General MLO/MLOC FAQs

These questions and answers constitute informal guidelines only and do not constitute legal advice or rules by DFI. Any interpretations of Chapter 454F are specific to the facts and circumstances in each particular situation. Questions and answers will be updated and supplemented as DFI develops additional guidance.

If additional guidance is required on a unique situation in your company or for yourself, you may send your inquiry via letter or email to:

Division of Financial Institutions
Department of Commerce and Consumer Affairs
P.O. Box 2054
Honolulu, HI 96805

or

[email protected]

 

  • Applicants must submit their completed applications to the Division of Financial Institutions (“DFI”) through the Nationwide Mortgage Licensing System (“NMLS”).
  • Applicants for Mortgage Loan Originator Companies:  Please (1) complete the MU1 applications (2) create employment relationships and (3) create sponsorships with individuals.  Companies can also complete MU4 applications for their employee or independent contractor mortgage loan originators or the mortgage loan originators can complete their own.  “Quick Guides” for the workflow process may be found at the NMLS website at:   https://mortgage.nationwidelicensingsystem.org/licensees/resources/Pages/QuickGuides.aspx.  These workflow processes were created for applicants transitioning their licenses, but are also relevant to new license applicants.
  • Additional information and application checklists can be found at the NMLS website at: https://mortgage.nationwidelicensingsystem.org/slr/transitions/Pages/HITransPlan.aspx.
  • Effective December 31, 2010, all mortgage broker and mortgage solicitor licenses issued by the State of Hawaii expired.  All persons, individuals, sole proprietorships, partnerships, corporations, limited liability companies, limited liability partnerships, or other associations of individuals, however organized, wishing to conduct residential mortgage loan origination activities are required to obtain a license as a mortgage loan originator (“MLO”) or mortgage loan originator company(“MLOC”) under the new Chapter 454F, Hawaii Revised Statutes (Chapter 454F), as amended by Act 84, 2010 Regular Session Laws (Act 84), unless otherwise exempt under Chapter 454F.

General provisions (Please read Chapter 454F, HRS for specifics)

  • Regulation of the new licensing program by DFI rather than the Professional and Vocational Licensing Division.
  • Repeal of Chapter 454 Hawaii Revised Statutes (“Chapter 454”) – “mortgage brokers” and “mortgage solicitors” licenses will not be issued after December 31, 2010.  Persons engaging in residential mortgage loan origination as defined in Chapter 454F will need to hold “MLO” and “MLOC” licenses.   An MLOC shall not maintain a branch office in Hawaii without an “MLOC branch” license.
  • A requirement that all licensed MLOCs maintain a principal place of business in Hawaii, obtain approval for branch office locations, and designate a manager at each office.
  • A requirement that all underwriters and loan processors who act as independent contractors be licensed as MLOs 
  • A requirement that applicants for licensure under the new Hawaii statute submit fingerprints for both federal and State criminal background checks.
  • Submit information on personal history and experience, and grant authorization to the NMLS and the Hawaii Commissioner of Financial Institutions (Commissioner) to obtain both a credit report and information related to any administrative, civil, or criminal findings by any governmental jurisdiction.
  • In cases of applicants that are not individuals, key people within an MLOC, including control persons, officers, directors, general partners, and managing members, are also subject to the preceding requirements, however need not submit fingerprints or authorize a credit report at this time.
  • A requirement that no license under the program shall be granted if the Commissioner finds that an applicant for an MLO or an MLOC license has had its license revoked in any jurisdiction at any time, or the applicant has been convicted, pled guilty or nolo contendere, or been granted a deferred acceptance of a guilty plea for a felony during the seven years preceding the application date, or at any time if the felony involved an act of fraud, dishonesty, breach of trust or money laundering.  An applicant also must not have been convicted at any time of any misdemeanor involving an act of fraud, dishonesty, breach of trust, or money laundering.   In cases of applicants that are not individuals, key people within MLOCs, including control persons, officers, directors, general partners, and managers, are also subject to the preceding requirements.
  • A requirement that the applicant has demonstrated financial responsibility, good character and general financial fitness. An applicant is not considered financially responsible when that person has shown disregard in the management of his or her personal financial condition. Lack of financial responsibility may be evidenced by: (1) current outstanding judgments, (2) outstanding government or tax liens, (3) foreclosures on an individual applicant’s property within the past three years, and (3) a pattern of seriously delinquent accounts within the past three years.   In cases of applicants that are not individuals, key people within MLOCs, including control persons, officers, directors, general partners, and managers, are also subject to the preceding requirements.
  • A requirement that the individual applicant must complete twenty hours of pre-licensing education and mustpass a national test and state test.
  • A requirement that after a license has been issued, an MLO is required to complete eight hours of continuing education each year.
  • A requirement that licensees pay a “Mortgage Loan Recovery Fund” fee upon initial licensure and annually thereafter when a license is renewed. The purpose of the Mortgage Loan Recovery Fund is to allow consumers to seek redress against licensees who have committed acts of fraud or misrepresentation.  A consumer will be required to obtain a judgment from a court and will have to exhaust all other remedies before applying for recovery from the fund. The Surety Bonds currently required under the provisions of Chapter 454 will be eliminated.