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Virginia Mortgage Loan Originator Licensing
General Information
Definitions
Frequently Asked Questions
General Information
The Secure and Fair Enforcement Mortgage Licensing Act of 2008 (S.A.F.E. Act) directed
states to adopt mortgage loan originator (MLO) licensing and registration requirements
that meet the minimum standards specified in the SAFE Act. In response, the 2009
Virginia General Assembly passed legislation (Chapter
17, Title 6.2 of the Code of Virginia ) for licensing mortgage
loan originators. On June 29, 2011, the US Department of Housing and Urban Development
(HUD) issued a final rule that sets forth the minimum standards for the state licensing
and registration of residential mortgage loan originators, requirements for operating
the Nationwide Mortgage Licensing System and Registry, and HUD’s federal oversight
responsibilities pursuant to the SAFE Act. For the entire final rule, please visit
http://www.ofr.gov/OFRUpload/OFRData/2011-15672_PI.pdf.
Chapter 17, Title 6.2 of the Code of Virginia provides that unless exempt from licensing,
no individual can act as a MLO, or hold himself out to the general public as a mortgage
loan originator, unless such individual has first obtained a license under that
Chapter. Chapter 17 requires the filing of an application for a MLO license through
the Nationwide Mortgage Licensing
System (NMLS).
The MLO application form is referred to as Form MU4. Each individual mortgage loan
originator must submit Form MU4 through NMLS. If an
individual has submitted Form MU4 in another state, re-entry of the record into
NMLS is not required; rather, the Virginia Mortgage Loan Originator license request
should be added in the license wizard in NMLS for submission.
- In order to qualify for a license, loan originators must meet the additional requirements
listed below:
- Pre-license educational certification administered by NMLS
- A passing score on the national and state mortgage test administered by NMLS
- A satisfactory criminal background check administered by NMLS
- A finding of financial responsibility, character and general fitness
Definitions
A mortgage loan originator is defined as an individual who takes an application
for or offers or negotiates the terms of a residential mortgage loan, as defined
by the S.A.F.E. Act.
S.A.F.E. defines a residential mortgage loan as any loan primarily for personal,
family, or household use that is secured by a mortgage, deed of trust, or other
equivalent security interest on a dwelling (as defined in Section 103(v) of the
Truth in Lending Act) or residential real estate upon which is constructed or intended
to be constructed a dwelling.
A dwelling is a residential structure that contains 1 to 4 units, whether or not
that structure is attached to real property. The term includes an individual condominium
unit, cooperative unit, mobile home, and trailer, if it is used as a residence.
Frequently Asked Questions
- What is the "S.A.F.E." Act?
- What is the NMLS?
- What Virginia statute requires filing of mortgage loan originator applications?
- What Virginia agency is responsible for issuing mortgage loan originator
licenses?
- Who is a mortgage loan originator under the Virginia Code?
- What is a residential mortgage loan and dwelling under S.A.F.E
- What are the fees for a MLO License?
- Who is required to be licensed as a mortgage loan originator in Virginia?
- Who does not need this license?
- If my employer is exempt, do I need to obtain a mortgage loan originator
license?
- If I am employed by a bank, do I need to be licensed as a mortgage
loan originator?
- I am an owner of a licensed mortgage company, do I also need an MLO
license?
- What if I am an independent contractor?
- What NMLS form must be submitted for a mortgage loan originator license?
- Who must submit application Form MU4 through the NMLS?
- What are the license prerequisites?
- What are the bonding requirements for mortgage loan originators?
- How many hours of education are required in order to get a license?
- Where can I take the required test or find out about the educational
courses and course providers?
- What information does the Virginia mortgage loan originator test cover?
What is a good study guide for the state exam?
- Do I need a physical location in Virginia to be a licensed mortgage
loan originator?
- When do I have to renew my mortgage loan originator license?
- What are the requirements for renewal of a mortgage loan originator
license?
- What are the continuing education (CE) requirements?
- Who shall I call or write for further assistance?
- Q: What is the "S.A.F.E." Act?
A: The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E)
requires that states have in place a system of licensure for mortgage loan originators
no later than August 1, 2009.
- Q: What is the NMLS?
