Pre-Licensing Info: Who needs a license? When's the deadline?

Arizona Association of Mortgage Brokers

WHO NEEDS A LICENSE AS A LOAN ORIGINATOR

According to Arizona Revised Statutes, Title 6, Chapter 9, Article 4 (Arizona Law) that is administered and enforced by the Arizona Department of Financial Institutions (DFI), and according to The Secure and Fair Enforcement for Mortgage Lending Act of 2008 (SAFE Act), every “Loan Originator” (LO) must obtain an LO license from DFI by applying for the license through the Nationwide Mortgage Licensing System and Registry (NMLS).

Loan Originators assist consumers in obtaining or applying to obtain a residential mortgage loan by, among other things, advising borrowers or potential borrowers on loan terms (including rates, fees, other costs), preparing loan packages, or collecting information on behalf of the consumer with regard to a residential mortgage loan.  A residential mortgage loan is a loan for personal family or household use or is residential real estate on which a dwelling is constructed or intended to be constructed.

Arizona Law, in concurrence with the SAFE Act, defines a “Loan Originator” as:

A natural person who for compensation or gain or in the expectation of compensation or gain does any of the following:

1.  Takes a residential mortgage loan application;

2.  Offers or negotiates terms of a residential mortgage loan; 

3.  On behalf of a borrower, negotiates with a lender or noteholder to obtain a temporary or permanent modification in an existing residential mortgage loan agreement; or

4.   A loan processor or underwriter who is an independent contractor.

WHAT’S THE DEADLINE

All Loan Originators must be licensed before July 1, 2010.  Anyone who must be licensed by the deadline and fails to do so cannot conduct any part of the business of a mortgage loan originator.

There are exceptions and exemptions so if you are not sure if you fit into any of the above categories that require a loan originator license, please contact DFI at 602-771-2800 or licensing@azdfi.gov.

This is general information and is not meant to be construed as legal advice.

Sources

Secure and Fair Enforcement for Mortgage Lending Act of 2008 (SAFE Act)

Arizona Revised Statutes, Title 6, Chapter 9, Article 4 -- scroll down to Chapter 9, Article 4

  

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Comments

[Mark]

Who's exempt?

[Mickie Maurer]

Do you have fees for originator licensing/test; renewal fee, change of Broker Fee?

[Jmaes]

is anyone exempt from the coarses due to seasoned experience ??

[Blog Moderator]

Answer to Mark's Question
People who do not need to be licensed.
Taken from the language of the SAFE Act at http://www.csbs.org/AM/Template.cfm?Section=SAFE_Act&Template=/CM/ContentDisplay.cfm&ContentID=18486

Any individual who—
(A) meets the definition of loan originator and is an employee of—
(i) a depository institution;
(ii) a subsidiary that is—
(I) owned and controlled by a depository institution; and
(II) regulated by a Federal banking agency; or
(iii) an institution regulated by the Farm Credit Administration; and
(B) is registered with, and maintains a unique identifier through, the Nationwide Mortgage Licensing System and Registry.

Any individual who performs purely administrative or clerical tasks on behalf of a Loan Originator

Any loan processor or underwriter who does not represent to the public, through advertising or other means of communicating or providing information (including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items), that such individual can or will perform any of the activities of a loan originator. An independent contractor may not engage in residential mortgage loan origination activities as a loan processor or underwriter unless such independent contractor is a State-licensed loan originator.

Any individual who only performs real estate brokerage activities and is licensed or registered in accordance with applicable State law, unless the person or entity is compensated by a lender, a mortgage broker, or other loan originator or by any agent of such lender, mortgage broker, or other loan originator;

Any individual who or entity solely involved in extensions of credit relating to timeshare plans, as that term is defined in section 101(53D) of title 11, United States Code.

“Administrative or clerical tasks” is further defined as the receipt, collection, and distribution of information common for the processing or underwriting of a loan in the mortgage industry and communication with a consumer to obtain information necessary for the processing or underwriting of a residential mortgage loan.

[Blog Moderator]

Answer to Micki Maurer:

See this post

http://www.azampblog.org/2009/09/who-needs-a-license-as-a-loan--originator----------------loan--originators-lo-assist-consumers-in-obtaining-or-applying-to.html?cid=6a01156faa369f970c0120a5467127970b#comment-6a01156faa369f970c0120a5467127970b

[Blog Moderator]

Answer to Jmaes question.

Unfortunately, seasoned experience or years in the business does not exempt someone who wishes to originate loans from becoming licensed.

[Jiggs LeMieux]

We are a FDIC insured depository institution with an Arizona state banking charter. Do our originators need to be licensed, or just registered?