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.

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

Agencies: Commence NMLS Registration

The federal bank, thrift and credit union regulatory agencies, along with the Farm Credit Administration, announced today that the Nationwide Mortgage Licensing System and Registry (Federal Registration) will begin accepting federal registrations, effective immediately.

Under the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) and the agencies' final rules, residential mortgage loan originators employed by banks, savings associations, credit unions, or Farm Credit System institutions must register with the registry, obtain a unique identifier from the registry, and maintain their registrations. 

Agencies

Farm Credit Administration

Federal Deposit Insurance Corporation

National Credit Union Administration

Office of the Comptroller of the Currency

Office of Thrift Supervision 

Following expiration of the 180-day initial registration period on July 29, 2011, any employee of an agency-regulated institution who is subject to the registration requirements will be prohibited from originating residential mortgage loans without first meeting these requirements.

(The registration rules exclude mortgage loan originators that originated five or fewer mortgage loans during the previous 12 months and who have never been registered.) 

Initial registration: January 31, 2011 to July 29, 2011.

Visit Library for Issuance

Registration of Mortgage Loan Originators
Interagency Announcement
January 31, 2011

NMLS: MLO Registration to Commence

In its first Financial Institution Letter of the year, the FDIC issued on January 4, 2011 its issuance FIL-1-2011 in which the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System,, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Farm Credit Administration, and the National Credit Union Administration, (collectively, Agencies) announced that they expect the system for federal registration of residential mortgage loan originators (MLOs) to begin operation on or around January 31, 2011.

The Agencies' rules implementing the SAFE Act require MLOs to register with the Nationwide Mortgage Licensing System and Registry (Registry) within 180 days of the date the Registry begins accepting federal registrations. The Agencies will confirm the opening date for federal registration closer to the actual date and will publish notice of that date in the Federal Register.

On July 28, 2010, the Agencies announced the Federal Register publication of rules implementing the SAFE Act through this joint press release.

In any event, the federal bank and thrift regulatory agencies have said that they expect to be ready to accept residential mortgage loan originator registrations by about January 31, 2011.

Under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act), loan originators must register with the Nationwide Mortgage Licensing System and Registry within 180 days of the date the Registry announces it can accept registrations. A precise date will be published in the Federal Register when it is determined, the agencies said.

A loan originator that does not register within the 180-day period will be prohibited from originating residential mortgage loans until it has completed its registration. There will be an exception for those who originated no more than five loans during the previous 12 months.

Rules adopted jointly by the agencies establish the registration requirements for loan originators employed by agency-regulated institutions and set the requirements for these institutions, which include the adoption of policies and procedures to ensure compliance with the S.A.F.E. Act and final rules.

The rules also require that each loan originator obtain a unique identifier through the Registry that will remain with that loan originator, regardless of changes in employment. This is intended to give consumers access to employment and other background information about loan originators. Registered mortgage loan originators and agency-regulated institutions will be required to provide these unique identifiers to consumers.

Compliance Effective: On or around January 31, 2011

OUTLINE OF MLO REGISTRATION TIMEFRAME

• The press release states that advance notice would be provided for the date the Registry would begin accepting federal registrations: the Agencies currently expect federal registration to begin on January 31, 2011.

• MLOs employed by Agency-regulated institutions will have 180 days from the date on which the Registry begins accepting federal registrations to complete initial registration. At present, the Agencies expect the initial registration period to expire on July 29, 2011.

• After the initial registration period expires, MLOs will be prohibited from originating residential mortgage loans until they successfully complete the federal registration process.

• The Agencies' rules provide a de minimis exception whereby MLOs that originated 5 or fewer mortgage loans during the previous 12 months are not required to complete the federal registration process.

• The Agencies will confirm the actual registration start date before the initial registration period begins and publish an announcement in the Federal Register.

Visit Library for Issuance SAFE Act - Update: Registration of Residential Mortgage Loan Originators, FIL-1-2011 January 4, 2011

FHA: Connects to the NMLSR

On January 5, 2011, HUD-FHA issued Mortgagee Letter 2011-04, which notifies mortgagees that HUD will begin collecting the unique identifiers assigned by the Nationwide Mortgage Licensing System and Registry (NMLS) to individuals and entities participating in the origination of loans submitted for insurance by the FHA.

