Use of NMLSR ID

Issue/Inquiry

When can the NMLSR ID number be used on advertisements and when must it be provided to the customer?

Response Summary

Under the S.A.F.E. Act, the unique identifier of the mortgage loan originator must be provided to the consumer upon request, before the mortgage loan originator acts as a mortgage loan originator, and through the mortgage loan originator’s initial written communication with the consumer. The unique identifier can also appear in advertisements or on business cards, but there is no requirement for it to be disclosed in this manner. For closed-end consumer loans secured by dwellings, Regulation Z requires the names of the loan originator organization and the individual loan originator and the NMLSR IDs issued to them to appear on the credit application, the note or loan contract, and the security instrument. For loans covered by the TRID rules, this information must also appear on the Loan Estimate and the Closing Disclosure.

Response Detail

Under the S.A.F.E. Act, the unique identifier of the mortgage loan originator must be provided to a consumer:

• Upon request
• Before the mortgage loan originator acts as a mortgage loan originator
• Through the mortgage loan originator’s initial written communication with a consumer, whether on paper or electronically. 12 CFR §1007.105.

When the final rule was published, the commentary noted that the requirement could be met by a financial institution in several ways. For example, it could direct consumers to a listing of registered mortgage loan originators and their unique identifiers on its website; post this information prominently in a publicly accessible place, such as a branch office lobby or lending office reception area; and/or establish a process to ensure that institution personnel provide the unique identifier of a registered mortgage loan originator to consumers who request it from employees other than the mortgage loan originator.

The intention of the federal regulatory agencies was for the rule to cover written communications from the originator specifically to his or her customers, such as a commitment letter, good faith estimate or disclosure statement, and not written materials or promotional items distributed by an institution for general use by its customers. While this provision does not require institutions to include the unique identifier on loan program descriptions, advertisements, business cards, stationary, notepads, and other similar materials, institutions are not prohibited from doing so. 75 Federal Register 44675.

Under the requirements of Regulation Z, the names of the loan originator organization and individual loan originator and the unique identifier numbers assigned to them by the National Mortgage Licensing System and Registry (“NMLSR ID”) must appear on the following documents for a consumer credit transaction secured by a dwelling:

• The credit application
• Loan Estimate and Closing Disclosure
  
• The note or loan contract
• The security instrument

This information must appear whenever such a document is provided to a customer or presented to a customer for signature 12 CFR §1026.36(g)(1), (2). It is not necessary for the information to appear more than once on each document. Official Interpretations, 1026.36(g)(1) – 3.

If there is more than one individual loan originator, the name and NMLSR ID that should be added is that of the individual loan originator who has primary responsibility for the transaction at the time the loan document is issued. It is not necessary for the information to appear more than once on each document. Official Interpretations, 1026.36(g)(1)(ii) – 1.

Under the TILA-RESPA Integrated Disclosure (“TRID”) rules, the NMLSR ID numbers of the financial institution and/or mortgage broker and of the individual loan officer must also appear in the “Additional Information about this Loan” section of the Loan Estimate, and in the “Contact Information” section of the Closing Disclosure. 12 CFR §§1026.37(k), 38(r).

 

 

 

This entry was posted on Saturday, July 8th, 2017 at 1:34 pm.