Getting a mortgage can be overwhelming, and most borrowers are happy to receive advice or guidance from their mortgage lender. But how can you be sure your loan officer has the proper training and licensing to help you?
That’s why the NMLS was created – to help borrowers ensure they are working with fully licensed and trained mortgage professionals.
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The Nationwide Multistate Licensing System (NMLS) is a centralized database of mortgage originators (MLOs), mortgage servicers, and other lending professionals. Federal regulations require these parties to obtain and maintain at least one state license, and states are required to share licensing information through NMLS.
Each individual, business and branch location is assigned a unique NMLS ID number that consumers can use to locate their mortgage lender or loan officer in the NMLS database. In addition to the MLO, the NMLS also catalogs the following information in its database:
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Name (including other names they used for business purposes)
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Contact details
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License information
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Current and former employment in the mortgage industry
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Any history of civil or criminal actions against the MLO
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NMLS was launched in 2008 as part of the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) in an effort to protect consumers from predatory lending. It was originally called the Nationwide Mortgage Licensing System, but eventually changed to the Nationwide Multistate Licensing System. People may use these terms interchangeably.
Before the SAFE Act of 2008, there was no national oversight of mortgage professionals. Each state has its own financial services regulators, but before NMLS, there was no way to verify that a newly licensed mortgage professional didn’t have a reputation for shady lending practices in other states.
In addition to establishing the NMLS database, the 2008 SAFE Act established federal requirements for MLOs to obtain and maintain at least one state license, and for states to share licensing information through the NMLS.
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To become part of the NMLS database – which also means having an NMLS license – a mortgage professional must meet several state and federal requirements. These include:
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Complete a minimum of 20 hours of pre-licensure training
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Pass a national mortgage test
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Undergo a credit report review
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Complete an FBI background check
Mortgage professionals and MLOs are also required to complete eight hours of continuing education each year to maintain their NMLS licenses.
Licensing is administered by the state, meaning specific requirements may vary from state to state.
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If you’re looking to buy a home or refinance your mortgage, you can use the app to research mortgage lenders or lenders you’re considering working with.
The NMLS Consumer Access site is easily searchable even if you don’t have the MLO’s NMLS number. You can search by NMLS ID number or enter the individual or company name, city, state and zip code.
Searching this consumer site will help you make an informed decision about who to work with for your mortgage needs. You will gain a complete understanding of the MLO’s licensing, background and work history.
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What is the difference between NMLS and MLO?
NMLS stands for the Nationwide Multistate Licensing System, a national database of mortgage and lenders and professionals. It provides consumers with a method to check their background and licensing information. MLO is short for “mortgage lender” and describes an individual or company that is paid to arrange, obtain, or negotiate a consumer mortgage loan. An MLO can be a mortgage lender, an individual mortgage broker, or a loan officer who works for a lender.
The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) of 2008 established the NMLS in response to the predatory lending practices of the early 2000s that contributed to the 2008 mortgage crisis. The NMLS allows borrowers to investigate mortgage professionals to make more informed decisions about which companies to use when buying a home or refinancing a mortgage.
Each mortgage professional has a unique NMLS ID number that consumers can use to look them up on the NMLS Consumer Access website. But even if you don’t have the NMLS number of a mortgage professional or company, you can still search for them using their name or DBA (doing business under) name, along with their city, state, and zip code – although the geographic information is not always necessary.
This article was edited by .