang Member # 6: Copies of Appraisals
Gang Member # 7: Mortgage Loan Originator Compensation

Library

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Chart: Final Rules - Compliance Dates

Let's start first with a chart of the Final Rules and their respective compliance effective dates. I realize that there is considerable interest in the RESPA/TILA integration of mortgage disclosures; however, on November 16, 2012 the CFPB published a Final Rule exempting persons from complying with twelve specified Title XIV mortgage disclosure requirements. The RESPA/TILA disclosure integration is now scheduled for completion in September 2013. Without the aforementioned exemption, these twelve disclosure requirements would actually have taken effect on January 21, 2013.

Chart deals with only the Gang of Seven (Final Rules).

S.A.F.E. ACT - Final Rule: Minimum Standards

On June 29, 2011, the Department of Housing and Urban Development (HUD) announced publication of a Final Rule setting the minimum standards that states must meet to comply with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE) in licensing mortgage loan originators. 

The Final Rule was published in the Federal Register on June 30, 2011 and is available in our library. (See below.)

The states and territories affected are: All 50 states, the District of Columbia, Puerto Rico, Guam, and the Virgin Islands.

The Final Rule recognizes the legislation adopted by these states and territories in support of SAFE and it seeks to provide clarification of the minimum standards against which each state's laws and regulations will be evaluated.

Effective Date: August 29, 2011

AUTHORITIES

While states are charged with enacting licensing standards that meet the requirements of SAFE, overall responsibility for interpretation, implementation, and compliance was delegated to HUD. 

However, the SAFE Act was amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), and the authorities and duties delegated to HUD, relating to SAFE, will be transferred on July 21, 2011, to the new Consumer Financial Protection Bureau (CFPB) established by the Dodd-Frank Act.

HIGHLIGHTS

The Final Rule:

Explains the criteria that will be used to determine whether a state has put in place a system for licensing and registering mortgage loan originators as required by the SAFE. The rule does so by clarifying the meaning of "engaging in the business of a loan originator," which determines whether an individual must be licensed, and the rule also provides that certain activities do not amount to engaging in the business of a loan originator. 

Further clarifies that employees of government agencies and bona fide nonprofit organizations who act as loan originators only as part of their duties do not engage in the business of a loan originator and do not require licensure by states. 

Does not define the terms of "loan originator" or "business of a mortgage loan originator" to include individuals who only engage in loan modifications or are third-party loan modification specialists.  HUD is deferring to the CFPB the issue of whether such individuals should be licensed under SAFE or should otherwise be regulated under other CFPB regulatory authority.

REGULATORY FRAMEWORK

SAFE also mandates the creation of a Nationwide Mortgage Licensing System and Registry (NMLSR). All states are asked to provide for a licensing and regulatory regime for all residential mortgage loan originators.

VISIT THE NMLS USERS FORUM

FOR UP-TO-DATE INFORMATION

To comply with SAFE, states have put in place statutory and regulatory frameworks that require originators to take initial and continuing education courses, pass a test, and undergo civil, criminal and financial background checks.

In any State that fails to have in place a licensing system that meets the minimum requirements, mortgage loan originators may be required to be licensed under a federal program.

Though minimum standards have been established and clarified, States have the right to enact additional legislation and rules, and to take actions that exceed the federal SAFE Act minimum requirements.

LIBRARY

SAFE Mortgage Licensing Act:
Minimum Licensing Standards and Oversight Responsibilities
FR 76/126 - June 30, 2011

Mortgage Call Reports – FREE Information Kit, Deadlines, Workshops, and FAQs

Filing deadline for the first quarter 2011 was on May 15, 2011. However, updates to the NML took place on Saturday, May 14, 2011, and that update may have affected the ability to file. It is likely that there will be some leeway by the relevant regulatory agencies - but not an obligation - to permit late filers to avoid administrative penalties if the MCR filing takes place within the next few days. The MCR filing must be done even if the company did not conduct any residential mortgage loan activity during the reporting period.

