NMLS Unique Identifying Numbers Explained
The mortgage industry isn’t just a major pillar of the financial services industry; it directly affects the lives of everyday people. That’s why federal law in the United States requires that every Mortgage Loan Originator and Broker register with the Nationwide Mortgage Licensing System & Registry (NMLS) upon completion of their respective state licensing requirements.
After registering, NMLS then issues a unique identification number to each Mortgage Broker or Mortgage Loan Originator to help regulators and watch groups like the American Association of Residential Mortgage Regulators (AARMR) monitor and maintain the integrity of the industry as a whole.
How Mortgage Loan Officers Get an NMLS Number
Following the initial blow of the 2008 Financial Crisis, The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, or SAFE Act, was one of many reforms enacted by the United States government to ensure the integrity of mortgage-based financial markets, as well as protect future investors and consumers from mortgage malpractice. The aforementioned act, which legally requires all residential Mortgage Loan Originators to register with the Nationwide Mortgage Licensing System & Registry, also sets minimum license standards for state governments — such as annual Continuing Education requirements — giving borrowers confidence nationwide that they’re working with a qualified, registered Mortgage Broker or MLO.
Here are the steps to getting your mortgage license and registering with NMLS:
- Visit the NMLS website and create an individual account
- Complete your state’s required Pre-Licensing education
- Pass the state-issued mortgage examination
- Apply for your Mortgage Broker or Mortgage Loan Originator License
The SAFE Act & NMLS
Put simply, the Great Recession of 2008 was a chain reaction spurred largely by the U.S. subprime mortgage crisis. As a result, new legislation in banking and lending was enacted by the U.S. government to prevent similar events from occurring in the future. The SAFE Act, and subsequently NMLS, are among that new wave of regulations intended to monitor, as well as protect investors, financial institutions, and consumers from falling victim to negligent or illegal lending and borrowing practices. Between the SAFE Act and NMLS, consumers and hiring managers have access to a mortgage professional’s employment history — including any criminal activity related to loan origination — and can feel confident knowing that the person they are working with is held to specific professional and educational standards.
How Are NMLS Numbers Used?
NMLS numbers can be used to look up a specific mortgage professional. NMLS, like many other professional databases, allows consumers to research their MLO and make sure that they’re dealing with a professional who genuinely has their best interest at heart. Mortgage companies and lenders can also make sure they’re hiring similarly high-quality candidates to help their clients get loans by looking up their NMLS number.
NMLS Numbers for Mortgage Loan Officers
Mortgage firms often use NMLS to ensure that the candidates they choose to represent their business, and more importantly their clients, are in good standing with the law. Likewise, registered Mortgage Brokers and registered Mortgage Loan Originators can encourage potential clients or real estate agents to look them up for added confidence before conducting business.
NMLS Numbers for Consumers
Using the registered Broker’s NMLS number, consumers can discover many things about their Broker including their contact information, work history, and publicly adjudicated disciplinary and enforcement actions taken against them. If a mortgage professional refuses to provide their NMLS number, it should be a red flag for prospective clients.
How to Look Up an NMLS Number
Looking up mortgage lenders via NMLS ID is simple. Just visit the NMLS consumer access website and enter the NMLS identification number. If a number or identifier is entered correctly but fails to produce any results (or provides inaccurate results), then the person you are trying to find is not registered and might be conducting business illegally.
Do NMLS Numbers Expire?
Since working in the mortgage industry comes with great responsibility, NMLS unique identifiers must be renewed annually along with state licenses. The renewal period begins 11/1 and ends 12/31 of every year. Mortgage professionals also have to complete a minimum of 8 hours of Continuing Education per year to maintain their license. Of course, that’s just the minimum requirement established by the SAFE Act. Many states require additional Continuing Education.