IBA Compliance Connection

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In Illinois, is a title company or title agent required to obtain a Nationwide Mortgage Licensing System (NMLS) registration when they are acting as closing agents? If so, should we list it in the Closing Disclosure?

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In Illinois, title companies and their employees are not required to obtain an NMLS identification number when they are acting as closing agents, provided they are not receiving compensation for “brokering, funding, originating, servicing or purchasing of residential mortgage loans.”

The CFPB’s Closing Disclosure includes a table on page five entitled “Contact Information” that contains a line item for disclosing the NMLS identification number of the settlement agent (among other parties involved in the loan closing). However, the space in the line item in the table corresponding to the settlement agent should be left blank if that person is not required to obtain an NMLS identification number pursuant to the federal SAFE Act or the Illinois Residential Mortgage License Act of 1987. Since title companies and their employees are not required to obtained an NMLS identification number by virtue of their providing settlement services, this space should be left blank.

For resources related to our guidance, please see:

  • SAFE Act, 12 USC 5103 (“Subject to the existence of a licensing or registration regime…an individual may not engage in the business of a loan originator without first — (1) obtaining, and maintaining annually — (A) a registration as a registered loan originator; or (B) a license and registration as a State-licensed loan originator; and (2) obtaining a unique identifier.”)
  • Residential Mortgage License Act of 1987, 205 ILCS 635/1-3 (“No person, partnership, association, corporation or other entity shall engage in the business of brokering, funding, originating, servicing or purchasing of residential mortgage loans without first obtaining a license from the Secretary in accordance with the licensing procedure provided in this Article I and such regulations as may be promulgated by the Secretary.”)
  • Official Interpretations, Regulation Z, 12 CFR 1026, Paragraph 38(r), Comment 4 (“Section 1026.38(r)(3) and (5) requires the disclosure of an NMLSR identification (ID) number for each person identified in the table. . . . The space in the table is left blank for the disclosures in the columns corresponding to persons that have no NMLSR ID to be disclosed under § 1026.38(r)(3) and (5); . . . .”)