FHA-approved mortgagees and their employees must comply with the NMLS registration requirements of the states and entities with jurisdiction over their activities, and must register in accordance with the guidelines set forth by the NMLS.

Additionally, Sponsoring Third Party Originators are now required to ensure that their Sponsored Third Party Originators obtain and maintain an NMLS unique identifier (NMLS ID), as is required by the states and entities with jurisdiction over their activities and in accordance with the registration guidelines set forth by the NMLS.

Please also note that under the Helping Families Save Their Homes Act of 2009 (Pub.L. 111-22), the failure of an FHA-approved lender to comply with requirements of the Safe Act (12 U.S.C. 5101-5116) and applicable state law is cause for withdrawal of FHA lender approval or loss of authorization to participate in FHA lending programs.

HUD expects mortgagees to comply with applicable federal and state requirements governing NMLS licensing and registration. For more information on your state's NMLS requirements and implementation plans, you can visit the NMLS Resource Center.

HUD will capture NMLS IDs at a number of points in the lender approval and loan origination processes, which we have indicated below.

Read Below for Compliance Deadlines.

DATA CAPTURE OF NMLS IDENTIFIERS

APPLICATION FOR OR RENEWAL OF FHA LENDER APPROVAL

HUD will collect the NMLS company ID:

• From lenders seeking approval to participate in FHA programs via a new field in the "Application for Federal Housing Administration Lender Approval" (Form HUD-92001-A). The revised Form HUD-92001-A is expected to be released soon and available on HUD's document website.

• From lenders seeking to renew their FHA lender approval via the completion of a new field in the renewal screens in FHA Connection. Changes to the renewal screens in FHA Connection were released on October 4, 2010.

Completion of these new fields will become mandatory upon their release for those institutions that possess an NMLS company ID.

SPONSORING THIRD PARTY ORIGINATORS

HUD will collect the NMLS company ID of Sponsored Third Party Originators:

From Sponsoring Third Party Originators, by their completing the Sponsored Originator Maintenance screen in FHA Connection.

LOAN PROCESSING AND UNDERWRITING

Mortgagees will be required to complete the following new fields on the FHA Connection case number assignment screen, as appropriate:

1) Loan Officer: the NMLS ID of the loan officer who took the application from the applicant.
We expect this information to be used, among other things, to observe and enforce compliance with loan officer licensing requirements. Disclosure compliance regarding this data will likely be included in HUD's quality assurance examinations.

2) Sponsored Third Party Originator loans: the Sponsored Third Party Originator's company name and Taxpayer Identification Number (if applicable).
HUD will use the information to provide the Sponsoring Third Party Originators with Neighborhood Watch performance data for their Sponsored Third Party Originators. We expect the information to be used by HUD to assist in ensuring that participants in FHA loan transactions comply with the eligibility requirements governing participation in FHA programs.

Compliance Dates

Until March 31, 2011: entry of the name and NMLS ID of a loan officer is optional.

On and after April 1, 2011: the information must be entered in accordance with the following guidelines:

-The loan officer's first and last name are required, and

-If registered in NMLS, the loan officer's NMLS ID is required.

Here's a screen shot:

FHA Case Number Screen - General Information

HUD/VA ADDENDUM TO UNIFORM RESIDENTIAL LOAN APPLICATION
(HUD 92900-A)

Changes have been made to form HUD 92900-A, "HUD/VA Addendum to Uniform Residential Loan Application," to capture the company name, Taxpayer Identification Number and NMLS ID (if applicable) of a Sponsored Third Party Originator company.

Sponsoring Third Party Originator mortgagees may obtain the revised form at HUD's document website.

HUD 92900-A (9/2010): must be used for all loan applications taken by a Sponsored Third Party Originator.

HUD 92900-A (5/2008): may be used for loan originations not involving a sponsored originator until January 1, 2011.

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FHA Capture of Nationwide Mortgage Licensing System and Registry (NMLS) Information
Mortgagee Letter 2011-04
January 5, 2011

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