TopMortgage Compliance Update (1)
           January 13, 2011
                                             MLO Registration to Commence

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In its first Financial Institution Letter of the year, the FDIC issued on January 4, 2011 its issuance FIL-1-2011 in which the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System,, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Farm Credit Administration, and the National Credit Union Administration, (collectively, Agencies) announced that they expect the system for federal registration of residential mortgage loan originators (MLOs) to begin operation on or around January 31, 2011.


The Agencies' rules implementing the SAFE Act require MLOs to register with the Nationwide Mortgage Licensing System and Registry (Registry) within 180 days of the date the Registry begins accepting federal registrations. The Agencies will confirm the opening date for federal registration closer to the actual date and will publish notice of that date in the Federal Register.   


On July 28, 2010, the Agencies announced the Federal Register publication of rules implementing the SAFE Act through this joint press release.


In any event, the federal bank and thrift regulatory agencies have said that they expect to be ready to accept residential mortgage loan originator registrations by about January 31, 2011.


Under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act), loan originators must register with the Nationwide Mortgage Licensing System and Registry within 180 days of the date the Registry announces it can accept registrations. A precise date will be published in the Federal Register when it is determined, the agencies said.


A loan originator that does not register within the 180-day period will be prohibited from originating residential mortgage loans until it has completed its registration. There will be an exception for those who originated no more than five loans during the previous 12 months.


Rules adopted jointly by the agencies establish the registration requirements for loan originators employed by agency-regulated institutions and set the requirements for these institutions, which include the adoption of policies and procedures to ensure compliance with the S.A.F.E. Act and final rules.  


The rules also require that each loan originator obtain a unique identifier through the Registry that will remain with that loan originator, regardless of changes in employment. This is intended to give consumers access to employment and other background information about loan originators. Registered mortgage loan originators and agency-regulated institutions will be required to provide these unique identifiers to consumers.

Compliance Effective: On or around January 31, 2011

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  • The press release states that advance notice would be provided for the date the Registry would begin accepting federal registrations: the Agencies currently expect federal registration to begin on January 31, 2011.
  • MLOs employed by Agency-regulated institutions will have 180 days from the date on which the Registry begins accepting federal registrations to complete initial registration. At present, the Agencies expect the initial registration period to expire on July 29, 2011.
  • After the initial registration period expires, MLOs will be prohibited from originating residential mortgage loans until they successfully complete the federal registration process.
  • The Agencies' rules provide a de minimis exception whereby MLOs that originated 5 or fewer mortgage loans during the previous 12 months are not required to complete the federal registration process.
  • The Agencies will confirm the actual registration start date before the initial registration period begins and publish an announcement in the Federal Register.
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SAFE Act - Update: Registration of Residential Mortgage Loan Originators, FIL-1-2011

January 4, 2011

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