A: The Nationwide Mortgage Licensing System (NMLS) is a mortgage licensing system
developed and maintained by the Conference of State Bank Supervisors (CSBS) and
the American Association of Residential Mortgage Regulators (AARMR) to streamline
the licensing process, improve supervision and increase transparency in the mortgage
industry. NMLS contains a single record for each mortgage lender, broker, branch,
and each loan originator.
- Q: What Virginia statute requires
filing of mortgage loan originator applications?
A: Chapter 17, Title 6.2 of the Code of Virginia, passed by the General Assembly
and signed by the Governor in 2009, provides for licensing of mortgage loan originators
through NMLS. The State Corporation Commission also passed regulation 10 VAC 5-161
(10-60) for mortgage loan originators implementing Chapter 17 of the Code of Virginia.
- Q: What Virginia agency is responsible
for processing and issuing mortgage loan originator licenses?
A: The Virginia State Corporation Commission, through its Bureau of Financial Institutions.
- Q: Who is a mortgage loan originator
under the Virginia Code?
A: A mortgage loan originator is defined as an individual who takes an application
for or offers or negotiates the terms of a residential mortgage loan, as defined
by the Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E).
- Q: What is a residential mortgage
loan and dwelling under S.A.F.E.
A: S.A.F.E. defines a residential mortgage loan as any loan primarily for personal,
family, or household use that is secured by a mortgage, deed of trust, or other
equivalent security interest on a dwelling (as defined in Section 103(v) of the
Truth in Lending Act) or residential real estate upon which is constructed or intended
to be constructed a dwelling. The Truth in Lending Act defines dwelling as a residential
structure that contains 1 to 4 units, whether or not that structure is attached
to real property. The term includes an individual condominium unit, cooperative
unit, mobile home, and trailer, if it is used as a residence.
- Q.What are the fees for a MLO License?
A: The fee is $180, which includes a Virginia application fee of $150 and NMLS processing
fee of $30. (This fee does not include the cost of fingerprinting and credit report
fees that will be required.) All fees are collected through the NMLS and are NONREFUNDABLE.
- Q: Who is required to be licensed
as a mortgage loan originator in Virginia?
A: The following individuals are required to be licensed in Virginia as mortgage
loan originators:
- Individuals acting as mortgage loan originators who are employees or exclusive agents
of licensed mortgage lenders/brokers under Chapter 17 of Title 6.2 of the Code of
Virginia.
- Individuals, other than registered mortgage loan originators (see Question 10, answer
4), acting as mortgage loan originators who are employees or exclusive agents of
persons exempt from licensure under Chapter 17 of Title 6.2 of the Code of Virginia.
- Individuals acting as mortgage loan originators who are not employees or exclusive
agents of either persons licensed or exempt from licensing under Chapter 17, Title
6.2 of the Code of Virginia.
- Q: Who does not need this license?
A: The following are not required to be licensed:
- Any individual who only performs administrative or clerical tasks on behalf of a
person licensed or exempt from licensing pursuant to the Virginia Mortgage Lender
and Broker Act or on behalf of any individual licensed as a Virginia mortgage loan
originator
- Licensed real estate brokers, unless the person is compensated by the lender, a
mortgage broker, or other mortgage loan originator;
- Persons solely involved in extensions of credit relating to timeshare plans;
- A registered mortgage loan originator. "Registered mortgage loan originator" means
any individual who (i) meets the definition of mortgage loan originator and is an
employee of (a) a depository institution, (b) a subsidiary that is owned and controlled
by a depository institution and regulated by a federal banking agency, or (c) an
institution regulated by the Farm Credit Administration, and (ii) is registered
with, and maintains a unique identifier through, the Registry;
- Any individual who offers or negotiates terms of a residential mortgage loan with
or on behalf of an immediate family member;
- A licensed attorney who negotiates the terms of a residential mortgage loan on behalf
of a client incident to providing legal services to that client unless the attorney
is compensated by a lender, a mortgage broker, or other mortgage loan originator
or by any agent of such lender, mortgage broker, or other mortgage loan originator;
- An individual mortgage loan servicer. It is defined as any person who, on behalf
of a noteholder collects or receives payments pursuant to a residential mortgage
loan, or who, on behalf of a noteholder works with a borrower who is in default,
or in foreseeable likelihood of default, to modify or refinance the obligation to
prevent foreclosure or to finalize collection through the foreclosure process.
