GEORGIA DEPT. OF BANKING AND FINANCE
NOVEMBER 5-6, 2009
The information provided in this Power Point presentation is
based on general practice and may not apply in all circumstances.
Each mortgage licensee and each applicant for a Georgia Mortgage
Loan Originator license should review the following laws and
• Title V: S.A.F.E. Mortgage Licensing Act
Title V of P.L. 110-289
• Georgia Residential Mortgage Act
O.C.G.A. § 7-1-1000 et seq.
• Georgia DBF Mortgage Division Rules
GA Comp. R & Regs. 80-11-1 through 80-11-4
• Georgia Fair Lending Act
O.C.G.A. § 7-6A-1 et seq.
These may be found on our website or as a link from our
Title V of the Housing and Economic
Recovery Act of 2008 (H.E.R.A.)
S.A.F.E. MORTGAGE LICENSING ACT
‘‘Secure and Fair Enforcement for Mortgage Licensing Act of 2008’’
‘‘S.A.F.E. Mortgage Licensing Act of 2008’’
SIGNED INTO LAW BY PRESIDENT BUSH ON JULY 30, 2008,
THIS LAW REQUIRES ALL MORTGAGE LOAN
ORIGINATORS ORIGINATING RESIDENTIAL LOANS
TO BE LICENSED OR REGISTERED
WITH THE NATIONWIDE MORTGAGE LICENSING
SYSTEM AND REGISTRY
PURPOSES FOR ESTABLISHING A
NATIONWIDE MORTGAGE LICENSING SYSTEM & REGISTRY
In order to increase uniformity, reduce regulatory burden, enhance consumer
protection, and reduce fraud, the States, through the Conference of State Bank
Supervisors and the American Association of Residential Mortgage Regulators, are
hereby encouraged to establish a Nationwide Mortgage Licensing System and Registry
for the residential mortgage industry that accomplishes all of the following
(1) Provides uniform license applications and reporting requirements for State-licensed loan
(2) Provides a comprehensive licensing and supervisory database.
(3) Aggregates and improves the flow of information to and between regulators.
(4) Provides increased accountability and tracking of loan originators.
(5) Streamlines the licensing process and reduces the regulatory burden.
(6) Enhances consumer protections and supports anti-fraud measures.
(7) Provides consumers with easily accessible information, offered at no charge, utilizing
electronic media, including the Internet, regarding the employment history of, and publicly
adjudicated disciplinary and enforcement actions against, loan originators.
(8) Establishes a means by which residential mortgage loan originators would, to the greatest
extent possible, be required to act in the best interests of the consumer.
(9) Facilitates responsible behavior in the subprime mortgage market place and provides
comprehensive training and examination requirements related to subprime mortgage lending.
(10) Facilitates the collection and disbursement of consumer complaints on behalf of State and
Federal mortgage regulators.
§1502 of the S.A.F.E. Mortgage Licensing Act
§1503 of the S.A.F.E. MORTGAGE LICENSING ACT
(3) LOAN ORIGINATOR.—
(A) IN GENERAL.—The term ‘‘loan originator’’—
(i) means an individual who—
(I) takes a residential mortgage loan application; and
(II) offers or negotiates terms of a residential mortgage loan for compensation or gain;
(ii) does not include any individual who is not otherwise described in clause (i) and who performs purely
administrative or clerical tasks on behalf of a person who is described in any such clause;
(iii) does not include a person or entity that only performs real estate brokerage activities
and is licensed or registered in accordance with applicable State law, unless the person or entity is
compensated by a lender, a mortgage broker, or other loan originator or by any agent of such lender,
mortgage broker, or other loan originator; and
(iv) does not include a person or entity solely involved in extensions of credit relating to timeshare
plans, as that term is defined in section 101(53D) of title 11, United States Code.
(B) OTHER DEFINITIONS RELATING TO LOAN ORIGINATOR.—For purposes of this subsection, an
individual ‘‘assists a consumer in obtaining or applying to obtain a residential mortgage loan’’ by, among
other things, advising on loan terms (including rates, fees, other costs), preparing loan packages, or
collecting information on behalf of the consumer with regard to a residential mortgage loan.
