Idaho moves to national mortgage licensing system 

Idaho and six other state agencies began participating in the Nationwide Mortgage Licensing System.

The system is part of a new regulatory framework that aims to enhance consumer protection, unify and streamline state licensing processes for mortgage lenders and mortgage brokers, improve the efficiency and effectiveness of state supervision of the U.S. mortgage industry, fight mortgage fraud and predatory lending, and increase accountability among mortgage industry professionals, the Idaho Department of Finance said in a release.
“Across the nation, there has never been a single checkpoint for mortgage folks,” said Jacob Nordby, president of Northcity Mortgage in Boise and a member of the Idaho Association of Mortgage Brokers.
A practitioner previously could lose a license for bad practices in one state and then move to another state and receive a new license, he said. The new system provides some checks and balances as well as quality assurance, he said.
A couple of people are moving from other mortgage companies to Northcity, and that could take four to six weeks under the previous system, Nordby said.
The National Mortgage Licensing System will replace Idaho’s previous system, said Idaho Department of Finance Consumer Finance Bureau Chief Mike Larsen.
“It will enhance consumer protection in the mortgage arena by allowing regulators across the country to track and keep bad actors out of the industry.”
Larsen said the new system, activated on Jan. 2,  makes it easier for mortgage companies and originators to get licenses in multiple jurisdictions, he said. Regulators and loan originators also will face less complexity in dealing with people changing employers within the industry.
The National Mortgage Licensing System will drive uniformity of regulations as well as forms across the country he said.
The Idaho Department of Finance this year plans to introduce a bill in the Legislature that would eliminate a dual licensing requirement for originators – an effort to make regulation more uniform, Larsen said.
Now, people who originate residential mortgages secured by a first lien must be licensed under the Idaho Mortgage Practices Act and those who originate mortgages secured by a subordinate lien are licensed under the Idaho Credit Code, he said.
Idaho moved to the Nationwide Mortgage Licensing System along with Iowa, Kentucky, Massachusetts, Nebraska, New York and Rhode Island. The Idaho Department of Finance said regulators in 40 states so far have indicated intent to transition to the system.
The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators launched the new system.
Idaho Department of Finance officials said they worked with the Idaho Association of Mortgage Brokers and the Idaho Mortgage Lenders Association in moving to the new system.
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To contact the author, send e-mail to brad.carlson@idahobusiness.net.

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