NMLS Website Hopes to Bring Greater Transparency to Mortgage Industry

Reverse mortgage loan originator licensing information will be made publicly available through the Nationwide Mortgage Licensing System Consumer Access on January 25, 2010.

According to the NMLS Resource Center, the website is being launched to bring greater transparency to the mortgage industry and to comply with provisions of the SAFE Act.

Developed for consumers, the searchable website will allow the public to view information concerning state-licensed companies, branches, and individuals registered with NMLS. 

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The following information will be made available through NMLS Consumer Access:

  • NMLS Unique ID
  • Name (First, Middle, Last, Suffix)
  • Business Phone
  • Business Fax
  • Indication as to whether you are engaged in other business as director, owner, employee, etc
  • Other Names (other than the legal name, individual has used since the age of 18)
  • Employment History (full legal name of companies the individual has worked for including the current employer as supplied by the individual for the past 10 years; indication if financial-services related)
  • License # by Jurisdiction
  • License Name by Jurisdiction
  • License Status by Jurisdiction
  • Sponsorship for License (companies that have sponsored this individual)
  • Branch location associated with the individual

Initially, NMLS Consumer Access will not contain enforcement actions taken by regulators against licensed companies and individuals.  However, this functionality is being built into NMLS and will be made available through NMLS Consumer Access at a future date.

In addition, NMLS Consumer Access will not contain information concerning federally registered mortgage loan originators until the registration requirements are finalized by the Federal banking regulators.

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  • Not only is this offensive but it could be little more than an interesting yawn. It will only be effective if there is full participation by all players in the mortgage industry including the federally chartered banks.

    If this is intended to protect consumers, there should be some indication if originators have passed the NMLS exam and or if they were approved because of who their employer is. This is certainly not without precedence. If that worries exempt bank employees, they are free to take the exam.

    Finally if consumers are not aware of the website, regulators may feel they have achieved their goal but what real consumer protection has it provided? For those who are computer illiterate, the same information must be available by phone. It seems we are turning into a nation of distinct classes, those who are computer literate and those who are not; consumer protection must not be relegated to those who are.

  • We will all be 'computer' literate in just a few years…… baby is born, smack, implant microchip here, viola! Until then, agreed, discriminating based on computer ability, access, and affordability is nothing short of class / income discrimination.

  • We all know the National System has been set up not for Seniors protection, but so individual States will not lose licensing revenue. Until Bank employees are REQUIRED to participate by the Department of Treasury,
    this action is nothing more than a scam on the Public. By the way, since I expect this story will get good readership, will some heavy hitter explain to me why the FHA HECM Purchase Program has been set up to give the
    Senior borrower less money than in a regular FHA HECM Refinance? I have a client who, as part of his income while working for a wealthy family as a caretaker, was given a certain dollar amount into a fund to purchase a home (owned by the Employer) the caretaker and his wife have lived in for all that time. The title to the property has remained in the Employer's name. Now that the time has come to use the funds to claim ownership by changing the title, the Borrower if he uses the FHA HECM Purchase (14 years prior a price was agreed upon at $350,000; today it is worth $700,000 at FHA Appraised value), will be required to put $153,410 down, leaving $196,590 for cash on which to live the last years of their lives, if necessary. However, if the borrower spends roughly $2,000 to change the title first, then uses the FHA HECM Refinance program (at discounted fees by the same national title company), the lump sum at closing will be $361,000 plus dollars or almost $165,000 more cash in hand. Why the difference? Same house; same equity.

    • Unless I'm mistaken, the value used on the refinance will be the lessor of the purchase price ($350,000) or appraised value, unless the borrower waits a year to allow for seasoning. So the loan amount would be the same either way at this point.

  • That doesn't make sese, Lancejackson: The FHA Formula is based upon FHA HECM Appraised Value now; purchase price has nothing to do with anything. Besides, as far as seasoning–they have had fourteen years of
    that activity.

    • On a purchase transaction, loan amount is always based on the lesser of appraised value or purchase price. “Seasoning” is normally measured from when title is taken.