(8) RESIDENTIAL MORTGAGE LOAN.—The term ‘‘residential mortgage loan’’ means any loan
primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other
equivalent consensual security interest on a dwelling (as defined in section 103(v) of the Truth in
Lending Act) or residential real estate upon which is constructed or intended to be constructed a
dwelling (as so defined).
• Mortgage Loan Originators who are employees of:
1. A depository institution;
2. A subsidiary owned and controlled by a depository institution and is
regulated by a Federal banking agency;
3. An institution regulated by the Farm Credit Administration;
as long as they are Registered* with the Nationwide Mortgage
Licensing System and Registry (NMLSR) ( 1507(a))
*Refer to “Information for Federal Registrants” on the NMLSR website: “At this time
there is no action required in the Nationwide Mortgage Licensing System (NMLS) of any
mortgage loan originator who is an employee of a federally insured depository institution or an
owned and controlled subsidiary of such a depository institution that is federally regulated.”
• Mortgage Loan Originators who handle only Commercial
• Processors and Underwriters as long as they are supervised
and do not advertise or assume the role of a Mortgage Loan
• Real Estate Brokers that are providing industry services and
not Mortgage Loan Originator activity (§1503(3)(A)(iii))
A Mortgage Loan Originator who has been originating loans
for 50 years?
An owner or officer of a Georgia mortgage licensee who
performs loan originations?
A person licensed as a Mortgage Broker in his/her own name?
A Mortgage Loan Originator referring to himself/herself as a
“Mortgage Consultant” or by another title?
A Processor or Underwriter performing mortgage loan
originations or advertising that he/she performs them?
An Attorney soliciting loan modifications?
A Real Estate Agent negotiating loan terms?
!!! NO !!!
The law does not permit “grandfathering” and focuses on
the activity, not the title used to describe it.
The Georgia Residential Mortgage Act (GRMA) was
passed in 1993. It gives the Georgia Department
of Banking and Finance (Department) the right to
regulate the residential mortgage industry, with
This is a state law, where as the S.A.F.E. Act is a
federal law. In 2008 and 2009, GRMA was
amended to adopt certain provisions called for by
federal law. The S.A.F.E. Act does not preempt
state regulation of Mortgage Loan Originators, but
does establish minimum standards for licensing.
§7-1-1000 of the GEORGIA RESIDENTIAL MORTGAGE ACT
(22) 'Mortgage loan originator' means an individual who for compensation or gain or in the expectation of
compensation or gain takes a residential mortgage loan application or offers or negotiates terms of a
residential mortgage loan. Generally, this does not include an individual engaged solely as a loan processor
or underwriter except as otherwise provided in paragraph (5) of subsection (a) of Code Section 7-1-1002; a
person or entity that only performs real estate brokerage activities and is licensed or registered in accordance
with Georgia law unless the person or entity is compensated by a mortgage lender, mortgage broker, or
other mortgage loan originator or by any agent of such mortgage lender, mortgage broker, or other
mortgage loan originator; and does not include a person or entity solely involved in extensions of credit
relating to time-share plans, as that term is defined in 11 U.S.C. Section 101(53D).
(15) 'Loan processor or underwriter' means an individual who performs clerical or support duties as an
employee at the direction of and subject to the supervision and instruction of a person licensed or exempt
from licensing. For purposes of this paragraph, 'clerical or support duties' may include, subsequent to the
receipt of an application, the receipt, collection, distribution, and analysis of information common for the
processing or underwriting of a residential mortgage loan; and communicating with a consumer to obtain the
information necessary for the processing or underwriting of a loan, to the extent that such communication
does not include offering or negotiating loan rates or terms or counseling consumers about residential
mortgage loan rates or terms. An individual engaging solely in loan processor or underwriter activities shall
not represent to the public, through advertising or other means of communicating or providing information,
including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items, that
such individual can or will perform any of the activities of a mortgage loan originator.