   

• FAQs - Mortgage Call Reports - Article, by Jonathan Foxx
• Privacy Guidelines of NMLS - Synopsis, by Jonathan Foxx
• NMLS Library Section of Lenders Compliance Group
• Navigation Guide for Mortgage Call Reports
• Mortgage Call Report Basics
• Amending the Mortgage Call Report
• Requirements by Jurisdiction
• Practice Worksheet - Standard
• Field Definitions
• Expanded Section - Instructions
• Examples: Wholesale Lender, Retail Lender, Reverses Lender, Mortgage Broker
• Suite of Services - Lenders Compliance Group
• NMLS Users Forum - Sponsored by Lenders Compliance Group
  
  

DEADLINES FOR MORTGAGE CALL REPORT

Residential Mortgage Loan Activity
Due quarterly, within 45 days after every calendar quarter:

• Quarter 1 data (January 1-March 31) is due May 15
• Quarter 2 data (April 1- June 30) is due August 14
• Quarter 3 data (July 1-September 30) is due November 14
• Quarter 4 data (October 1-December 31) is due February 14

Financial Condition
Due annually, within 90 days of company’s Fiscal Year End

SOME FAQS

01Q: Am I required to file the Mortgage Call Report?

A: The Mortgage Call Report must be filed by all licensed Mortgage Brokers, Mortgage Bankers, Wholesale Lenders, Retail Lenders, and companies who make, service, or broker loans secured by residential real estate. The report must also be filed by all exempt companies who employ licensed mortgage loan originators. The report must be filed whether or not any business has been conducted under the license. 

02Q: Do branch offices and originators have to file the Mortgage Call Report?

A: No. The Mortgage Call Report is filed by the Mortgage Broker and Consumer Loan Companies and covers activities for branch offices and originators.

03Q: Do consumer loan licensees who make personal property loans have to file the Mortgage Call Report?

A: No. The Mortgage Call Report must be filed by licensees who make, service or broker loans secured by residential real estate.

04Q: When and what information do companies submit on the Mortgage Call Report if their fiscal year is not a calendar year?

A: The Mortgage Call Report must be submitted within 45 days of the end of the calendar quarter, not a company’s fiscal quarter. The activity information must reflect the data from the calendar quarter.

05Q: Is there a cost for submitting the NMLS Mortgage Call Report?

A: A processing fee will not be imposed in 2011 for filing the Mortgage Call Report. A decision is expected later in the year about any processing fees associated with filing the Mortgage Call Reports for 2012.

06Q: My company operates in multiple states. Do I file the NMLS Mortgage Call Report for each state?

A: Only one Mortgage Call Report is filed per company per quarter. This report includes break out data for each state in which the company is licensed or has licensed mortgage loan originators.

07Q: If I am an approved Fannie Mae or Freddie Mac Seller/Servicer or a Ginnie Mae Issuer but I currently don’t service any loans or issue mortgage pools, do I have to complete the Mortgage Call Report?

A: All state licensed companies or companies employing state licensed MLOs must complete the Mortgage Call Report even if they have had no activity during the reporting period. Companies that did not have activity during a particular quarter will be able to indicate this on the Mortgage Call Report. The system will require companies that have indicated on the MU1 Other Business Section that they are an approved Fannie Mae or Freddie Mac Seller/Servicer or Ginnie Mae Issuer to complete the Expanded Mortgage Call Report.

08Q: I am an approved Fannie Mae or Freddie Mac Seller/Servicer or a Ginnie Mae Issue but I currently do not complete the Mortgage Bankers' Financial Reporting Form (MBFRF), do I have to complete the Mortgage Call Report?

A: All state licensed companies or companies employing state licensed MLOs must complete the Mortgage Call Report even if they have had no activity during the reporting period or have not completed the Mortgage Bankers' Financial Reporting Form (MBFRF). If your state licensed company (or you are a company employing state licensed MLOs) is a Fannie Mae or Freddie Mac Seller/Servicer or Ginnie Mae Issuer, you must file the Expanded Mortgage Call Report. Companies that did not have activity during a particular quarter will be able to indicate this on the Mortgage Call Report.

09Q: I am a state licensed subsidiary of a federally regulated institution. Do I have to complete the Mortgage Call Report?

A: All state-licensed companies or companies employing state-licensed MLOs must complete the Mortgage Call Report.

10Q: If my institution is only federally-registered on NMLS and we only employ federally-registered MLOs, must we submit the Mortgage Call Report?