  • Show me the FHA Regulation, Lancejackson: It'll be interesting to hear what a couple of heavy hitter lawyers have to say on the matter (as well as a Congressman or two and a couple of US Senators.) The man is very sick and needs all the money possible.)

    • Mr. Nelson,

      The issue surrounding the two types of financing appears to be the issue of risk of ownership. If at least title has not vested in the name of the senior, then how can any indicia of ownership have passed to the senior? I am not attempting to give legal advice or guidelines but rather trying to put some meat on the skeleton you have correctly analyzed.

      There is no HUD rule on seasoning for HECMs other than flip issues. However, that does not mean that HUD is not curious as to why a particular transaction is not treated as a purchase rather than a traditional refinance. I have spent a few hours with the head underwriter of a much larger competitor on this issue.

      Many banks including our own have taken various positions on seasoning. With us, we look at the existing financing. If any part of the financing is “non-traditional” mortgages like seller carryback financing or a construction loan, Security One requires one year of ownership.

      Recently I did shopping among those lenders we use for an unusual type of property (at least in our part of the country) for which our warehousing lines will not provide financing. I found one lender in the group which did not require seasoning on those types of property.

      To help this senior will probably require some “shopping” on your part. You may find that no lender is willing to take on this particular type of seasoning risk.

  • Very interesting, Mr Veale: Actually, early in the FHA HECM process, we secured in writing from a lender the fact that fourteen years of occupancy with a written purchase agreement spelling out unusual terms was indeed proof of ownership even though title would only actually change at the competion of fourteen years of employment (and the contract consumated). Our homeowner was considered by the Employer an extremely valuable Employee whose continued loyalty was secured (guaranteed) with this powerful and unusual method of home purchase leading to ownership. And, the fact remains: The home is worth over $700,000, in even today's marketplace, with no debt whatsoever on ground that is considered by many the most valuable real estate in the State of Washington. This is one property any Bank should be happy to invest in with the borrower using an FHA HECM (where the Senior is limited in how much money can be borrowed vs the equity and FHA Insurance steps to protect the Bank against loss should we suffer a 1929 depresson again.) . It's just, if we could have completed this transaction in one step, the Senior could have saved himself close to $2,000 in Fees.

    • Hi again James. It sounds like they had an option to purchase the home at a price of $350,000. The purchase/sale of any asset is not complete until all contingencies have been met (this is a principle of purchase/sale accounting and law), so they won't have legal ownership until all contigencies have been met including obtaining financing and changing title. I'm sorry but I doubt very strongly that you will be allowed to use a value above $350,000 on a HECM for purchase on this. Regarding refinancing immediately thereafter and using a higher value, I suggest you shop around to see what you find, but you will likely find that all lenders require that you wait a year due to risks related to flipping. Good luck.

  • Damn, Jackson, what is it about readership that you don't understand? As far as “flipping”, are you nuts as well? These are Seniors: The Husband extremely sick, a Wife who wants to quit her job so she can remain home to help take care of him. Both of these fine people wish to remain in this house until their Maker calls. Fourteen–repeat–fourteen years of residency ought to eliminate even your concerns about “flipping”. How old are anyway?

  • Hi again James. It sounds like they had an option to purchase the home at a price of $350,000. The purchase/sale of any asset is not complete until all contingencies have been met (this is a principle of purchase/sale accounting and law), so they won’t have legal ownership until all contigencies have been met including obtaining financing and changing title. I’m sorry but I doubt very strongly that you will be allowed to use a value above $350,000 on a HECM for purchase on this. Regarding refinancing immediately thereafter and using a higher value, I suggest you shop around to see what you find, but you will likely find that all lenders require that you wait a year due to risks related to flipping. Good luck.

  • Damn, Jackson, what is it about readership that you don’t understand? As far as “flipping”, are you nuts as well? These are Seniors: The Husband extremely sick, a Wife who wants to quit her job so she can remain home to help take care of him. Both of these fine people wish to remain in this house until their Maker calls. Fourteen–repeat–fourteen years of residency ought to eliminate even your concerns about “flipping”. How old are anyway?rn

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