Maine transitions to the national mortgage licensing system

STATE OF MAINE                BUREAU OF CONSUMER CREDIT PROTECTION

KENNEBEC, SS.

IN RE:

)

TRANSITION TO THE NATIONAL   )           ORDER GOVERNING

MORTGAGE LICENSING SYSTEM )           INTERIM PROCEDURES

)

Pursuant to the provisions of the Maine SAFE Act, the Superintendent of the Bureau of Consumer Credit Protection (the Bureau) is authorized to issue orders and establish interim procedures to effectuate the transition to the National Mortgage Licensing System (NMLS) for licensing of individual Mortgage Loan Originators (MLOs).  The purpose of this Order is to provide guidance to applicants by setting forth procedural and technical standards and requirements.  The Bureau anticipates that this will be the first of several procedural orders, with additional orders being issued as the need arises during implementation of the new licensing program.

1)      Initial education requirements.  For several years the Bureau has registered individual loan officers employed by supervised lenders and loan brokers.  That registration process included requirements for initial and continuing education courses approved by the Bureau.  In order to provide proper credit for courses taken under the previous state-based system, applicants for an MLO license under the new NMLS system will be deemed to have met the initial educational requirements if they can demonstrate that they successfully completed a cumulative total of at least 20 hours of Maine-approved courses.  The courses must have been completed prior to October 1, 2010.  Before submitting to the Bureau proof of having met educational requirements, applicants must obtain an NMLS “unique identifier” number, and applicants must include that NMLS “unique identifier” number in communications with the Bureau, to ensure accurate record-keeping.  Proof must be in the form of an affidavit, a sample of which is attached hereto as Exhibit #1, and which is also found on the Bureau’s website, www.Credit.Maine.gov.  The completed affidavit may be scanned and e-mailed to the following e-mail address: LoanOfficerReg@maine.gov.  Those applicants without scanning capabilities should mail the affidavit, US Mail, to the Bureau at #35 State House Station, Augusta, ME 04333-0035.  Once the Bureau receives the affidavit, the Bureau will “certify” to NMLS that the applicant has met his or her requirements for pre-licensing education.  Those applicants who do not provide an affidavit attesting to completion of at least 20 hours of Maine-approved courses, will be required to complete 20 hours of NMLS-approved courses in order to satisfy the initial education requirements for a license.

2)      State and national tests. Applicants are required to pass state-specific and national tests in order to obtain a full license.  Starting January 1, 2011, no mortgage loan originator may originate loans without having passed the national test.  With respect to the Maine-specific test, due to the relatively late availability of the test, applicants have until March 31, 2011 to successfully pass that test.  An applicant who successfully passes the national test on or before December 31, 2010 will be given the status of “Approved – Conditional.”  The “condition” that must be satisfied is successful passage of the state-specific test prior to April 1, 2011.  Starting April 1, 2011, no mortgage loan originator may originate loans without having passed the Maine-specific test.

3)      Credit reports. Applicants’ credit reports and/or credit scores will be reviewed as part of applications received after October 17, 2010. A low credit score (for example, a score below 550) will trigger a review of the content of the applicant’s credit reports, to determine the nature of the factors leading to the low score. The Bureau will then reach a determination whether or not the contents of the reports indicate that the applicant possesses at least the minimum levels of financial responsibility, character and fitness to warrant the granting of a Maine mortgage loan originator license. Applicants denied a license wholly or in part based on the content of their credit reports will receive notice of the denial.  They will be encouraged to obtain and review their own reports to check for accuracy, and will be given an opportunity to request a review of the initial decision to deny the license by providing evidence of financial responsibility, character and fitness to the Bureau.

4) Criminal background history. As part of the application process, applicants must submit fingerprints to permit the running of a criminal background check.  Felonies within the past 7 years, as well as conviction of financial crimes, can serve to prevent an applicant from qualifying for a license.  Maine law provides that an applicant can attempt to demonstrate to the administrator that such a conviction does not affect the applicant’s good character and fitness.  However, federal law does not include such a discretionary clause.  In the near future the Bureau will determine whether it can consider requests for reconsideration of denials based on felonies within seven years, or financial crimes, and the results of that determination will be posted on the Bureau’s website, www.Credit.Maine.gov, together with any appropriate forms.