A: Currently only state-licensed companies and companies employing state-licensed MLOs must complete the Mortgage Call Report.

11Q: What do I include in the Broker Fee and Lender Fee fields of Residential Mortgage Loan Activity (RMLA) Section I?

A: Include all fees that your company has collected and retained. Examples include, but are not limited to, origination fees, application fees, servicing release premiums (SRP), and yield spread premiums (YSP). Do not include pass through fees. Note that compensation paid to MLOs is not considered a pass through fee.

12Q: How do I report my MLOs on the Mortgage Call Report?

A: You must enter the NMLS ID of the MLO along with the dollar amount and count of the residential loans that MLO closed during the reporting period. If the MLO had no activity, you would enter zeroes in the amount and count fields but the MLO must be listed for each state they hold a license.

13Q: What if my company had no MLOs during the reporting period?

A: When making the Mortgage Call Report filing, you will have the opportunity to enter information for any of your state licensed MLOs. If you do not have any state licensed MLOs during a reporting period, you would leave this section blank and attest to the filing before submission.

14Q: How do we report warehouse lines of credit?

A: Currently, you must list your warehouse lines of credit on each Residential Mortgage Loan Activity (RMLA) component. While each Residential Mortgage Loan Activity (RMLA) component is reported by state, the lines of credit should reflect all lines of credit the company holds.

15Q: Will the Mortgage Call Report be made available to the public?

A: Company specific reports will not be made publicly available. Aggregate data may be released to the public at a future date.

16Q: What happens to my data once it is submitted?

A: NMLS will process the data and release reports to state regulators on the submitted data. State regulators may also review individual company Mortgage Call Report filings within the system.

17Q: What amount do I report under the application amount, the initial amount on the application or the amount the application closes if it changes?

A: The initial amount on the application should be used when completing the Application data in the Mortgage Call Report.

18Q: What do you mean by “application” for the Mortgage Call Report?

A: Application is defined in the Mortgage Call Report as “an oral or written request for a home purchase loan, a home improvement loan, or a refinancing that is made in accordance with procedures used by a financial institution for the type of credit requested.” The Mortgage Call Report primarily relies on the Regulation B (ECOA) use and definition of application and generally follows Regulation C (HMDA) reporting requirements.

19Q: What happens if we do not file an Mortgage Call Report?

A: A company will be denied license renewal if any quarterly Mortgage Call Report filing is missing or if there are any related administrative penalties still outstanding.

20Q: Is the reporting activity information on the Residential Mortgage Loan Activity (RMLA) component by state based on the location of the property?

A: Yes, the activity information is based on the location of the property and reported by state.

More FAQs from NMLS

WORKSHOPS

At this time, only one NMLS-sponsored workshop is offered:

Monday, June 6, 2011 from 1:00 - 2:30 pm ET

NOTE: In order to register for this event, you will need to create a login ID on the CSBS website. You cannot use your NMLS login ID.

Mortgage Call Reports–FREE Information Kit!

As a courtesy to you, we want you to have a helpful FREE Information Kit to assist in preparation for filing the Mortgage Call Report (MCR).

Filing Deadline: 1st Quarter 2011 - May 15, 2011.

See Below For FREE Information Kit! 

 

 POLICIES AND PROCEDURES 

Draft and implement policies and procedures to:
(a) prepare and submit MCRs for an entity, and
(b) prepare and submit MCRs for individual MLOs.

[Contact Us for Assistance.] 

ACTION

1. Review NMLS requirements and forms for the MCR.
2. Prepare MCR data requirements for 1/1/11 to 3/31/11.
3. Submit the MCR by May 15, 2011.

 TRAINING

NMLS moderated conference call and webinars:

• Thursday, May 5, 2011 from 3:30 - 5:00 pm ET
• Monday, May 9, 2011 from 1:30 - 3:00 pm ET
• Tuesday, May 10, 2011 from 1:30 - 3:00 pm ET 

 QUARTERLY FILING

All state-licensed companies or all state-registered companies that employ licensed mortgage loan originators.

WHO - WHAT - WHEN - WHERE – HOW 

 Who files? All state licensed companies or companies employing state licensed mortgage loan originators.