(19) 'Mortgage broker' means any person who directly or indirectly solicits, processes, places, or negotiates
mortgage loans for others, or offers to solicit, process, place, or negotiate mortgage loans for others or who
closes mortgage loans which may be in the mortgage broker's own name with funds provided by others and
which loans are assigned within 24 hours of the funding of the loans to the mortgage lenders providing the
funding of such loans.
(20) 'Mortgage lender' means any person who directly or indirectly makes,
originates, underwrites, or purchases mortgage loans or who services
Any person (including companies) who perform
Georgia primary residential mortgage loan activity
is required to have a GRMA license except:
Banks and Credit Unions
Other persons identified in O.C.G.A. §7-1-1001.
Individuals are exempt from Mortgage Broker or Lender licensing as long as they are supervised,
exclusive, W2 employees
All independent contractors who perform Georgia
primary residential mortgage loan activity are
required to have a GRMA license
Mortgage loan activity includes, but is not limited to
soliciting, negotiating, originating, processing,
underwriting, funding, servicing, purchasing and Dept. of
offering loan modification services. &
Effective April 1, 2010, all Mortgage
Loan Originators originating Georgia
loans for residential properties will
require a GRMA Mortgage Loan
Originator (MLO) License*
*Any MLO who has filed a completed application for
licensing (MU4, pre-licensing education, has passed both
the national and state test, submitted fingerprints and a credit check,
and fees for a Georgia license) through NMLSR between January 4 and
March 31, 2010 will conditionally be allowed to perform origination until
his/her license is approved or denied. Applications will be approved or
denied as soon as possible, but are expected to be acted upon by the
Department by no later than June 30, 2010. MLOs submitting license
applications after March 31, 2010, may not originate residential loans in
Georgia unless and until a license is issued by the Department.
Originating a Georgia residential loan without a MLO license will
subject the Mortgage Loan Originator and his/her
employer to administrative action and fines.
CONFUSED ABOUT LICENSES?
1. Do you own a company that handles primary residential mortgage loan
activity in Georgia?
Are you an independent NO Unless subject to an
contractor? YES exemption…
YES Must be licensed as a Broker or
Lender in Georgia under GRMA
No GRMA Broker or Lender license required
2. Do you originate residential mortgage loans in Georgia for a GRMA
You must obtain a MLO license under No MLO license under GRMA is
GRMA regardless of your position or title required
*A person that only handles residential investment loans or is an exempt
non-profit agency is not required to be licensed as a broker or lender
under GRMA, but under the S.A.F.E. Act, the loan originator is required to
be licensed as a MLO (see “Exempt Company Registration” on the NMLSR
The simple answer is NO. A past employment
history of loan originating does not guarantee that
a person will qualify for a Mortgage Loan
Originator license. There is no grandfather clause.
All applicants should review federal and state
qualifications prior to applying for a Mortgage Loan
Originator license in Georgia.
Pursuant to §1505(b) of the S.A.F.E. Act, the minimum
standards for licensing include the following:
1. The applicant has never had a loan originator’s license
revoked in any governmental jurisdiction
2. The applicant has not been convicted of, or pled guilty or
nolo contendere to a felony in a domestic, foreign, or
military court during the 7 year period preceding application
OR at any time if the felony involved an act of fraud,
dishonesty, breach of trust, or money laundering.
3. The applicant has demonstrated financial responsibility,
character, and general fitness
4. The applicant has completed the pre-licensing course
5. The applicant has passed a written test
6. The applicant has met either a net worth or surety bond
For licensing renewal, the licensed loan
originator must continue to meet the
minimum standards and complete 8 hours
of continuing education per year.
§ 1506(b) of the S.A.F.E. Act
How does GRMA compare to the S.A.F.E. Act?
1. The GRMA definition of a Mortgage Loan Originator’s activities - “takes a
residential mortgage loan application or offers or negotiates terms of a
residential mortgage loan” - is more comprehensive.
2. A Mortgage Loan Originator with an unpardoned felony on his/her record, no
matter how long ago it occurred, will not be able to be licensed in Georgia.