- Q: If my employer is exempt from
obtaining a mortgage lender/broker license in Virginia, do I need to obtain a mortgage
loan originator license?
A: Yes, if you meet the definition of a mortgage loan originator, but you are not
an employee of (a) a depository institution, (b) a subsidiary that is owned and
controlled by a depository institution or (c) an institution regulated by the Farm
Credit Administration.
- Q: If I am employed by a bank, credit
union or savings institution, do I need to be licensed as a mortgage loan originator?
A: No, but you will need to become a "registered mortgage loan originator" and obtain
a unique identifier from the Registry through NMLS.
- Q: Do I need a mortgage loan originator
license if I am an owner of a licensed mortgage company, but I do not originate
or negotiate the terms of a loan?
A: No, only those persons that meet the definition of a mortgage loan originator
need to be licensed.
- Q: What if I am an independent contractor?
A: If you are originating Virginia residential mortgage loans as an independent
contractor, you will need to be licensed as a mortgage broker as well as a mortgage
loan originator.
- Q: What NMLS form must be submitted
for a mortgage loan originator license?
A: Form MU4
- Q: Who must submit application Form
MU4 through NMLS?
A: If your employer is already registered in NMLS (i.e. it has previously submitted
an MU1 filing for another state in the NMLS system), then either you or your employer
can complete the MU4 form in NMLS. However, if your employer is not registered in
NMLS, then the individual mortgage loan originator must submit Form MU4 through
NMLS. Please visit the NMLS
Resource Center for more information on submitting a MU4 form.
- Q: What are the license prerequisites?
A: The license prerequisites are:
- Surety bond
- Fingerprint cards and satisfactory criminal background check through NMLS
- Pre-license education certification administered by NMLS
- A passing score on the national and state mortgage test administered by NMLS
- A finding of financial responsibility, character and general fitness
- Q: What are the bonding requirements
for mortgage loan originators?
A: There are two types of surety bond forms in Virginia, form CCB-8813 and form
CCB-8814. These surety bond forms will replace surety bond form CCB-8802 which is
used by licensed mortgage lender/brokers.
Individuals wishing to obtain a mortgage loan originator’s license who are employees
or exclusive agents of mortgage lender/brokers licensed or exempt from licensing
pursuant to the Virginia Mortgage Lender and Broker Act will be covered by surety
bond form CCB-8813. Each employer, including a sole proprietor whether or not he
employs other loan originators, must obtain surety bond CCB-8813, as prescribed
by Virginia regulation and submit it to Virginia within 5 days from the filing of
a mortgage loan originator’s application through NMLS. If an employer has submitted
the surety bond CCB-8813 on a previous filing and the bond remains in force, it
is not necessary to file a new bond.
Individuals wishing to obtain a mortgage loan originator’s license that
are not employees or exclusive agents of mortgage lender/brokers licensed
or exempt from licensing pursuant to the Virginia Mortgage Lender and Broker Act
and are themselves exempt from licensing under the Mortgage Lender and Broker Act,
must obtain and submit surety bond CCB-8814 within 5 days from filing the application
through NMLS.
Independent contractors taking loan applications or offering or negotiating terms
of a residential mortgage must obtain a mortgage broker’s license and a mortgage
loan originator’s license. These individuals will file surety bond CCB-8813 which
will cover the bonding requirement for both licenses.
The surety must be an insurance company authorized to execute such bond in Virginia
and must be accompanied by a power of attorney authorizing an agent to execute such
bond. The surety bond forms can be downloaded from the Checklist (New Application
Jurisdiction-Specific Requirements).
The following table establishes the amount of the surety bond required to be filed
on behalf of mortgage loan originator applicants. In most instances the amount of
the surety bond will be based on the volume of loans brokered, made or originated
during the preceding calendar year by the entity or individual filing the bond.
