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#1833813 - 07/17/13 08:15 PM MLO Classification
Philip Lacher Offline
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Joined: Jul 2013
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New Jersey
We are considered about whom signs a mortgage commitment. Presently, the head of our mortgage company, who is not a registered MLO due to his salary/commission structure, signs them. We believe that this may be an issue. Anyone else interpret the MLO rule that way?

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Loan Originator Compensation Rule
#1833819 - 07/17/13 08:35 PM Re: MLO Classification Philip Lacher
hgliii Offline
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If you head of mortgage company does not originate mortgages he is not required to register. If he is a UW that is decision maker he should not be registered, as he is exempt. Therefore he can sign the commitments without any problem.
Last edited by hgliii; 07/17/13 08:36 PM.
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#1833822 - 07/17/13 08:41 PM Re: MLO Classification Philip Lacher
Dani York, CRCM Offline
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TN
He only needs to be registered if he meets both parts of the 2-prong test under the SAFE Act. Does he accept applications AND offer (includes communicating terms) or negotiate terms to the consumer? If he only does one, then he does not need to register. If he does both, then he needs a number.
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#1833882 - 07/18/13 12:08 AM Re: MLO Classification Philip Lacher
rlcarey Online
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If he only does one, then he does not need to register. If he does both, then he needs a number.

Yes - under the SAFE Act. However, under Texas State law, the test is only one of the two in order to either have to be registered on the NMLS or licensed by the State. I'm really not sure if there is any other State in the union that has the same requirements.
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#1837284 - 07/29/13 04:06 PM Re: MLO Classification Philip Lacher
Gotwood Offline
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Randy - So a teller who earns a referral fee is now a loan originator. Do they have to be registered in the NMLSR?

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#1837286 - 07/29/13 04:12 PM Re: MLO Classification Philip Lacher
JWills, CRCM Offline
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The Mitten State
Does the teller accept mortgage applications or negotiate the terms? Or does the teller just refer a customer to the bank, and then collects the referral fee if the loan is made?
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#1837290 - 07/29/13 04:15 PM Re: MLO Classification Gotwood
Dani York, CRCM Offline
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Dani York, CRCM
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TN
Originally Posted By: Gotwood
Randy - So a teller who earns a referral fee is now a loan originator. Do they have to be registered in the NMLSR?


Only if they meet the 2-prong test definition of MLO under the SAFE Act.

If your state's SAFE Act is a one-prong test, and they meet that one prong, then yes. If not, then no.
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I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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#1837299 - 07/29/13 04:34 PM Re: MLO Classification Philip Lacher
Gotwood Offline
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Generally, when the customer is at the teller line they see if they have interest in a HELOC. if they do, they refer them to the consumer banker. if the loan closes, they get a $25 referral fee. they are instructed to only discuss the types of loans we make, not to discuss the customer's individual needs.

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#1837300 - 07/29/13 04:35 PM Re: MLO Classification Philip Lacher
JWills, CRCM Offline
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JWills, CRCM
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The Mitten State
they would not need to be registered
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#1837303 - 07/29/13 04:39 PM Re: MLO Classification Philip Lacher
Dani York, CRCM Offline
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TN
Gotwood, not knowing what state you are in, I can tell you what the Federal rule for registration is and what the TN state rule is (TN mirrors the Federal rule).

Under the Federal SAFE Act rule, your employees only have to reguster with NMLS if they both accept an application for a covered loan AND offer of negotiate terms (quote a rate, call a customer and tell them they are approved, deliver the GFE, etc). If your tellers are not doing both of those, then they do not need to be registered under the Federal rule. You still need to check your state law, as Randy pointed out Texas, at least is a 1-prong test. I'm not sure if any other states are 1-prong or not. TN is not.

You do however, have requirements under Reg Z to train them and make sure they pass a background check and credit check, but they do not need a number.
_________________________
I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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