5)      Surety bonds. Maine’s SAFE Act permits the Bureau to accept a supervised lender’s bond or a loan broker’s bond in lieu of an individual MLO bond, if the MLO is employed by, or is the exclusive agent of, the supervised lender or loan broker.  Those MLO applicants seeking to be covered by a supervised lender’s bond or loan broker’s bond must submit an “Employment Verification Form” (see Exhibit #2, attached to this Order), completed and signed by a representative of the licensed company, together with a photocopy of the company’s existing surety bond. The completed Employment Verification Form and copy of surety bond may be scanned and e-mailed to the following e-mail address: LoanOfficerReg@maine.gov.  Those employers without scanning capabilities should mail the documents, US Mail, to the Bureau at #35 State House Station, Augusta, ME 04333-0035.  Those MLO applicants who are not employed by, or are not the exclusive agent of, a licensed supervised lender or loan broker, must submit a $25,000 bond (or demonstrate a satisfactory net worth, as described in paragraph 6 below) as part of their application.  A sample surety bond form for an individual MLO is attached to this Order as Exhibit #3.  For MLOs supplying their own individual bond, the original, signed bond form must be mailed to the Bureau; a scanned copy is insufficient.

6)      Net worth. As an alternative to posting an individual surety bond in the amount of $25,000, those MLO applicants who are not employed by, or who are not the exclusive agents of, licensed supervised lenders or licensed loan brokers, will be permitted to demonstrate a personal positive net worth through submission (by scanned e-mail, or by US Mail) of a balance sheet prepared by a CPA consisting of an audited report, a reviewed report or a compilation report, reflecting that the applicant has a positive net worth (assets in excess of liabilities) of at least $25,000.  Applicants should consult with a CPA regarding preparation of such a balance sheet.

7)      Challenging the accuracy of information entered in the NMLS. Any MLO or applicant for an MLO license is permitted to challenge the accuracy of information relating to that MLO or applicant, by submitting a detailed letter to the administrator (Superintendent, Bureau of Consumer Credit Protection, #35 State House Station, Augusta, ME 04333-0035) setting forth the nature of the challenge and providing evidence or proof of the inaccuracy.

8)      Individual annual “call” reports.  Under the provisions of the Maine SAFE Act, all MLOs are required to compile a record of all loans originated or arranged each year. The first call reports will be due on or before January 31, 2012 and will cover loans originated during calendar year 2011.  To prepare for this requirement, all MLOs should begin maintaining records of loans originated or arranged during calendar year 2011.  Completed call reports may be scanned and e-mailed to the following e-mail address: LoanOfficerReg@maine.gov.  Those MLOs without scanning capabilities should mail the call report, US Mail, to the Bureau at #35 State House Station, Augusta, ME 04333-0035.  A sample individual MLO call report is attached to this Order as Exhibit #4.

9)      Late renewals.  If an MLO licensed in the system is late with his or her renewal application (i.e., if the application is not received prior to January 1 of each year), then the individual’s license expires and that individual is prohibited from conducting any loan origination activities.  For two months the license is placed in a “Terminated – Failed to Renew” status.  Between January 2 and March 1, a license may be reinstated within the Bureau’s discretion if a renewal application is submitted in proper form accompanied by all fees and attachments, together with a late renewal fee of $100 for each month or partial month that the renewal application is late.  If a license is not reinstated by March 1 of any year, its status is changed to “Terminated – Expired,” and an applicant must restart the NMLS application process from the beginning.

10)  Deficiency in continuing education requirements. Under ordinary circumstances a continuing education course is valid only in the year it is taken.  However, if an MLO has not completed the required hours of continuing education courses prior to December 31 of a given year, the MLO’s license terminates and the individual must cease all origination activity.  However, the individual may “make up” the deficiency between January 2 and March 1 and can then apply for reinstatement. In these cases, the courses taken are credited retroactively to the calendar year just passed, and they do not count toward the MLO’s requirements for the year in which they are actually taken.

