As of July 1, 2020, residential mortgage loan servicing activities are covered under the Idaho Residential Mortgage Practices Act (Act) through an expanded definition of mortgage lending activities. Companies that service residential mortgage loans, whether first party or third party, regardless of lien position, will now be licensed as an Idaho Mortgage Broker/Lender. Companies that solely service residential mortgage loans will no longer require additional licensure under the Idaho Credit Code or Idaho Collection Agency Act, unless they offer additional non-mortgage products or services covered by those statutes.
Military Member, Veteran, Veteran-Spouse Priority – Sole Proprietor or MLO Applicants only:An individual that is a current military member, veteran, or spouse of a military member or veteran, is entitled to an expedited application review once required verification documentation has been uploaded and notification to the Department of Finance has been received. To qualify, the military member or veteran must have served on active duty for at least 180 consecutive days and if discharged, the discharge must be an honorable discharge or general discharge under honorable conditions. Refer to the new application checklist for required documentation to be provided.
Additionally, if you hold a current, valid and unrestricted active mortgage broker, mortgage lender or mortgage loan originator (MLO) license in another state or jurisdiction, with similar qualification requirements and without any disciplinary, criminal or enforcement actions, you may be eligible for a license while completing any additionally-required Idaho application requirements.
Financial responsibility requirements must be met by all MLOs (MU4) and control persons/key individuals (MU2). Requirements to meet financial responsibility are outlined inIdaho Guidance Statement 2020-01-CFB. An explanation letter will be required that addresses all derogatory accounts with the exception of medical accounts. Any representations made regarding disputes, satisfactions, payment plans (formal or voluntary), settlements, discharges, etc., must be supported by documentation and uploaded to the application record in NMLS.
Company applicants will need to meet the requirements of a financial analysis review underGuidance Statement 2020-04-CFB.
Credit reports and criminal background checks (CBC) are required at initial application for both control persons/key individuals (MU2) and MLOs (MU4). Credit reports and CBCs are also required of all MLOs at time of license renewal and may also be required of control persons/key individuals. Renewal requirement details are listed on the Annual License Renewal Application checklist.
MLO Temporary Authority to Operate (TA):If a complete application package is not provided within 60 days of notification of application deficiencies, the application will be deemed withdrawn and void and any fees paid will be forfeited. Failure to provide a complete application (which includes a complete disclosure section with explanations and supporting documents) within the specified time under Idaho Code 26-31-305 (7) is considered a withdrawal by the applicant. ANY EXISTING TA WILL BE IMMEDIATELY TERMINATED. No extensions will be granted, and TA cannot be reinstated once terminated.
Mortgage Loan Originators (MLO) who have completed application requirements with the exception of a sponsorship and/or being affiliated to an Idaho-licensed location will be issued an “Approved-Inactive” license until all sponsorship or location licensing is complete. No business may be conducted under an “Inactive” status. An Inactive status may be maintained indefinitely if all annual requirements, such as financial responsibility, CE, credit report and criminal background check (CBC) authorizations, have been completed by the renewal deadline.
MLO Pre-license education(PE) requirements consist of: three (3) hours of instruction on ethics; three (3) hours of instruction on federal law and regulations; two (2) hours of instruction on lending standards for non-traditional mortgage products; two (2) hours of Idaho law directly related to the IRMPA and Rules; and ten (10) hours of instruction on elective topics. All instruction must be approved by the NMLSR.
MLO Continuing education(CE) annual requirements consist of: three (3) hours of instruction on federal law and regulation; two (2) hours of instruction on ethics; two (2) hours of instruction on lending standards for non-traditional mortgage products; and one (1) hour instruction of Idaho law related to the IRMPA and Rules. All instruction must be approved by NMLS.
Paper licenses are not issued for mortgage company or individual licensees. Approved licenses may be verified on theDepartment’s websiteor on theNMLS Consumer Access website.
Communication with Idaho licensees and pending applicants is done primarily through email. It is the licensee’s responsibility to keep application information, such as email addresses, current. This allows communication from the Department pertaining to the license, renewals, training, etc. Many emails are sent in “bulk” so if an email address blocks bulk email it is recommended that the setting be changed or that the Department domain be identified as an approved sender.
The NMLS Call Center is available from 9:00am-9:00pm EST at (855) NMLS-123 or (855) 665-7123. Contact the Call Center for technical and system navigation questions and support. Contact state regulators for state-specific policies and information. Remember—NMLS is an information conduit and system of record for information storage. The NMLS does not review license information, does not make decisions on licenses or license requirements and does not issue a “national” license.
Each applicant and licensee, whether an individual or a company, is responsible for the accuracy of the information in its MU Form record in the NMLS. Each loan originator and control person/key individual is responsible for the information contained in his or her Form MU2 or Form MU4 and must attest to the accuracy and truthfulness of the submitted information prior to transmission to any regulator. Incorrect, incomplete, or false information filed will delay the approval processes, may jeopardize an approved license status and may result in an administrative action against the applicant or licensee.
New Applicants
Before applying for a license you should consult the new application checklists for Idaho on theNMLS Resource Center. Additional resources available include tutorials, work flow guides, quick guides, navigation guides, and the NMLS Policy Guidebook. If you wish to apply for a license and currently do not have an account on the NMLS, visit Getting Started, which will walk you through the entitlement and application process.
What License Type Should I Apply For?
Mortgage Broker/Lender License:This license is required of any company or sole proprietor, regardless of location, conducting direct or indirect mortgage origination, mortgage modification or residential mortgage servicing activity for compensation or gain, or in the expectation of compensation or gain, on residential real estate located in Idaho. This license type also applies to Credit Union Service Organizations (CUSO).
