Under the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act) and the financial institution regulatory agencies’ final rules (Federal Register), residential mortgage loan originators employed by banks must register with the Registry, obtain a unique identifier from the Registry and maintain their registrations.
Texas law defines residential mortgage loan originator as an individual who for compensation or gain or in the expectation of compensation or gain: 1) takes a residential mortgage loan application; or 2) offers or negotiates the terms of a residential mortgage loan. Also, don’t make the mistake of thinking that your residential loan officers need to register.
Employees who perform purely administrative or clerical tasks on behalf of residential mortgage loan originators are not required to register. To avoid unnecessarily exposing your administrative and clerical staff to the registration requirements, review the job descriptions of all employees who work in residential lending.
Employees of a bank subsidiary are exempt from licensing, but not the employees of a holding company subsidiary. See Texas Finance Code §180.002(16) (A) (ii). If you want to avoid licensing of employees of a bank holding company subsidiary, you may want to move their jobs to the bank or to a subsidiary of the bank.
The method of paying mortgage loan originators does not matter. If an employee performs any of the tasks listed for pay, they must be registered. Don’t try to parse the words of the law to try to avoid registering an employee.
If you aren’t quite ready to register your mortgage loan originators, don’t panic; you still have almost three months to get them registered. However, you need to make sure that you get them registered timely. If you haven’t developed and adopted policies and procedures on the registration of mortgage loan originators, use the time before July 29, 2011 to do so. Click here to read further information regarding the registry and the registration process.