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Industry Letters

Mortgage Loan Originator Authorization


On July 11, 2009, Article 12-E of the New York Banking Law (“Banking Law”) was repealed and a new Article 12-E was introduced to comply with the provisions of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE”). For an overview of this new statute, please see the industry letter dated January 8, 2010, and for a more detailed review please visit our Frequently Asked Questions on the Mortgage Loan Originator Licensing area of the website.

TO:                  All Mortgage Bankers and Brokers

FROM:             New York State Banking Department

RE:                  Mortgage Loan Originator Authorization

DATE:              December 19, 2007


Article 12-E of the New York Banking Law, which goes into effect on January 1, 2008, requires individuals to obtain authorization from the Superintendent of Banks before engaging in mortgage loan origination with respect to New York residential real estate. As previously announced, the New York State Banking Department (“Banking Department”) will be using the Nationwide Mortgage Licensing System (NMLS), which goes into effect on January 2, 2008, as the initial step in the application process. In addition to the online application through the NMLS, individuals will be required to submit additional supplementary documents directly to the Banking Department.

Implementation is anticipated to take up to 24 months, meeting the January 2010 deadline for full compliance with the law. The timing for submitting applications is based on the Mortgage Loan Originator’s (MLO) status prior to January 1, 2008. The law and regulations require that new entrants to the business must be authorized on initial employment, while individuals employed as an MLO prior to January 1, 2008 are required to be authorized by January 1, 2010.

New Entrants: Under the Superintendent’s regulations, individuals who begin working in the industry as a mortgage loan originator after January 1, 2008 have a grace period between January and April 1, 2008 in which to apply and receive notification that their application has been received by the Banking Department. After April 1, 2008, no individual who entered the business for the first time after January 1, 2008 will be permitted to engage in mortgage loan origination until their sponsoring entity has been notified that their application has been received. To avoid any disruption to their work, new entrants are encouraged to begin applying well in advance of April 1, 2008.

Existing MLOs: Individuals who worked in the industry prior to January 1, 2008 are able to submit online applications any time after January 2, 2008. However, they are not required to submit an application until July 1, 2008, or a later date granted to their sponsoring entity by the Superintendent.

Originating Entities: Originating entities (mortgage bankers and mortgage brokers) will be able to begin registering on the system in April 2008. Once originating entities are registered on the system, they will have the ability to submit online applications on behalf of MLOs employed by or affiliated with them.

As we finalize a more detailed schedule for processing applications, we are requiring all mortgage bankers and mortgage brokers to submit the names and addresses of each MLO employed by or affiliated with them as of December 31, 2007. The report must be submitted on or before January 15, 2008. An update to this report is required at the end of each quarter going forward, identifying newly employed or affiliated individuals operating as MLOs.

In preparation for the transition to the NMLS system, the Banking Department has created a dedicated section on our website with information for MLOs and originating entities, including an overview of Article 12-E of Banking Law; an outline of the application process; and answers to the most frequently asked questions about compliance with the new MLO Regulations.

Applicants may begin asking their employers for fingerprint cards over the coming weeks. To ensure you have enough fingerprint cards and fingerprint certification forms, originating entities are encouraged to submit requests via e-mail to fingerprintrequest@banking.state.ny.us. Please clearly indicate the number of fingerprint cards and forms you are requesting and the mailing address to be used. If e-mail is not available, please call (212) 709-3535.

Please visit our website at www.banking.state.ny.us and select the ‘Mortgage Loan Originators’ link on the left navigation bar. If you have any additional questions after reviewing the information on our website, please feel free to call the Banking Department’s Mortgage Banking Unit at (212) 709-7655 or e-mail your question to mlo@banking.state.ny.us.

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