(An unpardoned felon is ineligible to work for a GRMA licensee, regardless of
title or position.) (O.C.G.A. § 7-1-1004(h))
3. Financial responsibility will be determined based on a review of credit
Must be in compliance with child support
No outstanding tax liens
No defaults on student or government loans
No charge-offs, collections, or foreclosures* unless payment plan has been approved with at
least three payments remitted
◦ *Any Foreclosure with a deficiency balance must have a payment plan with three payments made. A foreclosure with no
deficiency will not restrict licensing. A short sale agreed to by the lender without a derogatory submission to the credit
agency will not restrict licensing. If the lender reports to the credit agency, a payment plan must be approved.
4. GRMA permits the acceptance of NMLSR pre-licensing and continuing
education from any other state, with the exception of one hour of continuing
education that must be based on Georgia’s laws and rules.
5. A Mortgage Loan Originator may be covered under the surety bond of
his/her employer with the employer’s consent. Otherwise, a surety
bond of $10,000 or $15,000 is required to be obtained by the
Mortgage Loan Originator. (Bond is based on origination.)
SPECIFIC TO GEORGIA
A MLO must meet both the S.A.F.E. Act and GRMA requirements.
A MLO must be sponsored by one GRMA Broker or Lender licensee at a
time. It is the responsibility of both the MLO and the sponsoring
licensee to maintain the correct sponsorship status. A MLO cannot
work for two GRMA licensed companies unless he/she has a Broker
license in his/her individual name (i.e. John Smith). Sponsorship would
then be under that license.
The MLO must list his/her location as that of the GRMA licensee’s main
office or Georgia branch on record. The Department does not
recognize branches located in other states for purposes of this listing.
A MLO, unless licensed as a Broker in his/her own individual name,
must be compensated by the GRMA licensee on a W2 basis. A MLO who
also owns his/her own company (which is licensed through GRMA) may
be additionally be compensated through dividends. Diverting
compensation through another company not licensed under
GRMA (i.e. for “marketing”) owned by the MLO or
otherwise is unacceptable.
SPECIFIC TO GEORGIA
• A MLO must complete a NMLSR 20-hour pre-licensing education
course in order to receive a license in this state. The Department accepts
the pre-licensing education from other states.
• If you wish to become a GRMA Mortgage Broker at the same time or
within a year of becoming a licensed MLO, your NMLSR 20-hour pre-
licensing education will count toward your 40-hour Broker licensing, if
applicable. (Standard Broker licensing fees will apply.)
• The NMLSR 20-hour pre-licensing education can be used to meet the
Broker continuing education for renewal, but will not meet requirements
for MLO continuing education requirements. (Applicable to Brokers who
wish to take the course, but do not get licensed as a MLO.)
• Continuing education for a licensed MLO is 8 hours annually from a
NMLSR approved course provider. One of the 8 hours must be related to
Georgia’s Laws and Rules. (Complete by Oct. 31 each year.)
• Broker continuing education was reduced from 12 to 8 hours. These
same NMLSR 8 hours can be used to meet the Broker continuing
• The Department accepts NMLSR continuing education from any other
state. (One hour of Georgia’s Laws and Rules
Google the name NMLS,
Or go via link on our website: www.dbf.georgia.gov/dbfmtg,
Or go direct: http://mortgage.nationwidelicensingsystem.org/
On the home page, click “Loan Originator”
Loan Originators- Getting Started:
◦ Step by step instructions and Tutorials
◦ Requirements for each state (when available)
◦ NMLSR fees
◦ Approved course providers for pre-licensing and continuing
education, and register your education
◦ Testing handbook, test centers, schedule a test
You must apply through the NMLSR for each state.
