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 in Idaho 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 under Guidance 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.
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.
Before applying for a license you should consult the new application checklists for Idaho on the NMLS 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) conducts independent contractor mortgage loan processing or mortgage loan underwriting services on 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 an exempt entity under Idaho law engaging in mortgage loan origination activities through independent contractors or 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.
- 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 involving financial 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