Virginia Mortgage Loan Originator Licensing
General Information
Definitions
Who is required to be licensed?
Who does not need a MLO license?
Who must submit application Form MU4?
What are the fees for a MLO License?
What are the bonding requirements for MLOs?
What are the educational and testing requirements for MLOs?
When can I file the MLO application?
Frequently Asked Questions
General Information
On or after July 1, 2010, unless exempt from licensing, no individual can act as a mortgage loan originator (MLO), or hold himself out to the general public as a mortgage loan originator, unless such individual has first obtained a license under Chapter 16.1 of Title 6.1 of the Code of Virginia
. Chapter 16.1 requires the filing of an application for a mortgage loan originator (MLO) license through the Nationwide Mortgage Licensing System (NMLS). You are urged to file an application as soon as practicable in order to obtain the required license by July 1, 2010.
The Bureau of Financial Institutions does not have plans at this time to process new mortgage company licenses through NMLS or to manage existing mortgage lender or broker licenses through 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, including a satisfactory credit report.
NMLS functionality for certain prerequisites
At the time you submit the application for a mortgage loan originator license, the NMLS system might not be able to perform certain functions, such as criminal background checks and credit reports. However, follow the NMLS application instructions and submit the application as soon as possible. The Bureau will designate the status of the application as “Pending-Deficient” and proceed with the investigation of the application. At the time the required information becomes available from NMLS, the Bureau should be ready to complete the application process.
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 federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E).
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.
Who is required to be licensed?
- Individuals acting as mortgage loan originators who are employees or exclusive agents of licensed mortgage lender/brokers under Chapter 16 of Title 6.1 of the Code of Virginia.
- Individuals, other than registered mortgage loan originators (for a definition of registered mortgage loan originator, see item 4 below), acting as mortgage loan originators who are employees or exclusive agents of persons exempt from licensure under Chapter 16 of Title 6.1 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 16, Title 6.1 of the Code of Virginia.
Who does not need a MLO license?
- 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 as an incident to representing a 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 performing certain activities as an employee of a mortgage loan servicer.
Who must submit application Form MU4?
- 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.
What are the fees for a MLO License?
- 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.
What are the bonding requirements for MLOs?
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.
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 16 of Title 6.1 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.
What are the educational and testing requirements for MLOs?
Each state has to meet the minimum pre-licensing educational requirements of the federal S.A.F.E. Act for mortgage loan originators. Virginia's pre-licensing educational requirements are identical to the requirements of the S.A. F. E Act. Section 6.1-431.9 of the Code of Virginia addresses pre-licensing educational requirements for MLOs. It requires at least 20 hours of education approved by the Registry (NMLS). It specifies that educational courses must include at least 3 hours of federal law and regulations; 3 hours of ethics, which shall include instruction about fraud, consumer protection, and fair lending issues; and 2 hours of training related to lending standards for the nontraditional mortgage product marketplace. The law does not specify the number of hours of state law instruction. NMLS has approved a number of providers for offering pre-licensing education courses. A list can be found at the http://mortgage.nationwidelicensingsystem.org/courseprovider/.
Section 6.1-431.10 sets forth the testing requirements for federal laws and state laws. The tests are developed by NMLS and administered by a test provider approved by NMLS. For additional information and enrollment to take the tests, visit the http://mortgage.nationwidelicensingsystem.org/courseprovider/.
When can I file the MLO application?
Presently, NMLS is not fully functional with respect to the fingerprinting and credit report requirements. In an effort to speed up the licensing process, the Virginia Bureau of Financial Institutions accepts MLO applications filed through NMLS in anticipation of approving such applications as soon as NMLS functionality allows it. It is recommended that you apply for the Virginia MLO license as soon as possible to avoid the last minute rush. If you do not secure an MLO license, you will not be able to operate on or after July 1, 2010.
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?
- When do mortgage loan originators need to be licensed in Virginia?
- When can one apply for a mortgage loan originator license in Virginia?
- Who is a mortgage loan originator under the Virginia Code?
- What is a residential mortgage loan and dwelling under S.A.F.E
- 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?
- Do I need a physical location in Virginia to be a licensed mortgage loan originator?
- When do I first have to renew my mortgage loan originator license?
- When will Virginia issue the licenses for qualified applications filed in 2009?
- Can my company apply for a mortgage lender/broker license or amend its record in Virginia through NMLS?
- 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 16.1, Title 6.1 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.
- 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: When do mortgage loan originators need to be licensed in Virginia?
A: Mortgage loan originators are required to obtain a Virginia license by July 1, 2010.
- Q: When can one apply for a mortgage loan originator license in Virginia?
A: Presently, NMLS is not fully functional with respect to credit report and fingerprinting requirements. However, it is not necessary to meet these requirements prior to filing an application. In an effort to speed up the licensing process, the Virginia Bureau of Financial Institutions accepts MLO applications filed through NMLS in anticipation of approving such applications as soon as NMLS functionality allows it. It is recommended that you apply for the Virginia MLO license as soon as possible to avoid the last minute rush. If you do not secure an MLO license, you will not be able to operate on or after July 1, 2010.
- 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: 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 16 of Title 6.1 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 16 of Title 6.1 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 16, Title 6.1 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, including a satisfactory credit report
- 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 16 of Title 6.1 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: Do I need a physical location in Virginia to be a licensed mortgage loan originator?
A: No.
- Q: When do I first have to renew my mortgage loan originator license?
A: You will first have to renew your mortgage loan originator license on or before December 31, 2010, assuming it was obtained prior to October 1, 2010.
- Q: When will Virginia issue the licenses for qualified applications filed in 2009?
A: Virginia will start issuing licenses when all the requirements are met through NMLS. According to NMLS, the system will be fully functional in the first quarter of 2010.
- Q: Can my company apply for a mortgage lender/broker license or amend its record in Virginia through NMLS?
A: No. In Virginia an application for a mortgage lender/broker license must be filed directly with the Bureau of Financial Institutions. Also, a Virginia licensed mortgage lender/broker must continue to file directly with the Bureau any changes to its records, such as a name change, change of senior officers and directors, or change in ownership.
- 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.