CFPB Regulatory Changes: Loan Originator Name and NMLS Number on Certain Documents

A new Regulation Z requirement promulgated by the CFPB (see forthcoming 12 CFR § 1026.36[g]) requires the name and NMLS number of the loan originator organization and the individual loan originator (with primary responsibility for the origination of the loan) to appear on the following documents, in connection with a closed-end credit transaction secured by a dwelling:

1. The loan application;

2. The promissory note or loan contract; and

3. The security instrument.

It is expected that this requirement will also extend to the forthcoming Loan Estimate and Closing Disclosure as well. Excluded from this requirement are home equity lines of credit and loans secured by a consumer’s interest in a timeshare plan (see forthcoming Ibid. § 1026.36[b]).

This requirement takes effect on January 10, 2014. However, FNMA and FHLMC are permitting the inclusion of this information on their uniform notes and security instruments prior to such time. When included, this information should print after the borrowers’ signature lines and the notary acknowledgment (if applicable), unless state law necessitates otherwise. FHLMC’s requirements are even more stringent and require the information to be “in the space immediately” after the signature lines and notary acknowledgment, as well as to be disclosed in the following format:

Mortgage Loan Originator ______________________
Nationwide Mortgage Licensing System and Registry Identification Number _______________

(see https://www.fanniemae.com/singlefamily/legal-documents and the “Authorized Changes” on http://www.freddiemac.com/uniform/unifchanges.html for details)

We have decided to support this requirement by including a new segment in all applicable promissory notes and security instruments which will generate the necessary text in the appropriate location on the document, in accordance with FNMA’s and FHLMC’s authorized changes.

There has been some ambiguity within the document vendor industry as to which (and how many) names and NMLS numbers should print in connection with this requirement for brokered loans. The regulatory provisions, Official Staff Commentary, and analyses for this new rule are ambiguous on this matter. Should only the information of the lender and his originator print on the forms, should only the information of the individual originator of the broker print, or should the information for the broker and lender companies (and their respective individual originators) print on the document?

Taking a more conservative approach, coupled with the fact that under proposed rules the information for all four entities will need to appear on the Loan Estimate and Closing Disclosure (see 77 FR 51261, 51321, 51329, 51443, & 51453), the new segment will consist of 8 label fields and 8 content fields which will populate the information of up to four different entities.

The 8 label fields will default the following text, in order to comply with FHLMC’s requirements (though clients will be able to alter the text in these fields, if desired):

Mortgage Loan Originator:
Nationwide Mortgage Licensing System and Registry Identification Number:

Mortgage Loan Origination Company:
Nationwide Mortgage Licensing System and Registry Identification Number:

Mortgage Loan Originator (Creditor):
Nationwide Mortgage Licensing System and Registry Identification Number:

Mortgage Loan Origination Company (Creditor):
Nationwide Mortgage Licensing System and Registry Identification Number:

The 8 content fields will default to pull information from the following fields:

• #6887 – Loan Originator Name
• #43035 – Loan Originator NMLS Number
• #48412 – Loan Origination Company Name
• #46321 – Loan Origination Company NMLS Number
• #1057 – Loan Officers Name
• #67186 – Loan Officers NMLS Number
• #15360 – Lender Name and Extension
• #55378 – Lender NMLS Number

Please note that if the lender on the promissory note is different than the loan origination company name, then the four fields and labels containing the lender and loan officer name and NMLS number will print. If the names are the same, then only the information for the loan origination company and loan origination will print.

These changes will be put into production as soon as they become available. The first set of modified documents will be in production by October 5, 2013, but only for loans with application dates (Field #147 “Application Date”) that are on or after January 10, 2014. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.

 

September 25, 2013
Multiple Document Requests

Update:
Our original article mistakenly referenced Field Index #68706 for the Loan Officers NMLS Number; the correct Field Index is #67186.