Mortgage Industry Update

Licensing Updates

License Types As of April 2019 As of April 2018
Mortgage Broker Main Office 302 287
Mortgage Broker Branch Office 208 186
Consumer Loan Main Office 667 649
Consumer Loan Branch Office 2,530 2,515
MLOs - Active 14,133 15,412
MLOs - Inactive 1,879 1,930

Temporary Authority to Operate for Certain MLOs

Effective November 24, MLOs who meet certain requirements may be eligible for Temporary Authority to Operate. This temporary authority allows eligible individuals to continue MLO activities while meeting testing/education requirements for a state license. Development is underway for changes in NMLS to accommodate this temporary authority to operate.

To be eligible for temporary authority, an individual must be:

  • Employed through NMLS by a state-licensed mortgage company; and
  • Either be Federally registered in NMLS as a MLO during the one year preceding the application submission or licensed as an MLO during the 30-day period preceding the date of application

*NMLS will verify the MLO’s employment with a state-licensed mortgage company as part of the application process. The company employing the MLO during temporary authority is subject to both the federal SAFE Act, and the state law under which the company is licensed, to the same extent as if the MLO was licensed in the state.

Additionally, individuals are not eligible for temporary authority if they have:

  • Had a MLO license application denied or a MLO license revoked or suspended in any jurisdiction;
  • Been subject to, or served with, a cease and desist order; or
  • Been convicted of a misdemeanor or felony that would preclude licensure under the law of the application state.

Expect more information about temporary authority to operate in the coming months. See Sec. 106 of S. 2155, also known as Public Law No. 115-174 for further information.

Applications – By the Numbers

A frequent information request from industry is regarding licensee counts or application trends. Q4 of last year had two very different stories, depending on the license type.

  • For MLOs, applications fell with about 800 applications compared to more than 1,000 during the same period in 2017.
  • For companies, applications increased with 55 applications compared to 34 applications during the same period in 2017.

So far, Q1 looks similar with less MLO applications and more company applications. MLO applications in Q1 were 981 compared to 1,405 in Q1 2018 and company applications in Q1 were 40 compared to 34 in Q1 2018.

If you are curious about nationwide numbers, SRR publishes a quarterly mortgage update with nationwide and state numbers. Here is the 2018 Q4 Mortgage Update.

Tips from the Licensing Unit

As you prepare new branch applications as well as any amendments, here are some pitfalls to avoid:

  • MLO sponsorship: Before submitting a sponsorship request for a MLO licensee, verify:
    • MLO updated their email address on the individual form or has a personal email listed
    • MLO updated their employment history to accurately reflect your company
    • The MLO’s work location is properly licensed with the Department or is pending licensure
  • Branch Manager: Before submitting a branch application, verify:
    • Branch manager is WA MLO licensed if the location has WA MLOs at it
    • Branch manager reflects branch in their registered locations if the branch is near the manager’s residence
  • Surety Bond Changes: With surety bonds in electronic form on NMLS, only certain changes require a rider, namely a corporate name change and amount change. If you are replacing your surety bond, a new electronic bond is required. When the surety delivers the new bond document to you in NMLS, be sure to verify its accuracy, especially the effective date. You can return the bond document to the surety for correction(s). Once the bond is delivered to us, we are limited on how corrections can be made.

Mortgage Broker Forum Updates

The Forum met March 6 at the City of Renton Maintenance shop. Topics of discussion were the licensing and exams updates; an update on the anticipated rulemaking to codify the Trust Account Guidance and provide information about the upcoming eligibility for temporary authority; a discussion of potential changes to the MLO home-based branch license requirement; and finally, the beginning of the project (April 24) to review the Designated Broker test.

The next Forum meeting is Tuesday, October 8 at the Renton Community Center. If you have questions about the Mortgage Broker Forum, contact Jeff Lorsch, Evergreen State Mortgage.

Upcoming Dates

  • May 14 - Mortgage Industry Webinar
  • May 15 - Q1 Mortgage Call Report Filing Deadline
  • May 21 - WAMP Meeting from 10:00-12:00
    Master Builders Association
    325 116th Ave SE, Bellevue WA 98004