Register on NMLSR
Complete the MU4 form
◦ Any owner or control person will have his/her same NMLSR unique identifier number previously issued under
a MU2, and all info should transfer to the MU4
Complete the 20 hour pre-licensing course
◦ Can be taken before or after the test
Pass the Nationwide test
Pass the State test
Submit Fingerprints and Authorization for Credit Report
Apply for state licensing - Georgia
◦ States will have jurisdiction specific requirements (NMLSR links directly to states’ websites)
◦ For Georgia, submit the jurisdiction specific items directly to the Department:
Oath of applicant with passport picture;
Background Check and Credit Report Authorization for the Department; and
Surety Bond if required
Pass the State test
Apply for licensing for that State (via NMLSR)
Be aware of any state restrictions or additional requirements
Additional fingerprint and credit report fees may apply
MLO APPLICATION FOR LICENSING IN
The NMLSR website can be reviewed for a checklist for the application
process. NMLSR will send the MLO’s education, test scores, fingerprint
results, and application to the Department once the MLO application
for Georgia is submitted. The MLO must send the state specific
documentation directly to the Department. It is the MLO’s
responsibility to complete the requirements for application.
Fingerprinting through NMLSR will not be available until after Jan. 25,
2010, but will NOT be acceptable from any other source. Credit
reports may not be available through NMLSR in time for licensing,
therefore they will be performed through the Department at no
additional cost to the MLO, until available through NMLSR.
The MLO will be notified through a NMLSR email if there is a state
deficiency or when the MLO license has been approved/denied. If you
have any questions regarding your MLO application status, you may
email the Department at email@example.com.
Any application that is deemed incomplete will not be approved.
The NMLSR will assign the MLO’s unique identifier.
◦ Same unique identifier number previously assigned under
MU2 (owner or control person) if applicable, but there will
be a new filing number.
Upon approval of the MLO licensing application, the
Department will issue the MLO a GRMA MLO license
number, and send the GRMA license via email. The
MLO’s license number or name may be searched on
the Department’s website.
Do not confuse the GRMA MLO license with a GRMA
Broker or Lender license. The GRMA MLO license
authorizes the holder to originate loans, but the MLO
still must be an exclusive, supervised, W2 employee
of the sponsoring licensee.
The NMLSR unique identifier, not the GRMA MLO
license number, is used to identify the MLO on forms
and on the NMLSR website.
Registering on NMLSR - $30
Pre-licensing course - Contact Provider
Nationwide test - $92
State test - $69
Application for state - Varies; GA $100
Credit report - $20-50*
Fingerprinting - $56*
Surety bond of $10,000 or $15,000 - Contact
Continuing education – Varies
Renewal fees - Varies + NMLSR $30; GA $100
*Not currently available through NMLSR, but
expected to begin in January 2010. The costs may vary.
IMPORTANT DATES for NMLSR and GRMA
July 30, 2009 Nationwide test available
Oct. 22, 2009 Georgia pre-licensing education and test become available
Nov. 1, 2009 Renewals begin for Mortgage Broker and Lender licenses
Nov. 30, 2009 Last day to submit renewals to avoid a late fine (No CE required.)
Dec. 31, 2009 Last day to submit renewals
Jan.1, 2010 Mortgage Broker and Lender licenses not renewed on or
before Dec. 31 will expire
Jan. 4- Mar. 31, 2010 Applications accepted for loan originators seeking a
Georgia MLO license
Warning- incomplete applications will not be approved
April 1, 2010 All MLOs must have submitted a complete licensing
application on or before March 31st. Applications filed after
March 31, 2010 will result in the applicant being prohibited
from originating residential loans until licensure is approved.
Oct. 31, 2010 All MLO and Broker continuing education hours must be
completed to avoid a late fine
Nov. 1, 2010 Renewals begin for all GRMA licenses
Nov. 30, 2010 Last day to submit renewals to avoid a late fine
Dec. 31, 2010 Last day to submit renewals
Jan. 1, 2011 All licenses not renewed on or before Dec. 31 will expire
LAWS AND RULES
DEADLY SINS FOR LICENSEES:
1. Failure to allow an examination; withholding information
or making false statements to the Department or NMLSR
2. Pattern of misrepresentation in loan documents
3. Dealing with unlicensed entities, including but not limited
• Unlicensed company
• Unlicensed mortgage loan originator
• Contract employee or 1099 compensation
4. Hiring of an unpardoned felon or hiring an individual with
a current Cease and Desist Order issued by the
Department (The MLO, unless individually licensed as a
Broker or Lender in Georgia, cannot have employees.)
