Compliance Q&A: NMLS Requirements

What do mortgage modifications require?

December 1, 2011

Q Are individuals engaged in mortgage loan modifications required to register on the Nationwide Mortgage Licensing System & Registry (NMLS)?

A No. Employees who are engaged solely in mortgage loan modifications don’t meet the SAFE Act’s two-pronged definition of “mortgage loan originator” (MLO) as one who:

1. Takes a residential mortgage loan application; and

2. Offers or negotiates terms of a residential mortgage loan for compensation or gain.

Neither modifications nor assumptions result in the extinguishment of an existing loan and the replacement by a new loan; instead, the terms of an existing loan are revised or the loan is assumed by a new debtor.

So, employees engaged solely in these activities don’t “take loan applications” within the meaning of the SAFE Act.

Next: SAFE Act

Q Does the SAFE Act require the credit union to post the unique identifiers of its registered MLOs on the institution’s website?

A No. The credit union isn’t required to post registered MLOs’ unique identifiers on its website.

Doing so is strictly voluntary, as is providing the numbers in program descrip-tions, advertisements, or on business cards.

Under the SAFE Act, a registered MLO is required to provide his unique identifier to a consumer only upon request, before acting as an MLO, and through the MLO’s initial written communication with a consumer, if any, whether on paper or electronically.

Visit CUNA’s compliance blog—“CompBlog”—at Email with questions or ideas for blog posts, and keep the conversation going with your peers on COBWEB—CUNA’s compliance listserv.