Three people are discussing the process of applying for a mortgage license
ComplianceJuly 06, 2022

NMLS and mortgage lending licensing

In accordance with the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), each state must license mortgage loan originators in line with national standards.

In addition, all state-licensed and federally registered mortgage loan originators must be registered with the National Mortgage Licensing System (NLMS).

In this article, we explore frequently asked questions about NMLS and mortgage lending licensing, including the process, what’s required, and how to submit your application.

What is NMLS?

NMLS or the National Mortgage Licensing System and Registry is a web-based platform used by more than 60 regulatory government agencies to administer initial license applications and manage ongoing compliance requirements in participating states, the District of Columbia, Puerto Rico, U.S. Territories, and Guam.

A citizen-focused portal, NMLS is also used by companies and individuals seeking to apply for, amend, renew, and surrender licenses in these jurisdictions. This covers mortgage lenders, money transmitters, and money services, including check cashing and currency exchange businesses. Furthermore, NMLS is the system of record for all federal registrations required of federally regulated mortgage loan originators.

What is an NMLS license?

NMLS as a system does not grant or deny license authority. Rather it makes the process of applying for a mortgage license in multiple states easier since it provides a common tool and process for all participating states. Using the NMLS portal, lenders and originators can register for exams, make payments, report authorized agents, renew licenses, and more.

What is an NMLS number?

The NMLS unique identifier is a number permanently assigned by the NMLS for each company, branch, and individual that maintains an account in the system.

This identifier was mandated by the SAFE act and most state mortgage licensing laws require mortgage loan originators to include it on various documents, including business cards.

Note: The NMLS unique identifier is automatically assigned to a company or individual when they create an account in NMLS. However, the identifier is not valid until a state license or federal registration has been issued.

What are the requirements for a mortgage lending license?

The SAFE Act requires that state-licensed mortgage loan lenders and originators pass a written qualified test and undertake pre-licensure and continuing education courses. The Act also requires them to submit fingerprints to the NMLS for an FBI background check and authorize an independent credit report.

States may have their own supplemental requirements to the standard NMLS application. The system provides a checklist by state and license type. For example, Montana Mortgage Broker Company applicants are required to obtain a surety bond of up to $100,000. Pennsylvania Money Transmitter Company applicants must submit fingerprint cards for a Criminal Background Check for each control person. And a Massachusetts collection agency license applicant must submit various documents in hard copy via mail to the Division of Banks, including financial statements, notarized documents with original signatures, and a bond.

Note: While the SAFE Act requires NMLS to fulfill certain responsibilities associated with education services or background checks, individual state law determines if a state-licensed mortgage loan lender or originator must pass the SAFE Mortgage Test, complete education training, and complete their background checks.

How do you obtain a mortgage license through NMLS?

To obtain a mortgage license through NMLS, first review your state requirements by visiting the NMLS State Licensing Requirements page for your state. The page outlines the documentation you may need to upload and send to the state agency.

Prior to submitting an application, all state-licensed mortgage loan originators and certain individuals must pass the National SAFE MLO test, complete pre-licensure training, and submit a criminal background check and credit check. NMLS provides information on the specifics of each of these requirements.

Be sure to coordinate your application with your employer. If your company is registered with NMLS or registered in a state via the system, either you or your company must complete Individual Form (MU4) and pay associated fees. If your company is completing your MU4 form, wait for their direction before proceeding.

When creating an account in NMLS, ensure that all information is accurate, complete, and reflects all legal documentation. Inaccuracies can result in one or more duplicate accounts (and can be costly to fix).

Note: If you have an existing NMLS account because you are or were state licensed or federally registered, you must grant your employer access to the account. (Your login information and NMLS identification number won’t change.)

Once your account is created, visit the resource center to access printable forms to support your application. You may be able to submit applications and some attachments online. However, state and industry-specific attachments have to be mailed to the appropriate state agency (together with the NMLS-provided checklist) within five days of submitting your application.

Learn more

CT Corporation can guide businesses through the process of using NMLS. We can file all licenses and registrations required, minimizing time-consuming and costly delays. If you are already licensed, we can file renewals and manage ongoing compliance.

To learn more about how CT Corporation can help you manage your business license needs, contact a CT Corporation Service Representative or call (844) 701-2064.

The CT Corporation staff is comprised of experts, offering global, regional, and local expertise on registered agent, incorporation, and legal entity compliance.

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