11)  Amendments to NMLS data. Any MLO whose information changes (e.g., address; employer) must immediately make amendments to that MLO’s own record with NMLS.  The Bureau will review the changes for approval. In those cases in which an MLO changes employment, the MLO who is relying on the surety bond of a licensed supervised lender or loan broker must also submit a new “Verification of Employment” form (see Paragraph 5, above, and Exhibit 2, attached to this Order).   A $20 “change fee” will be assessed for all employment changes, payable by credit card or by check made out to “Treasurer, State of Maine.”

12)  Surrender. Similar to the process of amending an MLO’s record (see above), any surrender of an MLO license must be accomplished by the MLO amending that MLO’s records through the NMLS.  The Bureau will be notified of the action and will process the surrender.

Dated at Gardiner, Maine this 28th day of September, 2010.

____/s/ William N. Lund__________

William N. Lund, Superintendent

Bureau of Consumer Credit Protection

Exhibit # 1

Maine Mortgage Loan Originator License Application

Applicant’s Affidavit of Completion of 20 hours of Maine-Approved Educational Courses

Name of Applicant ___________________NMLS “Unique Identifier” Number:________________

Now comes the above-named __________________________, and attests to the truth of the following statements:

1) My name is _ _____________ , and my home address is ___________ __________________________________.

2) This Affidavit is submitted to the Maine Bureau of Consumer Credit Protection in support of my application for a Mortgage Loan Originator (MLO) license.

3) I have successfully completed a minimum of 20 total hours of educational courses approved by the Bureau, as follows (use additional pages if necessary):

Title of Course             Where or how taken       Date of Completion                Number of hours

The above statements are true and complete to the best of my knowledge and belief.

______________________                                        Date: ___________

Signature

_____________________

Name (printed)

Personally appeared before me the above-named _____________________________ and made oath to the statements by him/her subscribed,

Before me,

________________________________

Notary Public/Justice of the Peace/Attorney

Exhibit #2

MAINE MORTGAGE LOAN ORIGINATOR (MLO)

EMPLOYMENT VERFICATION FORM

Name of Applicant for Mortgage Loan Originator (MLO) License________________________

Address of Applicant:________________________________________________________________

Applicant’s NMLS Unique ID Number:  ______________

I, ___________________________________ hereby certify, to the best of my

(Name of employer’s certifying officer)

knowledge, information and belief, that:  ___________________________________

(Name of Applicant)

  • Is a bona fide W-2 employee                     OR o  Is an exclusive agent

(Only select one)           

of:  _________________________________________________________________________________

(Name of Company or Organization)

and is covered under surety bond number _________________________ (copy attached) on file with the Maine Bureau of Consumer Credit Protection.

Furthermore, I certify that the employer:

  • Holds a Maine Supervised Lender or Loan Broker license number:  ___________(Enter Maine license number)
  • Has a pending application for a Maine supervised lender and or loan broker license.

o  Other (explain)

___________________       ____________________           __________________    _____________

Print Name                                  Print Title                             Signature                       Date

STATE OF:  __________________

COUNTY OF:  _____________________, to wit:

Sworn and subscribed before me this _________ day of __________, __________.

____________________________

Notary Public

My commission expires: ______________________

Exhibit #3

AMOUNT $25,000                                                                                 BOND NO:  _________________

STATE OF MAINE BUREAU OF CONSUMER CREDIT PROTECTION

MORTGAGE LOAN ORIGINATOR (MLO) INDIVIDUAL SURETY BOND

KNOW ALL PERSONS BY THESE PRESENTS THAT _______________________________________________

(Name of individual)

residing at _______________________________________________________ in the County of _________,

(Street address and City/Town)

State of _____________________________, as Principal, and

(State)

______________________________________________________________________________,

(Name of bonding company)

a bonding company duly organized and existing under the laws of the State of ____________________________, being duly qualified to transact business in the State of Maine, as Surety, are holden and stand firmly bound unto the Superintendent, of the Bureau of Consumer Credit Protection of the State of Maine, for use of any person or persons who may have a cause of action against the Principal of this bond under the provisions of the act under which this bond is given, in the just sum of twenty-five thousand dollars ($ 25,000), to be paid to the said person or persons as aforesaid, to which payment well and truly to be made, we hereby jointly and severally bind ourselves, our respective heirs, executors, administrators, successors or assigns, firmly by these presents.