Entities or Individual MLOs? Some states are still not licensing via the NMLS; consequently, MLOs must submit Mortgage Call Reports if licensed in those states.

Annual and Quarterly Reports? Many State Banking Departments have indicated that they will accept the NMLS Mortgage Call Report as satisfaction of their state specific reporting requirements.

How do multiple state licensees file? Only one NMLS Mortgage Call Report is filed per company per quarter, including break out data for each state in which the company is licensed and/or has licensed mortgage loan originators.

Timeframe? Information must be submitted within 45 days of the end of a calendar quarter. The information must reflect the data from that calendar quarter. 

 MORTGAGE CALL REPORT

• NMLS Users Forum - Website - Sponsored by Lenders Compliance Group

• FAQs - Mortgage Call Reports - Article - Authored by Jonathan Foxx

• NMLS Library Section of Lenders Compliance Group

• NMLS Mortgage Call Report Basics - NMLSR

• Privacy Guidelines of NMLS - Synopsis - Authored by Jonathan Foxx

• Mortgage Call Report Requirements by Jurisdiction - NMLSR

• Practice Worksheet - Standard - May 2011 - NMLSR

• NMLS Field Definitions - NMLSR

• Expanded Section - Instructions - NMLSR

• Examples: Wholesale Lender, Retail Lender, Reverses Lender, Broker

• Suite of Services - Lenders Compliance Group 

Mortgage Call Report Workshop - NMLS Offers Training

The NMLS will provide training for the Mortgage Call Report 

Dates (Click to Register)

Wednesday, April 13, 2011 from 2:00 - 3:30 pm ET
Thursday, April 14, 2011 from 2:00 - 3:30 pm ET
Thursday, May 5, 2011 from 1:30 - 3:00 pm ET
Tuesday, May 10, 2011 from 1:30 - 3:00 pm ET

NOTE: In order to register for this event, you will need to create a login ID on the CSBS website.  You cannot use your NMLS login ID.

 Description

NMLS is sponsoring a professionally-moderated conference call and webinar for companies that wish to learn about the NMLS Mortgage Call Report.  The webinar will provide users with an overview of the requirements and "how to" for submitting a Mortgage Call Report in NMLS.

 What will participants learn?

• Policies regarding who needs to submit the NMLS Mortgage Call Report and when
• Directions on which portions of the Call Report need to be completed by different companies
• Resources for completing the Call Report, such as field definitions
• Overview of the XML option for uploading Call Report data into NMLS
• How the Call Report data will be used by regulators

 Presenters

 

-Tim Lange, Senior Director - Policy, State Regulatory Registry LLC
-State Mortgage Regulators, TBD
 

 Cost

The registration fee for this professionally-moderated workshop is $35, which entitles the registrant to one conference call dial-in and one webinar login for the audio and visual portions respectively.

THE DIAL-IN NUMBER AND WEBINAR LINK WILL BE EMAILED TO REGISTRANTS 2 DAYS BEFORE THE WORKSHOP.

 Visit Library

Nationwide Mortgage Licensing System & Registry
Library Section

Mortgage Call Reports - Get Ready!

Jonathan Foxx is a former Chief Compliance Officer of two publicly traded financial institutions, and the President and Managing Director of Lenders Compliance Group, the nation’s first full-service, mortgage risk management firm in the country.

I think you will be interested in reading my newest article.

It is published in the March edition of the National Mortgage Professional Magazine, the publication that is considered the premier mortgage industry magazine for mortgage originators.

This article provides FAQs for filing the NMLS Mortgage Call Report (MCR). It also provides an in depth outline and includes charts.

MCR filing will now be required, commencing with the first calendar quarter of 2011. It is being fully activated on the Nationwide Mortgage Licensing System & Registry (NMLSR) website.  

I am pleased to share this article now with you, our valued clients and colleagues. Our monthly compliance clients received an Advance Copy one month ago. 

We provide expert guidance in all areas of residential mortgage compliance.

If you are not yet a client, shouldn't you become one?

We are the first full-service, mortgage risk management firm in the country devoted exclusively to residential mortgage compliance.

If you have questions about this matter or would like assistance with residential mortgage compliance, please CLICK HERE to contact me at any time.

