License Status MLO/MLOC

MORTGAGE LOAN ORIGINATOR/MORTGAGE LOAN ORIGINATOR COMPANY

 FREQUENTLY ASKED QUESTIONS

General Questions

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.  Additional answers can be found using the NMLS Resource Center.

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

dfi-NMLS@dcca.hawaii.gov

Who needs an MLO license, an MLOC license, and an MLOC branch license?

From January 1, 2011, a person, unless specifically exempted by Chapter 454F, HRS, shall not engage in the business of an MLO or MLOC with respect to a residential mortgage loan on any dwelling located in this state without first obtaining and maintaining annually, a license under Chapter 454F.

 

FEES AND PAYMENTS

What fees are required for my application?

In addition to the Mortgage Loan Recovery Fund fees, nonrefundable fees are required and are outlined in HRS § 454F-22.  Additionally, NMLS charges fees for the various license applications.

Where does an applicant pay fees? Online through the NMLS or directly to the Division?

Most fees, including Mortgage Loan Recovery Fund fees, are payable through the NMLS.  Fees not eligible for payment through the NMLS shall be payable to DFI.  At this time, the $35 fee for each control person, executive officer, director, general partner, and managing member of an MLOC is not payable through the NMLS and must be paid directly to DFI.

 

 MORTGAGE LOAN RECOVERY FUND AND BONDING

 What is the Mortgage Loan Recovery Fund?

The purpose of the Mortgage Loan Recovery Fund is to allow for recovery of money, in an amount not more than $25,000 per transaction, for any person aggrieved by an act, representation, transaction, or conduct of a licensee involving fraud, misrepresentation, or deceit.  This fund is in lieu of a bonding requirement for licensees.  Licensees pay both an initial fee upon licensure, and an annual fee to fund the Mortgage Loan Recovery Fund.

Do I need to obtain a bond to conduct mortgage loan originator activities? 

No.  Under Chapter 454F, bonding is no longer required.  Instead, licensees will contribute, through annual fees, to fund the Mortgage Loan Recovery Fund.

Who needs to pay the Mortgage Loan Recovery Fund fee and what are the fee amounts?

All licensees are required to pay the Mortgage Loan Recovery Fund fee.  An initial amount is due upon licensure, and an annual fee is due upon renewal.  The current fees are:

  • Principal office of a MLOC:  $300 upon initial licensure and $200 upon license renewal
  • Branch office of a MLOC:  $250 upon initial licensure and $100 upon license renewal
  • MLO:  $200 upon initial licensure and $100 upon license renewal.

 

REGISTRATION WITH NMLS

Who needs to register with the Nationwide Mortgage Licensing System?

Every MLO, MLOC, and other person in this state that conducts mortgage loan origination activities for residential mortgage loans, unless specifically exempt, shall register with the NMLS.  Upon registration, a person creates a record with the NMLS and obtains a unique identifier.

Some persons are only required to register with the NMLS, and do not need to obtain a license under HRS Chapter 454F, even if they conduct mortgage loan origination activities.  These persons do not require a Chapter 454F license because they are already adequately regulated under another law and therefore do not require further regulation by means of licensure under Chapter 454F.  These persons are either “exempt registered mortgage loan originators” (“exempt registered MLO”) or “exempt registered mortgage loan originator companies” (“exempt registered MLOC”).

Who qualifies as an “exempt registered MLO”?

An exempt registered MLO is an MLO who is an EMPLOYEE of (1) an insured depository institution; or (2) an institution that is regulated by the Farm Credit Administration.  These employees must be registered with the NMLS and must maintain a unique identifier to keep their exempt status.

Who qualifies as an “exempt registered MLOC”?

There are currently only two categories of business that qualify for this exemption:  (1) a Hawaii-licensed nondepository financial services loan company that has employees who conduct mortgage loan origination activities and who are licensed as MLOs under Chapter 454F; and (2)  holding companies of banks or savings associations.

 

EXEMPTIONS FROM LICENSING

 Who is exempt from licensure?

(1)  An exempt registered MLO when acting for an insured depository institution, or an institution regulated by the Farm Credit Administration;

(2)  Any individual who offers or negotiates terms of a residential mortgage loan with, or on behalf of, an immediate family member of the individual;

(3)  Any individual who offers or negotiates terms of a residential mortgage loan secured by a dwelling that served as the individual’s residence;

(4)  A licensed attorney who negotiates the terms of a residential mortgage loan on behalf of a client as an ancillary matter to the attorney’s representation of the client unless the attorney is compensated by a lender, an MLOC or other MLO or by an agent of a lender, MLOC, or other MLO;

(5)  A person or entity that only performs real estate brokerage activities and is licensed or registered by the State unless the person or entity is compensated by a lender, a mortgage  loan originator company, or other MLO or by an agent of the lender, MLOC or other MLO;

(6)  A person or entity solely involved in extensions of credit relating to timeshare plans, as the term is defined in Section 101(53D) of Title 11, United States Code;

(7)  An exempt registered MLOC as defined by Chapter 454F; or

(8)  An insured depository institution.

 

COMMERCIAL v. RESIDENTIAL NATURE OF CHAPTER 454F

 If I only make or broker loans on commercial, non-residential properties, am I required to obtain a license under HRS Chapter 454F?  

No.  Chapter 454F only applies to loans on residential real estate.

 

LOAN MODIFICATIONS VS. REFINANCE

 Do individuals who perform loan modifications need to be licensed in Hawaii

“Mortgage loan originator” means an individual who for compensation or gain or in the expectation of compensation or gain:

(1)  Takes a residential mortgage loan application; or

(2)  Offers or negotiates terms of a residential mortgage loan.

 

 

 PENDING LOANS WITH NO MLO LICENSE

What happens to pending loans that have not closed before a MLO is licensed or a MLOC is closed?

A person that is not exempt under Chapter 454F, will not be able to originate residential mortgage loans in Hawaii without the requisite license(s) beginning January 1, 2011.