RSK.IQ Question of the Week 9/11/17

What NMLSR ID Should be Used When the Loan Officer Changes?


The loan officer who received the application for a residential mortgage loan is no longer with the Bank, and his name and NMLSR ID appear on the Loan Estimate (“LE”). Should a new LE be prepared? What else must be done to reflect the change?

Response Summary

The use of the initial loan officer’s name and NMLSR ID on the application and LE was appropriate when those documents were issued, since he was the primary loan originator at the time. The name and NMLSR ID of the succeeding loan officer will be disclosed on the Closing Disclosure, note, and mortgage, since such individual will be the primary loan originator when those documents are issued. The change in the loan originator will not require a revised LE to be provided. The new loan officer will be required to provide the unique identifier to the consumer.

Response Detail

Under Regulation Z, the name and NMLSR ID of the individual loan originator must appear on the following documents for a consumer credit secured by a dwelling:

  • The credit application
  • The LE and Closing Disclosure
  • The note or loan contract
  • The security instrument. 12 CFR §1026.36(g).

If more than one individual meets the definition of loan originator for a transaction, the name and NMLSR ID of the individual loan originator with primary responsibility for the transaction at the time the loan document is issued must be included. Official Interpretations, 1026.36(g)(1)(ii) – 1.

In this case, the credit application and LE would have disclosed the name and NMLSR ID of the loan officer who was handling the transaction when the document was issued. Since that loan officer is no longer with the Bank and, therefore, no longer the primary loan originator, the name and NMLSR ID of the subsequent loan officer will be disclosed on the Closing Disclosure, note, and mortgage when these documents are issued.

A revised LE must be provided only under the following circumstances:

  • Changed circumstances that cause the settlement charges to increase more than is permitted under the TRID rule
  • Changed circumstances that affect the consumer’s eligibility for the terms of the loan applied for
  • Revisions to the credit terms requested by the consumer
  • Locking the rate, which causes the points or lender credits to change
  • The consumer indicates an intent to proceed more than 10 days after the LE was provided
  • The loan is a new construction loan and the settlement is delayed by more than 60 calendar days; if the LE discloses that prior to 60 days before consummation, the creditor may issue a revised disclosure. 12 CFR §1026.19(e)(iv).

As the change in the loan originator will not affect any of these factors, a revised LE does not have to be issued.

Under the S.A.F.E. Act, as implemented by Regulation G (Part 1007), a registered Mortgage Loan Originator (“MLO”) must provide his or her unique identifier (i.e., the NMLSR ID) to a consumer:

  • Upon request
  • Before acting as a MLO
  • Through the originator’s initial written communication with a consumer, if any, whether on paper or electronically. 12 CFR §1007.105.

The regulation does not distinguish between an initial MLO and a succeeding MLO.  The new loan officer must, therefore, fulfill these requirements as appropriate as though from the first instance.

This entry was posted on Monday, September 11th, 2017 at 1:34 pm.

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