THE CONDITION OF THIS OBLIGATION IS SUCH THAT if the said ______________________________ shall faithfully perform the duties and obligations pertaining to the business of a mortgage loan originator to be conducted in accordance with the tenure of the license to engage in said business issued to ______________________________ by the Superintendent, of the Bureau of Consumer Credit Protection of the State of Maine under the authority, of and as provided in Title 9-A M.R.S.A., the Maine Consumer Credit Code, and shall conform and abide by each and every applicable provision of the Code and to all rules and regulations lawfully made by the Superintendent hereunder and shall pay to the State and to any such person or persons, any and all monies that may become due or owing to the State, or to such person or persons from said obligor, under and by virtue of the provisions of these Acts, then this obligation shall become void; otherwise it shall be and remain in full force and effect.

This bond shall cover all claims collected, property converted and losses occasioned by the licensee during the term of the license covered by the bond, but the aggregate liability of the surety for any and all claims which arise under the bond shall in no event exceed the above principal amount.

The surety may be relieved of further liability hereunder by giving 30 days written notice to the principal and to the Superintendent of the Bureau of Consumer Credit Protection of the State of Maine.

IN WITNESS WHEREOF we have hereunto set our hands and seals,

This ____________________ of ____________________ A.D. ___________

Put Seal

Here

___________________________________

Principal

By: ________________________________

___________________________________

Capacity

___________________________________

Surety

By: ________________________________

___________________________________

Capacity

Approved ____________________ day of ____________________ A.D. ________________

___________________________________

Superintendent, Bureau of Consumer Credit Protection

ACKNOWLEDGMENT BY PRINCIPAL (MORTGAGE LOAN ORIGINATOR)

STATE OF ___________

County of _______________ss.

On this ___________________ day of ___________________, before me, __________________, a notary public in and for the County and State aforesaid, residing therein, duly commissioned and sworn, personally appeared ____________________ known to me to be the person whose name is subscribed to the within instrument, and acknowledged that he/she executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year in this certificate first above written.

(Seal)

_______________________________

Notary Public

ACKNOWLEDGMENT BY SURETY (BONDING COMPANY)

County of _______________ss.

On this ___________________ day of ___________________, before me, __________________, a notary public in and for the County and State aforesaid, residing therein, duly commissioned and sworn, personally appeared ____________________ known to me to be the person whose name is subscribed to the within instrument, and acknowledged that he/she executed the same.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal, the day and year in this certificate first above written.

(Seal)                                                                                                              _______________________________

Notary Public

Exhibit #4

State of Maine

Mortgage Loan Originator

Due on or before January 31, 2012

Report of annual residential mortgage loan origination.

Name of Mortgage Loan Originator:____________________  NMLS Unique ID #__________

Enter the number and dollar amounts of all residential mortgage transactions you originated in Maine in calendar year 2011, separating those in which you represented a supervised lender from those in which you represented a loan broker.

TypeNumber of loans

Dollar amount of loans

First mortgage loans
As lender:
As broker:
As lender: $
As broker: $
Second mortgages (fixed term)
As lender:
As broker:
As lender: $
As broker: $
Construction loans
As lender:
As broker:
As lender: $
As broker: $
Home equity lines of credit
As lender:
As broker:
As lender: $
As broker: $
Reverse mortgages
As lender:
As broker:
As lender: $
As broker: $
Other (describe)
As lender:
As broker:
As lender: $
As broker: $

Totals:

As lender:
As broker:
As lender: $
As broker: $

I hereby certify that the statements in the foregoing report are true and correct to the

best of my knowledge and belief.

_________________            ________________            _____________        ________

MLO Signature               MLO Name (printed)                  Employer                 Date