Topic: Mortgage Loan Originators (MLOs)
-
Are the mortgage loan originators (MLOs) at our bank subject to the recent amendment to the Civil Administrative Code that requires certain professionals licensed by the Illinois Department of Financial and Professional Regulation (IDFPR) to take sexual harassment prevention training? Our understanding is that this law applies only to professionals with continuing education requirements — which our MLOs do not have — but they do have to make annual attestations.
—
by
No, we do not believe that your bank’s MLOs are subject to the new sexual harassment prevention training requirements in the Civil Administrative Code, provided they are registered with the Nationwide Mortgage Licensing System (NMLS). However, due to recently enacted amendments to the Illinois Human Rights Act, all private employers with at least one employee…
-
Is the “Illinois Addendum to Residential Mortgage Loan Application” form required for a Home Equity Line of Credit (HELOC)? This form asks a borrower to indicate whether they are in a registered civil union. Also, is the “Illinois Signed Documents Disclosure” form required for a HELOC? This form requires the borrower to acknowledge that “it is your responsibility to obtain copies before mailing signed documents back to the licensee” under 38 Ill. Adm. Code 1050.1150.
—
by
No, a bank is not required to use either of these forms in connection with a HELOC, although your bank may find them useful for the reasons discussed below. The Illinois Addendum to Residential Mortgage Loan Application may be helpful for all residential real estate transactions, including HELOCs, in order to identify individuals who may…
-
We are planning to hire a mortgage lender who would be compensated with commissions only. Are there any Illinois laws or regulations that we need to be aware of?
—
by
No, we are not aware of any Illinois laws specific to compensation provided to a loan originator on a commission basis, outside of general employment laws applicable to any type of commissioned employee. Of course, federal law prohibits paying commissions to a loan originator that are “based on a term of a transaction,” such as…
-
We have a Loan Production Office in Florida, but we operate our business out of Illinois. Are there any special considerations we need to be aware of regarding the mortgage license and NMLS registrations for bank employees who are Florida-based mortgage loan originators?
—
by
No, we are not aware of any special considerations regarding your bank’s Florida-based mortgage loan originators, provided they are registered with the Nationwide Mortgage Licensing System (NMLS). In Florida, like in Illinois and every other state, a mortgage loan originator who is a bank employee and is registered with the NMLS is not required to…
-
Does the Residential Mortgage License Act (SB 2615), including the new advertising requirements, apply only to state licensed banks?
—
by
No, the Residential Mortgage License Act of 1987, including these new advertising requirements, does not apply to banks. State-chartered institutions (as well as national banks) and their employees are exempt from all provisions of the Act. For resources related to our guidance, please see: Public Act…
-
Regarding the Residential Mortgage License Act (SB 2615), is there any guidance for the inclusion of the NMLS consumer website in advertising?
—
by
The Residential Mortgage License Act of 1987, including these new advertising requirements, does not apply to national banks. National banks (as well as state-chartered financial institutions) and their employees are exempt from all provisions of the Act. Consequently, your bank is not required to include the NMLS consumer website in advertising. If your bank chooses…
-
We are advertising mortgage loans in Illinois, but we are an FDIC-insured bank. Does the Residential Mortgage License Act apply?
—
by
No, the Residential Mortgage License Act of 1987 does not apply to banks. Banks and their employees are exempt from all provisions of the Act, including its advertising requirements. For resources related to our guidance, please see: Illinois Residential Mortgage License Act of 1987, 205 ILCS 635/1-3(a) (“No provision of this Act shall apply to…
-
Our bank is a national bank, and we recently learned of an amendment to the Residential Mortgage License Act of 1987 updating the advertising requirements for mortgage loans, including a requirement that advertisements reference the NMLS Consumer Access website. Can you confirm that these requirements do not apply to national banks?
—
by
Yes, we can confirm that the Residential Mortgage License Act of 1987, including these new advertising requirements, do not apply to national banks. National banks (as well as state-chartered financial institutions) and their employees are exempt from all provisions of the Act. For resources related to our guidance, please see: …
-
We originate our first lien mortgage loans through a subsidiary. Can we require those borrowers to open a checking account with us?
—
by
Yes, we believe that your bank can require borrowers to open a deposit account at your bank — provided that the requirement is applied consistently to avoid any fair lending implications. There is no prohibition against tying a loan product offered through a subsidiary to a deposit account product at your bank. Illinois and federal…
-
On a residential mortgage loan application, does the loan officer have to sign the application? We are not a HMDA reporting institution.
—
by
No, we do not believe that loan originators are required to sign loan applications. Regulation Z requires the disclosure of a loan originator’s name and NMLS identifier on credit applications and other documents related to residential mortgage loans, but it does not require the loan originator’s signature. However, secondary market investors may impose their own…