Lesson Two — The NMLS

The Nationwide Mortgage Licensing System and Registry (NMLS)

Encouraging states to set minimum standards for licensing and registration of mortgage loan originators to help reduce fraud was one of the primary goals of the SAFE Act. Initial implementation and enforcement of the SAFE Act fell under the Department of Housing and Urban Development (HUD).  HUD appointed the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) to establish and maintain a nationwide mortgage licensing system and registry for the residential mortgage industry.

History of CSBS and AARMR

The Conference of State Bank Supervisors (CSBS) in cooperation with the American Association of Residential Mortgage Regulators (AARMR) established the State Regulatory Registry LLC (SRR). SRR’s function was to develop and operate a nationwide system for state regulators in the financial services industry. The system was intended to enhance state’s ability to protect consumers; improve supervision and enforcement of licensed entities; and streamline licensing and other processes for state agencies and the industry through the use of modern technology and centralizing redundant state agency operations.

SRR currently owns and operates the Nationwide Mortgage Licensing System & Registry (NMLS) that has been developed by state mortgage regulators. NMLS is currently used by all state residential mortgage regulators to process licenses by mortgage lenders, brokers and/or professionals. In 2009, SRR launched the NMLS Consumer Access site which is an online public database which discloses the licensing information of firms and individuals.