 
Regards,
Jonathan Foxx
Lenders Compliance Group
President and Managing Director

 

Excerpt

FAQs:

WHO-WHAT-WHEN-WHERE-HOW (BUT NOT WHY!)  

Filing of the MCR is required by the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act or Act) - the same Act that requires licensing and registration of Mortgage Loan Originators (MLOs)  - as codified in the following provision:

"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."  (My emphases)

NMLS Privacy Guidelines

In the course of working with our clients on their licensing and registration compliance, the question often comes up about the confidentiality of nonpublic personal information that is stored in the Nationwide Mortgage Licensing System Registry (NMLS).  

Additionally, we are asked who may obtain access to an Mortgage Loan Originator's (MLO's) confidential information.

Indeed, this question has come up several times in the NMLS Users Forum that we recently created in the following web spaces:

• LinkedIn
• Facebook
• Twitter
• Website

It is essential to know the NMLS privacy guidelines. Some information is available on the NMLS website, but not enough, and it is too condensed or insufficiently available.

We have prepared a 2-page Privacy Guidelines synopsis of the NMLS privacy guidelines. 

Available in our Library.

 

 AUTHORITY

The information in the NMLS is maintained to support regulatory supervision while providing the general public with access to certain information.

Privacy guidelines, in general, are based on the provisions of the Privacy Act of 1974 [5 U.S.C. 552a], as amended, which must be implemented by the NMLS. The authority to maintain the  NMLS and its privacy protocols comes from Section 1507 of the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act) [12 U.S.C. 5106]. 

CATEGORIES OF RECORDS

The guidelines apply to any persons required by the S.A.F.E. Act to register in or license through the NMLS to obtain unique identifiers, and to maintain their registrations and licenses.

NMLS contains information documenting identity, including name and former names, social security number, gender, date of birth, and place of birth; home and business contact information; the date on which the MLO becomes an employee with the institution; criminal history, including the results of a background check; financial services-related employment history; civil, arbitration, regulatory, and disciplinary actions arising out of the MLO's financial services; and licensure revocations and suspensions. 

DISCLOSURE OF CONFIDENTIAL INFORMATION

Under the Privacy Act [5 U.S.C. 552a (b)], all or a portion of the records or information contained in the NMLS may be disclosed to:

• The appropriate federal, state, local, foreign, or self-regulatory organization or agency responsible for investigating, prosecuting, enforcing, implementing, issuing or carrying out a statute, rule, regulation, order, policy or license if the information may be relevant to a potential violation of civil or criminal law, rule, regulation, order, policy or license.

• A federal agency in the executive, legislative, or judicial branch of government, or to a Federal Reserve Bank, in connection with the hiring, retaining, or assigning of an employee, the issuance of a security clearance, the conducting of a security or suitability investigation of an individual, the classifying of jobs, the letting of a contract, the issuance of a license, grant, or other benefits by the receiving entity, or the lawful statutory, administrative, or investigative purpose of the receiving entity to the extent that the information is relevant and necessary to the receiving entity's decision on the matter.

• The Department of Justice, a court, an adjudicative body or administrative tribunal, a party in litigation, or a witness if the MLO's regulator determines, in its sole discretion, that the information is relevant and necessary to the matter.

• A congressional office in response to an inquiry from the congressional office made at the request of the individual to whom the record pertains.

• Contractors, agents, or others performing work on a contract, service, cooperative agreement, or activity for the MLO's regulator and who have a need to access the information in the performance of their duties or activities for the MLO's regulator.

• Appropriate federal, state, local authorities, and other entities when (a) it is suspected or confirmed that the security or confidentiality of information in the system has been compromised; (b) there is a risk of harm to economic or property interests, identity theft or fraud, or harm to the security or integrity of this system or other systems or programs that rely upon the compromised information; and (c) the disclosure is made to such agencies, entities, and persons who are reasonably necessary to assist in efforts to respond to the suspected or confirmed compromise and prevent, minimize, or remedy such harm.

• Depository and financial institutions or their subsidiaries or institutions regulated by the MLO's regulator for use in registering employees as MLOs or renewing employee registrations.

