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!

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

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