- Required Surety Bond Amount
Schedule showing surety bond amounts by loan volume
|
Loan Volume |
Bond Amount |
|
$0 - $5,000,000 |
$25,000 |
|
$5,000,001 - $20,000,000 |
$50,000 |
|
$20,000,001 - $50,000,000 |
$75,000 |
|
$50,000,001 - $100,000,000 |
$100,000 |
|
over $100,000,000 |
$150,000 |
The surety bond amount for a person, filing a bond on behalf of a mortgage loan
originator applicant, that was not conducting a mortgage lending or brokering business
or performing business as a mortgage loan originator during the previous calendar
year is $25,000.
For persons licensed under Chapter 17 of Title 6.2 of the Code of Virginia (Virginia
Mortgage Lender and Broker Act) as a mortgage lender or a mortgage lender AND broker,
the minimum amount for the surety bond is $50,000. Submitting surety bond CCB-8813
in the appropriate amount will meet Virginia Mortgage Lender and Broker Act requirements
as well as mortgage loan originator bond requirements.
- Q: How many hours of education are
required in order to get a license?
A: 20 total hours (which includes 3 hours of federal laws and regulations, 3 hours
of ethics and 2 hours of training related to lending standards for the nontraditional
mortgage products).
- Q: Where can I take the required
test or find out about the educational courses and course providers?
A: For additional information and enrollment to take the tests, visit the NMLS Resource
Center at http://mortgage.nationwidelicensingsystem.org/profreq/testing/.
- Q: What information does the Virginia
mortgage loan originator test cover? What is a good study guide for the state exam?
A. A content outline for the Virginia Mortgage Loan Originator test is available
through the NMLS (http://mortgage.nationwidelicensingsystem.org/profreq/testing/Content%20Outlines/VA%20State%20Content%20Outline.pdf). A good study guide for the state exam is the Bureau's
Mortgage Licensee Reference Guide, which provides an overview of Virginia mortgage
laws and regulations.
- Q: Do I need a physical location
in Virginia to be a licensed mortgage loan originator?
A: No.
- Q: When do I have to renew my mortgage
loan originator license?
A: MLO licenses approved prior to November 1 must be renewed through NMLS between
November 1 and December 31 of each calendar year.
- Q: What are the requirements for
renewal of a mortgage loan originator license?
A: A mortgage loan originator license will be renewed only if the licensee meets
the following conditions:
- (a) the license submits the renewal application, all required information and documentation
through NMLS and pays the required fees.
- (b) the licensee continues to meet the conditions for initial licensure; and
- (c) the licensee has obtained the continuing education prescribed in § 6.2-1710
of the Code of Virginia. Credit for continuing educational courses can only be given
in the year the courses are taken.
If a licensee fails to timely meet the licensing conditions, but meets such conditions
before March 1 of a renewal year and pays a reinstatement fee of $30, his license
will be reinstated.
Below is guidance with respect to taking CE courses prior to applying for renewal:
- If you completed PE in 2009 or 2010 AND were approved for a license in 2010, you
MUST complete CE in 2011.
- If you completed PE in 2009 or 2010 AND were approved for a license in 2011, you
MUST complete CE in 2011.
- If you completed PE in 2011 AND were approved for a license in 2011, you ARE NOT required to complete CE in 2011.
- Q. What are the continuing education
(CE) requirements?
A. The CE requirements are listed in Section 6.2-1710 of the Code of Virginia. You
must take and complete annually at least eight hours of CE courses approved by NMLS
through approved providers. The courses shall include at least (i) three hours related
to federal law and regulations; (ii) two hours related to ethics, which must include
instruction about fraud, consumer protection, and fair lending issues; and (iii)
two hours related to lending standards for the nontraditional mortgage product market.
A licensed mortgage loan originator may only receive credit for a CE course in the
year taken and may not take the same course in the same or successive years to meet
the annual requirements for CE.
- Q: Who shall I call or write for
further assistance?
A: NMLS has customer service operators who can help you with any technical questions
in connection with the completion and electronic submission of Form MU4. The telephone
number for NMLS is (240) 386-4444. The
NMLS Resource Center
is also very valuable. For other questions you may call the Licensing Section of
the Bureau of Financial Institutions at (804) 371-0484 or e-mail
mlo@scc.virginia.gov.
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