Regulated Lender License:This license is required of any company or sole proprietorship regardless of location, conducting direct or indirect mortgage loan origination or mortgage loan modification activity on dwellings located in Idaho for compensation or gain, or in the expectation of compensation or gain, and are currently exempt from licensure under the Idaho Residential Mortgage Practices Act due to their additional regular business involvement in consumer lending or consumer loan servicing activity, other than mortgage lending or servicing, but still need to sponsor MLOs. This is also for company and branch transitions of existing regulated lender licenses not currently managed in NMLS.
Exempt Entity Registration:This registration is required of any entity or sole proprietorship, that: 1) conductsindependent contractor mortgage loan processing or mortgage loan underwriting serviceson behalf of Idaho mortgage broker or mortgage lender licensees or regulated lender licensees and registrants on dwellings located in Idaho, but DOES NOT conduct or engage in mortgage origination activities; or 2) is anexempt entityunder Idaho law engaging in mortgage loan origination activities throughindependent contractorsor W2 employees required to be licensed as mortgage loan originators by Idaho law. This registration is NOT available to mortgage broker/lender companies or regulated lender companies.
Mortgage Loan Originator License:This license is required of any natural person conducting residential mortgage loan origination, residential mortgage loan modification, independent contractor mortgage loan processing or independent contractor mortgage loan underwriting activities in Idaho on behalf of a mortgage broker, mortgage lender, regulated lender or exempt entity from locations licensed to conduct activity in Idaho.
General Information
- Licensees are not required to maintain a physical location in Idaho
- Net branching is not allowed—branch arrangements must meet HUD minimum standards
- There is no “one-time exemption” from licensing for individuals regularly engaged in mortgage brokering, mortgage lending or mortgage modification activities.
- Exempt entities include, but are not limited to, certain financial institutions, governmental entities, wholesale lenders (may require alternate licensing for 2nd mortgage retail activity), and active Idaho-licensed attorneys and accountants.
- Sole Proprietors must obtain both a mortgage broker/lender company license and a mortgage loan originator license.
- Individuals may be employed by or associated with more than one Idaho licensee. However, loan origination and loan modification activities must be exclusive to only one Idaho licensee.
- Criminal Background Check Standards: In order to obtain or maintain a mortgage loan originator license (or potentially to qualify as an acceptable control person/key individual in Idaho), the following items will be considered:
- Any felony conviction, plea or finding during the previous seven (7) years;
- Any felony conviction, plea or finding at any time if the felony involved an act of fraud, dishonesty, breach of trust or money laundering;
- Note: “Felony” includes an offense punishable by a sentence of at least one year imprisonment and/or a fine of at least $1,000. The term also includes a military general court martial.
- Any misdemeanor conviction, plea or finding involvingfinancial services.
Related Links and Information
- Financial Responsibility/Fitness of Mortgage Loan Originators and Control Persons
- Telecommuting and Branch Licensing Requirements
- Financial Analysis Guidance
- Activities that Constitute Mortgage Lending Under the Idaho Residential Mortgage Practices Act
- Mortgage Recovery Fund—Mortgage Education Training for Licensees and License Applicants
- Compliance Connection Newsletters
As an expert in mortgage lending regulations, I bring a wealth of knowledge and experience to shed light on the intricate details of the Idaho Residential Mortgage Practices Act and related concepts. My expertise extends to the regulatory landscape, licensing processes, and compliance requirements in the mortgage industry.
The Idaho Residential Mortgage Practices Act, effective as of July 1, 2020, brought about significant changes to the regulation of residential mortgage loan servicing activities. Under the expanded definition of mortgage lending activities, companies servicing residential mortgage loans—whether first party or third party—are now required to obtain a license as an Idaho Mortgage Broker/Lender. This applies irrespective of lien position, and companies solely engaged in servicing residential mortgage loans will no longer need additional licensure under the Idaho Credit Code or Idaho Collection Agency Act, unless they offer non-mortgage products or services covered by those statutes.
One notable provision is the Military Member, Veteran, Veteran-Spouse Priority, granting an expedited application review for individuals in these categories. To qualify, military members or veterans must have served on active duty for at least 180 consecutive days, with an honorable or general discharge under honorable conditions.
For individuals holding a current, valid, and unrestricted mortgage license in another state with similar qualifications and a clean disciplinary record, there is an opportunity for reciprocity, allowing eligibility for an Idaho license with additional requirements.
Financial responsibility is a crucial aspect, and the requirements for Mortgage Loan Originators (MLOs) and control persons/key individuals are outlined in Idaho Guidance Statement 2020-01-CFB. This includes addressing derogatory accounts, providing supporting documentation for representations made regarding disputes, satisfactions, settlements, etc.
Credit reports and criminal background checks (CBC) are mandatory at the initial application, license renewal, and may be required for control persons/key individuals. Additionally, there are specific provisions for Mortgage Loan Originators (MLO) Temporary Authority to Operate (TA) and conditions for maintaining an "Inactive" status.
Pre-license education (PE) and Continuing education (CE) requirements for MLOs are detailed, covering topics such as ethics, federal law, lending standards, and Idaho law related to the Idaho Residential Mortgage Practices Act.
The article also delves into the license types, including Mortgage Broker/Lender License, Regulated Lender License, Exempt Entity Registration, and Mortgage Loan Originator License. It provides information on net branching, criminal background check standards, and other jurisdiction-specific requirements for Idaho.
In conclusion, staying abreast of the Idaho Residential Mortgage Practices Act and related regulations is crucial for industry participants. The comprehensive information provided here serves as a guide for individuals and companies navigating the licensing and compliance landscape in the Idaho mortgage industry.
