I have read through the final rule and did not find anything to answer my question, so I'm hoping someone can point me in the right direction. We have an employee who takes loan applications for mortgages that are funded by another bank. We do not offer traditional 15 and 30 year mortgages so we take these applications and submit them to the other bank. If the loan is made we receive a $200 processing fee, 1% origination charge and the yield spread. (This will change in April to comply.) Our employee that takes the loan applications receives a quarter of a percent of these three fees. (This will also change in April to comply). She does not handle any mortgage loans that we keep in house. So my question is, do we need to register her as an MLO with our bank, or should she be registered with the bank she is taking applications for?

Whose payroll is she on? If she is on your payroll or her contract is with your bank (if she is a contract employee), I would say that she needs to be registered as an employee of your bank. The investor banks will want to confirm your bank registration and her MLO registration.

If she is on the investor banks' payroll, she should probably register as an employee of their institution.

I think a good rule of thumb would be for her to register as an employee of whoever is issuing her a W-2 or 1099.

What Dani said.

We have the same situation. The MLO in question is on our payroll and is our employee. We registered the MLO as part of our bank.

I must be totally missing something here, so please correct me, but is it possible the person doesn't meet the "negotiates loan terms" part of the 2 prong test, if all disclosures are given by the bank that funds?

Raitch, I'm pretty sure that though the investor bank is issuing or even delivering the disclosures in some cases, the MLO in this case is still the contact person between the borrower and the investor bank. Unless that MLO isn't discussing the paper work the borrower received or closing the loan, I'd say they are offering or negotiating loan terms. Besides, the MLO is still probably asking the borrower questions concerning loan program, rate lock, etc.

Ok...makes sense.

Thank you all so much! raitchjay in most cases she is the only person the customer is in contact with so she handles deliever the disclosures and explaining them and gathering all the needed information. She is on our payroll so we will register her with us. I know she needs to be registered, but I don't know what she would actually need to put her number on. I would think she would give the customer the number of the loan officer at the other bank. I have that same question about the employees at our bank who do the same thing. Oh well, we will register them and move on. Thanks again for the help!

The MLO will give their number to the borrower.

rsanders--in your case, your mortgage MLO will give her number to the borrower, include her number on the 1003, etc, NOT the number of the loan officer at the investor bank.

For your inhouse employees, I would do the same thing. Our processors/loan assistants meet the 2 prong test and are being registered. They will put their number on the early disclosures. The loan officer will put their number on loan docs, etc. Additionally I am having all of our MLOs include their number on their business cards, email signatures, and signature lines for letters, etc.

The final rule says that the unique identifier must be given before acting as an MLO. If I am acting as an MLO, I wouldn't give your number, I would give mine.