During any investigation or examination, the Examiners of
the Department will verify the NMLSR unique identifier for the
MLOs. MLOs originating loans for Georgia residential
property after 4/1/2010 that do not have a license or had not
submitted a completed application by 3/31/2010 will be
subject to administrative action and fines.
•Uniform Residential Loan Application Form 1003 will require
the MLO’s and originating company’s NMLSR unique identifier
as of Jan. 1, 2010*
•The Department requires that the originating licensee
include the MLO’s NMLSR unique identifier along with the
MLO’s name on the Mortgage Loan Transaction Journal*
*As MLOs become licensed
COMPLIANCE - BOOKS & RECORDS
GRMA and the Mortgage Division Rules address compliance
requirements. Several changes have been made in 2008 and 2009
due to the enactment of the S.A.F.E. Act.
Advertising: As of July 1, 2009, in addition to the existing
requirements, all advertising must include the Broker’s or Lender’s
NMLSR unique identifier. If a MLO is involved in the advertisement,
the MLO’s NMLSR unique identifier is also required. Business cards
are now considered advertisements and must include the NMLSR
Mortgage Loan Transaction Journals: The originating licensee’s
journal must include the MLO’s NMLSR unique identifier (not GRMA
MLO license number) in addition to the information set forth in the
existing requirements. A journal is also required to be maintained
by the MLO. All records must be maintained for 5 years by the
COMPLIANCE - BOOKS & RECORDS
EXAMPLES OF BUSINESS CARDS- MLO and Broker/Lender Licensees:
John Smith 123 Mortgage, Inc.
Senior Loan Officer NMLS # 567123
123 Mortgage, Inc.
567 Easy Street, Suite 100
567 Easy Street, Suite 100 Atlanta, GA 30300
Atlanta, GA 30300 404-555-6789
770-555-3333 Cell NMLS # 123456
NMLS# 123456 Georgia Residential Mortgage Licensee # 5555
Georgia Residential Mortgage Licensee # 5555
EXAMPLE OF ORIGINATING CO'S MORTGAGE LOAN TRANSACTION JOURNAL
Application Date Borrower Name Co-Borrower Borrower Co- MLO Name NMLS# of Disposition Disposition
Name SS# (last 4 Borrower (first & last) MLO (closed, w/d, Date
or all) SS# denied)
04/01/2010 Jones, John Jones, Sue 1234 5678 John Smith 567123 Closed 05/01/2010
EXAMPLE OF MLO’S MORTGAGE LOAN TRANSACTION JOURNAL
Application Date Borrower Name Co-Borrower Company Name NMLS# of Disposition Disposition Date
Name Company (closed, w/d,
04/01/2010 Jones, John Jones, Sue 123 Mortgage 123456 Closed 05/01/2010
VIOLATIONS ARE COSTLY!
$ FINES- Each licensee, which means the MLO and
his/her employer, can be fined for violations of GRMA.
An example: $1,000 per transaction for a residential
mortgage loan origination without a MLO license.
ADMINISTRATIVE ACTION- A loan originator without a
MLO license will be subject to a Cease and Desist
Order, which will prevent that person from working for
a Georgia licensee for 5 years, plus a fine of $1,000.
! Any licensee can have his/her/its license revoked for
the aforementioned Deadly Sins. This can affect
licensure in other states.
OF BANKING & FINANCE
2990 BRANDYWINE RD, SUITE 200
ATLANTA, GA 30341
Have a general question regarding MLO licensing?
Have a question regarding your MLO application?
Questions regarding the NMLSR system must be
directed to its customer service at 240-386-4444.
Make sure your email is correct. This is our
means of sending you information.
Available on our website:
Monthly Summary- email notification sent
each month; past few years are also available
Frequently Asked Questions regarding
Mortgage Loan Originator licensing
Frequently Asked Questions regarding Broker
and Lender licensing