Is there a required form that we will need to sue to gather all MLO information?

Not as of yet. You are required by section ____.104 to have procedures in place to collect and report that information.

Sinatra Fan--Unfortunately, SAFE is almost requiring banks to establish clear lines and definitions of job duties and responsibilities. If you want to register everyone to be safe (no pun intended), you could certainly do that, though depending on the number of employees you have, it may not be cost effective. You may want to revisit some of your processes and see if it would be easier and cheaper to redistribute the job duties and "de-classify" some of those employees.

ahk--It is entirely up to your bank if you choose to use a form to collect the info. We are having our MLOs input their own information and HR will verify that info against their personnel file (application, etc), the CBC, and credit report.

So I'm probably WAY overthinking this, but does anyone know what exactly, constitutes "providing" the loan terms?

For example, our LOs will take the application and discuss terms with the borrower. On a non face-to-face application, the processor then puts together the TIL, GFE, and all other disclosures and mails them out to the borrower. Is the processor "providing" disclosures in this case, or would it have to be done in person to meet part 2 of the test?

It doesn't say. I would assume the method of delivery would not matter. Because of this we are registering all of our loan officers (they don't specialize), all of our processors, and our special assets personnel. For us it's not that bad since we don't have many.

Ah, come on, Dani, take some credit: that was a good pun.

To me at least, SAFE is anything but clear. It is another regulation that seems to have been written with the large institution in mind, where everyone’s job responsibilities are fairly well circumscribed. In a small bank such as ours, cross-training and the ability of employees to perform multiple duties is a must.

My initial thinking was, as you suggested, to register everyone who might possibly be ensnared by the MLO definition. But the expense factor comes into play, as you noted. Also, the requirement of section ___.105(b) (2) and (3) may be somewhat problematic to implement.

I absolutely agree!



As far as 105(b) (2) and (3), we are looking at having the MLOs include their identifier on their business card and in their signature line on any letters. To my knowledge the GFE is suppposed to have the identifier listed as well.

Would the inclusion of the unique identifier on the written application not suffice? That's what i was hoping for.

On the GFE? Is HUD issuing a new form? I thought we were not allowed to modify the GFE.

That's what I was hoping, too. But ___.105 indicates the number must be provided before the employee acts as a MLO, and "through the originator's initial written communication with a consumer."

But.....have you "acted as a loan originator" before meeting both parts of the two-pronged test? If the unique identifier were on the application when given to the consumer, is it not meeting that requirement?

I'll see if I can find where I read/heard that and let you know.

CR - If I am reading the 208.101-c-2-i A&B Exceptions correctly, you could not have more than 5 exempt lenders, or you exceed the Aggregate limit in (B):
A) The lender has to make < 5 loans in the prior 12 months (sounds like a rolling 12 month period, not the prior calendar year) AND
B) These lenders IN AGGREAGATE originate <= 25 loans in the prior 12 months

Then (ii) says that prior to exceeding these INDIVIDUAL and AGGREGATE limits, the lender must register.

I think its going to depend on when you give them the application. What if you take an application by phone or the customer picks up an application from a nonMLO branch person and mails it in?

Which MLO's unique identifier? If an applicant picks up an application package at a branch, completes it and returns it to the mortgage department, whose ID should be on the application? For a .pdf version of the application package that can be downloaded from our web site, whose MLO ID should be preprinted?

Dani beat me to it--again!

Ah i see your point.

So..in those instances......how do you comply? There may be no communication with an MLO prior to the application getting sent in, right?

OK, found it! I read it in the draft final rule, page 70, which also addresses commitment letters.

"Furthermore, the Agencies intend § ___.105(b)(3) of the rule to cover
written communication from the originator specifically for his or her customers, such as a
commitment letter, good faith estimate or disclosure statement, and not written materials or
promotional items distributed by the Agency-regulated institution for general use by its
customers."

Here is a link it is in the middle of page 70.

http://www.fdic.gov/news/board/2009nov12no8.pdf

That being said I don't think HUD will issue a new form. I assumed we would put the info in the originator name box (listing bank, loan officer, and unique identifier).

__.105(b)3 says "through the originator's initial written communication with a consumer, if any, whether on paper or electronically." If the MLO communicates through a letter, then they offer their unique identifier. If the consumer comes back in to consummate the deal, it could be given then right (if there is no previous written communication, that is)? Would adverse actions need to include the unique identifier?

Right, but at that point no one has acted as an MLO. They have only accepted an application. The MLO part comes into play when the terms are offered or negotiated. So if the MLO does that by letter or email or hands them a business card at their first face to face meeting, then they number needs to be on there.

FWIW, I'm just going to have the staff write their MLO number on their existing supply of business cards. We will include it preprinted on any re-orders.

Hadn't thought about that, but I think they would.

Good catch! I had glided right past that. That sentence also mentions a commitment letter, although I fail to see how such a document would be the "initial writen communication" with a consumer.


response to post 1425689

If it is not a straight declination of loan, but a counteroffer, I would agree it may qualify. However, once again, would this be the "initial written communication"?

If received electronically, maybe?

Commitments and AANs could theoretically be the initial written communication. Let's say I pick up an app in the lobby, fill it out and mail it to you. You underwrite it and call me with the terms (or lack therof :)), and then send me something in writing to confirm what you just told me on the phone. (And let's conjecture that all of this happens before any 3 day disclosures have been sent out.)