State and federal laws enacted this year provide for individual licensing of mortgage loan originators employed by or affiliated with licensed lenders and mortgage loan brokers, including independent contractors compensated by them in whole or in part, either directly or indirectly.  In Delaware, the State Banking Code was amended by adding new Chapter 24 of Title 5 for the licensing of mortgage loan originators.  Bank Commissioner Regulation 2401 was adopted to implement the new statute.

All licensed lenders and mortgage brokers must submit with their Delaware 2009 license renewal applications the names and addresses of all mortgage loan originators employed by or affiliated with them.  In addition, newly employed or affiliated mortgage loan originators must be reported to us at the end of each quarter going forward.

An individual who meets the definition of a mortgage loan originator, and is currently employed by a licensed lender or mortgage loan broker, must submit a license application to Delaware by March 31, 2009.  As provided in the new law, that individual then may continue to work as a mortgage loan originator on a provisional basis until the application has been approved or denied.

An individual who meets the definition of a mortgage loan originator, and begins employment after January 1, 2009, must submit a license application to Delaware BEFORE conducting business as a mortgage loan originator.  Once the application has been submitted, that individual then may conduct business as a mortgage loan originator on a provisional basis until the license application has been approved or denied.

Starting January 1, 2009, Delaware will join 20 other states, with more expected to join throughout 2009, using the Nationwide Mortgage Licensing System (NMLS), which enables the convenient management of state licenses in an electronic format through NMLS’s secure website, www.stateregulatoryregistry.org/nmls.  At this time, Delaware is joining NMLS only for the licensing of mortgage loan originators.

The NMLS has established four uniform forms to create a national standard of licensing.  Mortgage loan originators in  Delaware must complete form MU4 (uniform individual mortgage licensing/registration and consent form).  Mortgage loan originators may complete and submit Form MU4 themselves or their company may complete and submit Form MU4 if the company has an NMLS account and the mortgage loan originators log in and electronically attest to the accuracy of the information.   Individuals who have submitted form MU4 in another state do not need to re-enter the record into NMLS.  They will only need to add the Delaware mortgage loan originator license request in the license wizard in NMLS and submit.  For the 2009 license, the only Delaware attachments necessary would be to explain “yes” answers to any disclosure questions.  Requirements for fingerprinting, credit reports, educational credits and the national test will be implemented at a later date.

NMLS is available immediately for mortgage loan originators to begin completing their record.   Instructions and tutorials on how to complete these forms are available online at the NMLS website, www.stateregulatoryregistry.org/nmls.  Mortgage loan originators may begin completing form MU4 before January 1, 2009, but will not be able to submit the form to our office until January 1, 2009.  The NMLS website provides step-by-step instructions on how to access the system, guides on how to complete form MU4, each state’s transition plans and requirements, tutorials, current and future participating states, system alerts, system processing fees and general background information.  The NMLS call center is open 9:00 AM to 7:00 PM (EST) from Monday to Friday at (240) 386-4444 for any questions with the application.

An applicant for a mortgage loan originator license must pay an initial $250 Delaware investigation fee, along with a $30 NMLS new application processing fee.  These fees will be paid electronically through NMLS upon submission of Form MU4.  Upon approval of the license, a $250 Delaware licensing fee must be paid directly to the Office of the State Bank Commissioner.  This fee will be required annually.  All Delaware licensed mortgage loan originators will be subject to an annual $500 supervisory assessment, which will be billed by our office in July of each year.  An annual processing fee is also charged through NMLS and is applied on a per license per state basis.  These processing fees pay for NMLS’s operations, including licensee system access 362 days per year, ability to maintain, renew and run reports on your licenses, and call center support.

Please feel free to contact our office if you have any questions or need additional information.