• Third parties when the information relates to the employment history of, and publically adjudicated disciplinary and enforcement actions against, loan originators that is included in the NMLS for access by the public in accordance with Section 1507 of the S.A.F.E. Act. (Cited Above)
  

OTHER RECORDS

• Nonpublic personal information of MLOs, including confidential information submitted by the MLO's regulator.

• Nonpublic personal information and confidential information required to establish an account.

• Nonpublic personal information and confidential information to verify the identity of anyone who contacts the NMLS.

• Information provided by regulators and MLOs that are used by the regulators to issue and maintain a state license or monitor a federal registration, including:

license status

application approvals

denials

regulator's and MLO's updates

• Collection and disbursement information regarding state license fees, registration fees, system processing fees, and information to process payment transactions.
  

RECORD RETENTION

Records are stored in electronic media and retrieved by an individual MLO's name or unique identification number and by the financial institution's name.

Information in NMLS is kept for a minimum of five years after the MLO no longer holds a valid state license or registration that is maintained in NMLS.

Visit Library

Privacy Guidelines of Nationwide Mortgage Licensing System Registry (NMLSR) -
Synopsis
Lenders Compliance Group
March 14, 2011

Mortgage Call Reports Commence

The NMLS Mortgage Call Report (MCR) filing will now be required, commencing with the first calendar quarter of 2011. It will be fully activated on the NMLSR website in April. 

The SAFE Act requires:

"mortgage licensees to submit reports of condition to the Nationwide Mortgage Licensing System and Registry in such form and containing such information as the Nationwide Mortgage Licensing System and Registry may require." 

Under the SAFE Act, each individual loan originator licensee must submit a mortgage call report to the Nationwide Mortgage Licensing System and Registry (NMLSR) as a condition of licensure. 

According to the SAFE Act, a "mortgage call report" is a statement of condition of a mortgage company and its operations, including financial statements and production volumes.

Go to Library for Mortgage Call Report Toolbox

ACTIONS

• Download and review NMLS requirements and forms for the Mortgage Call Report.  
  [See Library] 
• Prepare NMLS records prior to April 2011.
• Draft and implement policies and procedures to (a) prepare and submit MCRs for an entity, and (b) prepare and submit MCRs for individual MLOs. [Contact Us]

REQUIREMENTS

Quarterly Report

• Filing Entities: All state-licensed companies or all state-registered companies that employ licensed mortgage loan originators.

Criteria

• Who files? All state licensed companies or companies employing state licensed mortgage loan originators.
• Entities or Individual MLOs? Some states are still not licensing via the NMLS; consequently, MLOs must submit Mortgage Call Reports if licensed in those states.
• Annual and Quarterly Reports? Many State Banking Departments have indicated that they will accept the NMLS Mortgage Call Report as satisfaction of their state specific reporting requirements.
• How do multiple state licensees file? Only one NMLS Mortgage Call Report is filed per company per quarter, including break out data for each state in which the company is licensed and/or has licensed mortgage loan originators.

Data Submission and Fees

• A specific solution has not been developed but the NMLS may implement an XML format. 
• Fees: To be determined.

Fannie/Freddie Seller/Servicer & Ginnie Mae Issuer

• Non-Servicing Fannie/Freddie Seller/Servicer and Non-Pool Ginnie Mae Issuers: All state licensed companies or companies employing state licensed MLOs must complete the NMLS Mortgage Call Report even if they have had no activity during the reporting period.
• Companies that did not have activity during a particular quarter will be able to indicate this on the NMLS Mortgage Call Report.

Subsidiaries of Federal Regulated Institutions

• All state-licensed companies or companies employing state-licensed MLOs must complete the NMLS Mortgage Call Report. 

Calendar Year - Fiscal Year

• Information must be submitted within 45 days of the end of a calendar quarter. 
• The information must reflect the data from that calendar quarter.

Visit Library

Mortgage Call Reports – Toolbox

1. NMLS Mortgage Call Report Basics
2. Mortgage Call Report Standard Section - Entities: Loan Originators
3. Mortgage Call Report Expanded Section - Entities: Fannie Mae or Freddie Mac Seller/Servicer, or a Ginnie Mae Issuer
4. Field Definitions - Definitions and Instructions
5. Examples: Wholesale, Retail, Reverse Lender, and Broker