Benefits and drawbacks to nationwide-licensing rules show as renewal season begins

Robin M. Gronsky, owner, Gronsky Law Office

As published in Scotsman Guide's Residential Edition, November 2009.

As per the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, all states must incorporate mortgage-originator licensing to national standards and participate in the Nationwide Mortgage Licensing System (NMLS) by this past Aug. 1 or this coming Aug. 1, depending on their legislative schedule.

If your state has already transitioned to the NMLS, you likely are somewhat familiar with changes to your licensing procedures. For example, random license-expiration dates -- in accordance with states' licensing laws and regulations -- necessitated brokers licensed in multiple states to keep a calendar of when their licenses expired and to ensure they submitted renewal applications on time.

On the Web ___________________________ • National Mortgage Licensing System (NMLS): www.stateregulatoryregistry.org/NMLS • Participating NMLS states: bit.ly/NMLSpart • States transitioning into NMLS: bit.ly/NMLStrans.

The NMLS has changed those procedures. Now, renewal season begins Nov. 1. The NMLS also requires that all licenses obtained through it expire on Dec. 31.

For mortgage lenders and brokers who operate in more than one state, this requirement poses certain benefits and possible problems.

NMLS plusses

One benefit of the NMLS is that brokers -- and those who maintain their licenses for their company -- no longer must keep track of different expiration dates. With the renewal process beginning Nov. 1, your NMLS administrator -- or the person in your company who has full access to your company's NMLS records and can add to or change them -- can schedule this work ahead of time.

Implementation also is simpler, compared to knowing each state's renewal processes. Whether you are renewing licenses in one state or in 50, you can access your company's NMLS records and check off every state in which you are licensed through the system, rather than completing multiple renewal applications.

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