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MLO v LO - Who Has to Do What?

Recorded on November 06, 2014

WHAT
Regulations implementing the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) were effective on October 1, 2010. Among other requirements the SAFE Act requires mortgage loan originators (MLO) to register with the National Mortgage Licensing System and Registry (NMLSR).
Revisions to Regulation Z, which were effective on April 1, 2011, prohibit certain acts and practices involving loan originators (LO). Significant clarification and expansion to the Regulation Z rules occurred in January 2014.

There is ample evidence that much confusion exists regarding who is or is not a MLO or a LO. Financial institutions have generally identified MLOs, gotten them registered and have maintained the registration over the past few years. But a number of financial institutions have failed to identify all employees performing the duties of a MLO, and as a result those employees have not been registered with the NMSLR. LOs are much more plentiful than MLOs. We are aware of numerous cases where financial institutions have not identified all of their LOs and have not met the numerous requirements applicable to LOs.

Misidentification leads to violations. The action needed to assure compliance with the SAFE Act and the action needed to assure compliance with the TIL requirements differ significantly.
This program clarifies who is a MLO and who is a LO. It also clearly describes the requirements and limitations applicable to MLOs and LOs. It is fair to say that all MLOs are LOs, but the definition of LO includes many involved in the mortgage lending function who are not, and never will be, MLOs.
This program is well placed on the calendar. Have you assured your MLOs have completed their annual renewal? Have your LOs received the required periodic training required by Regulation Z?

WHY

Most creditors have adopted procedures governing the actions of MLOs and LOs. But when an individual is not identified as a MLO or LO, the procedures are not applied and violations result. Every financial institution needs to reevaluate their process for identifying which employees are MLOs, which are LOs, and who is not subject to either set of rules.

CONTENT
Upon completion of the program participants will understand:

  • Who is and who is not a MLO;
  • Who is and who is not a LO;
  • Requirements and restrictions applicable to a MLO including:
  • Initial registration;
  • Annual renewal;
  • Use of the unique identifier;
  • Requirements and restrictions apply to a LO including:
  • Compensation rules;
  • Qualifications;
  • Required periodic training; and
  • NMSLR ID on documents.

Who Should Attend
The program is designed for compliance officers, human resource managers, management of mortgage loan departments, auditors and others involved in hiring, training and managing loan department employees.

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